ABA Section of Taxation Recommends Those who Relinquished under INA Prior to June 17, 2008 be Treated as Non-Citizens http://t.co/IqGYsexuJt

— Patricia Moon (@nobledreamer16) March 4, 2015

In our view, sections 877A and 7701(a)(50) should not be considered to apply to individuals who had previously ceased to be citizens, for both nationality and federal tax purposes, prior to the date those provisions were enacted. In particular these sections should not apply to individuals who relinquished citizenship on or before June 3 2004, and whose noncitizen status was deliberately grandfathered under the 2004 Act, or to individuals who relinquished their citizenship in accordance with the requirements of former section 7701(n) after June 3, 2004 and prior to June 17, 2008.

The “extra’ here is since 7701(n) was repealed in 2008, the writer also suggests those who relinquished after June 3, 2004 and prior to June 17, 2008, should also be considered non-citizens. IOW, 877A only applies AFTER 2008! NOT RETROACTIVE!
 

The American Jobs Creation Act of 2004 ( the “2004 Act”), however, created a disparity between expatriation for nationality purposes and expatriation for tax purposes. Specifically the 2004 Act enacted new section 7701 (n), which provided for the first time that an individual who ceased to be a citizen in accordance with the INA would continue to be treated as a citzen for federal tax purposes, until a specified notice requirement was satisfied.. Section 7701(n) was effective only for individuals who expatriated after June 3, 2004 so individuals who had relinquished citizenship on or before that date were not affected, even where they had never provided any noticed described in that provision.

Similarly, section 7701(a)(50) generally provides that an individual shall not cease to be treated as a U.S. citizen before the date on which the individual’s citizenship is treated as relinquished under section 877A (g)(4). Pursuant to section 301(g) of the 2008 Act, these provisions are effective for any individual whose expatriation date (defined as the date on which the individual relinquished citizenship) is on or after June 17, 2008.We therefore recommend that Treasury and the Service issue guidance, in any form that they deem appropriate, confirming that individuals who reliquished citizenship under the INA are not subject to sections 877A and 7701(n)(50) and thus continue to be treated as noncitzens of the United States for federal tax purposes following the 2008 Act.

I don’t need to point out how important this development is! This news is HUGE!

For the whole letter to Commissioner Koskinen, please see Here

Taxation #AmericansAbroad: Citizenship taxation vs. Residence taxation: M. Kirsch – B. Schneider May 2/14 Toronto https://t.co/KTe7wnQaNG

— Citizenship Lawyer (@ExpatriationLaw) March 2, 2015

Video also Here

 
“Revisiting the Tax Treatment of Citizens Abroad:Reconciling Principle and Practice” M.Kirsch
 
“THE END OF TAXATION WITHOUT END: A NEW TAX REGIME FOR U.S. EXPATRIATES”
SSRN-id2186076_Schneider
 
Bernard Schneider- April 15, 2013 letter to the Ways and Means Committee
B.Schneider2-Ways&Means
 
With thanks to Embee for the articles
 

UPDATED SAT 28 FEB 2015

 
Everyone should stand up and take notice that WE are having an effect on all things FACTA-oid. First it was only tax geeks and compliance condors. Now the scholars are chiming in. Funny how most simply are oblivious of the fact that the US overreach is the number one indication that the whole thing is simply flawed.

As John Richardson points out in the following repost from The ADCS blog, WE are making a difference. We haven’t been deterred by obnoxious comments from the public, the Canadian Conservative government, nor the compliance condors. One thing they don’t seem to get, is that nothing in life is fixed and immovable. Change is the only thing that one can count on. So while they all sit on the pedestal of “no one can fight this’ and “it’s US law,” let’s enjoy the fact that regardless of how difficult this has been, we have risen to the challenge and are worthy of respect; not just from them, but from ourselves.

Forbes had a nice quote the other day which reflects well upon our situation:

“Whenever you find yourself on the side of the majority, it is time to pause and reflect.”

Mark Twain

@ADCSovereignty #FATCA IGA lawsuit continues to be newsworthy and provides education and leadership to the world https://t.co/0K9zKqTBvt

— John Richardson – Counsellor for US persons abroad (@ExpatriationLaw) February 28, 2015

 
The lawsuit launched against Canada’s FATCA IGA will be remembered as part of the history of FATCA. As the Obama administration “boldly goes” to impose it’s will on the world, Canada’s FATCA lawsuit reminds both Homelander academics and International Compliance Condors that there is a world outside the United States.
 
Win, lose or draw, the FATCA lawsuit prosecuted by the Alliance For The Defence of Canadian Sovereignty is:
 
A. Reminding the United States that there is a world outside the United States;

B. Demonstrating that there are people who resent the attempts of the United States to impose its laws on the rest of the world;

C. Illuminating the immorality of (during a time when the U.S. Senate Finance Committee is considering tax reform) U.S. extra-territorial taxation.
 
Extra-territorial taxation is the U.S. practice of attempting to levy taxes on people who (1) do NOT reside in the United States and (2) on income and property not associated with the United States.

What the United States proudly calls “citizenship based taxation” is primarily an attempt to levy taxes on people based on a U.S. place of birth or because their parents had a U.S. place of birth.

We can’t choose where we were born. We can’t choose our parents. Yes, to be be sure:
 

“It’s unjust. It’s inhumane. People don’t choose where they were born.”

So, yes your FATCA lawsuit is making a difference. Yes, your FATCA lawsuit is continuing to make a difference. Yes, by all means do  continue this generous and important initiative!

Continue reading →

Bruce W. Bean,

Michigan State University – College of Law

AND

Abbey Wright Farnsworth,

Independent

February 25, 2015

ILSA Journal of International & Comparative Law, Vol. 21, No. 2, 2015

Abstract:

… two Canadians have filed a claim against the Canadian government asserting that the IGA entered into by the United States and Canada to implement FATCA violates several provisions of the Constitution of Canada,166 including Canada’s Charter of Rights and Freedoms, the Income Tax Act of Canada, and the Canada-U.S. Tax Treaty. The agreement requires Canadian FFIs to hand over information on qualifying accounts to Canadian tax authorities, who will in turn submit the information to the IRS.

… Additionally, there is concern that the agreement disregards the principle of maintaining sovereignty. The claimants and many other Americans living in Canada feel “entrapped in U.S. citizenship” and that their rights are being violated as they are “branded” potential tax evaders.

…The U.S. Government has taken a bold step with FATCA. The legislation is by far the most egregious example of extraterritorial overreach in history and has been harshly criticized by individuals and entities alike.

 **********************

(as most of the world’s countries and *foreign financial institutions*

submissively roll over for the U.S.A.)

Have you received a FATCA letter or been warned of the consequences of being a U.S. person?
 
 

WHO: John Richardson, B.A., L.L.B., J.D. is a citizenship lawyer in Toronto and a member of the Ontario Bar.

WHERE: University of London International Hall Meeting Room,
Landsdowne Terrace, London WC1N 1AS UK
150m walk from Russell Square Tube Station

WHEN: Monday, March 2, 2015. 6:30 – 8:30 pm

ADMISSION: Admission £15. Payable in cash on the door please (to cover costs).

 
Why am I getting letters from my bank all of a sudden?
 
 
FATCA became a reality in the U.K. on July 1, 2014. Financial Institutions must search for any indicia of “U.S. Persons.” Although both the definition of “U.S. person” and whether one meets the definition is not always clear, the process is ongoing. In some cases, there is no particular warning – just a letter indicating that they are suspected to be a “U.S. person”. Often one must prove to the institution sending the letter that one is not a U.S. person.

Continue reading →

http://www.ftseglobalmarkets.com/issues/issue-80-january-february-2015/aeoi-tax-reporting-doesnt-have-to-be-taxing.html

From the back alley of the Compliance Community comes this little tidbit which reinforces concerns about what all those trustworthy banks are going to do with all that shiny US Person customer data once their new FATCA and AEOI (Automatic Exchange of Information to support the OECD’s GATCA) systems get up to cruising speed:

AEOI: Tax reporting doesn’t have to be taxing

From FATCA to AEOI, who knows what the next move will be. And, with confirmation of exact reporting rules around AEOI still up in the air, there is still much uncertainty. The point is that those who continue to paper over the cracks instead of looking for a long term solution run the risk of non-compliance to local and global regulations and reputational damage. On the flip side, financial institutions that adopt flexible technology designed to cater for future unknowns, will avoid any headaches, and have capacity to explore how best to use the new AEOI/FATCA customer data. The silverlining, of course, is that once a firm’s AEOI infrastructure is in place, it provides a goldmine of customer data. Golden nuggets that could then be used for purposes other than keeping the tax authorities happy.

Alberta online bank first in Canada to shun U.S. clients amid tax rules

Some highlights from Barrie McKenna’s new Globe and Mail article:

“The information and documentation required to open and monitor an account within [Canadian Direct Financial] for a U.S citizen or resident outside of Canada is prohibitive to providing the level of service our clients expect and deserve,” explained Kirby Hill, a Canadian Western Bank vice-president and spokesman.

A number of financial institutions in Europe and elsewhere are already balking at doing business with Americans. But Canadian Direct Financial is believed to be a Canadian first.

Canadian Bankers Association spokeswoman Maura Drew-Lytle said she was unaware of any Canadian banks refusing to do business with Americans.

“It’s discrimination based on nationality,” said Kevyn Nightingale, a U.S. tax specialist at accounting firm MNP LLP in Toronto. “FATCA has put financial institutions in a conundrum.” Mr. Nightingale said the steep compliance costs simply aren’t worth the effort for some mid-sized financial institutions.

“I’m amazed this is the first one I’ve seen so far,” he said. “I would expect there would be more.”

Patricia Moon of Toronto, who renounced her U.S. citizenship more than two years ago, said the Alberta bank’s decision not to do business with Americans “demonstrates the harm” caused by Canada’s decision to share data with U.S. tax authorities.

“If all the banks started doing this, where are you going to open an account?” wondered Ms. Moon, a director of the Alliance for the Defence of Canadian Sovereignty, which is suing the Canadian government over its decision to share personal financial information with the U.S.

http://www.theglobeandmail.com/report-on-business/international-business/alberta-online-bank-first-in-canada-to-shun-us-clients-amid-tax-rules/article23186804/

http://www.law.ubc.ca/centre-business-law/cbl-events

The Tax Law and Policy Workshop is a seminar course open to both J.D. and LL.M. students, and meets twice a week.

The sessions with visiting speakers are held generally on Fridays from 1:30pm to 3:00pm in Room 122 of Allard Hall. Map / Allard Hall, University of British Columbia, 1822 East Mall, Vancouver BC

Scholars, students, and practitioners not enrolled in the course but who are interested in particular topics are welcome to attend the Friday sessions.

For further information, please contact the instructor of the course, Associate Professor Wei Cui, at cui@law.ubc.ca.

The paper being presented was just released:
http://www.law.nyu.edu/sites/default/files/upload_documents/Ruth%20Mason.pdf

February 27, Ruth Mason (from University of Virginia Law School): “Citizenship Taxation”

WSJ Expat, February 23, 2015, by Jonathan Lachowitz: Everything U.S. Expats Need to Know About IRS Tax Forms (But Were Afraid to Ask)

With one comment so far (comments open!):

Seriously, is this for real? American expats already declare and pay (higher) taxes wherever they are resident. Perhaps all this bureaucratic nonsense ought to be scrapped? It would not hurt America to bring herself into the 21st century world of residence-based taxation. The IRS would consequently become leaner or more effective by focussing on territorial taxation. An antiquated (19th century) tax policy called citizenship-based taxation should have been written in history books a long time ago…

**************
…which would lead one to agree: Virginia La Torre Jeker J.D, February 23, 2015: “Why the US Tax System Needs to Change”!

…Anon is apparently one of many hapless dual-nationals now caught in the big FAT(CA) trap. He’s obviously never filed a US tax return, is clueless about FBARs, SFFA’s reportable on Form 8938, PFICs, CFCs and all other variations of the US tax alphabet soup. Now, Anon’s local bank in Saudi Arabia (which is viewed as a “foreign” financial institution for US tax purposes) is probably asking him for a so-called “FATCA certification”. In all likelihood, the bank noticed that Anon’s Saudi passport listed a US birthplace. As part of the FATCA mandate imposed on this “foreign” bank, Anon must now “certify” his US status or provide evidence satisfactory to the bank that he is no longer a US person. Anon has probably done some investigating about FATCA and what it means to be a US citizen. Anon has just been given the shock of his life.