An interesting reference to a pay-walled issue of Tax Notes Today{2014 TNT 216-3 (11/7/14)} on Jack Townsend’s blog:

“Regarding so-called quiet disclosures — when taxpayers file amended returns and delinquent foreign bank account reports without coming in through the offshore voluntary disclosure program or the streamlined program — Best [senior adviser to the deputy commissioner (international), IRS Large Business and International Division] said, “The IRS recognizes that a quiet filing is a choice that the taxpayer has.”
But Best added, “We would prefer that taxpayers come in through one of our programs so that we have tracking mechanisms, information gathering mechanisms set up, but ultimately it’s up to the taxpayer.“

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When: Sunday, November 30, 2014, 6:30 – 8:30 pm

Where:Carr Hall, St. Michael’s College, U of T, 100 St. Joseph St., Toronto ON M5S 2C4
MAP

Admission: $20 individual or $40 for a family of up to four people. Payable in cash at the door, please (to cover costs). Hope to see you and your families on November 30. Spread the word!
 
This session will feature a very special guest speaker!

 
The IRS made changes to the “Streamlined Program” (a “relaxed” way for delinquent U.S taxpayers to catch up with their U.S. tax and information reporting forms) on June 18 of this year.
Further guidance was given on October 08. Snowbirds in particular, face a potential conflict. It is commonly misunderstood that anyone can stay in the U.S. for up to 180 (actually 182 or less) days per year without any tax consequences. In fact, the manner of counting days is subject to a complex way of computing the total number and of course, there is a form to be filed in the event one is over the limit. In the same manner many expats have been caught off guard with respect to filing tax and information returns, snowbirds who are unaware of the correct procedure are at risk.

Should one be so unfortunate as to be cast into the U.S. taxation net, the Streamlined Program might appear to be a way out. Even better, recent IRS indications are that they will presume that those outside the U.S. were non-willful non-filers, which will eliminate penalties. What could be better? However, in order to qualify for the non-U.S. residence status, one must not have spent more than 35 days in the U.S. for the past three years. The Catch 22 is in order to qualify for the U.S. resident version of Streamlined, one must have filed U.S. tax returns for the previous 3 years.
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Where: McBain Community Centre – Room A – 7150 Montrose Rd., Niagara Falls, Ontario L2H 3N3 MAP

When: Tuesday, November 11, 2014, 8:00 – 10:00 pm

Admission: $20 individual or $40 for a family of up to four people. Payable in cash at the door, please (to cover costs). Hope to see you and your families on November 11. Spread the word!

FATCA and extra-territorial taxation

Generally the question of whether one is a “U.S. person” (citizen, Green Card Holder, resident, substantial presence test) is determined under U.S. law. FATCA has the effect of enforcing the taxation of “U.S. persons” who reside outside the U.S. By changing the definition of “U.S.
person”, the U.S. can increase the number of “U.S. persons” residing in other countries. FATCA – by identifying “U.S. persons” – is the enforcer of extra-territorial taxation. The combined effect of “U.S. person” taxation and FATCA is that the U.S. can increase or decrease its tax base in other countries. If more people are deemed to be U.S. persons the tax base will increase. The FATCA rules make clear that the U.S. and only the U.S. will define what is a “U.S. account” (held by a “U.S. person”).

Interestingly the IRS has offices outside the U.S. (London, Frankfurt, Paris and Beijing). As FATCA becomes fully operational, one wonders whether the IRS will establish more “Local Office(s) Internationally”. FATCA is likely to make the IRS a “U.S. export”.

The U.S. is gradually expanding the number and kinds of people that it deems to be taxable “U.S. persons”. Leaving aside the question of “citizens”, it’s important to realize that U.S. “residents” (which can include people who do NOT reside in the U.S.) are taxable “U.S.persons”.
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Continued from Part III

Solution

This article was written in response to a request for a step-by-step explanation of FATCA that would help Americans understand what it is all about. I would like to conclude with an illustration similar to the one with which I began. If you were born in California but moved to Massachusetts in your 20s and lived there the rest of your life should you have to pay state taxes to California until the day you die? If you lived in Denver at one time and then moved to Atlanta should you have to keep paying municipal taxes to Denver for the rest of your life? Your answer to both questions, I’m sure, would be a resounding, “No! That’s ridiculous!” Of course it’s ridiculous and so is having to pay taxes to a country in which you no longer live. Continue reading →

This new post very well illustrates a lot that is in John Richardson’s presentation posted HERE.

Despite the good works of those at this site and others, I remain gravely concerned. Yesterday I attempted to inform my colleagues at a school we teach at in Japan of the situation we are all in by telling them about the experiences of a friend of mine. I prefaced the “discussion” with an email compilation if this friend’s emails to me on the subject. Following these, I have added my email to him telling him of the reaction I received.

Before that, however, it may be best to let you know a little about who I am. I am an American citizen who has lived most of my adult life in Japan. My spouse and our toddler are Japanese. I became aware of this problem around two years ago when applying for a new passport. There were statements on the application that I knew to be illegal. Searching into that issue lead me to your website and, well, you’ve been there, you know the rest.

This is today’s summarization, asking for input, corrections, etc. from other readers here. He says “Tear it apart.”:

Here is a summary I came up with from memory. My notes are unavailable to me while on the trains and subways of Tokyo, when I have time post.

Tear it apart! Any inaccuracies correct. I need this as spot on as possible. Continue reading →

Continued from Part II

Who Does FATCA Affect?

The short answer is: just about everybody. At the top of the list are those who carry U.S. indicia and who live outside of the United States. In Canada these are estimated to represent approximately 3% of the Canadian population. Add to that their spouses and family members with whom they share accounts and a much larger figure is indicated (perhaps, as has been suggested by some, as great as 12%.) Publicity about FATCA has served to educate not only “overseas US Persons” about CBT (citizenship-based taxation) and FBAR (Foreign Bank Account Report) but also those who employ them or otherwise associate with them. US Persons are being asked to vacate positions with signing authority. Some couples are reconsidering marriage plans and getting divorced due to the understandable unwillingness of non-US spouses to have their personal and financial information shared with the government of a foreign country. Banks, particularly in Europe, are refusing services, including such basics as mortgage renewals, to “US Person” customers. The list of abuses is lengthy and I refer you to the reference links that I provide in Part IV. Continue reading →

This post comes from Anne Frank. I agree with the contents and thank Anne Frank for taking the time to organize these thoughts.

Practical Solutions Needed

In my view, the election has created a small opening NOW to pursue a pragmatic solution that will resolve MOST but not all of the injustice that FATCA and CBT generally have wreaked upon US Persons outside the United States and their families. What is needed is (i) a VERY SIMPLE and SUCCINCT summary of why this is an injustice that can be grasped by any voter in a coffee shop with the attention span of a four year old; (ii) a SIMPLE and CLEAN proposal to make the problem go away; and (iii) a Congressman or woman with the courage to take it on.

There is an opening in my view because a) the Republicans control both houses; b) the Republicans have apparently embraced repeal of FATCA and CBT as bad policies; c) Democrats Abroad at least have recognized most of the injustices US law perpetrates upon its diaspora and can be expected to endorse at least limited action to address the worst of it if not outright repeal of FATCA; and d) a Congress which has a double majority has some hope of getting a bill passed which – if consistent with principles the Democrats have at least paid lip service to – the President might not veto. FATCA may be bad law, but it sells politically because it targets “FATCAT” tax evaders. We need to let them solve that problem in their own time and in their own way providing they stop with the collateral damage! We all know Congress will have only a short honeymoon period where it has any hope of getting things done, so the best hope of getting something passed is early and not late in the lifetime of the new Congress. The pending Canadian litigation will serve to keep some level of political attention and heat on the issue (I don’t overestimate that factor in the US of course!).

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