Liberty and justice for all United States persons abroad

The Isaac Brock Society

US banker proud to become Chinese national

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Times are changing.

US banker proud to become Chinese national:  “I am very proud to say I have become Chinese,” says Marshall Nicholson, a veteran American investment banker in Hong Kong

The rise of China has not only transformed the global landscape of the financial industry, but it has also changed an American banker’s nationality.

Some in Hong Kong’s financial community were surprised by an e-mail from one of the most veteran investment bankers in the city on Tuesday night. Marshall Nicholson, a managing director in charge of investment banking in Hong Kong for China International Capital Corporation (CICC) told his colleagues and friends that he had officially renounced his United States citizenship and would soon receive a HKSAR passport.

“I am very proud to say I have become Chinese,” said Nicholson in the e-mail, which was seen by the South China Morning Post and spread quickly in the local banking world on Tuesday night.

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Immigration reform bill would repeal INA provisions on renunciation of U.S. citizenship during wartime

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In July 1944, as World War II raged on, Congress passed a law to permit renunciation of U.S. citizenship by persons physically present in the U.S., which up to then had not been possible. The law was one of many aimed at interned Japanese Americans; it was a significant break from the earlier attitude, expressed as far back as Talbot v. Janson in 1795, that the U.S. should not allow loss of citizenship in wartime. The Seattle Times has more on the effects of this sordid provision in their 2004 article on the topic.

Surprisingly, the latest immigration reform bill in the Senate proposes the repeal of this law; see § 3713 (page 645) of the Border Security, Economic Opportunity, and Immigration Modernization Act. This odd historical provision probably has very little effect on Isaac Brock Society readers and other former U.S. persons — most of whom instead relinquished or renounced after moving abroad and naturalising as citizens of their new homes or taking up government employment there. But read on if you’re interested in the gory details and the rationale behind the repeal …

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Excellent submissions to the ways and means committee

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The deadline has now passed to submit comments to the Ways and Means Committee on Tax Reform. Comments are posted here. There were (and hopefully continue to be) a large number of letters from U.S. citizens abroad. Who knows what will happen? I am hopeful that Shadow Raider’s optimism will “carry the day”. For those who missed his comment:


Shadow Raider says

@Just Me, You can keep your hopes up. The reporters who wrote that article on The Hill probably contacted both chairmen of the international tax reform working group, Devin Nunes and Earl Blumenauer, and I suspect that the Republican aide who responded is the same Devin Nunes’s assistant whom I met last year. Yes, he defends citizenship-based taxation, but he is the only aide that I met who does. His opinion is not representative of what Congress thinks about the subject, so I think we can safely ignore his comments. All other aides that I met were supportive or at least open to changing the tax system to one based on residence.

Speaking of congressional aides, most of them are young, as you noticed (20-40 years old), highly educated, motivated and friendly. Also, most of them have traveled abroad, and they live in or around DC, which has a substantial international presence. Perhaps because of these characteristics, they are open-minded about the rest of the world and are interested in new ideas. A 150-year old policy that restricts international mobility is not something that they support. I think citizenship-based taxation is not going to survive much longer.

Also, Earl Blumenauer responded himself to the article on The Hill, and his response seems positive. I think I finally found the point that makes Congress care about the subject: thecompetitiveness of Americans for jobs abroad. When Bill Alexander proposed expanding the FEIE to all kinds of foreign income in 1992, he titled his bill “Overseas American EconomicCompetition Enhancement Act”. When Jim DeMint and Gregory Meeks proposed making the FEIE unlimited in 2007, they titled their bill “Working American Competitiveness Act”. Earlier this year, Dave Camp wrote that tax reform is needed to make US workers more competitiveinternationally. Now Earl Blumenauer mentioned something similar. The Senate Finance Committee scheduled a meeting on “international competitiveness” for next month, and I don’t think they are just talking about corporations. So congressmen don’t care much about logic, simplicity or fairness in the tax code, banking problems, exports or additional tax revenue, but they don’t want Americans to be undesired for jobs outside of the US simply due to their citizenship. In the past, this problem could be mostly solved with the FEIE, but today, with FATCA and the enforcement of FBAR penalties, even excluding all foreign income wouldn’t be enough. For Americans and foreigners to be considered equally for jobs abroad, Americans abroad can’t have tax or financial reporting requirements to the US either.

The Joint Committee on Taxation should say something about the subject in its report on May 6, and the Senate Finance Committee should also say something after its meeting on May 23. I think we’re in for a pleasant surprise.

Here are some comments that really captured the life of “U.S. citizenship abroad”.

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On its 31st birthday Canadian Charter of Rights Defends Against FATCA

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This post appeared on the RenounceUScitizenship blog.

 

On Sunday Justin Trudeau became the newest leader of the Liberal Party of Canada. Canadians over the age of 55, who have been denied “Freedom 55” by accident of where they were born, remember the day Justin was born. Yes, he is the son of former Prime Minister Pierre Trudeau. Love him or hate him, Trudeau Senior made his mark on Canada. His legacy was the “Canadian Charter of Rights and Freedoms”. At the time the Charter was enacted, the focus was on “individual rights”. Interestingly, many opposed the Charter because they thought that to give Canadians individual rights would make the country too much like the United States. Most would agree, on balance that the Charter has been a good thing for Canada.

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Canada’s offshore voluntary disclosure program not like #OVDP

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Taxpayers who disclose unreported income under the program not only avoid penalties and legal action, but the Canada Revenue Agency routinely waives partial interest on the overdue amounts as well, under little-known rules.

Perhaps Form Nation could learn something from this.

Simpler, cleaner and better!

 

American Expats Are Now Toxic Assets

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The Centre for Freedom and Prosperity (CF&P), a US-based organisation which seeks to “promote economic prosperity by advocating competitive markets and limited government” is one of the high-profile critics of America’s soon-to-be implemented Foreign Account Tax Compliance Act (FATCA).  This controversial new piece of legislation, say its opponents, will be financially detrimental to the vast majority US citizens living abroad.

Here  the President of the CF&P, Andrew F. Quinlan, shares his FATCA concerns in an exclusive interview with iexpats.com.

You, and the Center for Freedom and Prosperity, have been vocal opponents of FATCA. Why do you feel this new piece of legislation, which aims to catch tax evaders, ought to be repealed? Why are you lending your support for the anti-FATCA campaign?

First and foremost, the law simply doesn’t do what it is purported to do. Rather than target actual tax cheats, it burdens all Americans living and working abroad as if that were tantamount to criminality. As a result of FATCA’s sweeping new burdens, American expats are now toxic assets. Unwanted by foreign banks and financial institutions, and hounded by a government that has scapegoated them for problems created by the profligate spending of politicians, it’s not a good time to be making a living as an American abroad.

Overall, FATCA is just an affront to the principles and mission of the Center for Freedom and Prosperity. It violates the fundamental financial privacy of millions of Americans, eviscerates the most basic and long standing concepts of national sovereignty, and seeks to limit tax competition by controlling the free flow of capital. Furthermore, the economic harm to the US in terms of lost investment, and just to the world economy as a whole, may far outstrip the minimal “revenues” expected to be collected by the government.

Simply put, it is not properly the responsibility of the entire world to chase down every last potential dollar for US politicians to waste, all the while footing the bill for the pleasure.

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US expatriates plead for relief from IRS. ACA efforts noticed by @TheHill

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Lawmakers in Congress who are eyeing a rewrite of the tax code are getting an earful from Americans abroad who want relief from double taxation and time-consuming paperwork.

Letters are pouring in to the House Ways and Means Committee from as far away as Australia, Germany and Bahrain from citizens who say the IRS inflicts a particularly cruel form of punishment on them for living abroad.

“For the simple tax situation of one wage and some interest income, my 2012 U.S. tax return, with supporting documentation, is 28 pages!” an American living in Australia wrote to the House committee. “I muddle through as best I can, spending dozens of hours each year on it.”

Read more: http://thehill.com/business-a-lobbying/293187-americans-living-abroad-plead-for-relief-from-irs#ixzz2QEa4DvPP

MUST WATCH VIDEO on Accidental Americans in Canada (including Mark Matthews)

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Patrick W. Martin, Partner – Procopio, Cory, Hargreaves & Savitch, LLP
Lara Banjanin, Attorney Advisor – Office of Associate Chief Counsel – International (IRS)
Michael Welters, Partner – Bull, Housser & Tupper

Lara Banjamin is like ice woman however it is interesting to the Canadian lawyer next to see her discuss the legal obligations or lack thereof a Canadian lawyer has to the IRS. In Michael Welters seems to imply that under Canadian law a lawyer who happens to practice under circular 230 should recuse him or herself under certain circumstances

 

Mark Mathews, Steve Toscher, and Richard Harvey talk OVDI in second video below.(Two different videos)

Must watch, Must Watch, Must Watch

 

 

Here comes “DATCA” (FATCA reciprocity)

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Provide for reciprocal reporting of information in connection with the implementation of the Foreign Account Tax Compliance Act (FATCA).—

In many cases, foreign law would prevent foreign financial institutions from complying with the FATCA provisions of the Hiring Incentives to Restore Employment Act of 2010 by reporting to the IRS information about U.S. accounts.

Such legal impediments can be addressed through intergovernmental agreements under which the foreign government agrees to provide the information required by FATCA to the IRS. Requiring U.S. financial institutions to report similar information to the IRS with respect to nonresident accounts would facilitate such intergovernmental cooperation by enabling the IRS to reciprocate in appropriate circumstances by exchanging similar information with cooperative foreign governments to support their efforts to address tax evasion by their residents. The proposal would provide the Secretary of the Treasury with authority to prescribe regulations that would require reporting of information with respect to nonresident alien individuals, entities that are not U.S. persons, and certain U.S. entities held in substantial part by non-U.S. owners, including information regarding account balances and payments made with respect to accounts held by such persons and entities.

This was found buried on page 202 of the Analytical perspectives of the President’s budget.

http://www.whitehouse.gov/sites/default/files/omb/budget/fy2014/assets/spec.pdf 

Additionally this request was NOT found in the Treasury Green Book where normally requests of this nature are made.

So, this Bitcoin we’re hearing about and trying to understand — what does it mean for IRS, FATCA (as well as taxation within all countries)?

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The Bitcoin: Bubble or Bank — CBC The Current, April 11, 2013

If the Bitcoin becomes sometime in the near future the new “virtual?” currency as some think, will FATCA keep up?  Will any of us keep up?  Or, will it fail?  I’m trying to understand it all.