Monthly Archives: November 2014

RCMP reveals details of its $92-million plan to erect a 700-kilometre surveillance fence along the Canada-U.S. border

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Conrad Black: The Republicans have given the Obama Democrats a well deserved thrashing

“Corruption of offices and institutions has scraped the bottom of America’s profound experience in this area, with the Internal “Revenue Service and the prosecution service unleashed on partisan enemies and acting in brazen contempt of Congress when called to account by it.”

More on FATCA Driven IRS Forms, specifically including IRS Form W-8BEN-E

https://twitter.com/USCitizenAbroad/status/530009926132068353

“Importantly, none of these forms are in other key languages such as Spanish, French, Mandarin, Cantonese, Portuguese, etc. Imagine the daunting nature of completing these complex forms just in English when English is your first language, let alone completing them when you speak little to no English.”
The IRS will export English around the world. Those who teach “LegalEnglish” should take note. You can become the “Priests of FATCA”. ”
FATCA: A small step for man and a big step for Man/FATCAkind”

Tax-Expatriation

The lives of United States Citizens and Lawful Permanent Residents living outside the U.S. has necessarily become more complicated due to FATCA.  1998 Treasury Report - Factors Limiting Collection p2

Previous posts discussed unintended consequences of FATCA.  See, Part 2 – Unintended Consequences of FATCA – for USCs and LPRs Living Outside the U.S.

Also, see, Part 1- Unintended Consequences of FATCA – for USCs and LPRs Living Outside the U.S.

One of the most significant unintended consequence, is that the U.S. federal government (the IRS, the Treasury Department, or 1998 Treasury Report - Factors Limiting Collection p3Congress) never initially even contemplated USCs and LPRs living overseas.  In other words, the group targeted were U.S. resident individuals who were evading taxes through foreign financial institutions.  I say this, based upon extensive conversations I have had with ex-government officials and some government officials who were involved in the original policy discussions.

Also, see FATCA Driven – New IRS Forms W-8BEN versus W-8BEN-E versus W-9 (etc. etc.) for…

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Possible benefits of the coming into U.S. tax compliance through the Streamlined program?

This post originally appeared at the Isaac Brock Society.

Updated November 3, 2014 – Readers are strongly encouraged to read the comments as well. One must remember that Streamlined and OVDP are programs which have been invented by the IRS. They are not found in the Internal Revenue Code. Consequently this post should be read in the context of the following comment to this post:

Commentary on the ‘clarifying rules’:

http://tax-expatriation.com/2014/10/14/irs-releases-clarifying-rules-for-u-s-citizens-living-outside-the-u-s-re-streamlined-filing-guidance/

“……..FAQs are all the rage these days with the IRS, as the government does not take the time or spend the resources to follow the Administrative Procedures Act or similar requirements which are required in order to issue binding rules and regulations. See a previous post regarding these requirements, specifically regarding those who renounce U.S. citizenship or abandon LPR status and have not complied with IRS Notice 2009-85. See,Does IRS Notice 2009-85 regarding expatriation have the “force of law”? Posted on April 14, 2014

Hence, these SFCP are not legally binding on the IRS and they can pick cases as they choose for audit, review and penalty assessment in any manner they think is consistent with the law. Sometimes they do it in a manner that is not consistent with the law.”………….

Americans abroad are getting special attention from the IRS

 

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No Need to Provide a Negative Definition for Fraud – says Daniel Price, Attorney for IRS: as Reported by TaxAnalysts at USD-PITI

Tax-Expatriation

IRS Office of Chief Counsel attorney Daniel Price had some astute observations at the October 30 panel at the University of San Diego School of Law-Procopio International Tax Law Instituteannual conference.  For specific coverage by tax journalist Amanda Athanasiou of TaxAnalysts, in their Worldwide Tax Daily – IRS Addresses Questions About OVDP and Streamlined Filing

Tax Analysts - OVDI No need to Define Non-Willfulness - USD-PITI - Nov 3 - 2014Specifically, Mr. Price said that “Practitioners know what tax fraud is, practitioners know what willful conduct is — the government doesn’t need to provide a negative definition in this context.”

The panelists spent a significant time on the streamlined filing compliance program and how it should be more efficient for taxpayers and the government.  As reported in the TaxAnalysts article, Mr. Price “said the Service’s goal is to direct willful individuals with true criminal liability to OVDP and non-willful individuals to the streamlined program.”

See, IRS and Practitioner Comments on the Streamlined NonWillful Certification 

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A Republican midterm sweep may lead to lower corporate taxes

https://twitter.com/USCitizenAbroad/status/529291429072633856
Really, it’s time for the United States to stop taxing citizens who live outside the United States and the profits of corporations that are earned outside the United States. Territorial taxation for both.

Financial Post | Business

Republican victories in Tuesday’s U.S. midterm elections are unlikely to rattle equity markets, but could lead to significant changes in corporate tax policy and mark the beginning of the end for popular tax inversion deals that saw Burger King Worldwide Inc.’s proposed merger with Tim Hortons Inc.

S&P 500 companies earn 40% of their profits abroad, up from 15% in the mid-1990s. As a result, most large U.S. multinationals are exasperated by high U.S. corporate tax rates and more so by the taxes imposed on foreign profits when repatriated.

“U.S. companies cannot compete effectively abroad if they must pay taxes that companies headquartered elsewhere don’t,” said David Bianco, chief U.S. equity strategist at Deutsche Bank. “The slew of inversions, which Treasury recently rushed to impede, is evident that U.S. politicians don’t understand global business.”

A Republican-led Congress could pass legislation that establishes a timetable for transitioning the U.S. to a…

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The 2014 Third Quarter Renunciations Is probably the New Norm –

Note the two ways that a Green Card holder can terminate tax residency status. File the I-407 and through a Treaty Election.

Tax-Expatriation

USC Renunciation Q1 thru 3 -The Treasury Department announced 776 renunciations, which brings the 2014 total to 2,353, on track to match last year’s record breaking 2,999 citizens who renounced.

See Will Qtr 2 Exceed Qtr 1 – 2014, Record of USC Renunciations?

As has been mentioned previously, this list does not include lawful permanent residents who have terminated their LPR status for purposes of these tax law provisions.  For further reading on LPRs, see, Countries with U.S. Income Tax Treaties & Lawful Permanent Residents (“Oops – Did I Expatriate”?).

Maybe the LPR list represents several hundred thousands of individuals?  The current total estimated number of LPRs is 13.3 million as of 2012 as reported by the Office of Statistics of the DHS.  See,  Estimates of the Legal Permanent Resident Population in 2012

There are two distinct ways that LPRs can terminate their tax residency status.  First, through the formal immigration law process typically…

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