Tag Archives: expatriation

I’ll be back: Revisiting Expatriation for tax purposes vs. Expatriation for citizenship purposes

 

A recent post from Phil Hodgen discussing relinquishing U.S. citizenship and expatriation ends with:

People care about this because they are angling for an earlier expatriation date than “now”, whatever “now” is. It won’t work. If you are a U.S. citizen, you will not have an expatriation date earlier than an objective event involving paperwork. Invoking the time traveler exception again, this is impossible to do unless you have that special ability. Determine your expatriation date for tax purposes as of right now (whenever “now” is for you), and compute the tax consequences accordingly.

As one commenter wrote:

As someone born ‘dual’, and unable to acquire the magical, ‘back-dated’ CLN, I am personally unaffected. However, I think this article just caused a lot of people more sleepless nights. The nightmare never ends.

In my respectful submission the 877A rules:

– apply to those expatriating after the 877A provisions took effect in 2008; and

– do NOT apply to those expatriating prior to the 877A provisions becoming law.

The 877A rules should NOT be read to operate retrospectively.

The 877A rules should be understood to apply when both the expatriating act and the “objective event confirming the paperwork” took place after the 877A rules took effect.

The reasons for my thinking …

Continue reading

Advertisements

#Americans abroad who became citizens of another country prior to 1986 read this ..

 

 

Or for those who are not twitter literate:

http://isaacbrocksociety.ca/2012/01/07/dominant-and-effective-nationality-and-why-it-matters/comment-page-3/#comment-65347

@Puntlich11

Thank you for your well reasoned and articulate comment on this issue.

http://isaacbrocksociety.ca/2012/01/07/dominant-and-effective-nationality-and-why-it-matters/comment-page-2/#comment-65288

Much appreciated. You are absolutely right that very lawyers understand this issue. The reason is simple: the cases that you refer to and the context in which they arose were a long time ago. To really understand this area of law, one must almost grow up with it. But the main message that people need to take from your comment is:

“To clarify: If indeed your US nationality was forfeit upon naturalisation in Canada and if it was restored (retroactively but
conditionally) by Supreme Court decision then that restoration was subject (under international law acceded in by the USG) to your consent. You probably gave that assent by applying for a new passport. You should have had legal counsel. Unfortunately there aren’t many lawyers competent in this arcane area to which I have devoted much of my life.”

Phil Hodgen – “Why people expatriate” – A Comment on his post – What about those who cannot certify 5 years of tax compliance?

“Get out while the getting is semi-good.  Don’t wait for more time.  More time means more laws.”

– Phil Hodgen – “Why people expatriate”

Anybody who reads this blog is surely familiar with Phil Hodgen’s blog. Mr. Hodgen is California based tax lawyer who appears to have moved firmly into the practice of “Expatriation Law” – AKA helping people to renounce U.S. citizenship or  get rid of that green card. Mr. Hodgen’s latest blog post about “Why people expatriate” is proof that good things can come from long flights. Speaking of “good things”: one commentator wrote that:

This the best, even-handed analysis I’ve seen of the pros and cons of a US citizen bailing out. It should be required reading for every congressman and senator  in the US — as well as the president.

Sadly, it’s clear that Phil has little hope for an improvement. As he points out, it is the citizenship-based taxation that is the root of all this evil, and he sees very little chance of that ever changing.

When great powers begin their decline into eventual irrelevancy, it is rarely just one thing that historians finger as a root cause. But for the US, this may well be it.

In any case: Continue reading

Another expatriation driven by U.S. tax complexity and the time it takes – Expatriation is on the rise!

An interesting  post appeared today on Phil Hodgen’s blog. It appears that expatriation is on the rise. (Who could have known?) Note that the reasons have nothing to do with the payment of tax. They have everything to do with the the inability to live a normal productive life as a U.S. person living outside the United States.

What follows is an excerpt from his post: Continue reading

Possible waiver of U.S. tax and FBAR penalties for U.S. citizens residing abroad

Subject to the "unknown unknowns"

Thanks to Barrie McKenna of the Globe and Mail for this article and to his support on this important issue during this most difficult time for U.S. citizens residing in Canada and the rest of the world. Thanks also to Finance Minister Flaherty and the MPs who have supported Canada/U.S. dual citizens during this time.

On December 7, 2011 the IRS posted a Fact Sheet providing information about this issue. I have written some commentary about the Fact Sheet here.

I recently predicted that the IRS treatment of U.S. expats would become a diplomatic issue for the U.S. The December 2011 announcement by Ambassador Jacobson, concerning the IRS and U.S. expats,  suggests that this is true. Continue reading

Yet another reason to renounce U.S. citizenship: Medicare tax on unearned income

Obama's 3.8% tax on unearned income - it's true!

The situation is indeed dismal. I don’t understand everything in the following article,  but I can see that this is going to:

1. Add more bureaucracy and cost to filing your U.S. tax return – it is not clear how this is intended to impact expats (if they are considered at all);

2. Clearly interfere with your ability to invest and plan for retirement. The U.S. has become a nation of forms and bureaucracy.

The U.S. government is aliready taxing unearned and undistributed gains when it comes to PFICs (and perhaps more). Stop for a moment and think what this means. The idea behind income taxation is that a certain percentage of what you receive as INCOME is to go to the government as your contribution toward running the government. In its most simple terms, this means that (imagine a tax rate of 20%) that if you receive $100 then $20 goes to the government. The taxpayer does not receive all of that he was paid. When it comes to taxing “unearned income”, one needs to ask the following question: Continue reading

Expatriating Acts – The Status Of Your U.S. Citizenship

Updated on January 16, 2013

As the Government of Canada gets closer and closer to signing an IGA with the U.S. the issue of who is a “U.S. person” is becoming more and more important. Panic is starting to set in. Those of you who became citizens of another country prior to 1986 may not be U.S. citizens. Whatever you do: do NOT ask an accountant or tax preparer (they don’t have the expertise) or even a tax lawyer (they have a financial interest in your citizenship). The proper person to ask is a U.S immigration and citizenship lawyer.

Enjoy this old post.

Listen to the stories of these two people born in the United States. One of these is Professor Maurice Williams who wrote an interesting letter to Obama. Read the following blog post. These two people may or may not be U.S. citizens.

Renouncing U.S. Citizenship – A Growing Trend

Many people are coming to the conclusion that U.S. citizenship is at best undesirable and at worst dangerous. In the past – people came to America in pursuit of liberty and justice.  There are some who still do. What is new is the large number of people who are interested in “ceasing to be a U.S. citizen”. More and more people are renouncing U.S. citizenship.

But Wait – Maybe You Are Not A U.S. Citizen After All

I started this blog because I believe that there are U.S. expats who believe that they are U.S. citizens when in fact they are not. Even if you were born in the United States, you may not be a U.S. citizen. It is possible that there are people who entered the OVDI program who are no longer U.S. citizens. This is first of a series of posts where I will discuss reasons why you may no longer be a U.S. citizen.   There are many U.S. expats who would be very happy to be in your shoes. Continue reading