PREP Podcaster - “Success Favours The PREPared Mind”
Mobility Consultant David Lesperance - Citizenship through lineage and through marriage

Mobility Consultant David Lesperance - Citizenship through lineage and through marriage

February 18, 2021

January 17, 2021 - Participants include:

 

John Richardson

 

David Lesperance

 

In a world where "second citizenships" have become an insurance policy, there is lots of attention paid to "Migration Investment" AKA "Citizenship By Investment". But, sometimes there is an easier, less expensive and less politically charged way of acquiring a second citizenship.

Look in the mirror! You might have a claim to citizenship through lineage or through marriage.

For some people, as the Scotia Bank Tagline says:

"You are richer then you think.!"

 

 

US Treasury publishes list suggesting record numbers  relinquishing US citizenship in 2020 - but what can be inferred from the list?

US Treasury publishes list suggesting record numbers relinquishing US citizenship in 2020 - but what can be inferred from the list?

February 11, 2021

February 9, 2021 - Participants Include:

Dr. Karen Alpert - @FixTheTaxTreaty

Tim Smyth - @Tpsmyth01

John Richardson - @Expatriationlaw

Internal Revenue Code 6039G requires US Treasury to publish the names of US citizens who relinquish US citizenship. Some refer to the list as the "Name and Shame" list, while others call it the "Liberty List".

6039G in relevant part includes:

"Notwithstanding any other provision of law, not later than 30 days after the close of each calendar quarter, the Secretary shall publish in the Federal Register the name of each individual losing United States citizenship (within the meaning of section 877(a) or 877A) with respect to whom the Secretary receives information under the preceding sentence during such quarter."

Surprisingly there is wide disagreement about:

- exactly which individuals are required to be named on the list (all relinquishers, "covered expatriates" only, Green Card holders?)

- the accuracy of the list (how well does it correlate with the actual numbers of relinquishers)

- the reasons individuals relinquish US citizenship (political or to escape the US tax an/or regulatory net)

In this podcast we discuss: What does the list purport to represent and how accurate is the list?

 

The Tax Treaty Saving Clause - 2021 Edition: How the USA exports @CitizenshipTax throughout the world

The Tax Treaty Saving Clause - 2021 Edition: How the USA exports @CitizenshipTax throughout the world

February 9, 2021

February 9, 2021 - Participants Include:

Dr. Karen Alpert - @FixTheTaxTreaty

Tim Smyth - @Tpsmyth01

John Richardson - @Expatriationlaw

All US tax treaties include a "saving clause". With respect to individual US citizens, the effect of the "saving clause" is to:

1. First, guarantee that US citizens abroad who are dual tax residents will be subject to double taxation; and

2. Second, relax that double taxation in certain specific areas.

For example, Article XXIX of the Canada US Tax Treaty includes:

"2. Except as provided in paragraph 3, nothing in the Convention shall be construed as preventing a Contracting State from taxing its residents (as determined under Article IV (Residence)) and, in the case of the United States, its citizens (including a former citizen whose loss of citizenship had as one of its principal purposes the avoidance of tax, but only for a period of ten years following such loss) and companies electing to be treated as domestic corporations, as if there were no convention between the United States and Canada with respect to taxes on income and on capital.

3. The provisions of paragraph 2 shall not affect the obligations undertaken by a Contracting State:

  • (a) under paragraphs 3 and 4 of Article IX (Related Persons), paragraphs 6 and 7 of Article XIII (Gains), paragraphs 1, 3, 4, 5, 6(b) and 7 of Article XVIII (Pensions and Annuities), paragraph 5 of Article XXIX (Miscellaneous Rules), paragraphs 1, 5 and 6 of Article XXIX B (Taxes Imposed by Reason of Death), paragraphs 2, 3, 4 and 7 of Article XXIX B (Taxes Imposed by Reason of Death) as applied to the estates of persons other than former citizens referred to in paragraph 2 of this Article, paragraphs 3 and 5 of Article XXX (Entry into Force), and Articles XIX (Government Service), XXI (Exempt Organizations), XXIV (Elimination of Double Taxation), XXV (Non-Discrimination) and XXVI (Mutual Agreement Procedure);
  • (b) under Article XX (Students), toward individuals who are neither citizens of, nor have immigrant status in, that State."
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As citizenship and taxation have changed the "mission creep" of the "saving clause" has expanded. We suspect that treaty partner countries are only beginning to realize that the United States is using the "saving clause" to impose US worldwide taxation on the citizens and residents of other countries.
 
After all, US citizenship-based taxation is a system where the US imposes worldwide taxation, on non-US source income, according to US tax rules, on the tax residents of other countries.
 
Those wishing to understand more about the "saving clause" are invited to read the following three part series of posts written by Dr. Karen Alpert.

 

http://fixthetaxtreaty.org/2017/01/12/explaining-the-saving-clause-i/

http://fixthetaxtreaty.org/2017/01/19/explaining-the-saving-clause-ii/

http://fixthetaxtreaty.org/2017/01/29/explaining-the-saving-clause-iii/

 

Members of @SEATNow_org: American Extraterritorial Taxation Affects Different Groups in Different Ways - Learn How

Members of @SEATNow_org: American Extraterritorial Taxation Affects Different Groups in Different Ways - Learn How

February 5, 2021

January 20, 2021 - Participants Include:

 

John Richardson - @Expatriationlaw

Dr. Karen Alpert - @FixTheTaxTreaty

Dr. Laura Snyder - @TAPInternation

Suzanne Herman - @SuzanneHerman1

Keith Redmond - @Keith__Redmond

The core mission of SEAT is to "Stop Extraterritorial American Taxation". 

Extraterritorial American taxation is system that imposes worldwide taxation, on the non-US income of people who live in other countries. That said, there are different groups impacted.

These groups include:

American expatriates - short term Americans abroad who are returning to the USA and engage in financial planning in the US system. 

American emigrants - people who moved permanently from the United States and engage in financial planning in tax system of the country of residence (example Canada). 

Accidental Americans - people who moved from the United States as small children and not think of themselves as US citizens. Their financial planning revolves ONLY around their country of residence.

American Retirees abroad - people who have moved abroad to retire and live off U.S. source income (example Social Security). They are likely to file ONLY U.S. tax returns.

Additional victims of Extraterritorial Taxation include:

The sovereign countries where U.S. citizens reside; and

Homeland Americans who are effectively prevented from leaving the United States and living a normal life outside the United States.

Why it's important to distinguish the various groups impacted

US citizenship-based taxation AKA (the US imposition of US worldwide taxation on the tax residents of other countries) is a problem bigger than any one individual or one specific group. Different provisions of the Internal Revenue Code affect different groups differently.

Those varying and disparate effects have made it hard to unify the various groups of Americans abroad in the fight to end US citizenship-based taxation.

This podcast discusses the reason for this and provides examples.

 

 

 

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