PREP Podcaster - ”Success Favours The PREPared Mind”
Why US Citizenship Tax And FATCA Hurt Resident Americans (Even Though They Don’t Know It)

Why US Citizenship Tax And FATCA Hurt Resident Americans (Even Though They Don’t Know It)

October 7, 2022

October 7, 2022 - Participants include:

Greg Swanson - @IntlOwl

John Richardson - @Expatriationlaw

My discussion continues with Greg Swanson who is a U.S. citizen living in Switzerland. In our July 14, 2022 where Greg explained why:

 

The U.S. Tax System Has Turned US Citizenship Into A Global Disability

 

In that first podcast, Greg asked an important question for the 21st Century:

Why should a U.S. citizen living outside the United States, not have the same opportunities in life as his neighbour - a German citizen - living outside of Germany?

In this podcast Greg explains how and why the US extra-territorial tax regime hurts ALL Americans regardless of where they live. Therefore, citizenship and FATCA hurt America!

Greg has written some great articles which are available on Medium.

For Good And Evil: The Teaching Of Charles Adams Lesson 26 - Taxation And The Erosion Of Liberty

For Good And Evil: The Teaching Of Charles Adams Lesson 26 - Taxation And The Erosion Of Liberty

October 3, 2022
October 3, 2022 - Participants include:
 

John Richardson - @Expatriationlaw

Jimmy Sexton - @JimmySextonLLM

 

We discuss Charles Adams Lesson 26:

26. "'Liberty tends to carry the seeds of its own destruction, for freemen will often grant extensive taxing powers to their governments, not realizing that these taxing powers will, if carried to excess, destroy the very liberty they sought to preserve."

Continuing our podcast series:

For Good And Evil Podcast 1 - October 25, 2021

For Good And Evil Podcast 2 - November 1, 2021

For Good And Evil Podcast 3 - November 8, 2021

For Good And Evil Podcast 4 - November 15, 2021

For Good And Evil Podcast 5 - November 22, 2021

For Good And Evil Podcast 6 - November 29, 2021

For Good And Evil Podcast 7 - December 7, 2021

For Good And Evil Podcast 8 - January 10, 2022

For Good And Evil Podcast 9 - January 17, 2022

For Good And Evil Podcast 10 - January 24, 2002

For Good And Evil Podcast 11 - January 31, 2022

For Good And Evil Podcast 12 - February 7, 2022

For Good And Evil Podcast 13 - February 14, 2022

For Good And Evil Podcast 14 - March 7, 2022

For Good And Evil Podcast 15 - March 14, 2022

For Good And Evil Podcast 16 - March 20, 2022

For Good And Evil Podcast 17 - March 20, 2022

For Good And Evil Podcast 18 - April 18, 2022

For Good And Evil Podcast 19 - April 25, 2022

For Good And Evil Podcast 20 - May 2, 2022

For Good And Evil Podcast 21 - June 27, 2022

For Good And Evil Podcast 22 - July 4, 2022 

For Good And Evil Podcast 23 - July 25, 2022

For Good And Evil Podcast 24 - August 5, 2022

For Good And Evil Podcast 25 - August 22, 2022

In this episode we continue the teaching of Charles Adams - Lesson 26:

_____________________________________________

26. "'Liberty tends to carry the seeds of its own destruction, for freemen will often grant extensive taxing powers to their governments, not realizing that these taxing powers will, if carried to excess, destroy the very liberty they sought to preserve."

Thoughts On: ”FATCA LEGISLATION AND ITS APPLICATION AT INTERNATIONAL AND EU LEVEL: - AN UPDATE

Thoughts On: ”FATCA LEGISLATION AND ITS APPLICATION AT INTERNATIONAL AND EU LEVEL: - AN UPDATE

September 30, 2022

September 30, 2022 - Participants Include:

 

Anthony Parent - @IRSMedic

 

Keith Redmond - @Keith__Redmond

 

John Richardson - @Expatriationlaw

______________________________________________

 

Abstract - FATCA LEGISLATION AND ITS APPLICATION AT INTERNATIONAL AND EU LEVEL: - AN UPDATE:

 

"Abstract This in depth analysis updates a previous report commissioned by the European Parliament’s Policy Department for Citizens’ Rights and Constitutional Affairs and describes the most relevant developments in the period 2018-2022 in chronological order and then draws conclusions which include a systemic view of the current institutional dynamics, a provisional legal analysis on the basis of existing rules and policy suggestions."

 

Conclusion - Policy Suggestions:

 

7.3. Policy suggestions This paper concludes confirming the policy suggestions of the Report 2018 and advised by the European Parliament in the resolution of 5 July 2018 that attain to (i) bilateral EU-U.S. policies, (ii) unilateral EU policies, and (iii) multilateral policies in a broader sense. These policy suggestions are obviously impacted by the institutional constraints that have been highlighted in this in depth analysis. Bilateral EU-U.S. policies essentially imply the modifications of IGAs to align with GDPR and providing full reciprocity in the transfer of tax data between the EU and the U.S.

Unilateral EU policies are a second-best choice, should bilateral policies fail. There are three main actions in this area. • The U.S.’s failure to honour reciprocal guiding information exchange could lead to an investigation into the possibility for the EU of enacting “blocking legislation about reciprocity” that would apply until such time as the reciprocity is re-established in relation to FATCA. • “Blocking legislation about selected items” would apply until such time as certain FATCA criticalities in respect to Accidental Americans are mitigated by the U.S. If the EU were to block the application of FATCA (pending resolution of the outstanding issues surrounding FATCA) and, as a result, the U.S. were to impose a 30% withholding on U.S. source payments to EU financial institutions requested by FATCA, 26 then the EU could apply a mirroring 30% withholding on EU source payments to U.S. financial institutions and their operations in the EU. • To allow only transfers from the EU of FATCA Data associated with U.S. Persons who are not EU residents until a predefined set of bilateral measures are adopted, for example: (a) renegotiation of IGA to afford reciprocal treatment with respect to exchange of tax information; and (b) establishment of safeguards to data protection under GDPR. This would imply that FATCA would continue to operate in respect to transfers of FATCA Data associated with U.S. persons who are not EU residents or citizens, but there would be standstill clause for transfers of FATCA Data associated with U.S. persons who are EU residents or citizens. There are also options on the direction of multilateral policies in a broad sense. Automatic exchange of tax data and FATCA were established as multilateral measures in the fullest sense of the elimination of any kind of free rider to a global system of full sharing of tax information among countries. Multilateralism in the exchange of tax information should therefore be revived at EU-U.S.and multilateral level going back to the original spirit of FATCA as an initiator of such multilateralism, meant as a common method to share tax information to counteract tax evasion on a global scale."

 

You can access the report here:

https://www.europarl.europa.eu/RegData/etudes/IDAN/2022/734765/IPOL_IDA(2022)734765_EN.pdf

 

John Richardson  summary on Twitter:

https://threadreaderapp.com/thread/1575087700767428608.html

 

 

When ”Beneficial Ownership” Constitutes A Financial Interest And Triggers An FBAR Requirement

When ”Beneficial Ownership” Constitutes A Financial Interest And Triggers An FBAR Requirement

September 29, 2022

September 29, 2022 ...

 

When it comes to an FBAR filing requirement a recent decision in the Katholos case confirms:

“Although an ownership interest in an entity would certainly be considered a financial interest in that entity, ownership is not necessary to have a financial interest."

_______________________________________

 

Virginia La Torre Jeker - @VLJeker

and

John Richardson - @Expatriationlaw

discuss this issue in the context of the life of Americans abroad.

On August 10, 2022 a US District Court issued a ruling on the ongoing Katholos FBAR saga.

https://casetext.com/case/united-states-v-katholos

 

Of particular interest is the following paragraph:

 

"Here, it is undisputed that Katholos was a beneficial owner of the Storchen Finance Account. In general, a “beneficial owner” is “[o]ne recognized in equity as the owner of something because use and title belong to that person, even though legal title may belong to someone else; esp., one for whom property is held in trust.-Also terms equitable owners Owner, Black's Law Dictionary (11th ed. 2019). Though Katholos denies that her status as a beneficial owner is “tantamount to having a ‘financial interest' in the account that may give rise to the FBAR reporting requirements,” Dkt. 98-1, ¶ 25, the Court concludes that, as a beneficial  owner, Katholos had an equitable claim or right to the Storchen Finance Account- even if she did not have legal title. And because “interest” includes equitable rights to property, Katholos's arguments regarding legal title, who funded the account, and direct interest are not dispositive. See Continental Cas. Co. v. Bowen, No. 2:09-cv-00810-TC2011 WL 222340, *4 (D. Utah Jan. 21, 2011) (“Although an ownership interest in an entity would certainly be considered a financial interest in that entity, ownership is not necessary to have a financial interest.”). Thus, based on her status as a beneficial owner, the Court concludes that Katholos had a financial interest in the Storchen Finance Account."

Bottom Line: The Katholos decision reinforces the principle that one can't avoid the FBAR filing requirement by keeping your name off the account.

 

 

 

 

@MiAzhikwan - The Importance Of Love - The First Lesson

@MiAzhikwan - The Importance Of Love - The First Lesson

September 27, 2022

September 27, 2022 - Participants include:

Janine Seymour - @MiAzhikwan

 

John Richardson - @Expatriationlaw

 

Love  As An Antidote To Fear - The First Lesson

MiAzhikwan is a lawyer, LL.M., independent candidate and a member of the Bear Clan near Kenora, Ontario in Treaty Three Territory.

 

This is my third podcast with MiAzhikwan. The first was during her run as an independent candidate in the May 2022 Ontario election:

https://independentcandidates.substack.com/p/meet-janine-seymour-aka-miazhikwan#details

The second was on September 5, 2022 and explored the teaching of forgiveness:

https://independentcandidates.substack.com/p/miazhikwan-choosing-forgiveness-the#details

 

 

@MiAzhikwan -  Choosing Forgiveness - The Eighth Lesson

@MiAzhikwan - Choosing Forgiveness - The Eighth Lesson

September 19, 2022

September 5, 2022 - Participants include:

Janine Seymour - @MiAzhikwan

 

John Richardson - @Expatriationlaw

 

Forgiveness - The Eighth Lesson And Letting Go Of Rage

MiAzhikwan is a lawyer, LL.M., independent candidate and a member of the Bear Clan near Kenora, Ontario in Treaty Three Territory.

 

This is my second podcast with MiAzhikwan. The first was during her run as an independent candidate in the May 2022 Ontario election:

https://independentcandidates.substack.com/p/meet-janine-seymour-aka-miazhikwan#details

 

 

 

 

 

When It’s All Said And Done (And It’s Done): ”All Roads Lead To Renunciation”

When It’s All Said And Done (And It’s Done): ”All Roads Lead To Renunciation”

September 16, 2022

September 16, 2022 - Participants Include:

John Richardson - @ExpatriationLaw

Keith Redmond - @Keith__Remond

Anthony Parent - @IRSMedic

_______________________________________________

My (John Richardson) interpretation of the current situation:

 

1. The problems experienced by US citizens living outside the United States can be solved ONLY by severing US citizenship from US tax residency. In other words: citizenship cannot be the criterion for being subject to the Internal Revenue Code. No other country in the world (except Eritrea) imposes worldwide taxation based on and only citizenship. All other countries in the world have residence based taxation which means that residence and not citizenship is the criterion for tax residency. The only way to solve the problems for all Americans abroad, in all circumstances and for all time is to sever citizenship from the definition of US tax residency.

2. There is a difference between a "wish" and a "goal":

"The dictionary defines a wish as: to want; desire; to long for. Goals on the other hand are defined as: the result or achievement toward which effort is directed. The difference is profound not only in semantics, but also in how each can shape your thought process, your actions (or lack of), and ultimately, your life."

3. Individual Americans abroad have a "wish" for residence based taxation. That said, "residence based taxation" is NOT their goal. Their goal (if any) is to solve "their" problem (how they experience citizenship taxation) and not "the" problem "citizenship taxation itself. For example, solving the FATCA problem will NOT solve the problem of citizenship taxation.

4. No organizations except SEAT and Republicans Overseas have the specific goal of severing citizenship from tax residency.

5. Without pressure from large numbers of individual Americans abroad (which simply doesn't exist)  there is no political impetus for any legislative change to residence taxation.

 

In summary, there is little support for the "goal" of severing citizenship from tax residency.

In addition ...

The situation for Americans abroad is NOT getting better and has in fact gotten worse over the last ten years. I will continue to work with "like minded" people and "organizations" to achieve the goal of severing citizenship from tax residency. That said, this will take more time than this generation of Americans abroad has!

What all of this means is that ...

"All Roads Lead To Renunciation" (as soon as that goal is possible). 

For Good And Evil: The Teaching Of Charles Adams Lesson 17
For Good And Evil: The Teaching Of Charles Adams Lesson 16
Jim Bennett Of Fair Tax: Taxation, Fairness And Fairness In Taxation Both At Home And Abroad

Jim Bennett Of Fair Tax: Taxation, Fairness And Fairness In Taxation Both At Home And Abroad

September 2, 2022

September 2, 2022 - Participants Include:

Jim Bennett - @FairTaxOfficial

John Richardson - @ExpatriationLaw

Adopting the Fair Tax would create fairness in taxation for both US residents and Americans abroad. Generally the Fair Tax would:

- simply the tax code (The Fair Tax is only 131 pages)

- remove the need for the IRS

- move the United States to a system of territorial taxation

- end the practical application of US citizenship taxation

- ensure that every US resident actually paid federal tax

- and more ...

How will the increase in IRS funding impact the culture of taxation in the United States?

Previous podcasts with Jim Bennett and Steve Hayes include:

How The Fair Tax Would End Tax Residency, Worldwide Taxation And Taxation Of Americans Abroad - March 17, 2022

Rethinking Taxation: Continuing The "Fair Tax" Discussion With Jim Bennett And Steve Hayes - April 13, 2022

Steve Hayes Of FairTax.org: When It Comes To Taxation "Simplicity Is Virtue" (And Moral) - June 4, 2022

 

 

 

 

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