21.1K
Downloads
295
Episodes
Discussion about current events, culture, independent candidates, business, education, travel, death and taxes, global mobility, citizenship and residence by investment options, Americans abroad, FATCA, CRS, U.S. citizenship renunciation, Green Card abandonment, citizenship taxation, PFIC, GILTI, foreign trusts, I-407 and more ...
Episodes
Monday Jan 03, 2022
Monday Jan 03, 2022
January 3, 2022 - Participants include:
John Richardson - @Expatriationlaw
Jim Gosart - Vice-President Republicans Overseas
________________________________________________________
The United States is the only major country in the world that continues to impose worldwide taxation on its citizens when they move from the country and establish tax residency in another country. But, it gets worse. When US citizens move from the USA and establish tax residency in another country they are subjected to a separate and more punitive form of taxation that that imposed on US residents.
Nothing illustrates this principle better than the story of US citizens who attempt to carry on small businesses outside the United States. As well as the expensive forms and regulation, those US citizens who are "entrepreneurs abroad" risk being subject to tax on income they never received! Yes, it's true. Read on ...
US citizens abroad are generally subjected to various forms of taxation on "fake income" (meaning income they have never received). Some very common forms of "fake income" are found in Subpart F of the Internal Revenue Code. The Transition Tax and GILTI were created by the 2017 TCJA.
In this episode Jim Gosart and John Richardson discuss "fake income" as a general principle (it doesn't apply to US residents on their US based assets). The 2017 Transition Tax and GILTI are the result.
Our point is simple:
The only solution is for the United States to stop citizenship-based taxation and adopt pure residence-based taxation!
Wednesday Dec 29, 2021
Wednesday Dec 29, 2021
December 29, 2021 - Participants Include:
John Richardson - @Expatriationlaw
Diane Gelon - London, UK based New York lawyer - DianeGelon.com
On November 29, 2020 London based US lawyer Diane Gelon joined me for a discussion about the current state of renunciation. That podcast may be accessed here. One year ago, we discussed the fact that the relevant statute - S. 349(a) of the Immigration and Nationality Act - does not require that the renunciation meeting take place inside a US Consulate of Embassy.
_________________________________________________________
The text of the statute is:
§1481. Loss of nationality by native-born or naturalized citizen; voluntary action; burden of proof; presumptions
(a) A person who is a national of the United States whether by birth or naturalization, shall lose his nationality by voluntarily performing any of the following acts with the intention of relinquishing United States nationality-
(1) obtaining naturalization in a foreign state upon his own application or upon an application filed by a duly authorized agent, after having attained the age of eighteen years; or
(2) taking an oath or making an affirmation or other formal declaration of allegiance to a foreign state or a political subdivision thereof, after having attained the age of eighteen years; or
(3) entering, or serving in, the armed forces of a foreign state if (A) such armed forces are engaged in hostilities against the United States, or (B) such persons serve as a commissioned or non-commissioned officer; or
(4)(A) accepting, serving in, or performing the duties of any office, post, or employment under the government of a foreign state or a political subdivision thereof, after attaining the age of eighteen years if he has or acquires the nationality of such foreign state; or (B) accepting, serving in, or performing the duties of any office, post, or employment under the government of a foreign state or a political subdivision thereof, after attaining the age of eighteen years for which office, post, or employment an oath, affirmation, or declaration of allegiance is required; or
(5) making a formal renunciation of nationality before a diplomatic or consular officer of the United States in a foreign state, in such form as may be prescribed by the Secretary of State; or
(6) making in the United States a formal written renunciation of nationality in such form as may be prescribed by, and before such officer as may be designated by, the Attorney General, whenever the United States shall be in a state of war and the Attorney General shall approve such renunciation as not contrary to the interests of national defense; or
(7) committing any act of treason against, or attempting by force to overthrow, or bearing arms against, the United States, violating or conspiring to violate any of the provisions of section 2383 of title 18, or willfully performing any act in violation of section 2385 of title 18, or violating section 2384 of title 18 by engaging in a conspiracy to overthrow, put down, or to destroy by force the Government of the United States, or to levy war against them, if and when he is convicted thereof by a court martial or by a court of competent jurisdiction.
(b) Whenever the loss of United States nationality is put in issue in any action or proceeding commenced on or after September 26, 1961 under, or by virtue of, the provisions of this chapter or any other Act, the burden shall be upon the person or party claiming that such loss occurred, to establish such claim by a preponderance of the evidence. Any person who commits or performs, or who has committed or performed, any act of expatriation under the provisions of this chapter or any other Act shall be presumed to have done so voluntarily, but such presumption may be rebutted upon a showing, by a preponderance of the evidence, that the act or acts committed or performed were not done voluntarily.
_________________________________________________________
The London Embassy continues to deny US citizens wishing to renounce the opportunity to make renunciation appointments.
In this episode Diane and I discuss possible renunciation options that may meet the requirements of the law while not requiring a specific appointment for the purposes or renouncing.
Thanks to Diane Gelon for her creative thinking!
______________________________________________________
Appendix:
The description of the November 29, 2020 Diane Gelon podcast was ...
"One the hand one, many Americans abroad are desperate to pay the $2350 USD fee to renounce US citizenship. On the other hand, the US State Department has stopped providing appoints to renounce.
Do US citizens have the right to renounce?
The 1868 Expatriation Act suggests that they have a statutory right to renounce.
R.S. § 1999 provided that: “Whereas the right of expatriation is a natural and inherent right of all people, indispensable to the enjoyment of the rights of life, liberty, and the pursuit of happiness; and whereas in the recognition of this principle this Government has freely received emigrants from all nations, and invested them with the rights of citizenship; and whereas it is claimed that such American citizens, with their descendants, are subjects of foreign states, owing allegiance to the governments thereof; and whereas it is necessary to the maintenance of public peace that this claim of foreign allegiance should be promptly and finally disavowed: Therefore any declaration, instruction, opinion, order, or decision of any officer of the United States which denies, restricts, impairs, or questions the right of expatriation, is declared inconsistent with the fundamental principles of the Republic.”
The 1967 U.S. Supreme Court decision in Afroyim suggests they have a constitutional right to renounce.
The fact is that there is no bar to conducting renunication appointments through video conferencing. It's too bad that the US government won't allow this."
https://prep.podbean.com/e/locked-into-us-citizenship-do-americans-have-the-right-to-renounce/
Monday Dec 27, 2021
Monday Dec 27, 2021
December 27, 2021 - Participants include:
John Richardson - @Expatriationlaw
Jimi Gosart - Vice-President Republicans Overseas
_________________________________________________
As President John F. Kennedy said:
"The great enemy of the truth is very often not the lie, deliberate, contrived and dishonest, but the myth, persistent, persuasive and unrealistic."
The Myth: Various media outlets continue to preach the "myth" that its wealthy Americans who are renouncing US citizenship (to avoid US taxation).
The Truth: It's middle class Americans abroad who are renouncing US citizenship. They are not renouncing because they want to. They are renouncing because they are forced to (if they wish to engage in normal financial and retirement planning in their country of residence).
In this episode Republicans Overseas Vice President Jim Gosart and John Richardson discuss these issues.
The fact that Americans abroad cannot survive under the US tax system is one more reason why the only solution for Americans abroad is:
Pure residence-based taxation - No Carveouts and No Left outs!
Pure residence-based taxation will solve the all problems for all people all the time!
Thursday Dec 23, 2021
Thursday Dec 23, 2021
December 23, 2021 - Participants Include:
John Richardson - @Expatriationlaw
Joe Howard - @JustJoe12345678
Monday Dec 20, 2021
Monday Dec 20, 2021
December 20, 2021 - Participants include:
John Richardson - @Expatriationlaw
Jimi Gosart - Vice-President Republicans Overseas
In this episode we discuss a a proposed amendment to the Build Back Better bill which would disproportionately impact Americans abroad. The specific provision was a proposal to end the one carry year carry back of foreign tax credits allowed under Internal Revenue Code 904.
If passed this force Americans abroad to be more conscious of their US tax situation. When it comes to Americans abroad and US citizenship-based taxation Americans abroad should:
Think about CBT early! Think about CBT often! Think about CBT in relation to every aspect of their lives! And keep records of what they think about!
Thanks to Financial Times Reporter Emma Agyemang for this article!
____________________________
US bill threatens ‘double taxation for American expats in UK’
"UK-based Americans face cash flow headaches and possible double taxation due to a expatriate tax change proposed by the Biden administration Tax experts warned that the plan could eliminate the ability to offset tax paid in the UK against US liabilities on the same income. Measures being considered by the US Senate plan to abolish a carry back provision used when American expats have paid more tax abroad than they owe in the US. If UK tax is paid in the calendar year immediately following when the income is reported in the US, current rules allow for a backwards adjustment."
You can read the complete article here ...
https://www.ft.com/content/4c6d002d-5486-478d-88cf-83ff3847531d
Wednesday Dec 15, 2021
Wednesday Dec 15, 2021
December 14, 2021 - Participants Include:
Olivier Wagner CPA - @1040Abroad
John Richardson - @Expatriationlaw
The Expatriation Games - A Discussion with Oliver Wagner
This podcast features a practical and focussed discussion about some of the key issues in relinquishing US citizenship. Olivier has posted this podcast on his youtube channel.
These issues include:
There are two kinds of US citizenship:
1. US Citizenship for immigration/nationality purposes:
- relinquished on the date of the relinquishing act
2. US Citizenship for tax purposes:
- after June 3, 2004 relinquished on the date that notice is given to the US government
- prior to June 3, 2004 relinquished on the date of the expatriating act
___________________________________________
Covered expatriate status - tax compliance is necessary:
- one (but the not the only one) of the necessary conditions to avoid "covered expatriate" status is a certification of five years of tax compliance (in the five years prior to the year of the appointment at the Consulate)
- obviously this means that a defensible level of tax compliance is required
____________________________________________
Significance of Form 8854:
After listening to this podcast I think this issue deserves further clarification as follows:
- Since June 16, 2008 it is NOT necessary to file Form 8854 in order to sever tax residency from the USA. One ceases to be a US tax resident from the date of renunciation. This means that from that point on one is treated as a nonresident alien. But, note that renunciation does not cure/end past tax obligations.
- But the tax certification of five years compliance is required to be done on Form 8854. This is is why filing Form 8854 is necessary for avoiding covered expatriate status
- "covered expatriates" are subject to the 877A Exit rules and the 2801 tax impediments to making gifts or bequests to US persons
_________________________________________________
Reducing net worth to avoid covered expatriate status through gifting ... and more!
- For most people a net worth in excess of 2 million USD on the date of expatriation will make one a covered expatriate
- to make gifts is to reduce net worth (but there are requirements to make a valid gift).
Tuesday Dec 14, 2021
Tuesday Dec 14, 2021
December 13, 2021 - Participants Include:
John Richardson - @Expatriationlaw
Jimmy Sexton - @JimmySextonLLM
Our discussion this week does not focus specifically on the teaching of Charles Adams. That said, our discussion is motivated by our understanding of how taxation leads to the rise and fall of civilizations. We begin by discussing how the 2017 Section 965 Transition Tax was a huge benefit to a small number of US multinationals but a devastating blow to millions of individuals (particularly Americans abroad). Note that the benefits to resident Americans (and US corporations) makes it harder for the United States to see how destructive its tax policies can be to the lives of Americans abroad.
This week we discuss the general concepts of freedom and democracy and how:
- freedom and democracy are not the same; and
- how democracy and freedom are fundamentally at odds.
What happens when a majority through the democratic process diminishes the freedom of individuals? What human values should be protected from the democratic majorities through human/constitutional rights documents?
We discuss President Kennedy's 1961 Berlin speech where he clearly distinguishes freedom from democracy - noting also that the US (at that time) had never had to "put up a wall "to keep our people in". (I wonder what President Kennedy would have thought of the 877A Exit Tax?) Interestingly the speech focuses more on freedom than on democracy.
__________________________________________
Here is the text of the speech:
John Fitzgerald Kennedy
Ich bin ein Berliner Speech, June 26, 1963
I am proud to come to this city as the guest of your distinguished Mayor, who has symbolized throughout the world the fighting spirit of West Berlin. And I am proud to visit the Federal Republic with your distinguished Chancellor who for so many years has committed Germany to democracy and freedom and progress, and to come here in the company of my fellow American, General Clay, who has been in this city during its great moments of crisis and will come again if ever needed.
Two thousand years ago the proudest boast was "civis Romanus sum". Today, in the world of freedom, the proudest boast is "Ich bin ein Berliner".
I appreciate my interpreter translating my German!
There are many people in the world who really don't understand, or say they don't, what is the great issue between the free world and the Communist world. Let them come to Berlin. There are some who say that communism is the wave of the future. Let them come to Berlin. And there are some who say in Europe and elsewhere we can work with the Communists. Let them come to Berlin. And there are even a few who say that it is true that communism is an evil system, but it permits us to make economic progress. Lass' sie nach Berlin kommen. Let them come to Berlin.
Freedom has many difficulties and democracy is not perfect, but we have never had to put a wall up to keep our people in, to prevent them from leaving us. I want to say, on behalf of my countrymen, who live many miles away on the other side of the Atlantic, who are far distant from you, that they take the greatest pride that they have been able to share with you, even from a distance, the story of the last 18 years. I know of no town, no city, that has been besieged for 18 years that still lives with the vitality and the force, and the hope and the determination of the city of West Berlin. While the wall is the most obvious and vivid demonstration of the failures of the Communist system, for all the world to see, we take no satisfaction in it, for it is, as your Mayor has said, an offense not only against history but an offense against humanity, separating families, dividing husbands and wives and brothers and sisters, and dividing a people who wish to be joined together.
What is true of this city is true of Germany - real, lasting peace in Europe can never be assured as long as one German out of four is denied the elementary right of free men, and that is to make a free choice. In 18 years of peace and good faith, this generation of Germans has earned the right to be free, including the right to unite their families and their nation in lasting peace, with good will to all people. You live in a defended island of freedom, but your life is part of the main. So let me ask you as I close, to lift your eyes beyond the dangers of today, to the hopes of tomorrow, beyond the freedom merely of this city of Berlin, or your country of Germany, to the advance of freedom everywhere, beyond the wall to the day of peace with justice, beyond yourselves and ourselves to all mankind.
Freedom is indivisible, and when one man is enslaved, all are not free. When all are free, then we can look forward to that day when this city will be joined as one and this country and this great Continent of Europe in a peaceful and hopeful globe. When that day finally comes, as it will, the people of West Berlin can take sober satisfaction in the fact that they were in the front lines for almost two decades.
All free men, wherever they may live, are citizens of Berlin, and, therefore, as a free man, I take pride in the words "Ich bin ein Berliner".
(President Kennedy's first debate with (to be) President Nixon also focusses on freedom.)
Monday Dec 13, 2021
Monday Dec 13, 2021
December 13, 2021 - Participants Include:
Dr. Laura Snyder - @TAPInternation
Dr. Karen Alpert - @FixTheTaxTreaty
John Richardson - @Expatriationlaw
_________________________________________________________
Tax Sovereignty: All countries (including the US) has the right to create its own domestic tax policy. The question is how to solve the problem of US citizenship-based taxation from an international perspective.
The problem: US citizenship-based taxation means that US citizens are tax residents of the United States even when they are tax residents of other countries. Interestingly US tax treaties contain a provision called the "saving clause" which denies US citizens the benefits of a tax treaties. See for example Article XXIX of the Canada US Tax Treaty. Tax treaties generally include a residence tie breaker (usually Article IV) which allocates the tax residency of dual tax residents to one country or another. See for example Article IV of the Canada/US Tax Treaty. The "saving clause" denies residency tie break provisions to US citizens.
A solution: The saving clause always contains provisions that specify circumstances where the saving clause would not apply (double taxation, pensions, etc.) If the Article 4 residency tie breaker were added to the list of exceptions to the saving clause, then under the treaty:
1. US citizens would be eligible to benefit from residency tie break provisions; and
2. The treaty would allocate tax residency to the country where the individual actually lived and would specifically mean that US citizens would NOT be tax residents of the United States.
Notice that this solves the problems for individuals in all countries without discussing the specific problems that citizenship-based taxation causes in any one country.
A new multilateral agreement?
In addition (or as an alternative) to amending existing tax treaties, it would make sense for there to be a new multilateral agreement which would establish the principle that individuals can be a tax resident of only one country at at time.
_________________________________________________________
Further reading ...
Should Overseas Americans Be Required to Buy Their Freedom? Tax Notes, July 12, 2021
Mission Impossible: Extraterritorial Taxation and the IRS, Tax Notes, March 22, 2021.
Taxing the American Emigrant, The Tax Lawyer, Feb., 2021.
A Simple Regulatory Fix for Citizenship Taxation, Tax Notes, Oct. 12, 2020.
The Criminalization of the American Emigrant, Tax Notes June 29, 2020.
The Implications of Tax Residence for Human Rights (Paper prepared for the Accounting & Finance Association of Australia and New Zealand (AFAANZ) 2020 Annual Conference 1-11, July 5-7, 2020).
Callous Neglect: The Impact of United States Tax Reform on Nonresident Citizens, draft Jan. 8, 2019.
Investing with One Hand Tied Behind Your Back – An Australian Perspective on United States Tax Rules for Non-Resident Citizens, Jan. 8, 2018
SEAT's survey, May 4, 2021: http://seatnow.org/survey_report_intro_page/
Thursday Dec 09, 2021
Thursday Dec 09, 2021
December 9, 2021 - Participants Include:
Daniel Mazzola, CFA, CPA - American Portfolios
John Richardson - @Expatriationlaw
__________________________________________
On December 2, 2021 I joined Dan Mazzola in a discussion about the importance of Social Security. Social Security is one part of a financial planning plan. But, it is only one component!
As fewer and fewer people benefit from company pension plans it is becoming more and more important that people take personal responsibility for investing. To put it simply: investing and financial planning is not optional. It is an aspect of personal responsibility to yourself, your family and your country.
In this discussion we develop the theory that successful investing is much more about the habits and mindset of the individual. The actual investments are (in the long run) less important. As Benjamin Graham would have said:
"The investor’s chief problem - and even his own worst enemy – is likely to be himself."
It's important to ensure that investing is a long run decision and life style.
Investing is a marathon and not a sprint. But, the marathon of investing requires certain habits and a certain mindset.
There are many people who know what to do, but can't do what they know!
You will enjoy this conversation with Dan Mazzola.
Tuesday Dec 07, 2021
Tuesday Dec 07, 2021
December 6, 2021 - Participants Include:
John Richardson - @Expatriationlaw
Jimmy Sexton - @JimmySextonLLM
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
In this episode we continue the teaching of Charles Adams - Lesson 7:
______________________________________________
7. "All citizens, from recruits in the military to the chief leaders of society, should serve the state unselfishly, and if possible, without pay, motivated by a love for their country and an obligation to serve. Their primary reward should be the praise they receive from their fellow countrymen for a job well done."
____________________________________________________