PREP Podcaster - ”Success Favours The PREPared Mind”

The Importance Of US Social Security For Americans Abroad

November 11, 2021 - Participants Include:

L.J. Eiben - Raymond James - @L_Eiben

 

John Richardson - @Expatriationlaw

 

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Mr. L.J. Eiben is a Financial Advisor at Raymond James.

The information in this podcast and contained in these slides was obtained from sources RJA and believed to be reliable; however, we cannot represent that it is accurate or complete. It is provided as a general source of information and should not be considered personal investment advice or solicitation to buy or sell securities. The views expressed are not necessarily those of Raymond James (USA) Ltd. Raymond James (USA) Ltd. (RJLU) advisors may only conduct business with residents of the states and/or jurisdictions for which they are properly registered.

Raymond James (USA) Ltd. is a member of  FINRA / SIPC

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Financial planning has become a necessity for all individuals and families. US citizens living outside the United States face particularly difficult hurdles. Much of this is the result of the requirement of filing taxes in both Canada and the United States. What one tax system gives, the other taxes. As a result, it is essential that US citizens receive specialized financial, investment, tax (and even life) advice. In general the receipt of US Social Security is NOT dependent on being a US citizen. Hence it is available to all individuals who "paid into the system" without regard to citizenship. It is available to Green Card holders returning home, US citizens living abroad and those who renounced US citizenship.

Raymond James as a "cross border platform" which means that (in general) it can hold US investments in Canada for Canadians.

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Social Security And Financial Planning:

Retirement pensions and Social Security are an important part of Financial planning. US Social Security and Canada Pension Plan are significant income sources for a high percentage of North Americans.

Therefore, it is essential that US citizens living in Canada (or anywhere outside the United States) be aware of US Social Security. What are the requirements to be eligible for US Social Security? How does the Social Security totalization agreement between Canada and the United States work? What about spousal benefits? (Did you know that the non-citizen spouse is eligible for Social Security based on marriage to a US citizen?) Survivor benefits? This is an extremely specialized area. Individuals need to be aware of Social Security benefits early!

For a primer on U.S. Social Security benefits click here.

Objective: Understand how Americans abroad can maximum their US Social Benefits for themselves and for their families.

 

 

 

 

 

 

 

 

 

For Good And Evil: The Teaching Of Charles Adams Lesson 5

November 22, 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

 

In this episode we continue with The Teaching of Charles Adams Lesson 5:

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5. "When wars or other great emergencies demand great revenues, then all citizens should be taxed according to what they are worth by equitable principles, not odious arbitrariness."

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Interestingly Mr. Adams uses the word "citizens". I doubt that this is an endorsement of citizenship-based taxation. Yet it does reflect a common assumption (especially when the book was published 30 years ago) that citizens are residents and that residents are citizens.

In this episode we extend our discussion into the world of the covid-19 epidemic. Surely this would qualify as an example of "other great emergencies". What is meant by "equitable principles"? What is "odious arbitrariness"?

- is a "citizenship taxation" the equivalent of a "poll tax"?

- is the taxation of Americans abroad while refusing to provide covid-19 vaccines to Americans abroad an example of  arbitrariness which follows or violates the principle of "equitable principles"?

- the United States has different tax systems for different kinds of people and these systems are examples of the "separate but equal" principle. Is the establishment of different tax systems for different groups a violation of the principle of equality or an enhancement of the principle of equality?

 

For Good And Evil: The Teaching Of Charles Adams Lesson 4

November 15, 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

 

In this episode we continue with The Teaching of Charles Adams Lesson 4:

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4. "The ancient Greeks produced the first civilization without despotism; they achieved this by discovering that tyranny is the product of the wrong kind of taxation, especially direct taxation."

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In the last few years we have witnessed the proposals and actual introductions of a number of taxes where there has been no actual income realization event. These include:

- the proposed Warren wealth tax

- the proposed Wynden billionaires tax

- the 965 Transition Tax and GILTI

- the 877A expatriation tax

Are any of these taxes "direct taxes"? If not "direct taxes" do they qualify as "income taxes" (even without an income realization event?

 

 

 

 

For Good And Evil: The Teaching Of Charles Adams Lesson 3

November 8, 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

 

 

In this episode we continue with The Teaching of Charles Adams Lesson 3:

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3. "All encompassing taxation, vests enormous power in the tax bureau, which, in time, tends to overpower not only the taxpayer but also other branches of government. Even kings and emperors had had to yield to the enormous power of their tax bureaus."

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In the United States the Internal Revenue Code has become the constitution of the United States.  Not only does the IRS enforce the existing laws, but US Treasury (AKA the IRS) has been delegated the authority to make regulation, after regulation after regulation. 

Through "citizenship-based taxation" the US imposes its tax code on individuals who live in other countries. Therefore, the IRS impacts the lives of people outside the United States all day every day!

The FATCA IGAs have caused the kings/emperors of other countries to yield to the enormous power of the US tax bureau.

 

 

 

 

 

An Update With Ronald Aries (”The Dutch Pilot”): Catching Up With Him On The Eve Of His November 11 FATCA Appeal

October 28, 2021 - Participants include:

Ronald Aries  - @Ronald77171496

John Richardson - @Expatriationlaw

In April of 2021 I did my first podcast with the Ronald Aries "The Dutch Pilot".  Mr. Aries's story was the subject of a series of Articles at American Expat Finance. My first podcast with Mr. Aries may be heard here.

In this second podcast Mr. Aries shares his further thoughts on FATCA and how Dutch citizens are discriminated against when it comes to banking and financial services. 

In the first round a Dutch court ruled that Mr. Aries (an Accidental American) was required to comply with the FATCA rules. 

Mr. Aries continues on. On November 11, 2021 a Dutch Tribunal will hear his appeal from that decision.

I look forward to doing a subsequent  podcast with Ronald Aries after the November 11, 2021 hearing.

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Afterthought and note: The podcast with Ronald included a discussion of the US Netherlands tax treaty. After the chat with Ronald, I checked  the treaty in the Netherlands and confirmed that it is like the Canada/US tax treaty which stipulates that the Dutch Tax Authorities will not assist the IRS in collecting a tax debt on a Dutch citizen.  See this:

https://isaacbrocksociety.ca/2016/11/01/dual-citizens-of-sweden-france-netherlands-denmark-canada-take-note-your-country-will-not-collect-for-the-u-s/#comments

The argument should be that the same group of people (citizens of the Netherlands) who have special status under the collection provisions of the treaty should also get a carve out from the FATCA issues. I have offered this argument in Canada ...

 

Foreign Trusts With CPA Gary Carter: Forms 3520, 3520A And IRS Penalties

January 4, 2021 - Participants Include:

 

John Richardson - @Expatriationlaw

Gary Carter - GWCarter.com

 

Prologue 2019:

In 2019 thousands of Americans abroad were issued $10,000 penalties for the alleged late of filing of IRS Form 3520A. The Form 3520A penalty story was well documented and discussed at Tax Connections by CPA Gary Carter. Ultimately the efforts of Gary and others played a role in Revenue Proc 2020-17 which provided a filing exemption for certain "Foreign Trusts". For those interested I highly recommend the following two posts at Tax Connections.

Form 3520 and Substitute Form 3520A For Foreign Trusts And Gifts From Nonresidents

 

Treasury Exempts Applicable Tax Favored Foreign Trusts - From The 3520 And Therefore The Form 3520A Requirement

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This podcast features a discussion with Gary Carter that includes:

 

1. What exactly is required for something to qualify as a trust under the Internal Revenue Code?

2. Assuming you have a trust, what does the Internal Revenue Code 6048 say about the reporting requirements (ultimately found in Form 3520 and Form 3520A)?

3. What exactly is a "substitute" Form 3520A and when is it due?

4. How and why did the IRS issue thousands of Form 3520A penalties in 2019?

5. How did the work of Gary and others lead to the IRS issuing Rev Proc 2017 (exempting certain foreign trusts from the 3520 and 3520A requirements)?

6. What about reasonable cause as a defense to the IRS penalties?

7. How can you get the penalties abated with a single phone call? (Answer: Call 267 941 - 1000 and select option 3. Tell them that you timely filed a Form 3520 and you filed a substitute Form 3520A with/attached to the Form 3520. Good luck!)

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A special thanks to Gary Carter for sharing his expertise!

 

 

 

For Good And For Evil - The Teaching Of Charles Adams - Lesson 2

November 1, 2021 - Participants Include:

John Richardson - @Expatriationlaw

Jimmy Sexton - @JimmySextonLLM

 

Continuing our podcast series:

For Good And Evil Podcast 1 - October 25, 2021

Today we discuss the second lesson from Charles Adams "For Good And For Evil" was:

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2. "Whatever is taxed must be surveyed, if a tax system is all encompassing, liberty must give way."

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In this episode we break down the three component parts of this lesson:

 

1. Whatever is taxed must be surveyed 

 

2. If a tax system is ALL encompassing

 

3. Liberty Must give way.

 

In analyzing these concepts we explore the recently proposed "billionaires tax", FATCA, CRS, PFIC, Transition tax, Foreign trust and more ...

 

 

How Does Renunciation Affect Entitlement To US Social Security Payments?

October 27, 2021 - Participants Include:

 

Virginia La Torre Jeker - @VLJeker

John Richardson - @Expatriationlaw

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Many US citizens are entitled to US Social Security Benefits. They have spent a life of paying into the system.

Those considering renunciation of US citizenship sometimes have concerns about how NOT being a US citizen might impact their entitlement to US Security Benefits (to which they would otherwise be entitled).

In this episode Dubai based international tax lawyer Virginia La Torre Jeker and John Richardson discuss how renunciation of US citizenship impacts these issues.

The short answer is that:

For the vast majority of people, renunciation of US citizenship will have no impact on their continued entitlement to US Social Security. It will however have an impact on the way those payments are taxed. (Note that renunciation of US citizenship affects BOTH how Social Security is taxed under  the US Internal Revenue Code AND under applicable tax treaties.)

 

Further Resources:

1. US Gov - Your Payments While Outside The United States

2. US Social Security Information Site

3. More advanced questions and how long term residence abroad can impact US Social Security.

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Concerned about being barred from the United States after renouncing US citizenship?

 

Here is an earlier podcast with Virginia where we discuss the Reed Amendment and whether those renouncing US citizenship are really at risk of being barred from entering the United States. There is little evidence that renunciation of US citizenship (even if motivated by tax avoidance) will lead to being barred from entering the United States under the Reed Amendment.

 

 

 

 

For Good And For Evil: Podcast 1 - Introduction

October 25, 2021 - Participants Include:

 

John Richardson - @Expatriationlaw

 

Jimmy Sexton - @JimmySextonLLM

 

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For Good And For Evil - Podcast 1 - Introducing The Series

I am really excited to annouce a new podcast series called "For Good And For Evil". The series is based on the book by Charles W. Adams titled:

For Good And Evil: The Impact Of Taxes On The Course Of Civilization

This is a truly incredible book. Although (perhaps) not popular when it was published, Mr. Adam's observations were remarkably prescient. To put it simply much of the current focus on taxation can be understood through the discussion of history in this remarkable book.

The book describes history in terms of taxation. (Was the US Civil War really about slavery or was it about taxation?) After 36 chapters of explaining history in terms of taxation, we reach Chapter 37. In Chapter 37 - "Learning From The Past" - Mr. Adams list 27 lessons to be learned about taxation from the past (the first 36 chapters). These 27 lessons will be the basis for our series of podcasts. (We will of course link this to previous chapters.)

I (John Richardson) am pleased to be joined in this "trip through history" (as explained by taxation) by Jimmy Sexton, LL.M. (CEO of the Esquire Group). Jimmy and I have spent many hours discussing these principles. This podcast series will bring you into the discussion. We will of course invite other guests.

At present we are planning to do a podcast every Monday morning EST - Toronto, Canada time.

I am excited about this project and am sure that many of you will find it interesting. So, go out and buy the book. Follow this series. Send us your thoughts and questions on Twitter.

In order to prime yourself, here  is a link to a great video of an interview with the man himself - Charles W. Adams.

Enjoy!

 

 

 

Dr. Karen Alpert: Calling Australians To Tell Australia Gov How The US Tax Treaty Is Hurting you!

October 25, 2021 - Participants Include:

 

Dr. Karen Alpert - @FixTheTaxTreaty

 

John Richarsdon - @Expatriationlaw

 

As reported at American Expat Finance, the Government of Australia has solicited public comments about its tax treaties and tax treaty network. Dr. Karen Alpert, founder of the Fix The Tax Treaty site has prepared a submission to the Australian Government. You will find her submission here.

It is important that individuals impacted by this issue (US citizens living in Australia or Australian citizens living in the United States) take the time to comment on this issue!

The problems are summarized in Dr. Alpert's submission.  As you know, the problems include but are not limited to: the Australian Superannuation, sale of the principal residence, PFICs, the "saving clause", etc. Please take the time to make a submission which details how the current system has harmed you!

 

 

Note from Karen:

I would encourage all affected Australian citizens and residents to make their own submission. You can download our submission from our post at http://fixthetaxtreaty.org/2021/10/23/treasury-submission/ and attach it as an appendix to your own submission describing how the inadequate treaty affects you. Send a copy to your Member of Parliament. Submissions are due 31 October 2021 (AEDT). Unless the Australian Treasury hears from those who are affected, they will continue to ignore the inadequacies of the tax treaty.