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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
Tuesday Nov 30, 2021
Tuesday Nov 30, 2021
November 29, 2021 - Participants Include:
Virginia La Torre Jeker - @VLJeker
John Richardson - @Expatriationlaw
Two Solitudes = U.S. State Department and U.S. Treasury
Virginia and I continue our podcasts in which we clarify myths and misconceptions about renouncing US citizenship. This podcast emphasizes the difference between the immigration/nationality aspects of renunciation vs. the tax aspects of renunciation.
Although tax compliance is NOT required to renounce US citizenship, renunciation without tax compliance does have tax consequences.
This podcast focuses on more areas of misunderstanding and confusion ...
Renouncing US citizenship triggers issues under each of:
1. The Immigration and Nationality Act under 349(a); and
2. The Internal Revenue Code under sections under 7701(a)(50), 877A and 877, 2801
To put it simply: There are a lot of moving parts.
In this podcast Virginia La Torre Jeker and John Richardson continue our discussion including:
Immigration/Nationality Issues:
- is tax compliance required to be allowed to renounce US citizenship?
- what are the legal requirements to renounce US citizenship?
- is a second citizenship required in order to renounce?
Tax Issues:
- what is a covered expatriate?
- what does it mean to be subject to the US 877A expatriation tax?
- how are different kinds of assets treated for the purposes of expatriation?
- pensions vs. property ...
- ways of avoiding covered expatriate status (gifts, pre-renunciation sales, etc.)
- what about post-renunciation gifts from covered expatriates to US citizens?
- Relief Procedures For Former Citizens
Previous podcasts with Virginia include:
How Does Renunciation Of US Citizenship Affect Entitlement To US Social Security Payments?
Is It True That Renouncing US Citizenship Will Result In Being Barred From The United States?
Monday Nov 29, 2021
Monday Nov 29, 2021
November 29, 2021 - Participants Include:
John Richardson - @Expatriationlaw
Jimmy Sexton - @JimmySextonLLM
David Lesperance - Lesperance Associates
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
In this episode we continue with The Teaching of Charles Adams Lesson 6:
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6. "Nature will not bestow wealth equitably. A few citizens will inevitably acquire great wealth, which by natural justice they should share with the community. But this sharing should be enforced by moral persuasion and a strong public opinion, not force and confiscation."
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This lesson invites the discussion of how (or whether) the wealth acquired by the wealthy should be made available to society for the greater good.
Government: On the one side we have:
Governments who will simply confiscate wealth through confiscatory confiscation.
On the other side we have:
Private Philanthropy: Private individuals who through gifting choose the causes that the wish to support.
Can wealth be better deployed for the public good through individual giving/sharing or through government confiscations? In the 1960s Sir John Templeton (when the Subpart F rules were enacted) renounced his US citizenship. Free of US taxation he was able to deploy his wealth (and he most certainly did) for the benefit of mankind.
The current trend is to more confiscation. There is evidence that the trend toward confiscation is continuing to encourage more and more expatriations.
Listen to our discussion ...
Wednesday Nov 24, 2021
Wednesday Nov 24, 2021
November 24, 2021 - Participants Include:
Dr. Laura Snyder - @TAPInternation
Dr. Karen Alpert - @FixTheTaxTreaty
John Richardson - @Expatriationlaw
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On November 19, 2021 Congressman Beyer introduced HR 6057, the "Tax Simplification For Americans Abroad Act". This bill was the subject of two blog posts at:
You can read the text of the bill here.
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In this podcast we discuss the groups affected (or not) by this bill as follows:
The Good: Those with income of below $108.000 who are NOT the owners of CFCs.
The Bad: Those with incomes in excess of $108,000 who are NOT the owners of CFCs.
The Ugly: Entrepreneurs abroad who own CFCs.
We are of the view that should it become law that the primary effect would be to divide Americans abroad even more.
We firmly believe that:
Pure residence-based taxation is the ONLY solution that solves the problem for ALL people ALL the time!
No left outs! No carveouts! We advocate PURE RESIDENCE-BASED TAXATION FOR ALL!
Tuesday Nov 23, 2021
Tuesday Nov 23, 2021
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.
Monday Nov 22, 2021
Monday Nov 22, 2021
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?
Sunday Nov 21, 2021
Sunday Nov 21, 2021
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?
Sunday Nov 21, 2021
Sunday Nov 21, 2021
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.
Tuesday Nov 09, 2021
Tuesday Nov 09, 2021
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 ...
Monday Nov 08, 2021
Monday Nov 08, 2021
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
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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!
Monday Nov 01, 2021
Monday Nov 01, 2021
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 ...