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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
Sunday Dec 03, 2023
Sunday Dec 03, 2023
December 3, 2023 - Participants include:
Virginia La Torre Jeker - @VLJeker
John Richardson - @Expatriationlaw
On November 30, 2023 (on the eve of the US Supreme Court hearing in Moore), Senator Ron Wyden (along with other prominent Democrats) introduced the "Billionaires Tax Act".
Further information is available here:*
Join John Richardson and Virgina La Torre Jeker in this podcast which includes a discussion of:
- why the Billionaires Tax Act is an attempt to enact the Biden Green book proposals
- why the proposed legislation includes people who are NOT billionaires
- why an "applicable taxpayer" under the Billionaires Tax Act is similar to a "covered expatriate" under the 877A Exit Tax Regime
- how the Billionaires Tax Act treats all the assets of "applicable taxpayers" as PFICs
- how the Billionaires Tax Act makes the expatriation rules at least twice as punitive as they already are
- why for those who want the possibility of living outside the United States, expatriation is the best financial investment one can over make
- why it's better to pay 23.8% now rather than 49% later
- and more ...
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*NOVEMBER 30,2023
Wyden Leads Democratic Colleagues in Introducing Billionaires Income Tax
Legislation cosponsored by 15 Democratic Senators would close loopholes in the tax code that let billionaires avoid paying their fair share
Washington, D.C. – Senate Finance Committee Chairman Ron Wyden, D-Ore., today led colleagues in introducing the Billionaires Income Tax Act, legislation to ensure billionaires start paying their fair share in taxes.
Wyden is joined by U.S. Senators Debbie Stabenow, D-Mich., Bob Casey, D-Pa., Sheldon Whitehouse, D-R.I., Elizabeth Warren, D-Mass., Brian Schatz, D-Hawaii, Mazie Hirono, D-Hawaii, Tammy Baldwin, D-Wis., Sherrod Brown, D-Ohio, Bernie Sanders, I-Vt., Jeff Merkley, D-Ore., John Fetterman, D-Pa., Tina Smith, D-Minn., Peter Welch, D-Vt., Jack Reed, D-R.I., and Ed Markey, D-Mass., in introducing the bill.
“America’s tax code is riddled with loopholes that allow the ultra-wealthy to get away without paying their fair share, while working families have to play by a different set of rules and pay taxes out of each paycheck,” Wyden said. “You can only have a successful economy if you have a tax code that treats everyone fairly. My Billionaires Income Tax will make that a reality by ensuring those at the very top start paying their fair share, just like the rest of us.”
The Billionaires Income Tax Act would, for the first time, end one of the most prominent, legal ways that billionaires avoid paying taxes known as “buy, borrow, die.” Buy, borrow, die works as follows:
Buy: A billionaire uses their wealth to buy assets that appreciate in value (real estate, stocks, artwork, collectibles).
Borrow: The individual then borrows against that asset’s growing, untaxed value to fund their extravagant lifestyle, purchasing yachts, luxurious vacations, expensive art deals, and more. All the while, the assets continue to go up in value without paying a dime in tax.
Die: When the individual dies, their assets are passed to their children or other beneficiaries, often entirely tax-free, and the cycle continues.
The proposal would only apply to taxpayers with more than $1 billion in assets, or more than $100 million in income for three consecutive years.
“Teachers and firefighters shouldn’t be paying higher tax rates than the ultra-wealthy. It’s that simple,” said Senator Whitehouse. “Our legislation will level the playing field by closing tax loopholes to ensure the highest earners pay their fair share in taxes.”
“It’s common sense that billionaires should not pay lower tax rates than teachers, mechanics, and firefighters,” said Senator Stabenow. “The wealthy need to pay their fair share – plain and simple. And this legislation will help make it happen.”
“The wealthy hide their money in everything from stocks and real estate to yachts and expensive art – saddling the rest of us with the cost. This is a commonsense step to close one of the most exploited loopholes that the wealthy use to get out of paying their fair share,” said Senator Brown.
“For too long, billionaires have rigged the rules to cut their taxes to the bone, all while working families struggle to make ends meet. We should be investing in American families, not letting billionaires off the hook – and the Billionaires Income Tax takes an important step to make our tax system fairer,” said Senator Warren.
"Plain and simple, the system is rigged to benefit the ultra-rich and it’s time we level the playing field. I am proud to join my colleagues in introducing legislation to finally make sure that billionaires at the top pay their fair share and bring some fairness to our tax system,” said Senator Baldwin.
“For too long, our country’s tax code has rewarded wealthy individuals, enabling them to get away with paying lower tax rates than working families,” said Senator Hirono. “The Billionaires Income Tax Act would close loopholes in the tax code to ensure billionaires pay their fair share in taxes, while raising hundreds of billions of dollars to fund critical programs like Social Security and Medicare.”
“It is unacceptable that the wealthiest people in this country have all sorts of loopholes and cutouts in our tax code, while working Americans play by a different set of rules,” said Senator Smith. “We need to level the playing field so that folks at the very top are treated the same as everyone else. This legislation will help close loopholes and create a more fair and equitable tax code so that those at the top finally start paying their fair share.”
“Billionaires have rigged our tax system so that many contribute virtually nothing,” said Senator Merkley. “This is fundamentally unfair, undermining the legitimacy of the entire tax system. This has to end. And this bill is the way to end it.”
“While millions of Americans pay taxes directly from their paycheck each month, billionaires are able to shield their wealth from taxation and pay a lower tax rate on their earnings and wealth than the typical, hardworking family. Our bill ends this disparity and ensures that billionaires pay their share of taxes just like everyone else. This is about restoring fairness to our tax code,” said Senator Reed.
“Billionaires have gotten away for far too long with paying next to nothing in taxes – all while their bottom lines have continued to go up. This bill would make sure they finally pay their fair share, just like working Americans have been doing all along,” said Senator Schatz.
The Billionaires Income Tax is also endorsed by over 100 supporting organizations. A letter of endorsement with the full list of supporting organizations can be found here.
Today’s introduction closely follows a series of investigations by Wyden and his staff on the Senate Finance Committee to shed light on the various ways that ultra-wealthy Americans legally avoid paying their fair share in taxes. Earlier this month, Wyden also chaired a hearing during which members heard a firsthand account of how billionaires exploit loopholes in the tax code to avoid paying tax.
A one-page summary of the Billionaires Income Tax can be found here.
A section-by-section summary of the Billionaires Income Tax can be found here.
Legislative text can be found here.
Saturday Dec 02, 2023
Saturday Dec 02, 2023
December 2, 2023 - Participants include:
Dr. Karen Alpert - @FixTheTaxTreaty
Dr. Laura Snyder - @TAPInternation
John Richardson - @Expatriationlaw
SEAT members Dr. Karen Alpert, Dr. Laura Snyder and John Richardson discuss their predictions on how the Supreme Court will grapple with the difficult decisions in Moore. The SEAT/AARO amicus brief is here.
Prologue:
Twas the Night before Moore Poem
Twas the night before Moore, when all through the court
Not a justice was stirring, not even a clerk.
The issues were hung in the briefs with care,
In hopes that the justices soon would be there.
The tax profs were nestled all snug in their beds,
While visions of fake-income danced in their heads.
And Kathleen in ‘kerchief, and Charles in cap,
Had just settled their brains for a retroactive tax.
Friday Nov 24, 2023
Friday Nov 24, 2023
November 24, 2023 - Participants include:
Dr. Karen Alpert - @FixTheTaxTreaty
Dr. Laura Snyder - @TAPInternation
John Richardson - @Expatriationlaw
The purpose of SEAT has been and continues to be to conduct research (including the SEAT survey), prepare position papers, make submissions by SEAT to various governments, facilitate advocacy by individuals impacted, file amicus briefs and provide a centre for educating interested parties about the U.S. extra-territorial tax regime. (SEAT's work may be found on the SEAT website.)
SEAT believes that the problems caused to Americans abroad by the U.S. extraterritorial tax regime can be ended ONLY by severing citizenship from tax residency. We encourage the United States to join the rest of the world by taxing individuals on the basis of residence and source and NOT based on the citizenship of an individual.
Part of SEAT's work has been break our research into specific issues and categories. These categories are expressed as "SEAT Working Papers". In order to make the "SEAT Working Papers" available in podcast form, SEAT co-founders Karen Alpert, Laura Snyder and John Richardson are developing a series of podcasts - featuring interactive discussion - where we distill the "working paper" into conversational format. It is our hope that these podcasts will make SEAT's content available to a larger group of people.
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Extraterritorial Taxation #3: Education and Advocacy
This paper describes the efforts of many different organizations and individuals to change to the U.S. extraterritorial tax system, to lessen its burden on overseas Americans.
Available at: https://ssrn.com/abstract=4465124.
Friday Nov 24, 2023
Friday Nov 24, 2023
November 24, 2023 - Participants include:
Dr. Karen Alpert - @FixTheTaxTreaty
Dr. Laura Snyder - @TAPInternation
John Richardson - @Expatriationlaw
The purpose of SEAT has been and continues to be to conduct research (including the SEAT survey), prepare position papers, make submissions by SEAT to various governments, facilitate advocacy by individuals impacted, file amicus briefs and provide a centre for educating interested parties about the U.S. extra-territorial tax regime. (SEAT's work may be found on the SEAT website.)
SEAT believes that the problems caused to Americans abroad by the U.S. extraterritorial tax regime can be ended ONLY by severing citizenship from tax residency. We encourage the United States to join the rest of the world by taxing individuals on the basis of residence and source and NOT based on the citizenship of an individual.
Part of SEAT's work has been break our research into specific issues and categories. These categories are expressed as "SEAT Working Papers". In order to make the "SEAT Working Papers" available in podcast form, SEAT co-founders Karen Alpert, Laura Snyder and John Richardson are developing a series of podcasts - featuring interactive discussion - where we distill the "working paper" into conversational format. It is our hope that these podcasts will make SEAT's content available to a larger group of people.
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Extraterritorial Taxation #2: How It Is Experienced
This paper summarizes the findings of three recent surveys conducted to better understand how overseas Americans experience U.S. extraterritorial taxation.
Available at: https://ssrn.com/abstract=4465003
Thursday Nov 23, 2023
Thursday Nov 23, 2023
November 3, 2023 - Participants Include:
David (Coach) Coutts - @RealCoachCoutts
John Richardson - @Expatriationlaw
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One of the most extraordinary books I have ever read is Viktor Frankl's "Man's Search For Meaning". A summary of the message in the book included:
"Some see life as a never-ending quest for pleasure. Others believe life is about the accumulation of power and money. Frankl sees life as primarily a quest for meaning.
As humans we often look to the margins, those extreme situations that test the fiber of human character. Viktor Frankl survived at the ultimate margin. He concludes that the ultimate test for all of us is to find meaning in our lives. And it is within the power of everyone to find meaning, regardless of your health, wealth or circumstances – no matter how miserable or dire."
In a world where fewer and fewer people read, it's important to distill important messages and books into smaller digestible chunks. In this episode, Coach Coutts describes who the general message can be made more focussed, practical and helpful in the lives of everyday people.
Wednesday Nov 22, 2023
Wednesday Nov 22, 2023
November 22, 2023 - Participants include:
Dr. Karen Alpert - @FixTheTaxTreaty
Dr. Laura Snyder - @TAPInternation
John Richardson - @Expatriationlaw
The purpose of SEAT has been and continues to be to conduct research (including the SEAT survey), prepare position papers, make submissions by SEAT to various governments, facilitate advocacy by individuals impacted, file amicus briefs and provide a centre for educating interested parties about the U.S. extra-territorial tax regime. (SEAT's work may be found on the SEAT website.)
SEAT believes that the problems caused to Americans abroad by the U.S. extraterritorial tax regime can be ended ONLY by severing citizenship from tax residency. We encourage the United States to join the rest of the world by taxing individuals on the basis of residence and source and NOT based on the citizenship of an individual.
Part of SEAT's work has been break our research into specific issues and categories. These categories are expressed as "SEAT Working Papers". In order to make the "SEAT Working Papers" available in podcast form, SEAT co-founders Karen Alpert, Laura Snyder and John Richardson are developing a series of podcasts - featuring interactive discussion - where we distill the "working paper" into conversational format. It is our hope that these podcasts will make SEAT's content available to a larger group of people.
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This is the first in a series of podcasts to that are paired with various working papers and articles created by members of SEATNow.org
SEAT Working Paper Series #2023/1
Extraterritorial Taxation #1: How It Has Evolved
Since Cook v. Tait was decided in 1924 much has changed, with respect to both federal taxation and U.S. citizenship. This paper explains their parallel evolutions and why they call for Cook to be revisited.
Available at: https://ssrn.com/abstract=4464210
Tuesday Sep 26, 2023
Tuesday Sep 26, 2023
September 21, 2023 - Participants Include:
John Alan - @JohnAlanPod
Keith Redmond - @Keith__Redmond
Anthony Parent - @IRS_Medic
John Richardson - @Expatriationlaw
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Note this podcast is based on an interview with John Alan. The podcast was initially posted on his site at:
It is reposted here with John Alan's permission.
Tuesday Aug 15, 2023
Tuesday Aug 15, 2023
August 15, 2023 - Participants include:
Virginia La Torre Jeker - @VLJeker
John Richardson - @Expatriationlaw
Out with the "mitigation provisions" and a reminder that penalties for the failure to keep records can result in a separate penalty!
On August 10, 2023 Virgina La Torre Jeker published a post about the great FBAR penalty reset - the IRS response to the Bittner decision.
It's all about the new IRS FBAR Guidance Memorandum which took effect on July 6, 2023.
You can read it here:
https://www.irs.gov/pub/foia/ig/sbse/sbse-04-0723-0034-redacted.pdf
Clearly this is NOT "good news" for taxpayers (or should it say individuals with bank and financial accounts outside the United States).
Monday Aug 07, 2023
Monday Aug 07, 2023
August 7, 2023 - Participants include:
Katrina Haynes - Haynes Help
John Richardson - @Expatriationlaw
Thanking Katrina Haynes of HaynesHelp.com for a great discussion reviewing:
- entitlement to U.S. Social Security generally
- the two things that "totalization agreements" achieve U.S. citizens who move out of the United States
- Renunciation of citizenship, Green Card abandonment and entitlement to U.S. Social Security
- taxation of Social Security benefits as a U.S. citizen or as a nonresident alien
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For a complimentary webinar with Katrina on FBAR and Form 8938 for Americans abroad click here.
Friday Aug 04, 2023
Friday Aug 04, 2023
August 4, 2023 - Participants Include:
Virginia La Torre Jeker - @VLJeker
John Richardson - @Expatriationlaw
On July 27, 2023 Virginia La Torre Jeker published a blog post about the 3.8% NIIT ("Net Investment Income Tax"). The post is an excellent discussion of the "Net Investment Income Tax" generally and how it impacts Americans abroad specifically.
As a general principle the NIIT unfairly discriminates agains Americans abroad in (at least) the following ways:
1. The NIIT applies to those who use "married filing separately" category at a lower threshold ($125,000) than to those who use "married filing jointly" ($250,000). Because a higher percentage of Americans living outside the USA use the "married filing separately" category, the NIIT applies to a higher percentage of Americans abroad.
2. Because the US foreign tax credit rules do not allow foreign tax paid on investment income to be used as a foreign tax credit, the NIIT is virtually guaranteed to cause double taxation for Americans abroad. It is in effect a 3.8% US surcharge on non-U.S. investment income.
3. The NIIT applies to both PFIC (non-US mutual fund income) and CFC (Subpart F income) causing additional hardship for Americans abroad.
4. While exempting income from U.S. 401K (and similar U.S. income) from the NIIT, but applying the NIIT to non-U.S. tax deferred accounts (example Canadian RRSP) it further penalizes Americans abroad.
Incidentally, the purpose of the NIIT was to fund healthcare for U.S. residents. This healthcare is NOT available to Americans abroad.
Therefore, the NIIT is another particularly egregious example of U.S. citizenship-based taxation.