Monthly Archives: October 2014

A wealth management company for physicans asks: Are you a U.S. person?

MD Physician Services makes it clear that:
“It is important for clients to be aware that MD is legally obligated to report to CRA (who will notify the IRS) all clients who refuse to disclose whether they are a U.S. person. Clients should also know that conversations with their MD Advisor on this matter are not privileged.
Serious penalties for non-filing may apply even for those who are unknowingly non-compliant about their reporting obligations. The penalties for wilful non-compliance can be severe, including imprisonment.”
The complete article follows:
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When renouncing U.S. citizenship may be a smart retirement planning tool for #Americansabroad

On October 10, 2014 Kelly Phillips Erb (AKA @TaxGirl) published a “Guest Post” on the question of whether one one would give up U.S. citizenship because of taxes. It was a very will written post which detailed the horrors that Americans abroad experience in attempting compliance with a tax code that “puts most of their lives in the penalty box”.  I recommend the post to you. There are a number of comments about the post at the Isaac Brock Society.
The post concludes with:

So will I renounce to avoid taxes? Not exactly, because I DON’T OWE taxes due to my very low income. BUT IN ORDER TO AVOID THE CONSTANT THREAT, like a huge hammer hanging over my head, of “INFORMATION FILING PENALTIES” as I grow older and less able to cope. To protect my executors from those same things?
YES, I’m afraid I shall have to. I have put off taking this step until now, partly because of the cost and my fear of the long journey to the embassy in a distant city; but mainly in the hope that my beloved homeland would regain its wisdom and fix its mistakes by switching to an equitable system of residence-based taxation with penalties that reflect only a percentage of tax actually owed.
And now it seems I have waited too long. A price increase from $450.00 to $2,350.00 was just announced. I may be trapped. I am becoming desperate to escape, but unable to afford it.
What a silly situation this would be, if it weren’t so very tragic.
Oh my dear, sad homeland. I do so wish you happiness and a return to shared prosperity. Please do the same for me. Thank you.
*Tisha (who prefers not to be identified by last name) remembers fondly her years in Pennsylvania and its wonderful people. She now feels she is too old to start over again, and so remains in her mother’s country.

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Guest Post at Forbes: Inversions, Planning & Corporate Tax Rates

On October 8, 2014 I had a “Guest Post” appear at Forbes. The post discusses the uniquely American policy of taxing  economic activity that takes place outside the United States. The U.S. claims the right to tax this activity because it is the activity of a “U.S. Person” (which would include either a DNA citizen or a U.S. corporation). You can read the complete article at Forbes, but it includes:
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The citizenship exchange – You provide the capital we provide the citizenship

Of particular interest is:

Some developments are able to sell some lots to Americans who don’t want or need dual citizenship. But Americans alone aren’t enough to finance most projects. Instead, many projects gain most of their investments from people who routinely encounter travel restrictions and obstacles due to their country of origin.

And the continuation of Treasury’s War:

One big drawback of the programs is the potential for fraud. Authorities are concerned that without strict oversight, the programs can be used by money launderers and other criminals for unfettered travel.
In May, the U.S. Treasury Department sent banks a warning letter that foreign investors, namely Iranian nationals, were “abusing” St. Kitts’ citizenship-by-investment program for “illicit financial activity,” according to the letters. St. Kitts suspended Iranians from its program in 2013, but the U.S. alleges Iranians continue to get St. Kitts passports

And for those who wish to open the door to EU citizenship:

In Europe, qualified applicants can gain visas from Spain, Portugal or Latvia by buying property in those countries. France, Singapore and the U.S. grant visas to qualified applicants who invest in companies or projects that create a minimum number of jobs over a set period.