Monthly Archives: January 2026

“The IRS has an obligation to meet taxpayers where they live, but it is not doing so for taxpayers living abroad”

Leave a reply

So states the 2025 report of the Taxpayer Advocate!

A January tradition

January is the month that the IRS Taxpayer Advocate release its report for the previous year. In keeping with tradition the Taxpayer Advocate released the 2025 report this week.

Bottom Line:

The report is extraordinary in its recognition of the problems of Americans abroad. The problems are recognized as one of the ten most significant categories of problems experienced by taxpayers generally. The Taxpayer Advocate does a wonderful and powerful job of recognizing the injustices of the U.S. tax system as it applies to taxpayers living outside the United States. The report is available here.

A pdf version of the Taxpayer Advocate report is here:

ARC_Publication-2104_2025_Web

Podcast discussing the report

A condensed version of the podcast is captured in this AI generated video:

Continue reading →

Bonjour Part 6 – Rosenbloom and Shaheen Brief In Support Of Bruyea

Leave a reply

This is the sixth post in the “Bonjour” tax treaty series. In the fifth post I discussed that the U.S. Treasury is appealing both the Bruyea and Christensen cases. The dispute in these cases was over the issue of whether foreign taxes paid on investment income could be used as a tax credit against the Net Investment Income Tax. The background has been discussed in previous posts (See the appendix to this post). The precise is whether:

The Canada/U.S. tax treaty and the France/U.S. tax treaty (and similar treaties) allow for a foreign tax credit that is separate and independent of the foreign tax credits allowed under the Internal Revenue Code.

A foreign tax credit against the 3.8% NIIT is NOT permitted under the U.S. Internal Revenue Code. This means that, most Americans abroad who are subject to the NIIT will pay tax separately to BOTH the United States and their country of residence on the same investment income!

To put it another way: for Americans abroad, the Internal Revenue Code guarantees double taxation.

Can the tax treaties be interpreted to allow a foreign tax credit against the NIIT?

What follows is the Amicus brief authored by Professors Rosenbloom and Shaheen.

Bruyea – Amicus Brief

For better understanding here is a podcast which explains the Rosenbloom Shaheen amicus brief.

In addition, I wrote a more expansive version of this post for the Isaac Brock Society.

Does The Canada U.S. Tax Treaty Allow A Foreign Tax Credit Against The Net Investment Income Tax?

John Richardson – Follow me on X.com @ExpatriationLaw

Appendix – The First five posts in the “Bonjour” series …

The four previous posts discussed the foreign tax credit rules in the context of the NIIT (“Net Investment Income Tax“). For a description of the first four posts, see the Appendix to this post.

The first post detailed the provisions of the U.S. France tax treaty which created the “three bite rule”. By creating the “three bite rule” the U.S. France treaty was used to create a treaty based foreign tax credit.

Bonjour: Different US Tax Treaties Provide Different US Taxation For Different Groups Of Americans Abroad

Bonjour: Different US Tax Treaties Provide Different US Taxation For Different Groups Of Americans Abroad

The second post (also based on the U.S. France tax treaty) described how the U.S. France tax treaty was used to create an independent treaty based foreign tax credit. The purpose was to allow for a foreign tax credit against the NIIT (“Net Investment Income Tax”). Although a major breakthrough, it’s important to note that this case (Christensen):

1. Found that the treaty should be interpreted to create an a foreign tax credit that was independent of the credits allowed under the Internal Revenue Code;

2. Specifically ruled that the language “subject to the limitations of the law of the United States” (found in the opening paragraph of the double taxation clause) should be interpreted to preclude a foreign tax credit for payment of foreign tax on foreign investment income.

Bonjour Part 2 – US Citizens Living In France Can Use French Tax As A Credit To Offset The Obamacare Surtax!

Bonjour Part 2 – US Citizens Living In France Can Use French Tax As A Credit To Offset The Obamacare Surtax!

The third post continued the “NIIT Tax Treaty Chronicles”. Specifically, this post detailed how Judge Solomson, in the case of Paul Bruyea, determined that (contrary to Judge Blank’s ruling in Christensen) that the “subject to the limitations of the law of the United States”clause in Article XXIV, Paragraph 1:

1. Does NOT preclude the use of a foreign tax credit to offset the NIIT; and

2. That Article XXIV, Paragraph 1 allows a U.S. citizen or U.S. resident living in Canada to use taxes paid to Canada as a credit against the U.S. NIIT!

Judge Blank in Christensen and Judge Solomson in Bruyea reached opposite conclusions with respect to whether the following clause (as represented in the 2016 U.S. Model Tax Treaty) can be used to create a foreign tax credit which is independent of the foreign tax credit rules in the Internal Revenue Code (Sections 27, 901 and 904).

Article 23

RELIEF FROM DOUBLE TAXATION

1. In the case of __________, double taxation will be relieved as follows:

2. In accordance with the provisions and subject to the limitations of the law of the United States (as it may be amended from time to time without changing the general principle hereof), the United States shall allow to a resident or citizen of the United States as a credit against the United States tax on income applicable to residents and citizens:

a) the income tax paid or accrued to __________ by or on behalf of such resident or citizen; and

Therefore, I expect that this issue has NOT been fully resolved.

Judge Solomson’s decision in Bruyea is a very exciting decision. It goes FAR beyond the decision in Christensen and opens the door to arguing that many (if not all) U.S. treaties guarantee that the NIIT can be offset by foreign tax credits!!

https://citizenshipsolutions.ca/2025/01/20/bonjour-part-3-from-christensen-to-bruyea-boldly-go-where-no-interpretation-of-foreign-tax-credits-for-the-niit-has-gone-before/

Bonjour Part 3 – From Christensen To Bruyea: Boldly Go Where No Interpretation Of Foreign Tax Credits For The NIIT Has Gone Before!

The fourth post focused on Judge Solomson’s comments in Bruyea about when a later in time statute can override an earlier treaty. In general he was of the view that a later statute can override an earlier treaty only when Congress expresses a clear intent to overrule the treaty.

https://citizenshipsolutions.ca/2025/03/11/bonjour-part-4-what-the-bruyea-case-and-the-%c2%a7-2801-regs-suggest-about-the-last-in-time-rule-and-tax-treaty-overrides/

Bonjour Part 4 – What The Bruyea Case And The § 2801 Regs Suggest About The “Last In Time” Rule And Tax Treaty Overrides

The fifth post reveals Treasury’s decision to appeal both the Bruyea and Christensen cases.

https://citizenshipsolutions.ca/2025/09/03/bonjour-part-5-u-s-treasury-appeals-the-bruyea-and-christensen-cases-can-a-tax-treaty-provide-a-credit-independent-of-the-internal-revenue-code/

Bonjour Part 5 – U.S. Treasury Appeals The Bruyea And Christensen Cases – Can A Tax Treaty Provide A Credit Independent Of The Internal Revenue Code?

The sixth post introduces the Rosenbloom and Shaheen amicus brief in support of Bruyea and Christensen

https://citizenshipsolutions.ca/2026/01/09/bonjour-part-6-rosenbloom-and-shaheen-brief-in-support-of-bruyea/

Bonjour Part 6 – Rosenbloom and Shaheen Brief In Support Of Bruyea

Remembering The Iran Hostage Crisis, Attorney General Civiletti And The U.S. Commitment To International Law

Leave a reply

Prologue

January 3, 2026

I awakened on Saturday January 3, 2026 to the news that the United States had used its armed forces to cross Venezuela’s borders without the permission of the Venezuelan government, break into the home of its president, restrain the President and his wife, take the President and his wife into U.S. custody and forcibly remove them from Venezuela. Eventually they emerged in New York. There are some who describe this as a kidnapping.

This series of events was undertaken in violation of Venezuelan law.

It appears to have been undertaken in violation of U.S. domestic law.

Furthermore, there are indications that it was done in violation of international law.

January 5, 2026 – The United Nations held an emergency meeting. The New York Times reported that:

Venezuela Live Updates: At U.N. Emergency Meeting, U.S. Allies Criticize Military Action in Caracas

American allies including France objected to the military incursion into a sovereign state and the capture of the Venezuelan president as a violation of international law.

The full text of the New York Times article is here.

Assuming, without deciding, that the United States violated international law, it’s clear that:

The United States does not feel bound by International law.

As I absorbed what had happened my mind went back to December 10, 1979.

Circa December 10, 1979

On December 10, 1079 I was awakened by a radio broadcast where I listened to the very impressive voice, passion and arguments being made by U.S. Attorney General Benjamin Civiletti. Mr. Civiletti was explaining to the International Court of Justice the legal significance of a group of Iran students forcibly entering the U.S. Embassy, without the permission of the U.S. Government, taking control of the Embassy and holding the employees hostage. There are some who would call this a hostage taking.

Mr. Civiletti explained to the court that the occupation of the U.S. Embassy and holding the occupants hostage was a violation of specific treaties AND a violation of international law.

What follows is the full text of Mr. Civiletti’s plea to the International Court of Justice.

Civiletti 12-10-1979

What follows is an AI generated podcast based on Mr. Civiletti’s argument to the court. What is remarkable is that in 1979 the United States appears to be supporting the validity of international law and the sovereignty of nations. Those interested should listen to the podcast at least twice.

Conclusion – Then and now:

I suggest that …

In 1979 the United States felt bound by international law but not protected by it.

In 2026 the United States appears to feel protected by international law but not bound by it.

It appears that the United States of 1979 is not the same as the United States of 2026.

John Richardson – Follow me on X.com/expatriationlaw

Appendix – AI description of Mr. Civilleti’s appearance before the International Court Of Justice

On December 10, 1979, U.S. Attorney General Benjamin Civiletti delivered an oral argument before the
International Court of Justice (ICJ) in The Hague regarding the Iran Hostage Crisis. He called for an immediate end to the “barbaric” and illegal detention of 50 American diplomats and citizens at the U.S. Embassy in Tehran.

Key Points from the Speech

Illegality of Detention: Civiletti argued that the capture and continued holding of the U.S. diplomatic staff was a blatant violation of long-established international law, specifically the 1961 Vienna Convention on Diplomatic Relations, to which both the United States and Iran were parties.

Diplomatic Immunity: He emphasized the principle of diplomatic inviolability, which prohibits the arrest or detention of diplomats regardless of any grievances the host state might have. The receiving state is under a special duty to protect embassy premises and personnel.

Purpose of the Plea: The United States government came to the court not simply to reiterate the obvious illegality of Iran’s actions, but to demonstrate that “international law may not be tossed aside” with impunity.

Request for Provisional Measures: The U.S. requested the court to issue provisional measures, essentially a preliminary injunction, demanding Iran immediately release the hostages, ensure their safe departure, and submit those responsible for prosecution.

Tone: Civiletti described himself as addressing the court with “awe, but with restrained anger,” in light of the peril the hostages were facing.

Outcome

On December 15, 1979, the ICJ unanimously indicated provisional measures, ordering Iran to immediately release the hostages and return the embassy premises to U.S. control. Iran officially rejected and failed to comply with the order.

Archive – Helen Burggraf From October 23 – U.S. Gov moves in direction of lowering renunciation fee

1 Reply

Introduction:

What follows is a post written by Helen Burggraf in October of 2023 discussing the U.S. government intention to reduce the fee for a CLN from $2350 USD to $450 USD.

It is reposted with the kind permission of Helen Burggraf.

BREAKING: U.S. gov’t at last moves in direction of lowering renunciation fee

By Helen Burggraf

In what some expat groups and individuals are already hailing as a potential breakthrough, the U.S. State Department is seeking comments on its plans to reduce by almost 80% the basic fee it currently charges U.S. citizens for processing their requests to expatriate.

In a notice dated today [Oct 2] and posted on the Federal Register,

https://www.govinfo.gov/content/pkg/FR-2023-10-02/pdf/2023-21559.pdf

the State Department says it is “proposing to amend” the fee from its current $2,350 to $450, in response to concerns that “members of the public have continued to raise” since the fee was increased to the current amount from $450 in 2014.

It says that it is proposing to do this in spite of the fact that the lower amount has only ever represented “a fraction of the cost of providing” the consular services involved in processing a CLN (Certificate of Loss of Nationality).
Continue reading →