Author Archives: Admin

Proposal by @JoeBiden to increase the GILTI tax has particularly vicious implications for #Americansabroad

Introduction

Taxation is what America is about and America is about taxation.

Perhaps it’s better to say that:

Politics is about taxation and taxation is about politics.

Once Upon A Time In America

The primary legislative achievement of President Trump’s first term was the 2017 TCJA. It’s important to note that the TCJA had it’s genesis in the work of Michigan Congressman Dave Camp and was the result of a long term project of reworking the US tax system. It is absolutely incorrect to suggest that the TCJA was developed by the Trump Administration. It should not be referred to as “Trump Tax Reform”. That said, because of the “politics” involved in enacting the TCJA, the Trump Administration and Republican Controlled Ways and Means Committee, did impact the legislation at the margins. (Rate of repatriation tax, etc.)

Like all tax legislation the TJCA had clear winners and clear losers.

The TCJA Winner(s)

Continue reading

Renunciation is a process of transitioning from US citizen to nonresident alien. How does this affect your tax situation?

On June 25, 2020 Dr. Karen Alpert and I did a series of podcasts where we discussed how renunication will affect your interaction with the US tax system. The key point is that you will still be taxable by the United States on US source income. What does that mean? Under what circumstances could renunication of US citizenhip actually increase your US tax liability?

John Richardson – Follow me on Twitter @ExpatriationLaw

Good discussion on renouncing US citizenship AKA #citizide: The good, the bad and the ugly

This is one of the better interviews regarding US citizenship renunciation, covering a wide range of important issues.

Does the US provide #Americansabroad any benefits? Shouldn’t US #expats who find US @taxationabroad onerous just renounce their US citizenshp?

On May 30, 2020 the following question appeared on Quora and prompted some interesting answers and discussion:

As a defender of American “freedom”, how do you justify the fact that US citizens have to pay taxes to the US even if they live and work abroad (even if they have never been to the US but got their citizenship through their parents)?

I along with others attempted to answer the question. Here is my answer.

_________________________________________________________________________________________

Some of the most interesting analysis comes from the comments to the answers. See the following answer and comment. I have turned David Johnstone’s comment into a post.

One of the answers to the question included the suggestion that:

If someone lives and works abroad as an American citizen, he or she must be enjoying SOME benefits or they would logically renounce their US citizenship instead of paying US taxes. That would be a good solution for anyone facing this question. Just go!

David Johnstone responds to this answer with the following comment:

Continue reading

Seeking short social media – twitter and facebook posts – explaining why @citizenshiptax and #FATCA are wrong

On June 3, 2020 I plan to do a podcast with Anthony Scaramucci of Skybridge Capital and SALT Conference fame. The June 3 podcast has its roots in the following @Scaramucci tweet which was the subject of discussion at the Isaac Brock Society.

Mr. Scaramucci’s tweet generated a great deal of discussion. If you click on the tweet, you will see, what some of the responses were.

A third party individual has arranged for me to do a podcast with Mr. Scaramucci. This will take place on June 3. In order to provide background information for “citizenship taxation”, FATCA and how they impact Americans abroad, I would ask that you reply to the following tweet. It is your opportunity to contribute to the conversation.

Feel free to leave a comment to this post. I will ensure that it finds its way into the twitter thread.

John Richardson – Follow me on Twitter @Expatriationlaw

The S. 911 Foreign Earned Income Exclusion: It’s origins, journey, opportunities and limitations

I recently participated in a podcast discussing both the opportunities and limitations associated with the Section 911 FEIE (“Foreign Earned Income Exclusion”). It is short and explains why the FEIE is not the answer to the problems experienced by Americans abroad. You can listen to it here:

https://prep.podbean.com/e/us-taxation-of-americans-abroad-do-the-foreign-tax-credit-rules-work-sometimes-yes-and-sometimes-no/

The podcast was the subject of a post at American Expat Finance. That post prompted me to explore more deeply, the origins of the FEIE. When was it enacted? What was it designed to do? I found a fantastic article that I thought I would/should share.

Continue reading

Podcast – US Citizenship: Retain or Renounce – Streamlined, Relief Procedures For Former Citizens

(Interesting discussion in the above twitter feed.)

On April 30, 2020 I hosted a discussion with Karen Alpert, Laura Snyder, David Johnstone and Keith Redmond. The discussion touched on a variety of subjects of interest to Americans abroad and Accidental Americans.

The discussion included a segment on the September 2019 IRS Relief Procedures For Former citizens and how they compare to Streamlined compliance.

Bottom Line: It’s complicated. People are different. Different solutions for different people. But, for many:

“All Roads Lead To Renunciation”.

CARES Act Relief: How US citizen taxation leads to sending relief money to individuals outside the United States and denies relief money to individuals inside the United States

Introduction

This post is based on my Quora answer to the question: “Do you agree with the policy of not issuing checks to US citizens who jointly file taxes with someone who has an ITIN?

Part I – Objective Analysis

This post focuses on the class of individuals entitled to relief. It does not discuss how the relief is administered.

The statute authorizing the relief is found in Section 6428 or Subtitle F (the Procedure And Administration section of the Internal Revenue Code). The following sections specify WHO is entitled to the relief:

§6428. 2020 Recovery rebates for individuals

(d) Eligible individual

For purposes of this section, the term “eligible individual” means any individual other than-

(1) any nonresident alien individual,

(g) Identification number requirement

(1) In general

No credit shall be allowed under subsection (a) to an eligible individual who does not include on the return of tax for the taxable year-

(A) such individual’s valid identification number,

(B) in the case of a joint return, the valid identification number of such individual’s spouse, and

(C) in the case of any qualifying child taken into account under subsection (a)(2), the valid identification number of such qualifying child.

(2) Valid identification number

(A) In general

For purposes of paragraph (1), the term “valid identification number” means a social security number (as such term is defined in section 24(h)(7)).

(B) Adoption taxpayer identification number

For purposes of paragraph (1)(C), in the case of a qualifying child who is adopted or placed for adoption, the term “valid identification number” shall include the adoption taxpayer identification number of such child.

In summary this means that:

Those who are conditionally entitled to relief include, ANY individual except a nonresident alien, provided that they:

– have a Social Security Number (who is eligible for a Social Security Number?); and

– do NOT file jointly with an individual who does not have a Social Security Number

Who is a “nonresident alien” and therefore NOT an “eligible individual”?

Continue reading

A Twitter Tribute To Mark Andrews – Canada’s Equality Rights Pioneer

I am very sad to learn of the death of Mark Andrews. I was privileged to have known Mr. Andrews during the 1980s – a period in which he was Canada’s Equality Rights Pioneer.

Part A – A Twitter Tribute

Click here to see the thread.

Part B – My Full Length Post On The ADCS Blog

Comprehensive analysis of the CARES ACT From Professor Francine Lipman – @narfnampil

I received the following from Professor Francine Lipman who is on the faculty of the UNLV School of law. It seems to me to be an extremely comprehensive statement of how the CARES Act operates to provide funds to Americans in need.

I highly recommend that you access her scholarship.

With her permission, I have simply reproduced her email as the post.

________________________________________________________________________________________

Dear Passion Warriors for Justice:

I hope this is helpful to you and your colleagues. Stay strong and put your oxygen mask on first. We need your strength, stamina & resilience today and all days on the frontlines of justice. Feel free to contact me at Francine.lipman@unlv.edu for any reason or no reason at all. We are stronger together and I am sending you positive energy! We will get through this and be even more fierce, fearless and appreciative of community, fellowship and face to face conferences! @narfnapil on Twitter

The CARES Act was just signed into law, including a number of individual income tax provisions.

Here are some details on the Recovery Rebate Tax Credit:

Continue reading