Category Archives: Little Red Mental Health Book

“For those U.S citizens who have elected to live abroad, be it in Canada or elsewhere, American tax policy can place such individuals in a position that engenders constant and severe emotional stress. The vindictiveness of the U.S. position, its unfairness and irrationality, the fact that neither the U.S. government nor tax and legal experts even know the rules and how to rationally proceed, and the constant threat of economic calamity are all factors that can be emotionally devastating.”

Read the complete article here.

Part 55 – A Post “MOORE”Tem- The Supreme Court Upholds The 965 @USTransitionTax

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Introduction and purpose

The Supreme Court of the United States issued its ruling in the Moore case in June of 2024. The decision in Moore is here:

https://www.supremecourt.gov/opinions/23pdf/22-800_jg6o.pdf

Moore 22-800_jg6o

I would characterize the decision as a loss for the Moores, but a possibly a huge win for those who backed (and presumably financed) the Moore litigation. Here is why:

A loss for the Moores – A cursory glance at the result (seven to two in favour of upholding the transition tax) means that (1) the Moore’s lost because the 965 transition tax was upheld. Generally the court ruled that income WAS REALIZED to the foreign corporation and that REALIZED income could be attributed to the individual shareholder. A majority of the court was therefore able to avoid considering whether income must be realized in order for it to be taxed. This was of course a huge loss for Americans abroad (the largest group of people impacted by the transition tax). Only Justice Jackson specifically ruled that realization of income is NOT a requirement for taxation.

A win for those backing the Moore’s lawsuit – Justices Gorsuch, Thomas, Barrett and Alito ruled that income must be realized in order for it to be taxable. In other words, those arguing for a constitutional requirement of realization are only one Justice away from a ruling supporting a requirement for realization of income in order for taxation of income. (Of course, this leaves open the question of what is meant by realization).

Therefore, my opinion is that the Moore litigation was a success. Immediately after the decision was released there was some discussion of what this decision might mean for the constitutionality of the 877A expatriation tax. 877A mandates a deemed sale of assets and deemed distribution of pensions and other tax deferred accounts. The point is that 877A creates a “deemed” as opposed to “actual” realization event. On balance, I believe those who backed the Moore litigation came away as winners.

After the release of the decision I discussed my conclusions on the following two podcasts:

https://prep.podbean.com/e/the-title-of-audio1731891712/

https://www.youtube.com/watch?v=BQeT03ziu8k

The slides I prepared (below) generally explain my reasoning and analysis of the Supreme Court decision.

Moore 3

Moving forward – The Difficult we do today, the impossible takes a bit longer

The Supreme Court decision in Moore has strengthened the argument that realization is a requirement for taxation. An obvious target is the constitutionality of the 877A expatriation tax as suggested here and here.

Unsurprisingly, on December 3, 2024 the lawyers for Roger Ver (The Bitcoin Jesus) relied on the decision in Moore to argue that the 877A Exit Tax is unconstitutional

Ver gov.uscourts.cacd.915322.21.0!

Freedom 55 – The end of the “Little Red Transition Tax Book”

“Freedom 55” is a retirement slogan in Canada. The idea is for people to retire at the age of 55.

This is the 55th post in the “Little Red Transition Tax Book”. It is also the “retirement post”.

The Moore saga is over!

John Richardson – Follow me on X.com @Expatriationlaw

Part 15 in series: The Emotional Toll of US Non-Resident Taxation and Banking Policies – “I Just Wanted to Punch, Kick, Scream”

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Before moving to the post, if you believe that Americans abroad are being treated unjustly by the United States Government: Join me on May 17, 2019 for a discussion of U.S. “citizenship-based taxation” as follows:

You are invited to submit your questions in advance. In fact, PLEASE submit questions. This is an opportunity to engage with Homelanders in general and the U.S. tax compliance community in particular.

Thanks to Professor Zelinsky for his willingness to engage in this discussion. Thanks to Kat Jennings of Tax Connections for hosting this discussion. Thanks to Professor William Byrnes for his willingness to moderate this discussion.

Tax Connections has published a large number of posts that I have written over the years (yes, hard to believe it has been years). As you may know I oppose FATCA, U.S. citizenship-based taxation and the use of FATCA to impose U.S. taxation on tax residents of other countries.
Tax Connections has also published a number of posts written by Professor Zelinsky (who apparently takes a contrary view).

You will find Part 1 to Part 14 of this series of posts here.

Laura Snyder discusses the “emotional toll of U.S. non-resident taxation and banking policies

Laura Snyder has written (in addition to her original four posts) a series of five posts describing and exploring “The Emotional Toll of US Non-Resident Taxation and Banking Policies“. Part 10 of this series (comments of Nando Breiter) was a prologue to Ms. Snyder’s five posts.

Now over to Laura …

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Americans abroad and the compliance dilemma: What should be considered before contacting a lawyer

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The “Readers Digest Version …

It’s difficult to be a U.S. citizen living outside the United States. The U.S. extra-territorial tax regime has created an industry of professionals who “feast off the injustice” of the U.S. tax and regulatory regime. U.S. citizenship taxation reinforced by FATCA has truly created for tax, financial planning, and immmigration professionals:

“The gift that just keeps on giving.”

The messaging to Americans abroad includes:

Americans abroad who don’t file U.S. taxes are constantly warned of the consequences of non-compliance.

Americans abroad who DO file U.S. taxes are constantly warned of the consequences of mistakes in their attempts at compliance.

Americans abroad attempting financial and retirement planning outside the United States are constantly on the search for financial products that wont’ conflict with U.S. tax rules.

Americans abroad who want to escape by renouncing U.S. citizenship are constantly being warned of possible tax and immigration consequences associated with renunciation.

(It’s clear that U.S. citizens living outside the United States are being punished for who they are and NOT what they do or don’t do.)

In this context, there continues to be a significant “fear mongering” coming from various players in the U.S. tax compliance industry. I suggest that Americans abroad should exercise caution in how they respond to these messages. In 2013 I wrote a post suggesting eleven principles for how one should respond to the U.S. tax compliance (or noncompliance) problem. This 2023 post is intended to provide an update to the 2013 post. The 2013 post is reproduced as Part C of this update.

This general purpose is to provide suggestions for how to RESPOND rather than REACT to your possible situation as a U.S. citizen living outside the United Staes. My thoughts are organized in the following four parts:

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