Category Archives: FATCA

Americans Abroad Have Until April 29, 2024 To Tell FinCEN Why They Should Be Exempt From FBAR

Outline

To learn more about Mr. FBAR, I invite you to watch the following discussion with U.S. tax lawyer Virginia La Torre Jeker.

Part 1 – Introducing Mr. FBAR – Looking For Mr. FBAR
Part 2 – 2011 – Financial Crimes, FBAR and Americans Abroad – Perspective From The Isaac Brock Society
Part 3 – 2020 – Financial Crimes, FBAR and Americans Abroad – Comments From Americans Abroad And Treasury’s Answer
Part 4 – 2024 – Financial Crimes, FBAR and Americans Abroad – Americans abroad need to keep commenting
Part 5 – What should you include in your comment?
Appendix – Treasury’s 2021 response to the comments of Americans abroad

To cut to the chase:

Treasury has provided another opportunity (the last one was in 2020) for Americans abroad to comment directly on the FinCEN 114 AKA FBAR requirement. I strongly recommend that Americans abroad take this opportunity to comment on the appropriateness of FBAR being required for the local bank comments of Americans abroad.

You can comment here.

The instructions for how to comment say:

ADDRESSES:

Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to

www.reginfo.gov/​public/​do/​PRAMain. Find this particular information collection by selecting “Currently under 30-day Review—Open for Public Comments” or by using the search function.

FOR FURTHER INFORMATION CONTACT:

Copies of the submissions may be obtained from Spencer W. Clark by emailing

PRA@treasury.gov,

calling (202) 927-5331, or viewing the entire information collection request at

www.reginfo.gov.

Those who are interested in learning more, read on … Otherwise please go directly to the comment page.

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FATCA Is Not the Answer

Reposted from SEATNow.org.

On February 26, 2024, Tax Notes Federal published an article entitled “Taxing Fat Cats Abroad.”

The article defended the Foreign Account Tax Compliance Act (FATCA) as an “automatic exchange of information used to track down and tax accounts held by wealthy U.S. citizens living abroad.”

The article contained many errors and misinterpretations.

SEAT co-founders John Richardson, Karen Alpert, and Laura Snyder submitted a response to the article, entitled “FATCA Is Not the Answer.”

Their response, published on March 18, 2024, can be accessed via SSRN at this link.

The response explains:

1. The considerable differences between FATCA and CRS. They include FATCA’s lack of reciprocity and the United States’ refusal to join CRS;

2. The inequalities inherent in the U.S. tax system with respect to Americans living outside the United States and their discriminatory treatment;

3. The irrelevance of FATCA with respect to Farhy v. Commissioner and Bittner v. United States;

4. The unjust stigmatization of Farhy, Bittner, and all Americans living outside the United States;

5. Inconsistencies between the article’s defense of citizenship-based taxation and the “single tax principle” advocated by professor Reuven Avi-Yonah;

6. The failure of the article, in its theorectical defense of citizenship-based taxation, to contend with the real system in place today and its myriad intractable problems;

7. The lack of any connection between taxation and voting rights;

8. The importance of the 14th Amendment for the equal protection of the rights of Americans living outside the United States; and

9. That the 16th Amendment is not — and it should not be used as — a license to channel violations of constitutional and human rights through the tax code.

John Richardson – Follow me on X.com

Considering Renunciation Part 2: Recognizing And Overcoming The Emotional Barriers

I recently wrote a post describing some of the objective tax, immigration and financial planning issues surrounding the renunciation of U.S. citizenship. For all people tax and financial planning issues should be objectively considered. But objective issues can take one only so far. We are all individual human beings who experience the world differently. We all ascribe various degrees of importance to different things. Citizenship is about more than immigration, tax and financial planning. Citizenship is also a huge component of how we see ourselves in the world. Citizenship is part of who we are!

Therefore, for many people the renunciation of U.S. citizenship is very much a psychological and emotional process. It is a process of transitioning to a both a new stage of life and a new stage of self! This is because citizenship is very much a component of (1) who we are today, (2) our personal histories and (3) how we see our futures. I was recently seated at a lunch table with a new Canadian citizen who immigrated to Canada from China. By becoming a Canadian citizen he ceased to be a citizen of China. I asked him how he felt about losing Chinese citizenship. He said that he felt very bad and very sad. But, he said his present and future was in Canada and that he wanted to be and identify as a Canadian citizen. (U.S. citizens do NOT automatically lose their citizenship by naturalizing as Canadian citizens.) To think about citizenship is to think about life planning and (especially for U.S. citizens) financial planning. Citizenship can deprive people of opportunities or open up new opportunities.

As I was counselling a people who was renouncing in February 2024, I was asked:

“Do many people regret renouncing U.S. citizenship?”

In all the years I have been assisting people I have had exactly two people regret their renunciations. But, this was immediately after renunciation and the regret was short lived. In most cases, people comment that they wish they had renounced sooner. That said (especially for those who grew up in the United States) people wish they were not placed in a position where they feel they must renounce.

When it comes to renouncing U.S. citizenship:

People are NOT renouncing because they want to.

People are renouncing because they feel they have to.

Two podcasts to help people overcome the regret of renouncing U.S. citizenship


1. The Retired Citizen – You can always identify as a U.S. citizen if you want to

https://prep.podbean.com/e/the-retired-us-citizen/

2. The Dodge Stratus ad – You’re not losing a sports car. You are GAINING two doors!

https://prep.podbean.com/e/about-loss-of-identity-what-the-dodge-stratus-teaches-us-about-renouncing-us-citizenship/


Hope this helps you clear the emotional hurdles!

John Richardson – Follow me on Twitter @Expatriationlaw

The Five “Americans Abroad” Obama Would Meet In Heaven – How Taxation “Slices and Dices” Americans Abroad

Reminder:

US citizenship abroad information/discussion sessions in January of 2024:

1. London, UK – Wednesday January 17, 2024 – 18:00 – Location: The Sutton Arms – first floor wine room – 6 Carthusian Street, London – EC1M 6EB

2. Prague, Czech Republic – Sunday January 21, 2024 – Brix bar & Hostel, Rohacova 132/15, Prague 3 Žižkov
– 200CZK – includes lunch

3. The Prague session will be livestreamed on the IRSMedic Youtube Channel. Check there for how to join.

Further details here.

Outline, table of contents and purpose of this post.

Because U.S. citizenship taxation impacts different groups in different ways, it is hard to garner a significant mass of people to committed to the mission of ending citizenship taxation. There are five different groups who are impacted by citizenship taxation. Yet they would seem very different if you were to meet them in heaven.

Part A – “The Five People You Meet In Heaven” – the notion of interconnectedness
Part B – Barack Obama and the revival of citizenship taxation – how did his administration “slice and dice” Americans abroad?
Part C – Different kinds of Americans abroad with different attitudes toward the taxation of Americans abroad
Part D – Fault Lines Among Americans Abroad – The discussion in Keith Redmond’s American Expatriates Facebook group
Part E – The Five Types Of Americans Abroad Obama Would Meet In Heaven
Part F – Conclusion

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US Citizens Abroad – Discussion: Sunday January 21, 2024 – 13:00 – Prague Czech Republic (and London, UK – Jan. 17 – 18:30)

U.S. Citizens and Green Card Holders Abroad!!

Update – … London, UK too

I will be in London on Wednesday January 17, 2024. Since I am already there, I am happy to connect with London residents who wish to discuss all things related to surviving as a U.S. citizen living outside the USA. The session is:

When: Wednesday January 17, 2024 – 18:00 – 20:00

Where: Pret A Manger 18:00 – The Sutton Arms – first floor wine room – 6 Carthusian Street, London – EC1M 6EB

Registration for the London session: Please send me an email to: citizenshipsolutions@protonmail.com

Just tell me me your name and indicate that you wish to attend.

Read on to learn what these events/discussions are about.

______________________________________________________

Prague – Sunday January 21, 2024 – Livestream or attend live in Prague

Read on …

An appropriate New Year message …

Are you …

frustrated with the U.S. policy of citizenship taxation?

disappointed with the progress in achieving a change in the law?

fed up with being asked for your vote with no candidates representing your interests?

– finding it difficult to understand what it means to be in compliance?

– finding you cannot afford U.S. tax compliance?

forced to plead GILTI for running a small business?

experiencing further FATCA related problems?

wondering if/when the USA will join the rest of the world by adopting residence taxation?

– concerned that this may impact your non-citizen spouse and family?

– worried about how to plan for retirement?

– worried about estate planning?

– considering renunciation of U.S. citizenship?

These topics and more …

Don’t miss this opportunity to engage in discussion with people who live with the constant of anxiety of being a U.S. citizen living outside the United States. (Green Card holders are welcome too …)

Speaker: John RichardsonToronto based expatriation lawyer, co-founder of SEAT, blogger at CitizenshipSolutions.ca, Commentator on X.com/ExpatriationLaw

When: Sunday January 21, 2024 – 13:00

Where: Brix bar & Hostel, Rohacova 132/15, Prague 3 Žižkov

Cost: 200CZK – includes lunch

Registration:

In order to register please email:

g.smith@brixhostel.com

We look forward to a great (nonpartisan) discussion!

American expats urged to comment on State Dept fee reduction plan by 1st Nov deadline

October 29, 2023 By Helen BurggrafAmerican Expat Financial News Journal

Advocates for fairer tax treatment of American expats by their government, including both the Republicans Overseas and Democrats Abroad, are urging such expats not to hesitate in posting comments on a U.S. State Department proposal to lower the fee currently charged those seeking to renounce their U.S. citizenships, the deadline for which expires in less than three days. 

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Is A Canadian FHSA (“First Home Savings Account”) A Reportable Account Under The Canada/US #FATCA IGA?

August 23, 2023: An Important notice from the Canada Revenue Agency

Interim treatment of NEW First Home Savings Accounts (FHSA) under Part XVIII

The FHSAs are under consideration for being added to the list of the excluded accounts described in Annex II of the Agreement. These accounts do not need to be reviewed, identified or reported at this time.

https://www.canada.ca/en/department-finance/programs/tax-policy/tax-treaties/country/united-states-america-convention-consolidated-1980-1983-1984-1995-1997.html

What does this notice mean for U.S. citizens living in Canada?

On August 23, 2023 the Canada Revenue Agency released its latest guidelines for how financial institutions should interpret the Canada/US FATCA IGA. The guidelines are updated annually to reflect changes (which include) evolving financial products. The Canadian “FHSA” (First Home Savings Account) was introduced in 2023. My recommendation is that U.S. citizens living in Canada should have an FHSA.

The good news is that the FHSA accounts will join other accounts under Annex II which are NOT required to be reported BY FINANCIAL INSTITUTIONS under the FATCA IGAs! The FHSA should be reported by individuals on IRS Form 8938 with their tax returns when the Form 8938 is required!

In other words, U.S. citizens living in Canada can expect that FHSA accounts will NOT be reported to the Canada Revenue Agency and then the IRS.

The text from the guidelines – Section 5.6 (go directly to the bottom) – includes:
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@ADCSovereignty #FATCA Lawsuit Comes To The End Of The Road: Supreme Court of Canada Dismisses Application For Leave To Appeal

Background

The Alliance For The Defence Of Canadian Sovereignty FATCA lawsuit commenced in 2014. It was an incredible initiative which was “crowd funded” by hundreds (if not thousands) of individuals. The lawsuit was commenced by courageous plaintiffs who have been the face of the lawsuit for almost ten years.

A backgrounder on the case is available here.

A backgrounder on the decision of the Federal Court of Appeal is here.

The reasons for why the lawsuit was necessary are evident in this video:

July 13, 2023 – Supreme Court Of Canada Dismisses Application For Leave To Appeal

The order dismissing the appeal, which results in the official ending of this lawsuit is here.

Here is a colourful pdf of the final order:

40552

A series of posts describing various points in the long history of this lawsuit may be found here.

John Richardson – Follow me on Twitter @Expatriationlaw

Appendix

The difficulty in framing the narrative is exemplified in the following “Canadian Press” article and the comments to the article …

Interviews with @MyLatinLIfe: Digital Nomad Issues (including taxation for US citizens)

Between March and May of 2023 I had three discussion/podcasts with “Vance” of MyLatinLife.com.

I have put them all in one post. They will be of interest to “Digital Nomads” and “Remote Workers” generally.

Interview 1:

Interview 2:

Interview 3:

John Richardson – Follow me on Twitter @Expatriationlaw

Should tax residency Be Based On The “Circumstances Of Your Birth” Or The “Circumstances Of Your Life”?

Panel session – US Expat Tax Conference from Deborah Hicks on Vimeo.

Should taxation be based on the “circumstances of your birth” or the “circumstances of your life”? President Obama doesn’t think (apparently) that the “circumstances of your birth” birth should determine the “outcome of your life”. Should the “circumstances of your birth” determine your tax residency?

This is a second post exploring what is the true meaning of U.S. citizenship-based taxation. In an earlier post – “Toward A Definition Of Citizenship Taxation” – I explored the contextual meaning and effect of U.S. “citizenship taxation”. The only “contextual effect” and “practical meaning” of U.S. citizenship taxation may be described as:

Therefore, the practical meaning of “citizenship taxation” is the United States imposing taxation on the non-US source income earned by people who live in other countries. To be clear: citizenship taxation means that the United States is claiming the residents of OTHER countries as US residents for tax purposes!

That’s amazing stuff! Most countries believe that they are sovereign and that includes sovereignty over matters of taxation. Yet, any country that is a party to a U.S. tax treaty has actually agreed that a subset of the treaty partner’s tax residents are ALSO U.S. tax residents! Although nobody questions the right of the United States to prescribe its own definition of tax residency, few would agree that the United States has the right to claim the residents of other countries as U.S. tax residents. Yet, this is what the U.S. citizenship taxation regime means. This U.S. extraterritorial claim of taxation is at the root of the FATCA administration problems and at the root of the the events that led to Treasury Notice 2023-11 (released on December 30, 2022).

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