Tag Archives: Virgina La Torre Jeker

Podcast: In FBAR We “Trust” Part 2 – Obligations Attaching To People Associated With A Trust


This is the second of a series of four posts exploring some of the more difficult and “interesting” areas of (possible) FBAR obligations.The first post explains the FBAR filing obligations of trusts. This second post explains when individuals may have to file an FBAR because of their relationship to a trust. The third post explains how/why one may be required to file an FBAR based on control of an account rather than ownership of the account. The fourth post continues the discussion of when beneficial ownership without legal ownership triggers an FBAR obligation. The four posts are based on Podcasts with US tax lawyer Virginia La Torre Jeker.

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The "Exit Tax": Dual US/Canada citizen from birth, no Canada citizenship today = no exemption to US "Exit Tax"

The above tweet references a “guest post” written by Dominic Ferszt of Cape Town South Africa. The post demonstrates how the “dual citizen from birth” exemption to the S. 877A “Exit Tax” relies on the citizenship laws of other nations. In some cases those laws of other nations are arbitrary and unjust. If these laws were U.S. laws, they might violate the equal protection and/or due process guarantees found in the United States constitution. For example, Mr. Ferszt describes how the “dual citizenship exemption” to the “Ext Tax” is dependent on South African “Apartheid Laws”. He describes a situation where a “black” U.S. citizen from birth is denied the benefits of the dual citizen exemption to the Exit Tax, which are available to a “white” dual citizen from birth. (During the “Apartheid Era” Blacks were not entitled to South African citizenship.)

So, what’s the S. 877A “Exit Tax”  dual citizen exemption and how does it work?

The dual citizen exemption, which I have discussed in previous posts,  is found in Internal Revenue Code S. 877A(g)(1)(B) and reads:

(B) Exceptions An individual shall not be treated as meeting the requirements of subparagraph (A) or (B) of section 877(a)(2) if—

(i) the individual—

(I) became at birth a citizen of the United States and a citizen of another country and, as of the expatriation date, continues to be a citizen of, and is taxed as a resident of, such other country, and
(II) has been a resident of the United States (as defined in section 7701(b)(1)(A)(ii)) for not more than 10 taxable years during the 15-taxable year period ending with the taxable year during which the expatriation date occurs, or

Entitlement to the “dual citizen exemption” depends entirely on the citizenship laws of other countries …

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@VlJeker Newsweek interview on #FATCA and #Americansabroad

Virginia La Torre Jeker is a U.S. tax  lawyer  practising in the Gulf. She has shared the text of her recent interview with Newsweek. Although I highly recommend the complete interview, the following is of particular interest.

8. NEWSWEEK: Do you think more and more people will give up their US citizenship?
 VLJ: Absolutely – I have them as clients and am seeing more and more of them each day. I understand that many Consulates and Embassies in Europe have waiting lines for those wishing to expatriate. Think about it  – let’s say you are a Saudi Arabian national and are very happy living and working in Saudi Arabia or some other tax-free Middle Eastern country.  You plan to remain in the region because this is where you grew up, your family is here and your roots are here. Perhaps you became a US citizen after studying in America over a decade or two ago. You also have ownership in the family business and plan to build it up with your siblings.  The US tax laws require you to report extensive information about that foreign-owned business  causing disharmony in your family (including for example, provision of profit and loss statements, as part of your US tax return); you may have to file information returns about the financial accounts owned by that business; you will be paying US tax on your world-wide income and many potential business partners may no longer wish to do business with you because you are an American.  Wearing those shoes, a decision to expatriate may become more understandable