On February 12, 2014 I made submissions to the New Zealand Finance and Expenditure Committee concerning a possible New Zealand FATCA IGA with the United States. My original submission may be found here.
At the end of that submission, the committee requested additional information about the 877A Exit Tax imposed on “covered expatriates”. The purpose was to assess the relevance of this information to a possible IGA between New Zealand and the United States. I have written a second detailed submission which is of relevance to ALL countries contemplating a FATCA IGA. This submission will also be of interest to those who wish to understand the workings of the Exit Tax on the most basic level.
Here is the pdf version of the submission. As always, comments are appreciated.
This article appeared in the Toronto Observer which is a paper published through the journalism program at Centennial College in Toronto. It’s great to see awareness of FATCA and citizenship-based taxation expanding. The article includes:
Former American Peter Dunn wants Americans living in Canada to ask themselves an important question.
“Am I really an American citizen?”
Dunn, 50, has recently co-founded the Isaac Brock Society, a group raising awareness about the Foreign Account Tax Compliance Act (FATCA). Dunn settled permanently in Canada in 1994.
FATCA, designed to hinder tax evasion, forces American-Canadian residents to file taxes with the Internal Revenue Service (IRS). Dunn believes FATCA takes advantage of Americans abroad.
Tis the season (or almost) for those who plan to file U.S. Tax returns. Some of you have a tax preparer and some do not. U.S. Tax Prep is a site that is devoted to the problem of finding a competent and reasonable priced (is it possible to find both those things in one person) preparer. Those who either don’t have a preparer or aren’t happy with their preparer might start there. Here are some thoughts:
If you have a Chevrolet situation you don’t want a Cadillac preparer. With few exceptions, lawyers should not be used as tax preparers. They are simply too expensive. Here are parts of two emails that I have received in the last two days. Continue reading →
Significant Quotes: London Lawyer: “If you compare it to “romance” the U.S. is like fatal attraction, once they have got you, they will never let you go. You have to renounce your citizenship or you have to die.” Government Officials off the record: “Nobody in Congress represents overseas Americans.” Government Officials off the record: “It might be worth it lose a few thousand American citizens to catch some tax cheats.
The proposed changes come along with higher maximum fines and jail terms for citizenship fraud, as well as new options to – through the courts – strip citizenship from dual citizens convicted of certain serious crimes, such as terrorism. Many of the provisions are retroactive, leaving lawyers to wonder whether they’ll affect past high-profile cases, such as those in the “Toronto 18” terrorist plot.
But “several aspects” of the citizenship-stripping provisions wouldn’t likely survive a constitutional challenge, said Audrey Macklin, chair of Human Rights Law at the University of Toronto, who once served on the Immigration and Refugee Board. Other lawyers agreed.
Brad Westerfield, a tax lawyer at Butler Snow, said that renunciations have increased following the implementation of a new disclosure law — the Foreign Account Tax Compliance Act — that targets overseas tax evasion.
The measure, approved by Congress in 2010, is aimed at recouping some of the hundreds of billions the government says it loses each year in unpaid taxes.
“They’ve become so complicated — the increased filing obligations over the years,” Westerfield said. “You see more people giving up their citizenship or relinquishing their green cards … Individuals [are] wanting to simplify their financial affairs, and just pay tax and report to one jurisdiction.”
The comments are amazing. Great window into what America thinks of its expats. Would you want to remain a citizen of a country that regards you with so much contempt?
Adam Geller is a New York based national writer for the Associated Press. He is considering an article on the whole issue of Americans abroad and renunciations of U.S. citizenship (or not). Mr. Geller has lived overseas. Continue reading →