Note: This post was originally written in 2015. Parts of this post have been updated in January of 2021. (The original post is here.) The changes reflect the evolution of my thinking. I now believe that Treasury could (or could have) accomplished much of this proposal through Treasury regulations.
The 2015 Obama budget "non-tax proposal" for “dual citizens” cannot be implemented without Congressional approval http://t.co/wFVv9kaxUu
— John Richardson – lawyer for "U.S. persons" abroad (@ExpatriationLaw) February 8, 2015
Part 1 – The Obama 2015 Budget Proposal – Change you can believe in?
It is possible that (at long last) the U.S. government is beginning to recognize that there is a difference between “technical citizenship” and a voluntary U.S. connection indicative of “substantive citizenship” that might (but is not required to) justify taxation of U.S. citizens abroad in the 21st century.
In September of 2014, I conducted a “Problems of U.S. Citizenship Session” in Montreal, Canada. As usual many of the attendees were in the midst of their OMG (“Oh My God Moment”). The phrase “OMG Moment” is well known. But, what is the “OMG Moment”? I suggest that the “OMG” moment is one of two things. It is either:
1. The moment that those who believe that they are U.S. citizens (or other “U.S. persons”) learn that they are required (even though they don’t live in the U.S.A.) to obey U.S. tax laws, file U.S. tax and information returns, and are subject to the draconian life altering penalties that are part of membership in Club U.S.A.; or
2. The moment that they learn for the first time that they may be considered to be a U.S. citizen (or other U.S.person). This post will focus on those in the second group. That is on:
Those who do NOT believe and have not believed they are U.S. citizens and are learning that they “may be considered to be a U.S. citizen”. Continue reading →