— John Richardson – lawyer for "U.S. persons" abroad (@ExpatriationLaw) March 30, 2016
Yesterday I was forwarded an email which originated from the U.S. Consulate in Toronto. The purpose of the email (included at the end of this post) was to give notice of U.S. tax obligations for U.S. citizens living outside the United States. In other words, the State Department is assisting the IRS by notifying Americans abroad of their U.S. tax filing obligations. Put another way, this email represents: “Tax Education Outreach” from the IRS delivered by the State Department”
I do NOT recall this in previous years. That said, this email notification is extremely significant. It means that the IRS can argue that those who received this email may well have had notice that they were required to file U.S. tax returns. Over time, this will increase awareness of U.S. tax filing obligations. The greater the increase in awareness of U.S. tax filing obligations, the harder it will be to claim ignorance of those obligations. (This is in addition to the “Educational Outreach” coming in the form of FATCA letters from your local bank and your friendly journalists. In both cases, you are being asked to consider the question of: “Are you or have you even been an American citizen?“) Although, this is NOT an immediate problem, it seems logical that sooner or later it will become more difficult for Americans abroad to claim ignorance of their U.S. tax filing obligations. This may have implications for coming into U.S. tax compliance.
Q. Who would have received this email from the U.S. consulate?
A. Anybody who is on the U.S. Consulate email list. Q. Who would be on the U.S. Consulate email list?
A. It would include almost anybody who has applied for a U.S. passport. To put it simply: One who applies for a U.S. passport is now putting oneself in a position where one will be told about U.S. tax filing obligations. Since most Americans abroad need a U.S. passport, it stands to reason that those who apply for a U.S. passport are creating a situation where they will be told about U.S. “taxation based citizenship”. You can see where this is going. This appears to be the next step in the progression that includes … Continue reading →
“My advice would be to research it very carefully,” Citizenship Lawyer John Richardson said. “If the whole idea is to somehow escape America, to be clear as an American citizen in Canada, you’re legally required to have more contact with the U.S. government while you’re living in Canada than you would if you were still living in the United States.”
This is interesting and very welcome news. France is taking the lead to study and consider the effects of U.S. extra-territorial legislation on France, French businesses, and French citizens. The Commission is being led by Pierre Lellouche (Republicans, Paris) and Karine Berger rapporteur (Socialist, Republican and citizen, Hautes-Alpes). This appears to be a very broad study which includes, but is not limited to: FATCA, the U.S. taxation of French citizens and the “accidental Americans“.
For commentary see the post at Keith Redmond’s American Expatriates Facebook group. The post includes:
BIG NEWS!!!!! FRANCE ESTABLISHES A COMMISSION TO EXAMINE THE US EXTRATERRITORIAL OVERREACH BY THE US GOVERNMENT ON ITS CITIZENS IN FRANCE
“(Inaugural meeting dated Wednesday 2 March 2016)
The commissions for foreign affairs and finances of the French Parliament (Assemblee Nationale) decided to form a joint fact finding mission regarding the extraterritoriality of certain US laws, which held its inaugural meeting on Wednesday 2 March 2016. The president of the mission is Mr Pierre Lelouche (Republican Party, Paris) and his rapporteur is Ms Karine Berger (Socialist Party, Hautes-Alpes).
Several recent events have highlighted the propensity of the US courts and the US administration to purport to impose sanctions against foreign corporations and foreign individuals in respect of events occurring outside of US territory: these range from the record penalty one of France’s largest banks agreed to pay to the US administration (for a failure to comply with a US imposed embargo) to the acquisition of Alstom by General Electric against a backdrop of anti-corruption claims brought by the US authorities against senior managers of Alstom and including the US IRS pursuing French citizens living in France but born on US soil and therefore “Accidental Americans” for US income taxes.
Based on the feedback of a wide array of experts, the fact finding mission will attempt to define the contours of US extraterritoriality, exhaustively identify all cases of extraterritorial application of US laws, assess their impact and in particular their impact on fair competition and the economic losses suffered by French companies as a result, and to study ways in which to counter such practices both at a national and European level.
The mission hopes that its findings will lead to concrete implementation measures. The longstanding and deep ties that exist between France and the US in no way justify that the US should seek to assert legal imperium outside of its borders.rger rapporteur (Socialist, Republican and citizen, Hautes-Alpes).”