Hat tip to Mr. L.J. Eiben of Raymond James who provided this excellent presentation.
Now a discussion about US Social Security with L.J. …
Mr. L.J. Eiben is a Financial Advisor at Raymond James.
The information in this podcast and contained in these slides was obtained from sources RJA and believed to be reliable; however, we cannot represent that it is accurate or complete. It is provided as a general source of information and should not be considered personal investment advice or solicitation to buy or sell securities. The views expressed are not necessarily those of Raymond James (USA) Ltd. Raymond James (USA) Ltd. (RJLU) advisors may only conduct business with residents of the states and/or jurisdictions for which they are properly registered.
Raymond James (USA) Ltd. is a member of FINRA / SIPC
Bonus!! Renunciation and US Social Security
Updates November 22, 2021:
1. I have also written a post on the SEAT site which compares (in a general way) the Beyer Bill of 2021 to the Holding Bill of (2018). Any attempt to solve this problem through amending the FEIE actually has the effect of strengthening citizenship based taxation.
2. With respect to the 402(b) exclusion:
Update 1 Nov. 22: The exclusion of 402(b) plans is I believe an accident. But it demonstrates why these problems can't be solved by patching existing legislation. "The Beyer "Tax Simplification For Americans Abroad Act": A First Look "https://t.co/tSGYunrqmQ via @expatriationlaw
— John Richardson – lawyer for "U.S. persons" abroad (@ExpatriationLaw) November 22, 2021
Update – Podcast November 24, 2021
— John Richardson – lawyer for "U.S. persons" abroad (@ExpatriationLaw) November 21, 2021
On November 19, 2021 a post on the Democrats Abroad site introduced Congressman Beyer’s “Tax Simplification For Americans Abroad Act”. The Bill has been introduced as HR6057. I just saw this a few hours ago. Therefore, this post is necessarily a summary of my first impressions. It is likely that this will evolve and be updated over the next few days.
For those who do not want to read this relatively long post, the following excerpt provides an executive summary:
The Beyer Bill does NOT end US “citizenship-based taxation” and does NOT enact “residence-based taxation” as understood in the rest of the world. That said, the Beyer bill is intended to provide administrative (less to do) and substantive (less to pay) relief to middle class Americans abroad as long as they are not “entrepreneurs abroad” who carry on business through a CFC. “Entrepreneurs abroad” continue to be presumptively GILTI. If I am reading this correctly, GILTI income appears to NOT be included in the expansion of the scope of 911. Furthermore, the bill appears to provide conflicting directives on some “foreign pensions” (specifically excluding 402(b) pensions from the proposed new 911 exclusion while generally allowing foreign pensions generally to be excluded). It is my understanding that many Australian residents treat employer Superannuations as 402(b) pensions under the Internal Revenue Code.)
Like all “carveouts” the proposal purports to provide relief to a narrowly defined group of Americans abroad. In addition (this cannot be overemphasized) the bill retains US citizenship-based taxation. It should be clearly understood that ANY attempt to provide relief through expanding the FEIE (including the 2018 Holding bill) necessarily assumes the continuation of citizenship-based taxation.
This post is composed of the following four parts:
Part A – The General Purpose
Part B – General Impressions
Part C – The relevant modifications to IRC 911 Foreign Earned Income Exclusion
Part D – Tentative conclusion
* Appendix – The text of 911 with the proposed changes
Thursday November 18, 2021 – “Work From Anywhere” – registration link:
— John Richardson – lawyer for "U.S. persons" abroad (@ExpatriationLaw) November 11, 2021
On Thursday, November 18 from Noon-1:00PM, AmCham will be holding a webinar titled Work from Anywhere: Tax and Legal Considerations for Employers and Employees. This webinar, which was originally scheduled earlier this year and which follows from the successful webinar AmCham held addressing corporate tax issues, will analyze tax and legal matters that arise from the pandemic induced trend to have employees work from anywhere in the world.
This webinar will discuss pertinent topics in this area such as:
1. What are the recent trends regarding work from home arrangements in Canada and throughout the world?
2. What are some of the emerging issues associated with remote working arrangements? and
3. What are some of the practical steps businesses and executives may take to manage these risks?
The panel for this webinar features four knowledge leaders in the field of law and taxation.
* Michael Pereira, Partner, KPMG – Michael focuses on providing consulting and compliance services to high-net-worth individuals and senior executives with complex U.S. and Canadian tax issues. Michael specializes in intricate tax matters such as: 1) U.S. estate tax issues affecting U.S. citizens living in Canada and their U.S. citizen and/or U.S. resident children; 2) tax issues regarding foreign private equity structures, and 3) U.S. anti-deferral tax system for interests in foreign corporations, including the passive foreign investment corporation and controlled foreign corporation regimes. Michael is a Chartered Accountant and a Certified Public Accountant who earned a Masters of Science in U.S. Taxation from Wayne State University.
* Laura Tippett, Partner (Leader of Program Services – Regions East), KPMG – Laura has 15 years’ experience in Canadian and US personal tax and expatriate issues. Laura assists companies and their employees who are travelling cross-border, working with a variety of industries, including technology, defense, construction, consulting, energy, crown corporations and non-profit organizations. She works with employees who are on foreign assignment, travelling internationally on business, working remotely cross-border or relocating abroad. Laura has managed the Canadian/US expatriate programs for numerous multinational organizations, including overseeing several programs that have hundreds of Canadian-touching assignees annually.
* Kaley Dodds, Senior Manager, Employment & Labour Law, KPMG – Kaley’s is a management-side employment lawyer who represents private, public and institutional clients in a wide range of matters. Her practice covers employment, labour and human rights issues, ranging from litigation strategy, legal risk management, policy development, workplace training, to day-to-day employee relations and human resources advice. Kaley is called to the bar in Ontario and Alberta and has appeared before all levels of courts, arbitrators and human rights tribunals in both provinces.
* Ellen S. Kief, Principal and Managing Attorney at Kief Law – Ellen works with clients across Canada, the United States, and throughout the world addressing issues associated with U.S. immigration law. Ellen’s practice focuses on cross-border travel, business visas, investor visas, entertainment and sports, family visas, permanent residence and citizenship. Ellen is a national speaker and educator who has presented on numerous U.S. immigration topics including cross-border business travel, family immigration, inter-company transfers, and various types of immigrant and non-immigrant visas.
If you would like more information about this event, please see the flyer attached to this message. The flyer contains a link at the bottom where you may register to attend the event.
We hope you will be able to join us on November 18 for what should be a stimulating event. Thank you for your support of AmCham and its mission. Have a good day.
November 8, 2021 …
More on the Form 3520 penalty epidemic: "To be FORMWarned is to be FORMArmed! The easiest way to receive a Form 3520A penalty would be to file a Form 3520" https://t.co/zkxpLmeYbt via @expatriationlaw
— John Richardson – lawyer for "U.S. persons" abroad (@ExpatriationLaw) November 9, 2021
I just got off the phone with another person who was assessed a $10,000 penalty in relation to a Canadian TFSA (which is probably not even a trust for US purposes, which means it can’t be a foreign trust). Predictably her response is to simply renounce US citizenship.
The conversation reminded me of a podcast that I did (last January with CPA Gary Carter) about the 3520/A IRS penalty problem. As I result, I am posting this podcast.
This podcast features a discussion with CPA Gary Carter that includes:
It has become increasingly difficult for US citizens living outside the United States to comply with the US tax and regulatory regime. Unfortunately Americans abroad are being constructively forced to renounce US citizenship.
People are NOT renouncing US citizenship because they want to! They are renouncing because they have to!
The following podcast discusses many of the issues surrounding the renunciation decision. The discussion includes a discussion of several profiles, the applicability of the 877A Exit Tax and the dual citizenship from birth exemption.
Follow me on Twitter @Expatriationlaw
Prologue – April 26, 2017 – The Meadows FATCA Hearing
Democratic policy makers have been supporting automatic bank reporting of domestic bank information to the IRS since at least as early as 2017! See Elise Bean testifying at the Meadows FATCA hearing: https://t.co/Z7YPic8VRS
— John Richardson – lawyer for "U.S. persons" abroad (@ExpatriationLaw) October 17, 2021
2021 – The Democrats attempt to legislate domestic bank reporting to the IRS
President Reagan said "We are a nation that has a government — not the other way around." He could not have foreseen @TheDemocrats proposal of domestic #FATCA that bank information of resident Americans would be automatically be reported to the IRS. https://t.co/yigPUU3JNq
— John Richardson – lawyer for "U.S. persons" abroad (@ExpatriationLaw) October 16, 2021
The Democratic Party is working hard to turn America’s domestic banks into agents/accessories of the Internal Revenue Service. Specifically the Biden administration, Senate Democrats and the House Democrats are ALL in support of the proposal (which as informally described) is to require banks to automatically report aggregate inflows and outflows to the IRS. The Biden administration and Senate Democrats support a threshold of $600. The House Democrats appear to favour a reporting threshold of $10,000. As reported here Nancy Pelosi supports this reporting initiative.
When I hear people say that the IRC 911 FEIE and/or the IRC 901 FTC rules mean that #Americansabroad don't pay taxes to the US, I am reminded of John F. Kennedy's 1962 Commencement speech at Yale where he said: https://t.co/N6sOOPL4vO
— John Richardson – lawyer for "U.S. persons" abroad (@ExpatriationLaw) October 8, 2021
This is the fourth of a series of posts about international tax reform generally and how FATCA, CRS, citizenship-based taxation, GILTI, etc. work together.
The first three posts were:
This fourth post continues where the third post – How The World Should Respond To The US FATCA Driven Attack On The Tax Base Of Other Countries – left off. That post described in a general way that FATCA facilitated the US taxation of residents of other countries. The purpose of this post is to give a small number of important examples. To repeat:
The imposition of FATCA on other countries means that …
The United States has effectively expanded its tax base into other countries by claiming residents of other countries as US tax residents. This is a direct attack on and the erosion of the tax base of those other countries.
#FATCA helps US erode tax base of other countries in two ways: 1. Attracting foreign capital to @TaxHavenUSA 2. Imposing direct tax on residents of other countries: "FATCA: The 2010 'tax evasion law' that's 'now an extra-territorial money-sucking machine'" https://t.co/1DYJJ7TYeX
— John Richardson – lawyer for "U.S. persons" abroad (@ExpatriationLaw) October 7, 2021
This purpose of this post is to continue the general theme of focusing on the difference between what a law says and what the law means in application and effect. Yesterday’s post (The Pandora Papers, FATCA, CRS And How They Have Combined To Create Tax Haven USA) focussed on the role that the 2010 US FACTCA law played in in facilitating the rise of Tax Haven USA. (To be clear, I am not saying that FATCA was the sole cause.) That said, the unwillingness of the USA to sign the CRS (“Common Reporting Standard”) has also played a role in the growth of the US as a tax haven.
Many believe that FATCA is just the US version of the CRS. Because of this belief the US has received little or no resistance to its refusal to join the CRS. This belief that FATCA and the CRS are fundamentally the same is wrong. They are very different.
The purpose of this post is two-fold.
First, to explain how/why FATCA is very different from the CRS.
Second, to explain how FATCA is used to export the “original sin” of US citizenship-based taxation into other countries. To put it simply FATCA assists the United States in capturing the tax residents of other countries and subjecting them to direct US taxation.