Category Archives: Americans abroad

FATCA Is Not the Answer

Reposted from SEATNow.org.

On February 26, 2024, Tax Notes Federal published an article entitled “Taxing Fat Cats Abroad.”

The article defended the Foreign Account Tax Compliance Act (FATCA) as an “automatic exchange of information used to track down and tax accounts held by wealthy U.S. citizens living abroad.”

The article contained many errors and misinterpretations.

SEAT co-founders John Richardson, Karen Alpert, and Laura Snyder submitted a response to the article, entitled “FATCA Is Not the Answer.”

Their response, published on March 18, 2024, can be accessed via SSRN at this link.

The response explains:

1. The considerable differences between FATCA and CRS. They include FATCA’s lack of reciprocity and the United States’ refusal to join CRS;

2. The inequalities inherent in the U.S. tax system with respect to Americans living outside the United States and their discriminatory treatment;

3. The irrelevance of FATCA with respect to Farhy v. Commissioner and Bittner v. United States;

4. The unjust stigmatization of Farhy, Bittner, and all Americans living outside the United States;

5. Inconsistencies between the article’s defense of citizenship-based taxation and the “single tax principle” advocated by professor Reuven Avi-Yonah;

6. The failure of the article, in its theorectical defense of citizenship-based taxation, to contend with the real system in place today and its myriad intractable problems;

7. The lack of any connection between taxation and voting rights;

8. The importance of the 14th Amendment for the equal protection of the rights of Americans living outside the United States; and

9. That the 16th Amendment is not — and it should not be used as — a license to channel violations of constitutional and human rights through the tax code.

John Richardson – Follow me on X.com

The Unknown Ambassadors: A Saga Of Citizenship – Phyllis Michaux

I just read “The Unknown Ambassadors: A Saga Of Citizenship” by Phyllis Michaux.* Phyllis Michaux was an American citizen who married a French citizen/resident. She lived her adult life in France. By any standard, she was an impressive and effective advocate for the rights of Americans abroad.**

I recommend the book (if you can find a copy) to all Americans abroad. As diverse as the community of Americans abroad is, what unites them is far greater than what divides them. What unites all Americans abroad is the horrible discriminatory treatment they suffer at the hands of the U.S. government. (As the distribution of vaccines in the covid pandemic demonstrated, the discriminatory treatment is NOT limited to taxation.) In this respect the United States is practically unique. Ireland honours and celebrates its diaspora. France gives it expats representatives in the legislature. The United States does (in 2024) and always has (as documented in “The Unknown Ambassadors”) mistreat its citizens abroad. U.S. citizens abroad are examples of the “discrete and insular minorities” contemplated in Justice Stone’s infamous Carolene Products footnote 4.)**** U.S. citizens, more than the citizens of any other country are in need of a second citizenship.

Phyllis Michaux’s achievements from the 20th century offer lessons for the many individuals and groups who are advocating to achieve justice for Americans abroad in the 21st century.

“The Unknown Ambassadors” provides an account of Ms. Michaux’s recognizing discrimination against Americans abroad as a matter of fact, identifying the laws responsible for that discrimination, identifying the appropriate U.S. government agencies to lobby for change and finally executing that change. Advocates for Americans abroad in the 21st century should read this book. A testament to her achievements is that the “Phyllis Michaux Papers” are found in the “Georgetown University Archival Resources”.

Continue reading

Part 54 – Reactions To The Argument Before The Supreme Court In Moore: “Due Process” Does Matter

Introduction – More on Moore – A Focus on “due process”

Much of the argument before the Supreme Court in the Moore case focused NOT on whether there was income (it was accepted that the foreign corporation had realized income). Rather the discussion was focused on “due process issues”. Specifically the issues of (1) the retroactive nature of the income and (2) the fairness of attributing the income of the foreign corporation to the U.S. shareholder.

In Part 42 and Part 49 have written about the relevance of retroactivity.

Because “due process” issues were raised in the hearing, some commentators have begun discussing the “due process” issues which are part of the Moore appeal.

What follows are links to some examples of the discussion.

It will be fascinating to see how “due process” factors into the decision of the Court.

Interested in Moore (pun intended) about the § 965 transition tax?

Read “The Little Red Transition Tax Book“.

John Richardson – Follow me on Twitter at @USTransitionTax

The Five “Americans Abroad” Obama Would Meet In Heaven – How Taxation “Slices and Dices” Americans Abroad

Reminder:

US citizenship abroad information/discussion sessions in January of 2024:

1. London, UK – Wednesday January 17, 2024 – 18:00 – Location: The Sutton Arms – first floor wine room – 6 Carthusian Street, London – EC1M 6EB

2. Prague, Czech Republic – Sunday January 21, 2024 – Brix bar & Hostel, Rohacova 132/15, Prague 3 Žižkov
– 200CZK – includes lunch

3. The Prague session will be livestreamed on the IRSMedic Youtube Channel. Check there for how to join.

Further details here.

Outline, table of contents and purpose of this post.

Because U.S. citizenship taxation impacts different groups in different ways, it is hard to garner a significant mass of people to committed to the mission of ending citizenship taxation. There are five different groups who are impacted by citizenship taxation. Yet they would seem very different if you were to meet them in heaven.

Part A – “The Five People You Meet In Heaven” – the notion of interconnectedness
Part B – Barack Obama and the revival of citizenship taxation – how did his administration “slice and dice” Americans abroad?
Part C – Different kinds of Americans abroad with different attitudes toward the taxation of Americans abroad
Part D – Fault Lines Among Americans Abroad – The discussion in Keith Redmond’s American Expatriates Facebook group
Part E – The Five Types Of Americans Abroad Obama Would Meet In Heaven
Part F – Conclusion

___________________________________________________________________
Continue reading

US Citizens Abroad – Discussion: Sunday January 21, 2024 – 13:00 – Prague Czech Republic (and London, UK – Jan. 17 – 18:30)

U.S. Citizens and Green Card Holders Abroad!!

Update – … London, UK too

I will be in London on Wednesday January 17, 2024. Since I am already there, I am happy to connect with London residents who wish to discuss all things related to surviving as a U.S. citizen living outside the USA. The session is:

When: Wednesday January 17, 2024 – 18:00 – 20:00

Where: Pret A Manger 18:00 – The Sutton Arms – first floor wine room – 6 Carthusian Street, London – EC1M 6EB

Registration for the London session: Please send me an email to: citizenshipsolutions@protonmail.com

Just tell me me your name and indicate that you wish to attend.

Read on to learn what these events/discussions are about.

______________________________________________________

Prague – Sunday January 21, 2024 – Livestream or attend live in Prague

Read on …

An appropriate New Year message …

Are you …

frustrated with the U.S. policy of citizenship taxation?

disappointed with the progress in achieving a change in the law?

fed up with being asked for your vote with no candidates representing your interests?

– finding it difficult to understand what it means to be in compliance?

– finding you cannot afford U.S. tax compliance?

forced to plead GILTI for running a small business?

experiencing further FATCA related problems?

wondering if/when the USA will join the rest of the world by adopting residence taxation?

– concerned that this may impact your non-citizen spouse and family?

– worried about how to plan for retirement?

– worried about estate planning?

– considering renunciation of U.S. citizenship?

These topics and more …

Don’t miss this opportunity to engage in discussion with people who live with the constant of anxiety of being a U.S. citizen living outside the United States. (Green Card holders are welcome too …)

Speaker: John RichardsonToronto based expatriation lawyer, co-founder of SEAT, blogger at CitizenshipSolutions.ca, Commentator on X.com/ExpatriationLaw

When: Sunday January 21, 2024 – 13:00

Where: Brix bar & Hostel, Rohacova 132/15, Prague 3 Žižkov

Cost: 200CZK – includes lunch

Registration:

In order to register please email:

g.smith@brixhostel.com

We look forward to a great (nonpartisan) discussion!

Part 52 – December 5, 2023 – The Supreme Court Hearing In Moore v. United States

Moore v. United States – December 5, 2023

https://www.supremecourt.gov/oral_arguments/audio/2023/22-800

Audio of the actual hearing:

This podcast is an audio of the actual argument that took place before the court. The relevant link to the Supreme Court site is:

https://www.supremecourt.gov/oral_arguments/audio/2023/22-800

Significantly a transcript of the argument is available at:

https://www.supremecourt.gov/oral_arguments/argument_transcripts/2023/22-800_9ol1.pdf

The audio of the argument is also available at:

https://prep.podbean.com/e/moore-v-united-states-december-5-2023-the-argument-before-the-court/

_______________________________________________

SEAT President Dr. Laura Snyder attended the hearing. A fascinating podcast discussing her observations (right after the hearing ended) is available here.

https://prep.podbean.com/e/december-5-2023-debriefing-the-moore-case-what-happened-at-the-hearing/

SEAT along with AARO authored an amicus brief which explained the how the 965 transition tax impacted Americans abroad.

IRS Medic hosted a podcast both before, during and after the Supreme Court hearing. A link to that podcast is here:

Interested in Moore (pun intended) about the § 965 transition tax?

Read “The Little Red Transition Tax Book“.

John Richardson – Follow me on Twitter @Expatriationlaw

Part 51 – Twas The Night Before Moore – SEAT Members Discuss What They Expect In Moore Hearing

December 2, 2023 – Participants include:

Dr. Karen Alpert – @FixTheTaxTreaty

Dr. Laura Snyder – @TAPInternation

John Richardson – @Expatriationlaw

SEAT members Dr. Karen Alpert, Dr. Laura Snyder and John Richardson discuss their predictions on how the Supreme Court will grapple with the difficult decisions in Moore. The SEAT/AARO amicus brief is here.

Prologue:

Twas the Night before Moore Poem

Twas the night before Moore, when all through the court
Not a justice was stirring, not even a clerk.
The issues were hung in the briefs with care,
In hopes that the justices soon would be there.

The tax profs were nestled all snug in their beds,
While visions of fake-income danced in their heads.
And Kathleen in ‘kerchief, and Charles in cap,
Had just settled their brains for a retroactive tax.

Interested in Moore (pun intended) about the § 965 transition tax?

Read “The Little Red Transition Tax Book“.

John Richardson – Follow me on Twitter @Expatriationlaw

Americans Abroad Aren’t Denouncing Because They Want To. They Are Renouncing Because They Feel They Have To

Introduction/background:

Denunciation of U.S. Citizenship – From the perspective from a U.S. Senator

Renunciation of U.S. Citizenship – From the perspective of a U.S. journalist

It’s hard to have a discussion about why Americans abroad are renouncing U.S. citizenship. There are many different perspectives about renunciation. There is very little “shared reality”. Tax academics (who have the resources to know better), “pensioned intellectuals”, politicians and most journalists see this from a “U.S. resident perspective”. They don’t understand the reality of the lives of Americans abroad. But, Americans abroad are NOT a monolith. The ONLY thing they have in common is that they live outside the United States. Their circumstances vary widely. There is little “shared reality” among Americans abroad of what the issues are. AT the risk of oversimplification, I have attempted to divide “Americans abroad” into four categories (as defined below). The categorization will explain why different groups of “Americans abroad” experience the U.S. extra-territorial tax regime differently.

Hint: Americans abroad aren’t renouncing U.S. citizenship because they want to. They are renouncing U.S. citizenship because they feel they have to.

Politicians, tax academics, “pensioned intellectuals” and many journalists deal in the world of opinions. The opinions they hold are often “myths”. They are not “facts”. They are entitled to their opinions (as misguided and ignorant as they may be). They are NOT entitled to their “facts”.

This post is to describe the facts about how the extra-territorial application of the Internal Revenue Code and the Bank Secrecy Act pressure many Americans abroad to renounce U.S. citizenship. Interestingly a large percentage of those renouncing owe ZERO taxes to the U.S. government. They renounce anyway!

First, a bit of background to the problem – what is the problem and who is affected?

They do NOT meet the test of being “nonresident aliens” under the Internal Revenue Code

As SEAT cofounder, Dr. Laura Snyder explains, in the first of her 16 “working papers” describing the problems of Americans abroad:

The people most affected by the U.S. extraterritorial tax system are not a monolithic group. Some left the United States recently, some left years or decades ago. Some left as adults (some young, some middle-aged, and some retirees), while others left as children (with their families), and some have never lived in the United States (they are U.S. citizens by virtue of the U.S. citizenship of at least one parent). Some intend to live in the United States (again) in the near or distant future, while others do not intend to ever live in the United States (again). Some identify as Americans while others do not. Many are also citizens of the country where they live (dual citizens) while others hold triple or even quadruple citizenships. In referring to this group, there is no one term that sufficiently reflects its full diversity. What unites them is that they do not meet the test of “nonresident alien” under the Internal Revenue Code. Depending upon the context, this series of papers will use terms such as “persons,” “individuals,” “affected individuals,” and “overseas Americans.” The latter term has a drawback, however: it emphasizes connections to the United States while minimizing the important connections that such persons have to the countries and communities where they live.

That said, what divides Americans abroad may be greater than what unites Americans abroad!

Continue reading

Part 2 – Citizenship Matters: Elvis, Casablanca, Citizenship and Immigration: When Art Imitates Life

My day at the movies …

This post is a continuation of of my first post about Joe Grasmick’s “Free Trade Professionals” conference that took place in September of 2023 in Mexico City. The first post described the conference and why “citizenship matters”. The morning after the conference ended I boarded a plane for a long flight. I was still thinking about citizenship and immigration.

Usually I don’t watch movies on flights. This time (who knows why) I went through the movie selection and saw two movies where “citizenship/immigration status” played a huge role (whether directly or indirectly) on the lives of individuals. (I didn’t realize this until I watched both movies.) The new 2022 movie “Elvis” and the 1942 old movie “Casablanca” were on the menu. I watched both. Some thoughts on each …

“Elvis” the movie:

A great movie. Sure, it’s about the life and times of Elvis Presley. But, the story of Elvis also includes the role of his manager’s status as an illegal alien in the United States. A partial description includes:

Afterwards, Elvis headlines at the largest showroom in Las Vegas, the International Hotel, and resumes concert tours. Parker’s control of Elvis’ life tightens as he refuses Elvis’ request for a world tour. Motivated by gambling debts, Parker manipulates Elvis into signing a contract for a five-year Las Vegas casino residency. Elvis’ problematic behavior and prescription drug addiction overtake him, and a despondent Priscilla divorces him on his 38th birthday, taking their daughter Lisa Marie with her. After discovering that Parker cannot leave the country because he is a stateless illegal immigrant, Elvis attempts to fire him. Parker subsequently informs Vernon that the family owes him an $8.5 million debt accumulated over the years and convinces Elvis of their symbiotic relationship; though the pair rarely see each other afterward, Parker continues as his manager

https://en.wikipedia.org/wiki/Elvis_(2022_film)

How might the life of Elvis Presley been different if Colonel Tom Parker had either been a U.S. citizen or had a Green Card? Would Elvis’s career have unfolded differently? For that matter would he have died at such a young age? Clearly he would have toured outside the United States.

But, enough on Elvis. The more interesting story of the role of citizenship and immigration (and how they relate to Americans abroad) is found in the 1942 classic movie “Casablanca”.

.
“Casablanca” the movie:

Casablanca is a true classic. Classics (whether books, movies or art) are interpreted in different ways, by different people at different stages in their lives. As the flight took off, I was still thinking about immigration and how everybody is an immigrant or alien somewhere. How certain people (because of their lack of citizenship are subject to a form of “citizenship apartheid“. Because my mind was in the world of immigration and because I had clearly been a “foreigner” in Mexico City, I saw Casablanca in a completely different light. As described by Wikipedia

“Casablanca is a 1942 American romantic drama film directed by Michael Curtiz, and starring Humphrey Bogart, Ingrid Bergman, and Paul Henreid. Filmed and set during World War II, it focuses on an American expatriate (Bogart) who must choose between his love for a woman (Bergman) and helping her husband (Henreid), a Czechoslovak resistance leader, escape from the Vichy-controlled city of Casablanca to continue his fight against the Germans. The screenplay is based on Everybody Comes to Rick’s, an unproduced stage play by Murray Burnett and Joan Alison. The supporting cast features Claude Rains, Conrad Veidt, Sydney Greenstreet, Peter Lorre, and Dooley Wilson.”

Although Casablance may be in part a “romantic drama film” it is certainly a story about oppression, refugees, human mobility, citizenship, chance, injustice and human survival. Coming off the immigration conference, I interpreted the movie largely through the lens of circumstance, citizenship, fortune driven by the accident of birth and how little is required to disrupt the life any person. As the movie makes clear from the outset, people came to Casablanca because they were fearing and trying to escape from tyranny and were generally trying to get to “the Americas” (the safe haven of the time).

This is the trailer.

It’s a great movie. It’s great entertainment for people of all ages. But, seen through the perspective of citizenship and immigration it exhibits many parallels to the lives of Americans abroad.

What follows are some clips that exhibit analogies to common scenarios.

__________________________________________________________________________

Some meaningful clips from the movie Casablanca ..

A: Rick experiences an “Oh My God Moment”: On random events – sometimes bad things happen to good people…

B: About U.S. Citizenship and taxation – “It’s based on the circumstances of birth”

C: About the forced imposition of citizenship – Reminds me of the Accidental Americans – “I have never accepted tha privilege. I am now on French soil.”…

D: About the importance of the visa, passport and mobility documentation – It’s all relative … One way or the other, “citizenship matters”. Apparently Rick is always free (from an immigration and citizenship perspective) to return to the USA

E: “To renounce of not to renounce, that is the question”: On the meaning of the decision (including the renunciation decision) – If you don’t get on that plane (renounce), you’ll regret it …

F: Here’s looking at you kid – The U.S. extra-territorial tax regime (although a big problem is a “first world problem”)

G: I finally understood the origins of the title of the Wood Allan movie “Play It Again Sam” …

John Richardson – Follow me on Twitter @Expatriationlaw

Appendix – The trailer for “Play It Again Sam”

Part 1 – Citizenship Matters: How The Lives Of “Free Trade Professionals”, Americans Abroad And Casablanca Overlap

Mexico City – September 2023 – A reminder that citizenship matters

Last month I attended an Immigration Conference in Mexico City. It was organized by Buffalo immigration lawyer Joe Grasmick and focussed on the USMCA, CUSMA (formerly called the NAFTA Free Trade Immigration Visa- TN Visa). The conference highlighted the opportunities available to citizens of Canada, Mexico and the USA to live in any one of these three countries performing certain professional services for which they are qualified.

In a nutshell the “Free Trade Immigration” visa is an opportunity for:

1. Citizens of the United States, Canada and/or Mexico who have the status of being certain kinds of professionals (who they are and their professional qualfications); to accept

2. Certain kinds of employment (what will they actually be doing).

The devil is certainly in the details. Immigration under the “Free Trade Professional” category has its own nuances. It is certainly more difficult than it appears (and is described).

The conference was a “sobering” reminder that “citizenship matters”!

Continue reading