Separately on Nov. 2/22, in Bittner, the US Supreme Court will hear the case on the issue of whether the non-willful civil #FBAR penalty (found in 5321) - can be applied (based on a reading of 5314) on a "per account" or on a per "form" basis. It's the season of @InFBARWeTrust!
So, Bitter is about the interpretation of penalty application under 31 USC 5314 and 5321. Toth (if the Supreme Court hears the case) is about whether there are constitutional limitations to any penalties imposed under 31 USC 5321.
Bittner appeal assumes the civil @InFBARWeTrust penalty can be imposed. Is this true? 5314 imposes an obligation on ONLY Treasury (obligation to create FBAR). 5314 imposes NO obligation on ANY individual. Link to 5314 and text ... law.cornell.edu/uscode/text/31…
Let's now consider civil @InFBARWeTrust penalty in context of 31 USC 5321(a)(5) which creates a penalty for violating or causing a violation of 5314. Question: if 5314 imposes no obligation on individual, how can 5321 authorize a penalty on individual for violating 5314?
Again: An individual can ONLY violate the Treasury reg which creates the FBAR rules. The individual CANNOT violate 5314 because 5314 creates NO obligation on individual but ONLY on Treasury. The 5321 penalty applies to a violation of 5314 which means ONLY Treas can be penalized.
Note also that if we look at Criminal penalties under 5322 it creates a penalty for the violation of the regulation created by Treasury under 5314. 5321 does NOT impose a penalty for violation of regulation. Here are 5321 and 5322 side by side. Thoughts? law.cornell.edu/uscode/text/31…
Biden 2025 Green Book contains proposals exacerbating impact of US @citizenshiptax on #Americansabroad by creating @doubletaxation. Do NOT be fooled by references to "High Income" and "Wealthy". Reform of "taxation of capital income" = trouble for all! home.treasury.gov/system/files/1…
The 2025 Green Book repeats proposals in 2024, 2023 and 2022. For "some" of the impacts on #Americansabroad see this 2022 post from @VLJeker us-tax.org/2022/04/21/par…
Notice also the extension of and raising the NIIT #Americanabroad with small businesses (including local businsess of #expats. Clear @doubletaxation bc the NIIT (generally) cannot be used as a credit against US taxes. home.treasury.gov/system/files/1…
This will be interesting. The larger issue is how the meaning of the treaty is to be determined and whether the US Treasury is the one to determine that meaning. But, it’s clear that USA has declared war on French residents afflicted/disabled by U.S. citizenship.
USA is arguing that US/France tax treaty should be interpreted to REQUIRE @doubletaxation if France dares to tax investment income sourced in France and received by US citizens (property) resident in France. Treaty #savingclause used to create #doubletax and not avoid it.
The US gov’s brief is mind blowing claiming (inter Alia) that to allow an FTC on French source income would (because of the FEIE which doesn’t apply to invest income) give #expats a double benefit. taxnotes.com/research/feder…
In the April 19/24 decision in @MonteSilver1 v The IRS the USCA remanded the case to the District Court to reconsider the applicability of the South Carolina v Regen case. Full decision is here ... taxnotes.com/research/feder…
Interesting analysis from @DanNeidle. Example of the use of procedural rules to avoid analyzing what the #FATCA IGAs are really about (especially in application to UK residents). Should the UK really allow the US, to claim UK residents as US taxpayers? taxpolicy.org.uk/2024/03/08/sec…
@DanNeidle Par 5 of ruling Judge makes factual mistakes: 1. #FATCA IGAs are NOT US "treaties". 2. US tax authorities do NOT transfer information on "US citizens resident in the UK". Transfer is on individuals RESIDENT in UK (not citizens) who hold accounts in US!. assets.caselaw.nationalarchives.gov.uk/ewhc/kb/2024/5…
Par. 4 includes acknowledgement that #FATCA IGAs apply to accounts held by UK RESIDENTS who are US citizens. IGAs do NOT apply to US residents who are UK citizens. Hence, US receives UK account info about people who live in UK and do NOT live in the US! assets.caselaw.nationalarchives.gov.uk/ewhc/kb/2024/5…
Looking forward: @Keith__REDMOND, @IRS_MEDIC and @Expatriationlaw discuss the US #PFIC rules. Interestingly @RonWyden in his "Billionaires (so called) Tax Act" is applying PFIC (as applied to #Americansabroad) to resident Americans.
Similarity to #PFIC 1: @RonWyden's "Billionaires Tax Act" imposes an annual "mark to market" tax on "tradable" (think publicly traded stocks) assets. Pay tax without an actual sale ... finance.senate.gov/imo/media/doc/…
Similarity to #PFIC 2: @RonWyden's "Billionaires Tax Act" imposes a deferral charge on "non-tradable" WHEN they are sold. This is the attribution of income to somebody when they have not received income and charges interest on the #fakeincome. finance.senate.gov/imo/media/doc/…
When it comes to the Moore @USTransitionTax MRT case (to be argued Dec. 5/23) there is almost no agreement on what the case is even about (reflected in the statements of the interviewees.) Some thoughts on what was said ... cnb.cx/3QRdSfu
@USTransitionTax 1. Earnings accumulated before 2017 by CFCs were NOT "deferred". They were earnings of a non-US corp, that were not taxable by the US as per US tax law. There was never ANY obligation to bring those earnings into the US tax system. The TJCA created both new income and a new tax!
@USTransitionTax 2. Suggestion that CFCs were (prior to 2017) "pass through entities" is wrong. Subpart F was created precisely because CFCs are were not "pass through". The CFC was a separate legal entity that the US (as per treaties) was prohibited from taxing (except US source income).