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John Richardson - Counsellor for US persons abroad Profile picture
John Richardson - Counsellor for US persons abroad
@ExpatriationLaw
Expatriation - US Citizenship Renunciation - Green Card Abandonment: US should not impose #FATCA and @citizenshiptax on people with @taxresidency outside US
3 subscribers
Nov 16 • 5 tweets • 1 min read
Principle 6 - understanding what the #endingdoubletaxation of #Americansabroad means:

The biggest obstacle to change to the US @citizenshiptax extra-territorial tax regime is NOT Congress or Treasury

The biggest obstacle to change is (amazingly) #Americansabroad as a group.

Because, @citizenshiptax affects different people very differently, it is hard to (1) define the problem (people understand it in how it affects them) and (2) willingness to actively campaign for change.

All #Americansabroad must come together to demand the severance of citizenship from @taxresidency. Let's consider different groups and imagine how
@citizenshiptax affects members of those groups. Those with their financial center of gravity in the US might object to the compliance/filing requirements. But are not likely to experience the destructive affects of having a financial center of gravity outside the USA.

Least impacted: 1. Those who retired in the USA and moved abroad 2. Wealthy Americans who move abroad 3. Employed expats who are temporarily abroad.

Most impacted: 4. Emigrants living permanently abroad 5. Accidental Americans who file U.S. taxes

Could go either way: 6. Digital nomads (often use FEIE to avoid paying tax anywhere).
Nov 15 • 9 tweets • 3 min read
Principle 5 - understanding what the #endingdoubletaxation of #Americansabroad means:

Starting in "Principle 1" I explained that the problem of the #doubletaxation of #Americansabroad exists in relation to non-US income sources received by individuals who do NOT live in the USA (AKA #Americansabroad.

Key point: If @USCitizenAbroad does NOT have non-US income sources and assets, the US @citizenshiptax will be experienced mostly as filing a US tax return while living outside the USA. From that perspective it's easy to see why non-resident US citizens with US income sources and assets are not hugely impacted by US #citizenshiptaxation. Let's be a bit more precise. Imagine you have a @USCitizenAbroad with an investment portfolio of US stocks, US Social Security or a US pension. Even if taxed by the non-US country, the US generally has first right of taxation (it's US source income). US will NOT impose punitive taxation bc it's US source income. (The other country will generally provde a credit for US tax paid.
Nov 15 • 7 tweets • 2 min read
Principle 4 - understanding what the #endingdoubletaxation of #Americansabroad means:

Let's summarize "some" of the costs of the US @citizenshiptax regime to BOTH @USCitizenaboad and the countries where they live.

First, Costs of US @CitizenshipTax to #Americansabroad

- #Americansabroad are in effect subject to a separate and more punitive tax regime than Homeland Americans. On this point see:

citizenshipsolutions.ca/2019/03/12/the… Second, the lost opportunity of not being able to participate in retirement and financial planning programs created by their country of actual residence:

citizenshipsolutions.ca/2017/08/04/the…

Third, the horrible fees to tax preparers to prepare (often incorrectly) US tax returns. It is obvious that compliance costs should be considered a separate tax on UScitizenship.
Nov 15 • 5 tweets • 1 min read
Principle 3 - understanding what the #endingdoubletaxation of #Americansabroad means:

Because @doubletaxation of #Americansabroad is caused by US @citizenshiptax it is clear that ending the #doubletaxation of @USCitizenAbroad can be ended by ending #CBT - AKA separation citizenship from @taxresidency. This is the ONLY solution that solves the problems of all people, all the time and under all circumstances.

That said, other solutions have also been proposed.

These other solutions which RETAIN US #citizenshiptaxation and solve the problems of some but all include ...

- Proposals that RETAIN US @citizenshiptax but provide relieving provisions for some of the effects of #CBT for some people but not for others. Examples include:

- the 2018 Holding Bill and the later Beyer bills which mostly exclude most non-US source income from US taxation but are aimed at limited forms of income and leave ALL reporting requirements in place (Form 5471, Form 8938, Form 3520, Form 3520A, Form 8621, FinCEN 114, etc.)

Note that although these might enddouble taxaion they are limitedin scope.
Nov 15 • 7 tweets • 2 min read
Principle 2 - understanding what the #endingdoubletaxation of #Americansabroad means:

Q. Why would non-resident U.S. citizens (AKA #Americansabroad) be subject to @doubletaxation by the U.S. and their country of residence?

A. Because due to US @citizenshiptax they have @taxresidency in both the US and their country of residence. This means they may be subject to taxation by both countries on the same income. To put it simply, US citizens - living outside the US - are ALWAYS subject to @doubletaxation on non-US source income.

US #citizenshiptax is the primary cause of the @doubletaxation of #Americansabroad. There is a difference between #Americansabroad being "subject to @doubletaxation because of US @citizenshiptax and actual #doubletaxation.

For double taxation to exist both countries must subject the same income to taxation. If the same income is NOT subject to tax in both countries there is no double taxation, but there may be taxation based on US citizenship. For example, US citizens living in Canada are US taxable on the cap gain on sale of primary residence. But Canada does not tax this gain. Hence, no double taxation.
Sep 6 • 10 tweets • 2 min read
If you who wonder whether @DemsAbroad has any interest in issues facing #Americansabroad, here's the answer. @TheDemocrats do NOT care about @citizenshiptax and #FATCA AND "They don't care that they don't care." It's ONLY about your vote!! via @YouTubeyoutube.com/live/9cgIbShsW… @DemsAbroad @TheDemocrats @CitizenshipTax @YouTube The "Americans Abroad for Harris-Walz-Live" delivered the following message to #Americansabroad:
Sep 3 • 4 tweets • 2 min read
UNITED STATES v. SCHWARZBAUM (2024) - Aug. 30, 2024: 11th Circuit (citing Gorsuch dissent in Toth Supreme Court cert petition) disagrees with 1st Circuit ruling in Toth and rules 8th Amendment excessive fines clause applies to aspects of #FBAR penalties. caselaw.findlaw.com/court/us-11th-… The Schwarzbaum #FBAR case is a very interesting decision with fascinating decision of English law. Key excerpts (no substitute for reading full decision) caselaw.findlaw.com/court/us-11th-…

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May 8 • 7 tweets • 3 min read
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…
Image 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…

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Apr 29 • 7 tweets • 2 min read
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.
Apr 19 • 5 tweets • 2 min read
Congratulations to @MonteSilver1 and @GOPIsrael - the #GILTI lawsuit remains alive!! news.bloombergtax.com/daily-tax-repo… The oral argument in Monte Silver v. IRS (definitely worth listening to) is here ... courtlistener.com/audio/89880/mo…
Mar 9 • 5 tweets • 3 min read
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…
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Dec 18, 2023 • 20 tweets • 7 min read
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/…
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Nov 29, 2023 • 14 tweets • 3 min read
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!
Nov 26, 2023 • 7 tweets • 2 min read
US Model Tax Treaty: Par 4 of Article 1 includes "saving clause" that (1) allows US residents but NOT citizens to be treated as having @taxresidency - as per Art 4 - in treaty partner country + (2) denies US citizens (limited exceptions) treaty benefits. home.treasury.gov/system/files/1…

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Image @TaxResidency Both US citizens and Green Card holders are subject to all provisions (worldwide tax, reporting and penalties) of US tax code. Green card holders (but not citizens) may use treaty (dual @taxresidency tie break) to become "treaty nonresidents" and taxable only on US source income.
Oct 20, 2023 • 6 tweets • 2 min read
@goodtaxtakes @Tyler_Menzer Case 4 taxing nonres citizens as the book demonstrates) is (unlike case for taxing GC holders) not based on anything except tradition, ignorance, stupidity and mistakenly equating residence and citizenship. It’s obvious that the author of book doesn’t understand @citizenshiptax. @goodtaxtakes @Tyler_Menzer @CitizenshipTax Cook v. Tait is not about taxation. It’s about the relationship between the state and the citizen as it was understood in 1924 (the citizen was the property of the state). This is discussed in this video.
Oct 12, 2023 • 9 tweets • 5 min read
Hypocrisy from @SenateFinance, @RonWyden
+ @MikeCrapo. Complaints abt: 1. Canada's DST tax on US companies CDN SOURCE revenues + 2 Retroactive tax (Hello @USTransitionTax). Ignores USA does both via @citizenshiptax on CDNs #FATCA, #PFIC, #savingclause finance.senate.gov/imo/media/doc/… With this level of stupidity it's hard to know where to begin, but let's start with the fact that the USA itself targets foreign companies AND ESPECIALLY the Americans that work for them though US @citizenshiptax, @USTransitionTax, #GILTI, #PFIC, #SUBPartF finance.senate.gov/imo/media/doc/…
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Oct 6, 2023 • 7 tweets • 3 min read
2016 US Model Treaty has a more expansive "saving clause" than OECD and UN "saving clauses". 1. Like the OECD and UN Treaties it "saves" the right to tax US residents (as determined by treaty). 2. It also "saves" the rights to tax its "citizens" period. home.treasury.gov/system/files/1…

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Image 2016 US Model Tax Treaty has three "saving clause" provisions: 1. "Saves" US right to tax its "residents" (as determined under treaty tie break rules). 2. Tax US citizens who are residents of treaty partner country (treaty tie break rules don't apply) 3. Tax former citizens!
Oct 6, 2023 • 5 tweets • 2 min read
The 2017 OECD Model Tax Treaty, added a "saving clause". The purpose was to ensure that "residents" (as determined under treaty) would be taxed as residents and NOT as nonresidents. The purpose was to protect the domestic tax base. read.oecd-ilibrary.org/taxation/model…
Image Commentary leading up to the implementation of the OECD "saving clause" confirms the purpose was to ensure that "residents" could NOT be treated as "nonresidents" to gain treaty benefits to which they were not entitled. The commentary explains: read.oecd-ilibrary.org/taxation/preve…
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Jul 7, 2023 • 7 tweets • 3 min read
On June 27, 2023 @DanNeidle wrote an insightful article explaining why he does NOT support the US policy of @citizenshiptax. @RobertGoulder - in his 4th of July message - agrees that (with or without #FATCA) the US should adopt residence taxation. forbes.com/sites/taxnotes… .@DanNeidle's article (supported by comments) discusses both the practical (providing examples of it hurts #Americansaroad in the UK) problems and theoretical aspects (how can this be justified at all?) of @citizenshiptax. taxpolicy.org.uk/2023/06/27/cit…
Jun 28, 2023 • 11 tweets • 3 min read
June 23 - Pro wing of @Demsabroad hosted @USWealthTax advocate @Gabriel_Zucman: 1. Explains why he DOESN'T agree with CURRENT US @citizenshiptax AND why for MOST #Americansabroad current #CBT NOT justified. 2. Says #FATCA should be replaced with #CRS.
Jun 25, 2023 • 9 tweets • 2 min read
Superb article: @Saunderswsj explains generally how inflation leads to higher taxation and specifically the Obamacare 3.8% NIIT. Because foreign tax credits can‘t offset the #NIIT, #Americansabroad pay #doubletax on non-US investment income. The treaty doesn’t protect #expats. Strongly encourage reading Ms. Saunders - @Saunderswsj - article on how the #NIIT works and how inflation causes it to apply to more people (resulting in #doubletax of #Americansabroad). Link behind paywall wsj.com/articles/niit-…