TaxConnections

 
 

Access Leading Tax Experts And Technology
In Our Global Digital Marketplace

Please enter your input in search

Archive for John Richardson

To Punish 100 GILTI Corporations Is To Punish Millions More Individuals

John Richardson - To punish 100 GILTI Corporations is to punish millions more individuals

Introduction: As Goes Tax Reform For US Multinationals, So Escalates The Harm To Individual Americans Abroad

The Problem: The proposed changes in International Tax (mostly in relation to corporations) will affect numerically more individuals than corporations. The effects on Americans abroad, who run small businesses outside the United States, will be absolutely devastating.

Two Solutions: Suggestions for how to protect individuals (including Americans abroad) would be to make changes to the Subpart F regime – GILTI, etc. There are at least two ways this change can be achieved:

Read more

Mr. FBAR: Rule Of Law vs. Rule By Law

FBAR LAWS

Introduction: Looking For Mr. FBAR – Outside Looking In Rather Than Inside Looking Out

FBAR cases are newsworthy. For the last decade blogs and legal journals have been populated by some of the most important FBAR questions of the day.

These questions (most of which are unresolved) include:

– What does willfulness mean in the context of the failure to file an FBAR? What if an individual incorrectly answers the FBAR question on Schedule B?

– What accounts are required to be reported? Gambling accounts? Crypto currency accounts? Gift card balances?

– What does “reasonable cause” mean and when can reasonable cause apply?

– and most recently: Can the Government impose a separate penalty on each unreported account or can only one penalty be reported based on the requirement of one FBAR form?

Read more

The $50,000 FATCA Question: Are Accounts Less Than $50,000 USD Reportable Under The US Canada IGA?

The $50,000 FATCA Question: Are Accounts Less Than $50,000 USD Reportable Under The US Canada IGA?

Part I – What does the $50,000 threshold for FATCA reporting mean in practice?

This post is focused ONLY on accounts held by (1) individuals who (2) are “US Persons” within the meaning of the FATCA IGA who (3) have been identified as “US Persons” and who (4) have been unable to “self-certify” that they are not “US Persons”. There are tens of thousands of US citizens in Canada and other countries that carry on normal banking activities with their “USness” undetected. Their accounts are not being forwarded to the USA.

This post is NOT intended to apply to entity accounts or any other kind of account.

The Context …

As a result of the FATCA IGA, Canadian financial institutions are required to report any accounts owned by “US Persons” to the Canada Revenue Agency. The definitions section of the IGA stipulates that the definition of “US Person” is determined by the US Internal Revenue Code. Therefore, all countries who have signed FATCA IGAs have allowed the United States to define any of their citizens or residents as “US Persons” now and in the future. (I wonder whether this is a reason why China has not signed a FATCA IGA.)

Read more

The Warren “Ultra-Millionaire Tax Act of 2021”

The Warren "Ultra-Millionaire Tax Act of 2021"

The Contextual Background – Elizabeth Warren – January 28, 2021

Excerpts from a recent CNBC interview (see the following link for context) …

Read more

German Tax Authorities Reported To Be Imposing Tax On US Military Pay

German Tax Authorities Reported To Be Imposing Tax On US Military Pay

Prologue

This post draws heavily from the reporting of John VanDiver who has written a number of articles in Stripes. His most recent article is here:

“You don’t want to be chased and harassed by a government office. It is scary,” said Melissa Howell, the spouse of a U.S. soldier who is being targeted by a tax office in Germany’s Landstuhl area. “I don’t know how they expect people to come up with that money.”

Howell, a German who lives with her American husband and children, said she ran into trouble in June when she went to file her taxes at the local finance office.

She said she was interrogated about her husband and told to fill out a questionnaire that probed information about his employment.

She then received a letter ordering her to hand over her husband’s W-2 and other tax forms.

“I did it because I didn’t know. I found out that

was a mistake,” she said.

After that, she got a phone call from the tax office, saying that their case was getting handed over to a case manager who handles “American-German couples.”

 

Read more

A Simple Regulatory Fix For The Problem Of US Citizenship Taxation

John Richardson

Background

In 2016 I first made the suggestion that citizenship-based taxation could be changed through Treasury regulation. In October of 2020 John Richardson, Dr. Karen Alpert and Dr. Laura Snyder completed a paper titled “A Simple Regulatory Fix For Citizenship Taxation”. The idea advanced is that:

Read more

Guidance For Expatriates: Determining Net Worth For 877A Exit Tax Purposes – IRS Notice 97-19

Guidance For Expatriates: Determining Net Worth For 877A Exit Tax Purposes - IRS Notice 97-19

We genuinely appreciate TaxConnections members for the important role they play in educating tax professionals and taxpayers on rules and regulations they surface in the IRS tax code. These treasures finds are very helpful to so many and in this case John Richardson identifies Guidance For Expatriate Under Section 877 2501 210 and
6039F known as IRS Notice 97-19. If you are an expatriate, this is an important IRS Notice for you to read.

Guidance For Expatriate Under Section 877 2501 210 and
6039F (Notice 97-19)

PURPOSE

The Health Insurance Portability and Accountability Act of 1996
(the “Act”) recently amended sections 877, 2107 and 2501 of the Internal Revenue Code (the “Code”), and added new information reporting requirements under Section 6039F. This notice provides guidance regarding certain federal tax consequences under these sections and section 7701(b)(10) for certain individuals who lose U.S. citizenship, cease to be taxed as U.S. lawful permanent residents, or are otherwise subject to tax in the manner provided by section 877.

This notice has eleven sections:
Read more

The FBAR For United States Citizens And Residents Is Due Today, Oct 15th – What About Business Visitors?

The FBAR For United States Citizens And Residents Is Due Today, Oct 15th - What About Business Visitors?

Update 2020 …

Prologue: Circa 1948 – George Orwell anticipates the arrival of Mr. FBAR

Read more

US Citizens Living In Canada Will NOT Pay US Tax On $1200 US Cares Act Payment But Likely Will Pay US Tax On Canada’s CERB Payment

US Citizens Living In Canada Will NOT Pay US Tax On $1200 US Cares Act Payment But Likely Will Pay US Tax On Canada’s CERB Payment

Prologue – The Only Certainties Are Death And Taxes

The above tweet references an article in the Globe and Mail on May 7, 2020. The article contains interesting perspectives, but much has changed since that time.

COVID-19 And The Role Of Government Assistance

Read more

Individuals, Treasury, The State Department And IRC 6039G: Who Has To Report What When An Individual Renounces U.S. Citizenship?

John Richardson - Renounce U.S. Citizenship

Prologue – Treasury has recently reported the “Name and Shame” list

There is strong evidence that the numbers are NOT being accurately reported.

Renunciation of U.S. Citizenship triggers a “Reporting Frenzy”!

It’s simply unbelievable. The renunciation of U.S. citizenship triggers more reporting obligations on the part of individuals and government agencies than anything else. More than birth. More than death. More than marriage. More than bankruptcy. More than conviction of a crime (probably). It’s unbelievable.

The purpose of this post is to “slice and dice” what those reporting obligations are.

Let’s Go On A Magical Reporting Tour

The rules governing information reporting when one relinquishes U.S. citizenship are found in Internal Revenue Code 6039G. They impose reporting obligations on “some” individual relinquishers (“covered expatriates”), the State Department whenever a Certificate of Loss Of Nationality has been issued and on U.S. Treasury. (I will comment separately on the situation of Green Card holders at the end of this post.) Most of this is summarized in the following two tweets. But, because this is so confused, I am going to take the time to parse the statute.
Read more

Treasury Final Regulations Confirm That Foreign Income Subject To High Foreign Tax Be Excluded From Definition Of #GILTI

Treasury Final Regulations Confirm That Foreign Income Subject To High Foreign Tax Be Excluded From Definition Of #GILTI

July 20, 2020: The Readers Digest Version …

Treasury, IRS issue final and proposed regulations on income subject to a high rate of foreign tax

IR-2020-165, July 20, 2020

WASHINGTON — The Department of the Treasury and the Internal Revenue Service today issued a final regulation addressing the treatment of income earned by certain foreign corporations that is subject to a high rate of foreign tax.

The final regulations allow taxpayers to exclude certain high-taxed income of a controlled foreign corporation from their Global Intangible Low Taxed Income (GILTI) computation on an elective basis.

Treasury and the IRS today also issued a proposed regulation regarding the high-tax exception with the GILTI high-tax exclusion. Treasury and the IRS welcome public comments.
Read more

China Does Not Have And Is Not Moving Toward U.S. Style Citizenship-Based Taxation

China Does Not Have And Is Not Moving Toward U.S. Style Citizenship-Based Taxation

Readers Digest Version: The Bottom Line Is …

As reported by American Expat Finance, which discusses an interview with Dr. Bernard Schneider of Queen Mary …

You can listen to the podcast here.
Read more