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Archive for John Richardson

US Treasury Proposes That Foreign Income Subject To High Foreign Tax Be Excluded From Definition Of #GILTI

John Richardson On Foreign Income

In general – Good News For American Entrepreneurs Abroad …

On Friday June 14, 2019 US Treasury proposed in Notice 2019-12436 that any foreign income earned by Controlled Foreign Corporations be (subject to election) excluded from the definition of GILTI income. This will be particularly welcome to Americans living outside the United States, who are attempting to carry on business in their country of residence, through non-U.S. corporations.

For those who are concerned with understanding the hows and whys, I suggest you read Treasury’s Notice which includes a good history and description of the Subpart F rules, some Legislative History leading to the GILTI rules, and Treasury’s attempt to piece it all together. You will find it all here.

Treasury Notice 2019-12436

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How Do U.S. Tax Rules Constrain The Investment Choices Of US Taxpayers Living In Australia?

John Richardson 4

Before moving to the post, if you believe that Americans abroad are being treated unjustly by the United States Government: Join us on May 17, 2019 for a discussion of U.S. “citizenship-based taxation” as follows:

Think of it! With the exception of the United States, when a person moves away from the country and establishes tax residency in another country, they will no longer be taxed as a resident of the first country.

But in the case of the United States: If a U.S. citizen moves from the United States and establishes tax residency in a new country: (1) they will STILL be taxable as a tax resident of the United States (2) they will be subjected to a separate and more punitive system of taxation! (3) they will have to engage in financial planning according to the rules of the tax system where he resides.

We will now see how being subject to the U.S. tax system disables the individual, from being able to engage in the normal financial planning, that is optimal under the tax system where he resides. In effect, he will lose the tax benefits which are available to “non-U.S.” residents of his country of residence. The biggest cost of this is NOT the additional tax. The biggest cost is the opportunity cost of being disabled from normal financial planning. A discussion of “lost investing opportunity” in Canada is here. Dr. Karen Alpert will now explain how the “loss of opportunity” works in an Australian context.

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Former ACA Tax Director Jackie Bugnion Recalls The 2014 Kirsch Schneider Debate On Citizenship-Based Taxation

John Richardson CBT

Before moving to the post, if you believe that Americans abroad are being treated unjustly by the United States Government: Join us on May 17, 2019 for a discussion of U.S. “citizenship-based taxation” as follows:

This is part of a series of post I have written as a run up to the May 17, 2019 Tax Connections discussion about U.S. citizenship-based taxation.

Introducing Jackie Bugnion …

Jackie Bugnion was an important part of “American Citizens Abroad” for many years. She has an unusually nuanced understanding of the problems that citizenship-based taxation inflicts on Americans abroad. She was (and continues to be) a tireless advocate for the principle that the United States must transition to a system of residence-based taxation. When she retired she was the Tax Director at ACA. She was the author of some of the very best articles about citizenship-based taxation.

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What Does U.S. Citizenship-Based Taxation Actually Mean And To Whom Does It Actually Apply?

John Richardson - Citizenship Based Taxation

Before moving to the post, if you believe that Americans abroad are being treated unjustly by the United States Government: Join me on May 17, 2019 for a discussion of U.S. “citizenship-based taxation” as follows:

You are invited to submit your questions in advance. In fact, PLEASE submit questions. This is an opportunity to engage with Homelanders in general and the U.S. tax compliance community in particular.

I hope that this series of posts will give you ideas for questions and concerns that you would like to have addressed in the May 17, 2019 Tax Connections – Citizenship Taxation discussion.

Laura Snyder has graciously contributed four posts of this series. In her series of four posts, she has outlined the origins and requirements of U.S. citizenship-based taxation.

Ms. Snyder grew up in the United States and moved to Europe as an adult. The tone and pain reflected in her writing suggests that she truly identifies as being a citizen of the United States.

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It Hurts My Heart: The Case for Fairer Taxation of Non-Resident US Citizens (Part 4 of 4)

John Richardson part 4

Before moving to the post, if you believe that Americans abroad are being treated unjustly by the United States Government: Join me on May 17, 2019 for a discussion of U.S. “citizenship-based taxation” as follows:

You are invited to submit your questions in advance. In fact, PLEASE submit questions. This is an opportunity to engage with Homelanders in general and the U.S. tax compliance community in particular.

Thanks to Professor Zelinsky for his willingness to engage in this discussion. Thanks to Kat Jennings of Tax Connections for hosting this discussion. Thanks to Professor William Byrnes for his willingness to moderate this discussion.

Tax Connections has also published a number of posts written by Professor Zelinsky (who apparently takes a contrary view).

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It Hurts My Heart: The Case for Fairer Taxation of Non-Resident US Citizens (Part 3 of 4)

John Richardson Part 3

Before moving to the post, if you believe that Americans abroad are being treated unjustly by the United States Government: Join me on May 17, 2019 for a discussion of U.S. “citizenship-based taxation” as follows:

You are invited to submit your questions in advance. In fact, PLEASE submit questions. This is an opportunity to engage with Homelanders in general and the U.S. tax compliance community in particular.

Thanks to Professor Zelinsky for his willingness to engage in this discussion. Thanks to Kat Jennings of Tax Connections for hosting this discussion. Thanks to Professor William Byrnes for his willingness to moderate this discussion.

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It Hurts My Heart: The Case For Fairer Taxation Of Non-Resident U.S. Citizens (Part 2 of 4)

John Richardson Part 2

Before moving to the post, if you believe that Americans abroad are being treated unjustly by the United States Government: Join us on May 17, 2019 for a discussion of U.S. “citizenship-based taxation” as follows:

You are invited to submit your questions in advance. In fact, PLEASE submit questions. This is an opportunity to engage with Homelanders in general and the U.S. tax compliance community in particular.

Thanks to Professor Zelinsky for his willingness to engage in this discussion. Thanks to Kat Jennings of Tax Connections for hosting this discussion. Thanks to Professor William Byrnes for his willingness to moderate this discussion.

Tax Connections has published a large number of posts that I have written over the years (yes, hard to believe it has been years). As you may know I oppose FATCA, U.S. citizenship-based taxation and the use of FATCA to impose U.S. taxation on tax residents of other countries.

Tax Connections has also published a number of posts written by Professor Zelinsky (who apparently takes a contrary view).

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How Do I Protect Myself?: A Case Study In The Marginalization of Americans Living Overseas (Part 1 of 4)

John Richardson - Live Stream Event On

Before moving to the post, if you believe that Americans abroad are being treated unjustly by the United States Government: Join me on May 17, 2019 for a discussion of U.S. “citizenship-based taxation” as follows:

You are invited to submit your questions in advance. In fact, PLEASE submit questions. This is an opportunity to engage with Homelanders in general and the U.S. tax compliance community in particular.

Thanks to Professor Zelinsky for his willingness to engage in this discussion. Thanks to Kat Jennings of Tax Connections for hosting this discussion. Thanks to Professor William Byrnes for his willingness to moderate this discussion.

Tax Connections has published a large number of posts that I have written over the years (yes, hard to believe it has been years). As you may know I oppose FATCA, U.S. citizenship-based taxation and the use of FATCA to impose U.S. taxation on tax residents of other countries.

Tax Connections has also published a number of posts written by Professor Zelinsky (who apparently takes a contrary view).

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The United States Imposes A Separate And Much More Punitive Tax On U.S. Citizens Who Are Residents Of Other Countries

John Richardson April 10

Reposted Due To Upcoming Debate On Citizenship Taxation

On February 28, 2019 TaxConnections kindly posted my first post comparing the way that 19th Century Britain and 21st Century America Treated Its Citizens/Subjects. The post received a great deal of interest resulting in more than 120 comments (largely reflecting the frustration of Americans abroad and accidental Americans).

The purpose of that post focused largely on citizenship and the fact that the United States imposes worldwide taxation on U.S. citizens who are tax residents of other countries and do NOT live in the United States. What that post did NOT do was to focus on HOW the Internal Revenue Code applies to U.S. citizens who do NOT live in the United States.

The Bottom Line Is:

The United States is in effect imposing a separate and more punitive tax system on its citizens abroad. Strange but true. The purpose of this post is to explain how that works and to provide specific examples.

Prologue

Do you recognise yourself?

You are unable to properly plan for your retirement. Many of you with retirement assets are having them confiscated (at this very moment) courtesy of the Sec. 965 transition tax. You are subjected to reporting requirements that presume you are a criminal. Yet your only crime was having been born in America (something you didn’t even choose) and attempting to live as a U.S. tax compliant American outside the United States. Your comments to my recent TaxConnections Post reflect and register your conviction that you should not be subjected to the extra-territorial application of the Internal Revenue Code – when you don’t live in the United States.

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In The 21st Century The Most Important Thing About A Person Is Tax Residency

John Richardson- Residency Determines Tax

Green Card holders are deemed to be U.S. tax residents under the Internal Revenue Code. In most circumstances Green Card Holders are also treated as U.S. tax residents under U.S. tax treaties.

U.S. Green Card holders have traditionally been able to use tax treaties to sever “tax residence” with the United States. This decision carries both burdens and benefits and should never be undertaken without competent professional advice. (For Green Card holders who are “long term residents“, the use of a “tax treaty tie breaker” will result in expatriation. Expatriation may trigger the imposition of the Sec. 877A Expatriation Tax.)

The tax treaty tie breaker is available if and only if the individual is, according to the tax treaty, a tax resident of BOTH the United States and the treaty partner country.

Typically the tax treaty tie breaker is a mechanism where one uses the provisions of the tax treaty to assign tax residency to one and only one country according to the tax treaty.

To repeat: a condition precedent to the use of the tax treaty tie breaker is that the individual be a tax resident of both countries according to the tax treaty.

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United States Dual Citizens Receive Punitive Tax

Attention Please

We bring your attention to the commentary on the post this week  written by John Richardson of Citizenship Solutions in Toronto, Canada called “The United States Imposes A Separate And Much More Punitive Tax On U.S. Citizens Who Are Residents Of Other Countries”.

We appreciate the commentary to Johns post and ask our readers to add their own stories to educate the public of the impact of these laws have on dual citizens. The real financial impact is causing hardship and stress for many Americans who live and reside in other countries and have done so for years.

You can read the story and commentary at this link.

 

The United States Imposes A Separate And Much More Punitive Tax On U.S. Citizens Who Are Residents Of Other Countries

John Richardson - The United States Taxes Citizens Who Reside In Another Country

On February 28, 2019 TaxConnections kindly posted my first post comparing the way that 19th Century Britain and 21st Century America Treated Its Citizens/Subjects. The post received a great deal of interest resulting in more than 120 comments (largely reflecting the frustration of Americans abroad and accidental Americans).

The purpose of that post focused largely on citizenship and the fact that the United States imposes worldwide taxation on U.S. citizens who are tax residents of other countries and do NOT live in the United States. What that post did NOT do was to focus on HOW the Internal Revenue Code applies to U.S. citizens who do NOT live in the United States.

The Bottom Line Is:

The United States is in effect imposing a separate and more punitive tax system on its citizens abroad. Strange but true. The purpose of this post is to explain how that works and to provide specific examples.

Read more