Archive for John Richardson

Forms Required By #Americansabroad 101 – The Explanation

John Richardson BNN

The following is a response to comments made about an article written by Rachel Heller on titled, “Why I renounced my US citizenship (Hint: it’s not because I’m avoiding taxes!).” The article was well written, interesting and attracted responses from Homeland Americans. (It was reproduced here and attracted even more comments.) The comments from U.S. residents demonstrated again that they do NOT understand the problems experienced by Americans abroad.

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Muhammad Ali, Draft Resistors, And Loss of U.S. Citizenship

John Richardson June 15th

Like many, I was saddened to learn of the death of Muhammad Ali. Most of the media discussion of Ali’s death focused on his boxing career; there was far less attention paid to Ali’s refusal to accept induction into the United States military. This refusal led to his being stripped of his boxing license (why anyone would need a license to box is beyond me) and interestingly, the revocation of his passport (if you can’t box in America, we will prevent you from boxing outside America). Hmmm. Does Ali’s passport revocation remind you of any recent or past events?

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Physical Presence As A Necessary Condition For Being A US “Resident” Under The Internal Revenue Code

John Richardson


Every country in the world with the exceptions of Eritrea and the United States claim tax jurisdiction based on “residence”. Although the tests for “residence” may differ, “residence based taxation” means that it is possible to sever your tax connection to a country by severing residence.

The nations of Eritrea and the United States impose taxation based Read more

“Dual citizen exemption” encourages dual citizens from birth to remain US citizens

John Richardson

Ted Cruz was born in 1971 in Canada. He was therefore born a Canadian citizen. He claims to have been born to a U.S. citizen mother and was therefore a U.S. citizen by birth. (Whether he qualifies as a “natural born citizen” is a different question.) As a Canadian citizen he had the right (prior to renouncing Canadian citizenship) to live in Canada. Had Mr. Cruz, moved back to Canada, he could have avoided the U.S. S. 877A Exit Tax. Incredible but true. It will be interesting to see whether Mr. Cruz regrets renouncing his Canadian citizenship. As you will see, by renouncing Canadian citizenship, Mr. Cruz surrendered is right to avoid the United States S. 877A Exit Tax.

Here is why …

The S. 877A Exit Tax rules in the Internal Revenue Code, are the most punitive in relation to U.S. citizens living outside the United Read more

Distributions From Canadian RRSPs Are Subject To #Obamacare Surtax While Distributions From US Plans Exempt

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Yes, you read right.

By way of background, Obamacare was financed in part by the 3.8% Net Investment Income Tax (“NIIT”). At the risk of oversimplification, this is a tax on passive income. What those Canadians who are also “U.S. persons” need to know includes:

1. The NIIT is an instance of pure double taxation. It is believed by most practitioners that this tax CANNOT be offset by the usual foreign tax credit rules. (But, then again – maybe the NIIT is really a Social Security Tax and therefore NOT payable under the Canada U.S. Social Security Totalization Agreement.) Read more

Part 15 – Understanding “Exit Taxes”

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Interview with – Citizenship based taxation, PFIC, the S. 877A Exit Tax and #Americansabroad

On May 22, 2015 I was interviewed by Gordon T. Long. There is NO way to discuss U.S. “citizenship taxation” (which is primarily “place of birth taxation”) without discussing the S. 877A Exit Tax rules. During the month of April 2015, I wrote a 14 part series on “How the S.877A rules affect Americans abroad“. The interview with Mr. Long serves as a good reminder (or if you don’t want to read the posts) on:

– what it means to be a “covered expatriate

how the U.S. S. 877A “Exit Tax” rules operate to impose punitive “taxation” on non U.S. pensions (See the actual Read more

Part 14 – Understanding “Exit Taxes”

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“Leaving the U.S. tax system – renounce or relinquish U.S. citizenship, What’s the difference?”

Renunciation is one form of relinquishment – It’s not the form of relinquishment, but the time of relinquishment

Tina Turner: What’s FBAR Got To Do With It?

“Washington Post, Tina Turner Formally ‘Relinquishes’ U.S. Citizenship:

This item just in via an “activity” report from the U.S. Embassy in Bern, Switzerland, headlined “Soul Legend Relinquishes U.S. Citizenship.” Read more

Part 13 – Understanding “Exit Taxes”

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“I relinquished U.S. citizenship many years ago. Could I still have U.S. tax citizenship?”

Attn: Former U.S. Citizens: Are you STILL or have you EVER BEEN a U.S. “Tax Citizen”?


This is a long post. In fact, it is too long for the average reader. Therefore, I wish to summarize the purpose and possible (but not certain conclusion) of the post in a few simple sentences.

Here goes:

If you were born in the United States (and became a U.S. citizen at birth) who moved to Canada and naturalized as a Canadian Citizen prior to June 3, 2004:

1. Without informing the U.S. State Department or applying for a Certificate of Loss of Nationality; and Read more

Part 12 – Understanding “Exit Taxes”

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“The two kinds of U.S. citizenship: Citizenship for “immigration and nationality” and citizenship for “taxation” – Are we taxed because we are citizens or are we citizens because we are taxed?”

The United States of America – One country two citizenships – Introducing the “Tax Citizen”.  Dual Citizenship – American style – All Americans are both “Citizens” and “Tax Citizens”. One Country – Two Citizenships.

First Citizenship – Citizenship for Nationality Purposes

Americans have always been proud of their U.S. citizenship. Most U.S. citizens regard their U.S. citizenship as the most valuable thing they have. Most Americans will fight for their citizenship. They will die for their citizenship. They Read more

Part 11 – Understanding “Exit Taxes”

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S. 2801 of the Internal Revenue Code is NOT a S. 877A “Exit Tax”, but a punishment for the “sins of the father”

Updated September 12, 2015 – the IRS has issued “proposed rules”  governing the issue of “The sins of the father”.

The following was a comment on Part 9 of this “Exit Tax” series.

“I know many tax compliant, patriotic Americans who have renounced. Many have done so seeing the $2m threshold approaching, to protect their families and get on with their lives. All with heavy hearts.

You did not mention the additional burden on those who renounce who have US citizen relatives–the tax their Read more

Part 10 – Understanding “Exit Taxes”

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The S. 877A “Exit Tax” and possible treaty relief under the Canada US Tax Treaty

Introduction – The Canada U.S. Tax Treaty Does Not Always Prevent Double Taxation

See: Part 9 – Understanding “Exit Taxes” – For #Americansabroad: US “citizenship taxation” is “death by a thousand cuts”, but the S. 877A Exit Tax is “death by the guillotine”.

When countries independently make major changes in tax law, double taxation can occur.

The following comment from 5thSwiss on the Isaac Brock Society site explains why and how double taxation can be a reality. It also underscores the dangers of a U.S. citizen leaving the United States. Read more