TaxConnections


 

Archive for John Richardson

IRC Section 965 Transition Tax – Part 5

John-Richardson- Investigating the Transition Tax

Shades of ODVP

This is the fifth in my series of posts about the Sec. 965 Transition Tax and whether/how it applies to the small business corporations owned by tax paying residents of other countries (who may also have U.S. citizenship). These small business corporations are in no way “foreign”. They are certainly “local” to the resident of another country who just happens to have the misfortune of being a U.S. citizen. Read more

Tax Debt And Passport Revocation: The New Weapon Against Americans Abroad

John-Richardson- Tax Debt and Passport Revocation

US Passport application links Citizenship (State Dept) to Taxation (Treasury) to enforce “Taxation based Citizenship

The logical progression continues …

I just got off the phone with someone who has just received a letter from the IRS stating that:

1. He had a “seriously delinquent” tax debt; and

2. That notice of the “seriously delinquent” tax debt was being forwarded to the State Department.

(In 2016 I did a presentation on this topic just a few months after the law came into force. You may view the presentation here.) Read more

IRC Section 965 Transition Tax – Part 4

Canada, Transition Tax, John Richardson, non-US residents, tax laws

This is the fourth in my series of posts about the Sec. 965 Transition Tax and whether/how it applies to the small business corporations owned by tax paying residents of other countries (who may also have U.S. citizenship). These small business corporations are in no way “foreign”. They are certainly “local” to the resident of another country who just happens to have the misfortune of being a U.S. citizen.

Last night I was discussing the “transition tax” with an “individual” who is impacted by the tax AND is a Homeland American. He is a “tax resident” of ONLY the United States. For Homeland Americans who are subject to ONLY the U.S. tax system the “transition tax” is NOT a bad thing. Read more

IRC Section 965 Transition Tax – Part 3: The US Wants Your Pension

Canada, Transition Tax, John Richardson

This is the third in my series of posts about the Sec. 965 Transition Tax and whether/how it applies to the small business corporations owned by tax paying residents of other countries (who may also have U.S. citizenship). These small business corporations are in no way “foreign”. They are certainly “local” to the resident of another country who just happens to have the misfortune of being a U.S. citizen.

Those who fail to learn from history are doomed to repeat it Read more

IRC Section 965 Transition Tax: Part 2

John-Richardson- Americans Abroad, Transition Tax, IRC Section 965, Canada,

The possible use of the Canada U.S. tax treaty to defeat the “transition tax”

Beginning with the conclusion (for those who don’t want to read the post)

For the reasons given in this post, I believe that there are grounds to argue that the imposition of the Sec. 965 “transition tax” on Canadian resident/citizens DOES violate the Canada U.S. tax treaty. It is my hope that this post will generate some badly needed discussion on this issue. Read more

IRC Section 965 Transition Tax: Resistance Is Futile

transition tax, americans abroad, expatriate, canada

“This legislation is being interpreted by a number of tax professionals to mean that individual U.S. citizens living outside the United States are required to simply “fork over” a percentage of the value of their small business corporations to the IRS. Although technically “CFCs” these companies are certainly NOT foreign to the people who use them to run businesses that are local to their country of residence. Furthermore, the “culture” of Canadian Controlled Private Corporations is that they are actually used as “private pension plans”. So, an unintended consequence of the Tax Cuts Jobs Act would be that individuals living in Canada are somehow required to collapse their pension plans and turn the proceeds over to the U.S. government” Read more

U.S. Citizens Speak Out “While You Can” About Proposed Repatriation Tax Regulations: Exempt American Small Business Owners In United States And Worldwide From US Transition And GILTI Taxes

John Richardson - U.S. Citizens And Proposed Repatriation Tax

This is part of my series of posts discussing the Section 965 U.S. Transition Tax. This has been reposted with permission from Americansabroadfortaxfairness.org.

Time Out From Our Regular Programming With This Special Message – A Call To Action – from Attorney Monte Silver:

Hi Fellow Americans:

On August 1, 2018, the Treasury/IRS issued proposed regulations that interpret the Repatriation Tax Law – a 250 page very complicated document. I discovered that in issuing the document, Treasury, the IRS and other Federal agencies seriously violated numerous Federal laws and procedures. This gives us tremendous leverage in negotiating for an exemption from the Repatriation & GILTI laws.

It is not unreasonable to expect that this battle may be won by December 15, 2018. What you can do to help win the battle? Easy! Treasury needs to hear your voice in a few short paragraphs (as outlined below) – by October 7, 2018.

Read more

Green Card Abandonment – The Safe Disposal Of Kryptonite

John Richardson - Green Card Abandonment

This post is on the tax consequences of ‘expatriating’ for green card holders and US citizens; in other words, giving up your green card or citizenship. A green card is what US ‘lawful permanent residents’ use as proof of their immigration status.

Green card holders are deemed permanent residents of the US for federal tax purposes so they are subject to federal tax on worldwide income, and various reporting requirements, irrespective of whether they physically reside in the US.

Note that the definition of residency for immigration and tax purposes is not the same. Therefore, an individual can cease residing in the US and fail to renew his green card, but remain resident for tax purposes unless they follow the correct procedure for surrendering this status (described in Internal Revenue Code sec. 7701(b)(6)) by filing a form I407.

Read more

When You Are Issued A Visa For Permanent Residence In The United States, The IRS Considers You A Taxable Resident

John Richardson - When You Are Issued A Visa For Permanent Resident, The IRS Classifies You As Taxable

The Internal Revenue Code of the United States imposes worldwide income taxation on ALL individuals who are U.S. citizens or who are otherwise defined as “residents” under the Internal Revenue Code. “Residents” includes those who have a visa for “permanent residence” (commonly referred to as a Green Card). A visa for “permanent residence” is a visa for immigration purposes. Once an individual receives a visa for “permanent residence” they will be considered to be a “resident” under the Internal Revenue Code. Their status as a “resident” for tax purposes continues until they fulfill specific conditions to sever their “tax residency” with the United States. The conditions required to sever “tax residency” with the United States are found in S. 7701 of the Internal Revenue Code. (Basically a Green Card holder can’t simply move from the United States and sever tax residency.)

Read more

So You Have Received A Bank Letter Asking You About Your Tax Residence For Common Reporting Standards (CRS) Or Foreign Accounting Tax Compliance Act (FATCA) Part 3

John Richardson - Part III On FATCA AND CRS

Part E – Oh My God! I think I might be a “tax resident” of two countries – What is a “tax treaty tie breaker”? How does a “tax treaty” tie breaker work?

  1. I am a U.S. citizen and a “tax resident” of Canada who actually lives in Canada and not the United States. Can I use the “tax treaty” to become a “tax resident” of only Canada?
  2. Absolutely, positively NOT. U.S. citizens CANNOT use a tax treaty to break “tax residence” with the United States.The reason is that almost all U.S. tax treaties includes what is called a “savings clause“. The purpose of the “savings clause” is two-fold:

Read more

So You Have Received A Bank Letter Asking You About Your Tax Residence For Common Reporting Standards (CRS) Or Foreign Accounting Tax Compliance Act (FATCA) Part 2

Part B – The Combined FATCA/CRS Letter

This letter is particularly worrisome for Canadian residents (whether Canadian citizens or not) who were either born in the United States or are (otherwise) U.S. citizens or U.S. permanent residents (AKA Green Card Holders). Could this mean that they would be required to apply for a U.S. Social Security number?

What follows is a sample of a letter …

Read more

Meet Tax Experts At TaxConnections...