Individuals Subject to U.S. State Tax Jurisdiction, the Response of New York State
This is the tenth in my series of posts about the Sec. 965 Transition Tax and whether/how it applies to the small business corporations owned by taxpaying 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.
From The “Pax Americana” To The “Tax Americana”
This is the ninth in my series of posts about the Sec. 965 Transition Tax and whether/how it applies to the small business corporations owned by taxpaying 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.
Introduction – The purpose of this post is …
to demonstrate that the “transition tax” is an example (particularly egregious) of the principle that (1) not only does the United States impose “worldwide taxation” on the “tax residents” of other countries, but (2) it imposes a separate tax regime on certain “tax residents” of other countries that is different and far more punitive than the regime imposed on Homeland Americans. Yes, you read correctly!
It is the “Tax Americana”– a “form” (no pun intended) of an “empire” which is colonizing other countries through taxation.
A recent and most important example of the “Tax Americana” is the “transition tax” : A U.S. resident who has undistributed earnings in a U.S. corporation will NOT be subjected to the “transition tax”. A Canadian resident who has undistributed earnings in a Canadian corporation will be subjected to the “transition tax”!
This small business thought it was saving to invest in business expansion – Wrong, they were saving to be robbed by America!
This is the eighth in my series of posts about the Sec. 965 Transition Tax and whether/how it applies to the small business corporations owned by taxpaying 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
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
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
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
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
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.
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.
Part F – A “U.S. citizen” cannot use a “tax treaty tie breaker” to break U.S. “tax residence”. How then does a “U.S. citizen” cease to be a “U.S. tax resident”?
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?
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 …
Legal Post: Texas Sales And Use Tax For Equipment Rentals
Canada Just Passed Law Increasing Exclusion Rate For Capital Gains To 66.6%
Biden Proposes Highest Capital Gains Tax in Over 100 YEARS
What Is The BEAT For MNEs?
Event Waivers And Releases
Recent Comments