Because The US Exports Its Tax Code, Other Countries Should File Amicus Briefs In The Moore MRT Appeal

Why U.S. deemed income events cause problems for U.S. citizens living in other countries and erode the tax based of the countries where they live

All countries in the world have an interest in the Moore MRT appeal and should file Amicus briefs in support of the Moores.

The U.S. citizenship tax AKA extraterritorial tax regime applies to ALL U.S. citizens and residents wherever they live in the world. With its very expansive definition of “tax residency”, the United States claims the tax residents of other countries as U.S. tax residents. Those unlucky dual filers are subject to additional administrative fees, additional taxation and the opportunity cost of the inability to effectively engage in retirement and financial planning.

In the Moore MRT appeal the U.S. Supreme Court will consider whether “income” requires the actual receipt of income or whether “deemed income” meets the 16th Amendment test for income. Does the 16th Amendment require objective tests that must be satisfied before “income” can exist? The answer to this question will have profound implications for both the “U.S. citizen” residents of other countries and (2) the countries where they live. As previously discussed, if income does NOT have to be actually received, this opens the door for the U.S. tax the residents of other countries on income they have never received. Often the taxable event in the U.S. will take place before the taxable event in that other country.

The following post describes some examples where the United States is already deeming income to have been received for U.S. tax purposes before income has been received in the other country.

The following post describes how the U.S. deeming income to have been received for U.S. tax purposes prior to income having been received in the other country may result in (1) double taxation to the individual and (2) erosion of the tax base of the other country.

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Guide To Renunciation Of U.S. Citizenship Abroad

In this guide, we’ll discuss everything you need to know about the process of renouncing your U.S citizenship, how to book an appointment, waiting times you might expect, forms you need and how to complete them, interview tips and we’ll discuss the most common concerns US citizens have when renouncing your US citizenship. Everything we refuse to charge additional fees for because we believe that you can do it all yourself.

We understand that renouncing US citizenship is a life-altering decision that comes with an enormous amount of stress, doubt, and anxiety. We get many requests each week to help people prepare for their renunciation appointment.

We firmly believe that equipt with the knowledge you’re about to process, you can eliminate the stress and ease your anxiety. In fact, the process is simpler than you might think. At the end of the day, it is your right to decide whether you consider yourself to be a US citizen or not.

Renunciation Process

Section 349(a) of the Immigration and Nationality Act (INA) (8 U.S.C § 1481) governs the right of a U.S.citizent to renounce his or her U. S. citizenship. A person loses his/her U.S. citizen status if he/she voluntarily gives up his/her U. S. citi­zenship with the intent of relinquishing his/her U.S. citizenshi­p, making a formal renunciation before a diplomatic or consular officer of the United States in a foreign state.

In order for you to legally renounce your U.S. citizenship, you must:

1) appear in person before a U.Ss consular or diplomatic officer
2) in a foreign country at a U.S. Embassy or Consulate; and
sign an oath of renunciation

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Founder Of Russian Bank Pleads Guilty To Tax Fraud

Admits to Concealing More Than $1 Billion in Assets when Renouncing U.S. Citizenship and Agrees to Pay More Than $500 Million Penalty

The founder of a Russian bank pleaded guilty today to filing a materially false tax return.

“In 2013, when the value of Oleg Tinkov’s investment in his bank’s stock rose to over a billion dollars, Tinkov quickly renounced his U.S. citizenship and then lied to the IRS in a ploy to evade ‘exit taxes’ he knew were due,” said Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division. “Today, Tinkov has entered a plea to a felony and agreed to pay more than $500 million in taxes, interest and penalties, more than double the amount of money he sought to escape paying to the U.S. Treasury through his fraudulent scheme.”

“Oleg Tinkov brazenly violated United States tax law,” said Acting U.S. Attorney Stephanie M. Hinds for the Northern District of California. “No one who enjoys the immense benefits of United States citizenship, as Tinkov did, may avoid the corresponding obligation to support the country he chose. Tax evaders should take notice of the long reach of U.S. law enforcement.”

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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.
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The unified message from all should be that: The United States should stop imposing “worldwide taxation” on people who have “tax residency” in other countries and do NOT live in the United States! This is a message that all advocates of tax reform can support. As recently explained in a post from American Citizens Abroad (ACA) the mechanism (RBT vs TTFI) used to achieve this change is less important.

It is no secret that Congressman George Holding  is working on a proposal to end the U.S. practice of imposing “worldwide taxation” on those who have “tax residency” in other countries. If successful, this would be a positive change for the United States, U.S. citizens who choose to live outside the United States and the residents including accidental Americans. None of these should be burdened by the extra-territorial application of U.S. tax laws!

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