#CBTLawsuit – First report of Senate Finance Committee brings citizenship taxation lawsuit one step closer

As reported at the Isaac Brock Society, the “International Taxation Committee” has released it’s report on tax reform. In spite of the fact that more than 3/4 of the submissions were from Overseas Americans, the committee, acknowledged, but failed to address the intolerable treatment of Americans abroad.

As barely, a footnote, the Committee ended with:

F. Overseas Americans

According to working group submissions, there are currently 7.6 million American citizens living outside of the United States. Of the 347 submissions made to the international working group, nearly three-quarters dealt with the international taxation of individuals, mainly focusing on citizenship-based taxation, the Foreign Account Tax Compliance Act (FATCA), and the Report of Foreign Bank and Financial Accounts (FBAR).

While the co-chairs were not able to produce a comprehensive plan to overhaul the taxation of individual Americans living overseas within the time-constraints placed on the working group, the co-chairs urge the Chairman and Ranking Member to carefully consider the concerns articulated in the submissions moving forward.

What does this mean?

At a bare minimum it means that:

1. The “International Committee” views its purpose as dealing with “corporate interests” and not “individual interests”.

2. The “International Committee” views DNA Americans as less important than “Corporate Americans”.

3. The “International Committee” has acknowledged the urgency of the situation “for the international taxation of individuals, mainly focusing on citizenship-based taxation, the Foreign Account Tax Compliance Act (FATCA), and the Report of Foreign Bank and Financial Accounts (FBAR).”

Remember that many of the same submissions that were sent to the “International Committee” were also sent to the committee focusing on “Taxation of Individuals”. It’s difficult to see how this could not be addressed further by that Committee.

In terms of where to go from here …

1. There will (in the very near future) be a lawsuit launched in the United States against the most egregious aspects of U.S. TAX  policy,  as they relate to ALL PEOPLE deemed to be “U.S. persons” who reside outside the United States.

2. The lawsuit is likely to, in addition to issues of taxation,  include issues related to the “forced imposition of U.S. citizenship” on people who do NOT regard themselves as U.S. citizens or “U.S. persons”. Can the United States deem people to be “U.S. persons” when they believe that they are not?

3. The lawsuit will NOT be run by or through the “Alliance For The Defence of Canadian Sovereignty” (which will “stay at home” dealing with our FATCA lawsuit). It will be run by and funded by a different organization.

4. We hope for the support of all the various groups deemed by the U.S. Government to be “Americans abroad”. “If Americans abroad do NOT hang together, they will hang separately“.

Evaluating your personal situations …

It’s obvious that “U.S. citizenship abroad” lies somewhere between “difficult and impossible” (depending on your personal circumstances). The report from the “International Committee” suggests that the “plight of Americans abroad” is NOT likely to get better soon. This reality raises the obvious question of whether it’s safe to retain U.S. citizenship in a FATCA and FBAR world.

Stay tuned.

John Richardson

P.S. Here is the report from the International Committee.

The International Tax Bipartisan Tax Working Group Report

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