Chapter 22: To share or not to share” – Should a U.S. citizen share a bank account with a “non-citizen AKA alien spouse?

This post features an interesting Facebook discussion. The reality of life for many Americans abroad is two-fold:

1. It is common for Americans abroad to marry non-U.S. citizens;

2. Americans abroad are (with few exceptions) required to report to U.S. Financial Crimes (Think Mr. FBAR) bank accounts that they either have signing authority over or where they can control the disposition of the funds.

The reality is that, in the case of joint accounts, this means that the U.S. citizen will report the bank accounts of the spouse to the U.S. Government. Different people have different views of this.

The Facebook discussion referenced in the above tweet is very interesting.

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Update: The #CBTLawsuit rollout is beginning – we need YOUR support

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This post is to:

  • announce the “roll out” of a lawsuit filed in the United States
  • against the Government of the United States
  • to strike down the most egregious aspects of U.S. “place of birth taxation”
  • and provide relief for those who reside outside the United States and are unjustly, unfairly and unlawfully burdened by the attempt of the United States to impose its laws on the residents and/or citizens of other nations.

The lawsuit will require a large amount of funding including an immediate injection  of $25,000.

For those who only want to contribute the funding are invited to go here. Those who want to understand what we are doing read on.

By way of background:

One more U.S. citizen abroad is forced to renounce her U.S. citizenship:

Continue reading Update: The #CBTLawsuit rollout is beginning – we need YOUR support

“How To Live Outside The United States In An FBAR And FATCA World” – Part 2 – Taxation and your country of residence

Introduction …

Tax Connections recently reposted a post that I wrote:

“How To Live Outside The United States In An FBAR And FATCA World”. That post was reposted at the Isaac Brock Society, where it has received a number of interesting comments. Additional comments appear at the American Expatriates Facebook group. The comments have made me realize that there are many, many, more dimensions to this problem.

Americans abroad by definition live in other nations and are subject to the tax jurisdiction of other nations. My first post dealt with the life of U.S. citizens abroad from the perspective of U.S. taxation and regulation. What about from the perspective of your country of residence!

A particularly insightful comment at the Isaac Brock Society from Edelweiss reminded me that Americans abroad must be mindful of the tax laws of their country of residence. Edelwiess’s comment which is worth a post (and is being reposted here) is a stark reminder how the laws of all nations can impact your choice of investments anywhere.

In my original post, I listed as my “5th Commandment” (of 10 Commandments):

5. Thou shalt NOT buy non-U.S. mutual funds. If you do, you will have your gains confiscated in the form of an “Excess Distribution” Tax. Buy American. Buy U.S. mutual funds.

This is true from a U.S. tax perspective. Edelweiss reminds us that we must also consider the tax perspective from the country of residence – in this case the U.K. Edelweiss comments:
Continue reading “How To Live Outside The United States In An FBAR And FATCA World” – Part 2 – Taxation and your country of residence

“How To Live Outside The United States In An FBAR And FATCA World” – Part 3 – Sanctions and “direct life control”

Introduction …

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Tax Connections recently reposted a post that I wrote:

“How To Live Outside The United States In An FBAR And FATCA World”. That post was reposted at the Isaac Brock Society, where it has received a number of interesting comments. Additional comments appear at the American Expatriates Facebook group. The comments have made me realize that there are many, many, more dimensions to this problem.

In 2012 a seminar presenter at NYU joked that:

“FATCA is the gift that just keeps on giving”.

What has become clear (as a U.S. tax expert once commented) is that:

“U.S. citizenship is the gift that just keeps on taking!”

FATCA is simply a mechanism to help the USA exploit “U.S. citizenship” to keep on “taking” from:

There is more than one way of “taking” …

“Some” ways of taking include:

  • direct taxation
  • extra-territorial laws that restrict the liberty of U.S. persons (including “accidentals”) abroad

Restricting the activities of Americans Abroad

This post is to acknowledge and describe some of the ways that the USA uses its assumed jurisdiction over “U.S. citizens” to restrict the activities of those “citizens” when they are outside the United States.

Continue reading “How To Live Outside The United States In An FBAR And FATCA World” – Part 3 – Sanctions and “direct life control”

Homeland Americans can see their future by looking at #Americansabroad

Kat Jennings of Tax Connections has organized the world’s first internet tax summit. It will take place on September 21 -23, 2015. Free tickets are available.

Incredibly, the first day will provide education on the problems of Americans abroad which include: citizenship taxation, FATCA, FBAR, PFICs, foreign corporation, living as a U.S. citizen abroad, relinquishing U.S. citizenship and the Exit Tax.

This summit affords an excellent opportunity to educate large number of people including Homeland Americans. Therefore, we urge you to send the URL of this page;

https://citizenshiptaxation.wordpress.com/2015/09/13/homeland-americans-can-see-their-future-by-looking-at-americansabroad/

in an email, which might read:

“Dear Friend:

Please take the time to learn how the U.S. Government is destroying the lives of your fellow citizens abroad. Through a new U.S. law called FATCA, citizenship taxation and more, the U.S. Government is putting your fellow Americans in a position where they are being forced to renounce their U.S. citizenship. To hear their stories “first hand”, please visit:

http://www.vimeo.com/citizenshiptaxation

You are invited to learn more by attending the world’s first Internet Tax Summit on September 21 – 23, 2015. The day that focuses on the plight of Americans Abroad will be September 21.

You can register for and get a free ticket for the conference here.

What follows is some information about this event:

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Please take the time to forward this important information to everybody you know!

Learn more about the Internet Tax Summit at:

http://www.taxconnections.com

Chapter 5: Living Clean – How to live outside the United States in an #FBAR and #FATCA world

This series of posts developed from my “Educational Outreach” program for Americans abroad. It is an effort to respond in a practical way to the questions that people have.

The chapters of “Coming into U.S. Tax Compliance Book” are:

Chapter 1 – “Accepting Cleanliness – Understanding U.S. Citizenship Taxation – To Remain a U.S. Citizen or to Renounce U.S. Citizenship

Chapter 2 – “But wait, I can’t Renounce U.S. citizenship if I’m not a U.S. Citizen. How do I know if I am a U.S. Citizen?”

Chapter 3 – “No matter what, I must come into U.S. Tax Compliance – Coming into U.S. Tax Compliance for Those who have NOT been Filing U.S. Taxes

Chapter4 – “Oh no, I have Attempted U.S. Tax Compliance by Filing Tax Returns. I have just Learned that I have made Mistakes. How do I fix Those Mistakes?”

Chapter 5 – “I don’t want to Renounce U.S. Citizenship. How to live Outside the United States as a U.S. Tax Compliant Person

Chapter 6 – “I do want to Renounce U.S. Citizenship. This is too much for me. How the U.S. “Exit Tax” Rules Might Apply to me if I Renounce

Chapter 7 – “I Really wish I Could do Retirement Planning like a “Normal” Person. But, I’m an American Abroad. I hear I can’t Invest in Mutual funds in my Country of Residence. The Problem of Americans Abroad and non-U.S. Mutual Funds Explained.

Chapter 5: Living Clean – How to live outside the United States in an #FBAR and #FATCA World

“When in Rome, live as a Homelander” does, when elsewhere, live as they live elsewhere.”

Introduction:

Americans abroad are constantly told that they should “come clean”. They should file their U.S. taxes. This assumes that they are somehow “unclean” or perhaps “dirty”. The life of an “American abroad” is about three things:

1. “Thinking Clean” – The importance of “thinking clean” while living abroad.

2. “Coming Clean” – Atoning for the sins of “living abroad” and entering the U.S. tax system; and

3. “Living Clean” – Living as a Homeland American outside the United States

“Living clean” for Americans abroad

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A supporter of “citizenship taxation” is a person who thinks about “citizenship taxation”.

An opponent of “citizenship taxation” is a “U.S. tax compliant” American abroad who understands what it’s like to live under “citizenship taxation”.

Continue reading Chapter 5: Living Clean – How to live outside the United States in an #FBAR and #FATCA world

Chapter 4: Attempted US Tax Compliance: Fixing filing errors for Americans abroad in a #FATCA World

This series of posts developed from my “Educational Outreach” program for Americans abroad. It is an effort to respond in a practical way to the questions that people have.

The chapters of “Coming Into U.S. Tax Compliance Book” are:

Chapter 1 – “Accepting Cleanliness – Understanding U.S. Citizenship Taxation – To remain a U.S. citizen or to renounce U.S. citizenship

Chapter 2 – “But wait, I can’t renounce U.S. citizenship if I’m not a U.S. citizen. How do I know if I am a U.S. citizen?”

Chapter 3 – “No matter what, I must come into U.S. tax compliance – Coming into U.S. tax compliance for those who have NOT been filing U.S. taxes

Chapter4 – “Oh no, I have attempted U.S. tax compliance by filing tax returns. I have just learned that I have made mistakes. How do I fix those mistakes?”

Chapter 5 – “I don’t want to renounce U.S. citizenship. How to live outside the United States as a U.S. tax compliant person

Chapter 6 – “I do want to renounce U.S. citizenship. This is too much for me. How the U.S. “Exit Tax” rules might apply to me if I renounce

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FATCA, non-U.S. banks and the tax compliance industry have unleashed a “witch hunt” for Americans abroad. Those who have never filed U.S. taxes will find themselves under pressure to become U.S. tax compliant. In most cases, those who have never attempted U.S. tax compliance will be able to come into compliance relatively easily.

For those who have attempted U.S. tax compliance and have made mistakes, it is NOT quite as easy. Although all problems are fixable, caution is warranted. Depending on the seriousness of the mistake or omission, specialized counseling may be appropriate.

The first question is: MUST you “fix past filing errors”?

The answer appears to be no. A recent discussion of this problem included:

Neither the federal tax law nor the Treasury Regulations provide that a taxpayer has an affirmative statutory duty to file an amended income tax return, as long the original return reflects a good faith effort to comply with the law at the time the tax return was originally filed.  The Treasury Regulations, which are drafted by the IRS, instruct that a taxpayer “should,” within the period of limitation, amend to correct prior errors in a tax return, but not that a taxpayer “must” amend.  See Treas. Reg. § 1.451-1(a).

I have included the above as a “beginning” to your thought process. This is a question that you should explore with your adviser.

The second question is: SHOULD you “fix past filing errors”?

There is no way to even give “general advice” in this post. What I can do is refer you to the current guidelines posted by the IRS.

Start here. Click on the link in the above tweet and then seek specialized counseling.

Okay, our detour is over. Let’s return to the general principles for “Coming Clean” for those who are lucky enough to have never filed U.S. tax returns.

John Richardson – Citizenship Solutions