Category Archives: Taxes

US expats given hope of lower tax bills

 

I normally do not put up posts with a US emphasis but in this case I am making an exception.
Many Sandbox readers might be affected by these possible changes and I would like to make this information known.

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US expats given hope of lower tax bills

Republicans edge towards eliminating need to pay levies overseas and at home

published in the Financial Times
by Demetri Sevastopulo and Barney Jopson in Washington

You can read the article by answering a simple question that appears when the page loads. I cannot post the entire article due to copyright restrictions.

Here are some excerpts:

Millions of US citizens working overseas could see their tax bills lowered by an overhaul of the tax system as Republicans edge towards eliminating a requirement for American expatriates to pay taxes both overseas and in the US.

Kevin Brady, the Republican head of the House ways and means committee, which is drafting a tax reform bill, said lawmakers were considering the measure, which has been the focus of lobbying by Republicans Overseas, a group of party donors around the world.

“It is under consideration. They have made the case,” Mr Brady said in response to a question from the Financial Times at a Christian Science Monitor breakfast. “Lawmakers representing that area of the tax code have made that case.”

The US Chamber of Commerce, a business lobby group, has urged policymakers to consider US-only taxation for individuals, too, arguing that taxing foreign income hurts American managers at the overseas affiliates of US exporters.

Mark Mazur, who was the top tax official in Barack Obama’s Treasury department, said he supported the change, arguing that it was necessary to address the “inequity” of an expat paying tax on the same income to both the US and a foreign government.

“If you take two people, one works in London, one in New York, working for the exact same US multinational — if they make the exact same amount of money you might think they should be taxed exactly the same,” said Mr Mazur, who heads the Tax Policy Center.

Solomon Yue and Michael DeSombre are also mentioned in the article.

There are quite a few comments with JC doing Yeoman’s Duty.

Collective psychotherapy – U.S. citizens outside U.S. – Not what they take from you, it’s what they leave you with

cross-posted from renounceuscitizenship blog

Going back to a general thread from a few weeks ago – on law and morality – this post speaks more to the effects of the law when it is not rooted in morality. On one level, an apologist might claim that “doing one’s duty” and “paying one’s share” is moral and is necessary to maintain funding and order in a society. However, when such a law is applied to those who live outside that society, as we all know from experience, unexpected conflicts, resulting punitive actions and penalties tend to denigrate the quality of life. We are not talking about “quality of life” amounting to physical comforts or financial wealth. By “quality of life, what is referred to is mental stability, emotional trustworthiness and the ability to move through difficulties with a sense of direction and confidence. When these parameters are stifled by confusion/lack of clarity of what is expected, and ridicule and negativity is directed toward those affected, the result is a not an issue of lack of compliance but rather, wrongly imposed requirements that simply make people anxious, immobilized by fear, depression and a general inability to adjust to the situation. How this can be justified when those same people ARE compliant in the society where they live, strikes many as simply being immoral.

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The Wisdom of Moe Levine Moe Levine (not that I ever met him) was considered to be one of America’s greatest trial lawyers. Although he died in 1974, his wisdom lives on his book (appropriate called) “Moe Levine on Trial Advocacy“. He (legend has it) was a master at delivering the closing statement in his jury trials. When arguing for a severely injured plaintiff he (according to the commentators of his time) would tell the jury (referring to a badly injured client):

“It’s not what you take from them it’s what you leave them with.”
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2014 IRS Survey of Individuals Living Abroad – Maple Sandbox has it

As previously reported by the IRS, and several other sites, the IRS sent a survey to about 4,000 individuals ‘living abroad’, “regardless of whether or not you have filed a U.S. federal income tax return while living abroad.” This is being done through an independent survey firm, ICF.

(Updated)We have been requested to provide a specific link to the survey:
The IRS did it last year as well, and the 2012 survey results are available:
 
According to the Taxpayers Advocate Service 2013 Annual Report to Congress,
“The IRS has also contracted with an independent consultant to survey 4,000 individuals residing abroad who the IRS believes have U.S. filing requirement and did not file a return. The survey, to be conducted by mail and online, will “focus on why some individuals living abroad do not file a tax return, their awareness of certain tax provisions and forms specific to International Taxpayers, and how the IRS can encourage voluntary compliance among this population.” 
 
There is a lot to consider in this survey, and its ramifications, and much that I suspect people will find, at the least, questionable. Section 4E has 11 multiple choice questions around CBT, filing returns, etc. Section 4H is asking for ‘thoughts’ on what the IRS has done well, or how the IRS can “improve in communicating whether income earned outside the US is subject to US federal taxes”.
 
I am very, very curious to read the comments that this survey will generate!
 
(A password is required to access the survey).
Personally, I’m very interested to know if anyone who has never filed a U.S. tax return, and who thinks they should be filing, actually fills out the survey.

Watch out for smaller investment firms

While the emphasis here and at Brock has been primarily on the larger financial firms and their industry association, it will be interesting to watch how the smaller investment firms react to FATCA.

Here’s one item from Advisor.ca that may illustrate what we may see:

New rules for U.S. taxpayers with mutual funds

Advisors must be more diligent in determining whether clients truly are U.S. resident taxpayers, and remind them of their obligations. For our part, we won’t open accounts until prospects provide copies of their passports and sign IRS Form W-9 (Request for Taxpayer Identification Number and Certification

In particular, the smaller firms, which number in the hundreds, if not thousands, may not get the FATCA due diligence requirements correct and ask for information that is not required and may very well be illegal.

 

 

 

A Very Successful Two Person Protest!

Calgary411 and Outraged Protesting

Calgary411 and I set up on one corner of an intersection across from the BMO convention centre. Fortuitously, it was a great location, as anyone who wanted to go up to Macleod Trail to get a coffee had to walk right past us.

We got out there about 10am and immediately garnered a lot of interest from people driving by, as well as pedestrians. I quickly lost count of the thumbs up we received. Quite a few horn honks, as well.

Not too long after we got there, the first of the bicycle cops showed up. I was a little apprehensive, although we weren’t blocking Continue reading