Thanks to Badger for posting in What’s New Part 2 of the Interview with Bill Yates, former Associate Chief Counsel (International) with IRS
The interview relates to residence-based taxation, but also deals with OVDI and FATCA.
My favorite comment from the story is this:
“I’ll tell you one thing. I’ll never forget what someone said after one of our many, endless Form 8938 drafting sessions.”
“Boy, I sure wouldn’t want to have to fill out this form.”
That sums it all up, doesn’t it?
On FATCA, Mr. Yates says
I thought it was bad policy. We shouldn’t be pushing U.S. citizens towards expatriation.
He recognizes FATCA is hitting U.S. taxpayers living overseas with unforeseen consequences, such as having their foreign bank account(s) closed.
When asked if he thinks FATCA was a mistake, he replies:
It doesn’t matter what I think, now. FATCA is inevitable.
On OVDI, he gives an example of an Accidental American born in a US hospital to Canadian parents. He insists this was not and should not be the target of OVDI. But,
Believe me no one at the IRS Field level is going to speak up about the inconsistencies inherent in OVDI as far as “accidental citizens”
One more confirmation to stay away from OVDI!
Here is the Part 1 of the Interview with Bill Yates, which was earlier posted under What’s New.
12 thoughts on “"Boy, I Sure Wouldn't Want To Have To Fill Out That Form"”
I don’t know what to think of this article. I don’t believe him to be correct that permanent citizenship taxation and FATCA to be inevitable. I think in that sense he is just carrying water for the IRS.
Based on 100 years of behaviour since they introduced Income tax in the United States, why should we not suppose that CBT is a permanent fixture?
IMHO, CBT cannot possibly become a permanent fixture because of FATCA, and the USG’s insistence on suddenly enforcing CBT and FBARS whereas historically it has not bothered to inform or pursue US person’s abroad. It is a law that has been waiting for its turn to die. FATCA is its death knell.
Yes it was always law, but only some expats knew about it, and even fewer acknowledged it. USG cannot just start enforcing an outdated law and not expect a revolution. What we are living through and witnessing right now is the painful process which I think will ultimately result in the official end of this 100 year old law
Cut the guy a break. He’s been busting his a– for quite a while trying to figure out how to implement the nonsense. And that is hard, because it is nonsense.
That he can’t imagine that all his hard work ought to go up in smoke is human.
For me, it’s enough that he offers some criticism at all.
@Tim: I actually think some form of FATCA or international information exchange is a good idea–similar to the very effective Canada-US Tax Treaty.
The problem with FATCA is it is way off the map from what was originally intended–to stop offshore tax evasion.
This comment from Yates says it all: “The Treasury and IRS have too much invested in FATCA to turn back now.”
So, instead of chasing tax cheats, Treasury and IRS are “invested” in chasing honest Americans (and their non-US families) and even accidental Americans like the one named in this article. And the former Americans, which many of us are, but which IRS won’t recognize without a CLN.
Treasury and IRS have become so impaired by their power, they are drunkenly speeding down an obstacle course, ignoring the flashing red lights, failing to yield to other vehicles and pedestrians and risking a catastrophic head-on collision.
These reckless drivers need to apply the brakes and stay off the road until they get a reliable GPS that will help them find their way again.
Will they? Of course not. They “have too much invested.”
Re: “they have too much invested”, I guess Treasury has never heard of the accounting term ‘sunk cost’.
The only thing that is inevitable is that fact that everything comes to an end sooner or later.
@SwissPinoy: The big question is will it end with a peace treaty or a nuclear explosion over our countries and lives.
Looking at the bigger picture (I mean beyond FATCA and CBT), personally I think we are at a pivotal point in history, where if we don’t figure out how to live in peace and work towards solving the countless and growing problems of our own creation, then it will soon be the end of this beautiful blue planet.
As long as FATCA is law, the IRS has to do something. And it will probably be difficult to sell Congress on RBT.
Homelanders can’t imagine that other countries could possibly have better ideas on how to do anything. That’s what I learned when I returned in the late ’70s after spending a year abroad. My helpful suggestions always fell on deaf ears.
As long as “expat taxpayers” and “FBARs” were simply under the radar, no one cared. That is over. Can you imagine the hue and cry that would commence if the IRS decided to ignore the letter of the law now and go back to treating US citizens abroad fairly? The homelanders think the only reason US citizens live abroad is to “cheat on taxes” and, thanks to the press stock photos, they think the cheating is invariably done under the shade of palm trees.
Heck, even Mr. Schumer wants a Reichsfluchtsteuer, supremely ironic for someone of Jewish heritage.
For the IRS to stop trying to implement FATCA, Congress has to change the law.
They KNOW the rest of the reasonable world taxes on residency. They champion CBT because they all believe they are exceptional and holding their citizenship should indeed cost a lot more than anyone else’s passport does. That attitude they’ve been taught from birth is hopeless to assault. It’s like talking to someone from Mao’s little red army about what might be wrong with his approach. They unsee things on purpose to continue to feel “exceptional” You OWE them regardless of where you live because of the great honour of being one of “us” No other justification is ever needed in their eyes. They do not question why other countries don’t do things this way. Of course other countries don’t tax on citizenship they reason because other citizenship isn’t valuable as much as ours. Why would they tax on citizenship when it’s not “ours” and therefore is nearly worthless.
I wish I was who they think I am though. Sipping fruity drinks on a nice island with lots of cash somewhere…at least this wouldn’t feel so completely screwed up.
The nice thing about shredding your US nationality and using the former passport for backyard fire starter is that you will free to go to that island and sip on your fresh fruit juice. I try to imagine myself riding a horse in the Argentine Pampas, and at night drinking their wine beside the fire.
Canada lets you do that, and will welcome you back if you decide that you want another dose of winter. And Canada will not demand to know where you were and what you were doing for a living while you were gone.
Canada grants those freedoms. Canada grants you the freedom to leave. The United States of Arrogance does not. Therefore Canada is a better country. Any other country of any consequence except the United States grants those freedoms as well. Vis-a-vis the United States, they are better countries too.
You realize of course that one American argument for their policy is that they allow foreign citizens to vote. If I were to vote where I was born, there would probably be a member of the Black Panthers at the polling station ready and waiting to shred my absentee ballot.
Another argument they put forward is that they protect their foreign-resident citizens. Good grief, if my car were to break down in Detroit or Chicago’s south side, they wouldn’t be able to protect me in their own country. If it happened in Chicago, some of Obama’s community organizer cronies would probably be among those who try to mug me. If I were to try to defend myself, I would probably have to go through the same nightmare as did George Zimmerman. Their Obama-loving media would also probably lynch me in the process, just like they did to Zimmerman.
I might even think about doing what you suggest once I know that the IRS and Warlord and Chief Obama are not nipping at my heels.
We should discuss some alternatives.