If the US really must do Citizenship Based Taxation, I have a recommendation.
Adopt the Eritrean model. It would be far more efficient and effective.
One simple form. Two percent of income. Send the check.
This will save the IRS far more money than they currently raise through CBT and will significantly reduce costs. One downside is it will put lots of IRS Agents, lawyers and accountants out of work.
My consultant fee for this advice to US Treasury: A significant donation to our Canadian Legal Challenge of FATCA Fund.
Oh wait. If they simplify CBT, they don’t need FATCA and we will not need to challenge the Canadian government. Unless, of course, FATCA is about something other than taxes.
Many thanks to Em for the great find of the Eritrean tax form.
@USTreasury @IRSnews If u must do #CBT y not make it easy like Eritrea? One simple form. 2%. Send the check.http://t.co/VZYJEQZmZc
Who knew Theo Caldwell’s excellent financial Post article on Canada’s FATCA capitulation also appeared in Eritrea?!? Em!
http://www.capitaleritrea.com/us-and-eritrea-tax-canadas-fatca-capitulation/
Here is something else that Eritrea is more rational about than the US. Eritrean Citizenship. Someone born in Eritrea is not automatically an Eritrean citizen. So, no accidental Eritreans except if you were born to an Eritrean parent outside of Eritrea.
http://www.multiplecitizenship.com/wscl/ws_ERITREA.html
However, you can voluntarily renounce Eritrean citizenship. Or:
The following are grounds for involuntary loss of Eritrean citizenship: Person voluntarily acquires another citizenship. Person voluntarily serves the interests of another country.
Eritrea seems like a far better deal to me. Yet, Canada, the US and other governments condemned Eritrea at the UN and Canadian Foreign Affairs Minister John Baird expelled the Ambassador to Eritrea because of citizenship based taxation. Hmmm.
Eritrea must have a 100 or more page guide to completing their return. The IRS would certainly have one.
For example, what is meant by net monthly income and net annual income?
For months worked, what constitutes a month? For example, if a person worked 14 days in a 30 day month would that count as a month? Or is
months worked calculated as the total number of days worked in a year divided by 12?
Then again, the IRS would probably need at least 200 pages of instructions along with a $10,000 fine for incorrectly completing the form.
RT @MapleSandbox: How Eritrea Does #CBT. No #FATCA #FBAR: http://t.co/EbZT4dQ182
@RepubAbroadHK If USA insists on #CBT should adopt Eritrean model. One simple form. 2%. Send check. No #FATCA #FBAR http://t.co/VZYJEQZmZc
RT @LynneBlaze: @RepubAbroadHK If USA insists on #CBT should adopt Eritrean model. One simple form. 2%. Send check. No #FATCA #FBAR http://…
For Eritreans who don’t know who their father is (and by extension, their grandfather), does that mean they are off the hook for the 2% tax? Or maybe the Eritrean government assesses a penalty for incorrect/incomplete filing. No mention about penalties for perjury, etc.
Then there’s the old joke about the new, simplified, two question 1040:
1. How much did you make last year?
2. Send it in.
I would dance a jig if I had clinging Eritrean citizenship instead of USofA.
I think most would be thrilled that if Congress passed a law and the Court did not interfere, that said failure to file tax returns for three consecutive years is considered a voluntary expatriating act for non-residents.
RT @LynneBlaze: @RepubAbroadHK If USA insists on #CBT should adopt Eritrean model. One simple form. 2%. Send check. No #FATCA #FBAR http://…
The Eritrean Diaspora tax form tells it all.
Eritrean citizenship is clearly a better tax deal for expats than US citizenship. And Eritrea was condemned by a UN Resolution for it. Go figure.
@George, Wilderness: To top all of that off, it’s easy to renounce Eritrean citizenship–and they don’t bestow the Eritrean pedigree on everyone born in Eritrea.
I have neighbours who were born in Eritrea. They are both retired professionals and have never heard a word from Eritrea. They automatically lost their Eritrean citizenship when they became Canadian citizens in the 1970s. Unlike the US, Eritrea didn’t change its mind and try to reclaim them four decades later. Eritrea has no interest in their bank accounts.
As Wilderness said, “Go figure.”
What if we have a Canadian kid running around here with an errant American father they know nothing about who suddenly pops out of the wood work to reunite. Now that Canadian kid is American and hasn’t been filing their tax forms or FBARS and is subjected to all the penalties that implies. You know there is a U.S. military base close enough to me that the people from there come up to my city on the weekends to shop, go out to eat and party. I see them every week end in the summer. Mostly young men on a lark. In fact a couple of them have married and moved here that I personally know of. I’m sure there are others who have got a little over the top and left behind some poor Canadian girl with the gift of an American child. Better warn the local girls not to get involved with some of those handsome U.S. soldiers who are here every.single.weekend. I bet Eritreans don’t have to think in such far reaching detail.
How Eritrea Does #CBT. No #FATCA #FBAR formication necessary! @LynneBlaze http://t.co/jam9rugqYY
RT @FATCA_Fallout: How Eritrea Does #CBT. No #FATCA #FBAR formication necessary! @LynneBlaze http://t.co/jam9rugqYY