Tag Archives: Michael Kirsch

Video of May 2, 2014 Toronto debate on Citizenship taxation of #Americansabroad – Professor Michael Kirsch and Dr. Bernard Schneider

As you know, on May 2, 2014 ACA Global Foundation sponsored a debate on “21st Century Taxation of Americans Abroad: Citizenship-based taxation vs. Residence-based taxation. The debate featured Professor Michael Kirsch of Notre Dame University law school and Dr. Bernard Schneider of Queen Mary University in London, UK.

The debate has previously been discussed here and here. In addition, I used the ideas in the debate for a separate post on question of what connection to the United States should be required to justify citizenship taxation.

The video of the debate as been released and is referenced in the above tweet.

I reiterate my thanks to ACA Global, Professor Kirsch and Dr. Schneider.

I welcome your comments.

Taxation of #AmericansAbroad in the 21st Century: “Country of birth” Taxation vs. “Country of Residence” Taxation

Update January 2018: This post has been updated with some new links and discussion.

Prologue – The “Story Of The Century

Since July 1, 2014, the United States via threats threats of the FATCA Sanction, has begun a “world wide hunt” for people born in the United States (or are otherwise deemed to be “U.S. tax subjects”). A compilation of my posts describing the mechanics, effects and costs of FATCA and the FATCA IGAs is available in “The Little Red FATCA Book“. FATCA has spawned litigation against both the U.S. and Canadian Governments. A discussion of the “Alliance For The Defense Of Canadian Sovereignty” FATCA lawsuit against the Government of Canada is available here. Some thoughts on the “U.S. FATCA Legal Action” lawsuit against the U.S. Government are here. Both lawsuits have been vigorously defended by the respective Governments. The U.S. lawsuit may have reached the end of its viability (lack of standing and various procedural issues). The Canadian lawsuit continues.

With respect to those “Born In The USA”, the U.S. legal “claim of tax jurisdiction” is two-fold:

1. Those born in the United States (unless they have relinquished U.S. citizenship” for both tax and nationality purposes) are U.S. citizens.

2. Citizens of the United States are subject to the provisions of the Internal Revenue Code regardless of where they live in the world. The Internal Revenue Code (“IRC”) includes but is not limited to the obligation to pay taxes according to U.S. tax rules. The “IRC” also includes a wide range of “penalty laden reporting requirements“. The “IRC” also strongly discourages (through penalties and sanctions) participation in non-U.S. pension plans, non-U.S. investments (including non-U.S. mutual funds), the use of “non-U.S. business corporations” and (incredibly) non-U.S. spouses. (Even the divorce of a U.S. citizen and non-citizen is likely to be significantly more expensive.) As a result, the “extra-territorial application of the “IRC”) has the effect of exercising U.S. “control” over the lives of it’s citizens who do NOT live in the United States. Therefore, it is clear that the “extra-territorial” application of the “IRC” both (1) imposes the full force of the “IRC” on the resident/citizens of other countries and (2) has the effect of imposing the U.S. cultural values mandated in the “IRC” on those other countries. One can identify a list of the “10 Commandments” which are imposed on Americans abroad in an FBAR and FATCA world.

(Note that with the exception of U.S. citizens and “permanent residents”, as per Internal Revenue Code Sec. 7701(b), an actual physical connection to the United States is required to establish U.S. tax residency.)

As the article referenced in the above tweet makes clear, many people “claimed” by the United States as “tax residents”have never had any connection to the United States except that they were born there. The article includes:

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Taxation of #Americansabroad: @Thunfinancial Wall Street Journal Op-Ed follows article from @SaundersWSJ

The above tweet references an Op-Ed by Thun Financial’s David Kuenzi which recently appeared in the Wall Street Journal. This is a nicely done article which adds reinforcement to the excellent journalism by the Wall Street Journal’s Laura Saunders and Liam Pleven which appeared in the Wall Street Journal on June 18, 2014 and (discussing the new IRS Streamlined procedures) on  June 19, 2014. 

(The new Streamline Procedures were discussed by various “stakeholders” extensively:

The OVDP and  Streamlined Historians – Perspectives  of various Americans Abroad:

– at the Isaac Brock Society here and here

– by American Citizens abroad here

The second citizenship advocates:

– by Mark Nestmann here

The accounting firms:

– from Frank Hirth (U.K. based) here

The “What is non-willfull” group  here:

– by Stephen Mopsick here and earlier here

– by Patrick Martin here

– more by Patrick Martin here

– by Jack Townsend here

– by Robert Steinberg (particularly good analysis) here

The “Technicians” AKA “who is streamlined intended for” here:

– by Moodys here

– by Virgina La Torre Jeker here

– by Jack Townsend here

– by Robert Steinberg here)

Those who recognize that citizens of certain countries may have a second level of “home country specific issues” (Iran):

– by Virginia La Torre Jeker here

The Logistics – How to manage Streamlined “conFORMity”:

– by Virginia La Torre Jeker here

Interestingly both Mr. Kuenzi (as a presenter) and Ms. Saunders (as a journalist) attended the recent conference on U.S. Citizenship-based taxation conference which was held at the University of Toronto on May 2, 2014. The Toronto citizenship-based taxation Conference was a great success. Those interested can read: Thoughts and reflections on the Toronto Conference on the taxation of Americans abroad in the 21st century.

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Conference on “Citizenship-based taxation” – May 2/14 Toronto, Canada

I am very proud to participate in (what I believe to be) the first ever conference organized to debate issues surrounding “citizenship-based taxation”. The conference has been organized by “ACA Global“. The conference was reported on the Maple Sandbox blog as follows:

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