Dr. Snyder, Dr. Alpert and Richardson: 'Mission Impossible: 'Extraterritorial Taxation and the IRS'

The uniquely American definition of “tax residency,” which includes the imposition of worldwide taxation on the tax residents of other countries who happen to be American (even if they don't realize it), has left the U.S. Internal Revenue Service in charge of overseeing the implementation of three separate and distinct tax systems: residence, source, and extraterritorial, according to Paris-based attorney and U.S. taxpayer rights campaigner Laura Snyder, Toronto-based U.S. citizenship lawyer John Richardson, and Australia-based, recently-retired university lecturer and FixtheTaxTreaty.org founder Karen Alpert...

Recruitment for Taxpayer Advocacy Panel's only expat rep seat to begin shortly

American citizens who are resident overseas, and who would like a chance to make the American Internal Revenue Service better and more accountable to taxpayers, may wish to consider applying for the soon-to-be-vacated only international seat on the IRS's Taxpayer Advocacy Panel, currently held by suburban Paris-based Laura Snyder.

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IRS issues new Economic Impact Payments 'text scam' alert

The U.S. Internal Revenue Service issued a warning on Wednesday of a new "Covid-related text scam" that it said has been "created by thieves [to] trick people into disclosing [their] bank account information" by making them believe that it will result in their receiving the US$1,200 Economic Impact Payment (EIP). 

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IRS adds languages, digital-signing capability to key forms

As part of what it says is an "effort to reach under-served communities", the Internal Revenue Service is beginning to provide "information and assistance" to taxpayers in languages other than just English, as well as making certain key documents, such as the basic 1040 tax return form, available in Spanish.

The U.S. tax collecting agency has also added six forms to the 10 it has already said it would temporarily allow taxpayers to sign digitally, in a measure it said was aimed at helping to protect the health of taxpayers and tax professionals during the Covid-19 pandemic.

  • Tax

A few tax quotations the IRS missed...

Happy Tax Day! And what better way to celebrate than a few tax quotations.

As we noted yesterday, the collection of 15 tax quotations on the IRS's website (yes really), wonderful though it is – does miss a few classics that rank highly in our own collection...

There's Benjamin Franklin’s quote, for instance, which is probably among the world's best-known tax quotations of all: “In this world nothing can be said to be certain, except death and taxes.”

(Almost equally famously, American author Martha Mitchell included a variation on Franklin’s quote in her 1936 novel Gone with the Wind, in which she has her heroine, Scarlett O’Hara, say: “Death, taxes and childbirth! There’s never any convenient time for any of them!”)

Then there’s Lord Roy Jenkins’s classic quote about inheritance tax, always popular among British estate planners keen to help clients understand why they should take their (the estate planners') advice.  Jenkins – a former chancellor of the exchequer – described inheritance tax in a 1986 Commons debate as “broadly speaking, a voluntary levy paid by those who distrust their heirs more than they dislike the Inland Revenue."

Below are some other quotes that we consider classics, but which the IRS, for some reason, chose not to include in its compendium...

Some Tax Quotes the IRS missed... 

  •   “The avoidance of taxes is the only intellectual pursuit that carries any reward.” 
    ~ John Maynard Keynes

  • “A government which robs Peter to pay Paul can always depend on the support of Paul.”
    ~ George Bernard Shaw, Irish playwright and critic

  • “The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing.” 
    ~ Jean Baptiste Colbert (French economist and minister of finance under King Louis XIV of France,1619-1683)

  • “We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.” 
    ~ Winston Churchill

  • “The problem is not that people are taxed too little, the problem is that government spends too much.”
    ~  The late U.S. president Ronald Reagan

New tax quotes

 The introduction of the Foreign Account Tax Compliance Act in 2010 has resulted in the creation of a new genre of tax quotations, which Toronto-based lawyer and tax expert John Richardson has been perfecting – as anyone who has heard him speak at a tax industry event recently will know.

Below are some of Richardson's best-known quotes. 

  •    "The motto for Americans abroad should be: Report early, report often, report everything – and keep a record of what you report."

  •   "We’re in a situation in which the IRS is the judge, the jury and the executioner.”

  •   "The beauty, genius and timeless wisdom found in the Internal Revenue Code include the principle that the Internal Revenue Code, in its majestic equality, punishes both Homelanders and Americans abroad for having financial assets and accounts outside of the United States.”

  • "Americans abroad are always the most highly taxed people in their country of residence – making them the most highly taxed people in the world."

  • "The United States imposes a separate and more punitive tax system on those Americans living outside the United States than it does on Homeland Americans."

  • "The IRS treats marriage between a U.S. citizen and a non-U.S. citizen as a form of tax evasion."

  • "To the IRS, a non-U.S. pension is nothing but a sacred instrument of tax evasion."

  • "There are two kinds of Americans abroad with problems: First, those who do not file U.S. tax returns. Second, those who do file U.S. tax returns."

  • "All roads lead to renunciation."

  • "If you see the word foreign in the Internal Revenue Code, the word "penalty" (usually starting at  US$10,000) is sure to follow."

  • "It's not that Congress doesn't care about Americans abroad. It's that they don't care that they don't care."

  • "When the United States move to 'territorial taxation' for corporations [in the 2017 Tax Cuts and Jobs Act], what it actually did was to expand internationally the territory over which the United States claims tax jurisdiction." 

  • "The single most important skill for American citizens in the 21st century is the ability to complete and file a U.S. tax return without having to resort to professional help."

  • "A supporter of citizenship-based taxation is someone who has merely given some thought to the idea of citizenship-based taxation. An opponent of citizenship-based taxation is someone who actually understands citizenship-based taxation." 
  • Tax

Revealed: IRS’s sense of humor

With Tax Day for Americans around the world looming tomorrow (June 15), we thought it would be a good time to call attention to a rather quirky collection of tax quotations that we stumbled on, buried deep inside the IRS’s website...

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AXFNJ Podcast: Dubai private asset manager for U.S. expats Vince Truong explains why everyone needs ‘a financial roadmap in place’

AXFNJ Podcast: Dubai private asset manager for U.S. expats Vince Truong explains why everyone needs ‘a financial roadmap in place’

Hearing Americans who've been living abroad for 10 or more years, and sometimes for most of their adult lives, describe how they got there is always interesting, I find. Many...