Tax Notes - Former IRS Chief Backs Expats’ Bid for Residency-BasedTaxation
[…]
U.S. citizens living abroad face myriad headaches trying to comply with the United States’ nearly unique income tax requirements, according to former IRS Commissioner Charles P. Rettig and his former top aide, Tom Cullinan.
The pair, who are both now with Chamberlain, Hrdlicka, White, Williams & Aughtry, announced their support for residency-based taxation in a September 29 opinion piece posted on the website of the expatriate coalition Tax Fairness for Americans Abroad.
U.S. citizens who live or travel extensively abroad are generally required to file U.S. income tax returns and report income even if they didn’t earn any U.S.-based income, although exclusions and credits are available. A taxpayer letter posted by Tax Fairness for Americans Abroad argues that it isn’t the tax burden itself so much as the reporting compliance that beleaguers nonresident citizens.
[…]
Another perk of the LaHood bill? It proposes issuing nonresidency certificates to eligible taxpayers that could be presented to financial institutions abroad, exempting them from FATCA reporting requirements. “It is a simple, technical fix but one with life-changing consequences,” Rettig and Cullinan wrote.
[…]
Although a new system to allow nonresidents to opt out of U.S. income taxation may introduce new opportunities for tax avoidance, “that is not a reason to avoid fair treatment of U.S. citizens living abroad, ”Rettig told Tax Notes. He argued that the legislative language and associated guidance “should be able to anticipate most tax avoidance schemes” and that the IRS’s Criminal Investigation division can handle the rest.
[…]
“When it comes to fair tax treatment of citizens, does substantially every other country in the world have it right, or do we?” Rettig said.
READ THE FULL STORY HERE.