Link

Interesting FATCA/CBT/FBAR discussions here:
http://reddit.simonvreux.be/p/33y057/new

lol....US Department of Justice blames Americans abroad for their own FATCA injuries

The US Department of Justice has issued a 57-page response to the filing of a Motion for a Preliminary Injunction by the James Bopp FATCA repeal legal team. The report begins as follows:

Plaintiffs seek an extraordinary order that would halt enforcement of several duly enacted statutory provisions, along with associated regulations and implementing international agreements, aimed at curbing offshore tax evasion. The challenged laws are essential to tax enforcement, and the injuries that plaintiffs allege they have suffered as a result of such laws are self-inflicted, speculative, or even illusory. Plaintiffs’ claims for relief fail for lack of Article III standing, are jurisdictionally barred by the Anti-Injunction Act, and are meritless as a matter of well-established constitutional law. The preliminary injunction should be denied because plaintiffs have no likelihood of success on the merits and have no irreparable injury—certainly none to outweigh the great harm that the Government, and public interest in general, would suffer if enforcement of these laws were enjoined.

Republicans Overseas and others are reacting strongly to DOJ's victim blaming tactics. Here are links to the original story at Republicans Overseas and to John Richardson's comments at ADCS.

Here, again, is the complete DOJ document: DEFENDANT'S MEMORANDUM IN OPPOSITION TO PLAINTIFFS' MOTION FOR PRELIMINARY INJUNCTION

It is obvious that victim blaming is, and will continue to be, a central tactic of this Administration, as it is finally put on the defensive and forced to justify its outrageously discriminatory and immoral FATCA campaign. Now is a good time to remind ourselves of the essential characteristics and dynamics of victim blaming, which easily scale from the most primal one-on-one bullying to the targeting and systematic abuse of specific groups by the state. Here are a couple of good references to start with:

Green cards and treaty elections

If you have a green card and live abroad (in a country that has an income tax treaty with the United States) you can choose to be taxed as a nonresident of the United States. As you might guess, this has some unpleasant trickiness when it comes to the exit tax.

I offer here an interesting thought exercise: how a patient and methodical green card holder might avoid the exit tax, even if he/she is wealthy enough to otherwise trigger covered expatriate status.

Basic tax rule for green card holders

If you have a green card visa, you are a "resident alien" for income tax purposes. The consequences are simple:

• Render the IRS full income tax on your worldwide income, no matter where you live; and
• Submit all of the tax paperwork demanded by the U.S. government.

  Becoming nonresident

Every income tax treaty gives a green card holder (but not a U.S. citizen) living abroad the power to choose to be taxed as a nonresident of the United States. If you wield this power:

• You will be taxed only on your income from U.S. sources, and income earned outside the United States will not be taxed by the United States; and
• Your U.S. tax paperwork burden will be only marginally lighter.

You cause yourself to be a nonresident of the United States for income tax purposes by filing Form 1040NR and attaching Form 8833 to it.

some guidance with regards to OVDP or SFCP

The choice of program should be guided by the facts and circumstances. It is a function of the source of your offshore funds, the nature of the failure of your disclosure and whether your behavior was willful or nonwillful.
Questions to ask include:
• Did I have a purpose of avoiding or evading U.S. tax?
• Could my actions appear that I had a purpose of avoiding or evading tax? For example, bringing funds into or out of the U.S., using cash or “mules” rather than checks or wires, or moving assets between institutions, might give that appearance to the IRS.
• What is the size of the accounts?
• What is the amount of foreign assets?
• What is the source of the funds? Were they ever reported when they were first earned?
• Are the funds licit or illicit funds to begin with?
• Were the funds earned from foreign or domestic sources?
• Were the taxpayers living abroad when the accounts were set up? When the accounts were funded?
• What was the amount of earnings from the foreign accounts?
• Were FBARs filed for some accounts but not others?
• Did I provide false information to my tax return preparer?
• Am I in law enforcement, politics or a professional?
• What is the risk tolerance for the taxpayers?
• Will the spouses have different answers to these questions (perhaps separate counsel may be needed)?
Once you elect a program, the other is no longer available as a fallback.

Case : Form 8854 was not filed when green card abandoned

Case : A long-term resident returned to CH in 2013 and filed Form I-407 to abandon her green card.

She was not a covered expatriate because of the balance sheet test or the net tax liability test. However, she could not answer the certification test question (Form 8854, Part IV, Line 6) with "yes" because her 2012 tax return was wrong.

Her income tax return filing history is:

• Her 2012 income tax return (as a resident) was filed but omitted some income. She was a green card holder for the full calendar year of 2012. She did not abandon her green card until 2013.
• She filed a tax return for 2013. (I do not know whether she filed as a resident or nonresident). She did not file Form 8854 with the tax return
• She filed Form 1040 (a resident's tax return) for the full year of 2014, with no Form 8854.

Now, in 2015, she will amend her 2012 income tax returns to fix the problem. Then she will file her Form 8854 in 2015.

What to do?

The question facing the taxpayer is how should Form 8854 be answered? What is the taxpayer's expatriation date (see Part I of Form 8854) -- sometime in 2013 or sometime in 2015?

There is a related problem: do you file Form 8854 with the 2015 tax return or the 2013 tax return?