Monday, October 12, 2015

Slides for "Taxing Potential Community Members' Foreign Source Income"

This past Friday, I attended the Taxation and Citizenship Conference, held at the University of Michigan Law School, and ably organized by Reuven Avi-Yonah and Allison Christians.

I presented my paper "Taxing Potential Community Members' Foreign Source Income," which is available here.

The slides for my talk - which don't attempt to present the entire paper, as that would have been a real mess in a 15-minute time slot - are available here.

This is a fun and important topic, although (as I note in my paper), it's awfully hard to get a handle on how one should define "us" versus "them" for purposes of identifying individuals who will be treated as domestic taxpayers (a bad rather than a good thing for them, as it means they are potentially taxable on their foreign source income).

While I don't come to closure on that issue, I do note, mainly in the mode of preliminary exploration, that some of what I say regarding in my international tax book regarding entity-level corporate income taxation might also apply to the taxation of individuals - but with modification to reflect the differences between the two settings. I also sound what I think are a couple of fairly novel notes regarding how to think about taxing resident individuals' foreign source earned income, currently exempted (up to a dollar ceiling) under IRC section 911.

One subject of widespread agreement at the sessions, albeit not among the topics centrally addressed in my paper, was that FATCA, requiring foreign financial institutions to report to the U.S. regarding U.S. individuals' bank accounts, was aimed at people living in the U.S. who are committing tax fraud - not at U.S. citizens living abroad who may face onerous U.S. reporting requirements under the income tax, independently of FATCA. The question of burdens being imposed - often quite disproportionate to the tax revenue actually at stake - on our expatriates is something that requires more attention  than it has gotten to date from U.S. policymakers.

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