There are many misconceptions about how the U.S. federal tax law works in general; and specifically regarding the “expatriation tax” provisions. This resource – https://tax-expatriation.com/ – is specifically designed to try to bring clarity to these complex tax laws where there are many “tax myths” floating around in the internet.
This website of general information is certainly not a substitute for personal legal and tax advice to your specific circumstances. See, Limitations that explains why general legal information is not the same as legal advice, that is, the concrete application of law to a specific case with unique and particular facts.
In order to provide a public resource, this website tries to help clarify some of these myths. Incidentally, the internet is a great resource for information and at the same time – misinformation, misleading information, self-help snake oil gibberish and the like. I am often times amused, in a disturbed way – if I realize how someone might be making an important life mistake because of the lack the information and knowledge a person demonstrates they have in this area of the law, based upon their writings.
As a wonderful example of this, see this WWW-website reference to medical self-diagnoses – which is ironic in so many different ways. It is written by “Dr. John Anderson” who is apparently not a medical doctor at all, but rather has a PhD in fisheries.
It is common to see lay persons (or even purported tax advisers) reading and interpreting the law in a way they wish it were; the way they see it most favorable to their own circumstances, etc. These internet interpretations are usually not well founded in the law, especially not a comprehensive reading of the law, and especially in light of how the IRS and U.S. Treasury interpret the law. These comments are often a regurgitation of something someone has read on the internet or heard from a friend or acquaintance or a particular website.
They often are full of “legal arguments” that at times smack of what U.S. courts have consistently found to be deemed “tax protestor” arguments which consistently lose in U.S. courts. Another post will be forthcoming explaining this important concept, as I expect we will see similar expatriation cases work their way through IRS tax audits, administrative tax appeals and eventually some will reach the U.S. courts surrounding the “expatriation tax” provisions.
The world wide web is a powerful tool, when used prudently.
Enough of my musings about how myths of U.S. “expatriation tax law” are compounded throughout the world with the WWW!
If the law is not clear in its application, I will say it is unclear. If the law has been interpreted specifically by a particular Court, I will provide a discussion of that opinion. The “expatriation tax law” is an area of the tax law which has NO case law to date. There is not a single case that has been litigated by a taxpayer or the government surrounding Section 877 or any of the companion provisions.
There are also no regulations to date; that have been issued by the Treasury; only a few notices. See, Does IRS Notice 2009-85 regarding expatriation have the “force of law”?
However, the Treasury is working on issuing regulations under Section 2801, regarding the tax on “covered gifts” and “covered bequests.” The proposed regulations under Section 2801 are expected within the next few months; hopefully before year end. I have prepared and presented specific comments and recommendations to the Treasury and IRS on these yet unissued proposed regulations. For more background, see, The “Hidden Tax” of Expatriation – Section 2801 and its “Forever Taint.”