foreign earned income

[dakota99]

i hate to beat a dead horse BUT...
i realize that i did not phrase the question in the best way... but regardless of your comments, i do not understand the CONCEPT in question. the CONCEPT of taxing beyond the border as so many people have said is permitted or required; how can the feds tax beyond its borders, require people working abroad to file income tax returns when they are not in the US nor sending money back to the US? it makes no sense to me. people have been saying, it seems, that the income tax and social security tax is based on citizenship or residency, illegal or otherwise. "abezon" used the example of willing the lottery in Canada, and still i wonder; how can this be? do you know of any basic info on this subject, how it was decided about taxing americans working abroad?

 

[Snipes5]

If you don't get the concept, honestly there are TONS of tax evader sites what would be happy to agree with you and show you how "they" believe taxation is illegal, yada yada yada.

Of course they're wrong, but it's a free country and everyone is entitled to their opinion.

Seriously, I don't think we can help you anymore here. We've apparently explained it eight ways to sunday, and you don't get the concept. Sometimes you just have to accept that our collective centuries of experience are correct. If you'd like to challenge this in the courts, be our guest.

Snipes

 

[dakota99]

taxable income issue...

If you don't get the concept, honestly there are TONS of tax evader sites what would be happy to agree with you and show you how "they" believe taxation is illegal, yada yada yada.

I AM GLAD YOU REPLIED TO THIS POST BECAUSE I WANTED TO REPLY TO YOUR PREVIOUS POST.

I NEVER SAID THAT I BELIEVED THAT TAXATION OF F.E.I. WAS ILLEGAL, UNFAIR OR ANYTHING ELSE. AND I NEVER SAID THAT I DISAGREED WITH YOU. REMEMBER, I SAID I KNOW NOTHING ABOUT TAXES AND AM TRYING TO LEARN SOMETHING FROM THIS SITE AND PEOPLE LIKE YOU TELL ME WHAT YOU THINK, AND THAT IS OK, BUT YOU PROVIDE NO REFERENCES AND THEN BRING ON THE ATTITUDE. CHILL OUT!!!!

THAT BEING SAID, I DON'T GET THE ___concept___ OF TAXING BEYOND THE BORDER OR REQUIRING THE REPORTING OF INCOME AND APPLYING TAX RULES. WHAT YOU FOLKS HAVE BEEN SAYING IS ALL NEW TO ME AND IT SEEMS ODD, VERY ODD. SO AM I TO UNDERSTAND THAT WHEN PEOPLE ARE BORN IN THE USA AND WORK OVERSEAS, AS LONG AS THEY HAVE US CITIZENSHIP THEY HAVE A REQUIREMENT TO REPORT INCOME AND SEND TAXES HOME (WITHIN THE APPLIED RULES), BECAUSE OF US CITIZENSHIP? OK. I DON'T GET IT BUT OK. I KNOW NOTHING TO SAY TO ASSERT THAT YOU ARE WRONG.

Of course they're wrong, but it's a free country and everyone is entitled to their opinion.

Seriously, I don't think we can help you anymore here. We've apparently explained it eight ways to sunday, and you don't get the concept. Sometimes you just have to accept that our collective centuries of experience are correct. If you'd like to challenge this in the courts, be our guest.

Snipes

NO, I HAVE NO INTEREST IN TAKING THIS MATTER TO THE COURTS BUT IF YOU BELIEVE THAT INCOME EARNED BY US CITIZENS WORKING OVERSEAS IS INDEED REPORTABLE AND TAXABLE, THEN PROVIDE SOME SOLID REFERENCES. BUT OTHERWISE, NO DISRESPECT INTENDED, DON'T BELIEVE THAT FOLKS HERE HAVE MADE THIS ISSUE CLEAR AT ALL.

AND YOU STILL HAVEN'T ANSWERED ALL THE QUESTIONS; ONE SPECIFICALLY, "HAVE THE COURTS DECIDED ON THIS ISSUE?"
I WOULD LOOK IT UP BUT HAVE NO IDEA WHERE TO LOOK OR TO KNOW IF I AM LOOKING AT THE RIGHT INFO.

HAVE A NICE DAY.

 

[Snipes5]

You were provided a reference, complete with quoted sections in an earlier post by Abezon. The refrerence was 26 USC. You can find the USC on the Internet, just look up "Code of Federal Regulations" and find the correct section (26).

The Code takes the position that anything not SPECIFICALLY EXCLUDED is taxable, period.

Since the exclusion for foreign earned income stands at $80,000, I would wager that this is where the courts have let it stand.

I have no idea whether it's every been challenged in court, because I'm not an attorney, I'm an enrolled agent. If you want to know whether it's ever been challenged in court, you'll have to look it up. Start with "tax court", and reference foreign income, and see what you find.

I'm sure the folks here are not at all interested in doing free legal research for you, and personally speaking, I don't really care whether or not it has been challenged in court. My job is to inform others about what the law ultimately requires, not delve into the ins and outs of precedents and case law.

And do yourself a favor and lose the ALLCAPS. It's rude.

Snipes

 

[divgradcurl]

Just to put this thing to bed for good:

"VI. The leading text writers upon international law concede that a national sovereign has the power to impose taxes upon its nonresident citizens regardless of the sources from which such incomes are derived. I Oppenheim, Int. Law, p. 195; Bar, Int. Law, 2d ed., p. 247; Story, Conflict of Laws, 7th ed., pp. 21, 22, 682; I Westlake, Int. Law, pp. 111, 112, 206, 208; I Hyde, Int. Law, p. 362; Webster, The Law of Citizenship, 1891, pp. 167, 168.

The payment of an income tax by a nonresident citizen is looked upon as prima facie evidence of citizenship. The failure to pay such an income tax is, inter alia, of considerable weight in determining that the nonresident citizen has given up his allegiance to the United States. Borchard, Diplomatic Protection of Citizens Abroad, pp. 694-697, 706, 728 et seq.; Mr. Fish, Secretary of State, to Mr. MacVeagh, December 13, 1870, Foreign Relations, 1871, pp. 887-888; The Charming Betsy, 2 Cr. 64.

As pointed out in Minor v. Happersett, 21 Wall. 162, a citizen owes allegiance to his nation and is entitled to its protection.

[...]

Or to express it another way, the basis of the power to tax was not and cannot be made dependent upon the situs of the property in all cases, it being in or out of the United States, and was not and cannot be made dependent upon the domicile of the citizen, that being in or out of the United States, but upon his relation as citizen to the United States and the relation of the latter to him as citizen. The consequence of the relations is that the native citizen who is taxed may have domicile, and the property from which his income is derived may have situs, in a foreign country and the tax be legal -- the government having power to impose the tax.

Cook v. Tait, 265 U.S. 47, 56 (U.S. 1924)

And yes, that law is STILL good law -- the Supreme's have not oveturned it.

So, like I said in my FIRST post to you, because you are entitled to the priviliges of citizenship wherever you are, you can be taxed where ever you are.

NOW do you believe us?

 

[TLWE]

I posted the link to 2 tax codes, I am very famililar with them, because my husband works as a manager for Hallburton overseas.

As long as you keep your American citizenship you are going to be taxed after the first $80,000. And honestly why not? Most people who work overseas do send their income back to the States, and come back to the States when they retire. The simple way to avoid this is to renounce your American Citizenship. Let's face it, you can't "have your cake and eat it too".

The majority of people working overseas are provided with living arrangements and food by the company they are under contract with. Especially in Iraq, which is where you mentioned going to work. Let's face it, if you go to Iraq to work, what expenses are you going to incur? You more than likely aren't going to be buying a house over there, so you aren't going to be paying property taxes. You won't be an Iraqi citizen, so you won't be paying any taxes to their government.

For people who do buy homes and pay taxes in foreign countries, there are exemptions in your taxes you pay to the U.S. based on some taxes you paid in a foreign country. That is in the tax codes. If you do decide to work overseas, I highly recommend hiring a CPA if you don't already have one.

Also, if you are this easily frustrated by something as tax codes; you need to seriously consider how well you would hold up in a combat zone. Every little bombing and injury or death to civilians by stray bullets doesn't make the news. The DOD doesn't even keep up with the statistics on civilian injury and/or death. You mentioned being in the military from 1996 to 2000, you may have possibly deployed to Bosnia during that time. So did my husband, and I can tell you..."This ain't nuthin' like that was".

I don't know which company you are considering going to work with, but if it is Halliburtion:

A 7 year background check is run, you can not be behind in taxes or CS. You will be given a physical, if you are diabetic or have a condition which requires prescription narcotics, you can not go overseas. And you must pass a psych eval.