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| Re: More Americans renouncing citizenship because of greedy government (1237022) | |||
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Re: More Americans renouncing citizenship because of greedy government |
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Posted by subfan on Tue Oct 28 14:56:13 2014, in response to Re: More Americans renouncing citizenship because of greedy government, posted by AlM on Tue Oct 28 08:30:51 2014. The rule is that a credit is not available for voluntary Tax payments. The thinking behind this is that otherwise, a US person would have no motivation to minimize the tax paid to a foreign government, as he'd get a dollar-for-dollar credit for this payment against his US tax liability. This same reasoning would not apply to state tax payments, where the taxpayer receives only a deduction, and not a credit, for the tax paid.As I said earlier, it's not certain that the payment will be treated as voluntary and the credit will not be allowed - but there is a significant risk that the IRS will challenge the use of the credit in the year in question. subfan |
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