re: "“Pay to Play” vs “Pay to Pay” "

Richard Fernandez at Belmont Club noted a proposal impacting U.S. passport issuance.

Money quote(s):

"The problem with becoming a taxpayer is that it puts you in the system. You become a database record, and there’s no end to the uses that government can put that too. A proposed bill would allow the State Department to “deny, revoke or limit a passport for any individual whom the Internal Revenue Service has certified as having a ‘seriously delinquent tax debt’ in excess of $50,000. The amount would be adjusted for inflation in future years.” The provision was part of a larger amendment by Senate Majority Leader Harry Reid, D-Nev. to fund a highway bill."

There are a couple of ways that a U.S. citizen can find issuance of a U.S. passport to be delayed or denied. One is to be sufficiently behind on ones child support payments that the state in which they are paid reports that fact to the Department of Health and Human Services. They, in turn, relay that information to the State Department's Bureau of Consular Affairs and in very short order that information is available to U.S. consular and passport officials across the country and around the world.

Presumably this restriction would work in a similar fashion.

(Just to be clear, it's possible for a U.S. citizen abroad to get a limited validity passport that'll allow them to travel home to the U.S., just to keep them from being stranded.)

"One way to escape this hassle is not to join the system at all. Many Americans will never have to worry about getting their passport canceled for tax reasons because they don’t pay any. The Daily Mail reports: “Only half of U.S. citizens pay federal income tax, according to the latest available figures. In 2009, just 50.5 per cent of Americans paid any income tax to the federal government – the lowest proportion in at least half a century.”"

CAA has a problem with this.

It's not that many American aren't paying taxes at all, but their deductions and tax liability exceeds the amount of income withholding tax so they get a refund at the end of the year. In some cases, it's the entirety of the taxes they paid. Which withholding tax the federal government has the use of, interest-free, for as long as it takes the individual taxpayer to file their return.

4/4

re: "Globe and Mail: "IRS bearing down on Americans in Canada" "

Fred Fry at Fred Fry International ("Citizen Journalist and Observer of Human Nature") discussed overseas tax liability for U.S. citizens.

Money quote(s):

"Many Americans both Conservative and Liberal are upset with how their Government is functioning at the moment. I know I am not happy with the idiocy that is going on and the lies being put forward that somehow, we would be able to continue spending the outrageous amounts of money that the Government is currently spending, IF ONLY rich Americans paid a little more. Even Americans living overseas cannot escape the long arm of the US Government, which has decided to extend the arm of the Internal Revenue Service, the dreaded IRS, into the pockets of Americans overseas, even those who have no link to the country other than to have been born in the US or born by US parents. Apparently, there are lots of them."

Quite a few folks are born abroad to one (or more) U.S. citizen parents; many of them (no idea of the percentage....) eventually go "home" to the U.S. to live, study, marry, work, what-have-you.

U.S. nationality laws are written so that the U.S. citizen parent(s) have to have at least some U.S. "presence" prior to the birth of their U.S. citizen children; this is intended to prevent an unending series of generations of overseas "Americans" who have only a paper connection with the United States.

Many U.S. citizens abroad do not bother to file income tax returns with the IRS; and in many cases (see Fred's account below) they are not required to do so. There's a threshold income amount below which filings are not required.

That being said, Fred learned one of the reasons why it's a good idea to comply with those IRS rules.

"I lived in Finland for three years while doing my MBA. Two of those years I filed a tax return. The third year I didn't because I didn't meet the minimum reporting threshold. It turns out that it was good that I did because a short while later I moved back to the US and applied for a GreenCard for my soon to be Finnish wife. One of the requirements was providing copies of my previous three years Income Tax Returns, or an explanation of why I didn't file."

Consular officers working the immigrant visa (IV) portfolio will doubtless have encountered this situation numerous times: the U.S. citizen expatriat whio has married a foreign national and now want to get his or her a "green card."

Well, DHS issues the "green card" once a legal immigrant has been lawfully admitted to the U.S. What was once "the U.S. Consular Service" has to issue him or her an immigrant visa first.

There are a number of administrative and legal hurdles to that, and the overcoming the presumption that an immigrant will become a "public charge" once admitted to the U.S. is overcome by a sponsor (usually the petioner spouse him- or herself) providing proof of sufficient income to support the immigrant. Thus the requirement for providing copies of the federal income tax filings.

"It is odd however, to see the amount of effort that the IRS is extending to track down money overseas the US thinks it can extort from Citizens, however unfair, while at the same time they do little to nothing to hunt down illegal aliens living within the US who are working without the legal authorization to do so, are conspiring with their employers to not pay/evade taxes (in some cases also committing identity theft) and are simply getting a free pass."

Good point!

9/26

re: "Since you enjoy your job so much, Congress wants you to take a pay cut .... "

Domani Spero at Diplopundit ("Just one obsessive observer, diplomatic watcher, opinionator and noodle newsmaker monitoring the goings on at Foggy Bottom and the worldwide available universe.") explains what's stupid about this amendment.

Money quote(s):

"In case you did not see this -- Rep. Thomas Reed, R-N.Y sponsored an amendment that cut the locality pay for Foreign Service officers serving overseas. Mr. Reed's press release touts the removal of the "automatic 24 percent pay raise for foreign service officers," his third successful amendment apparently. And it passed the House over the weekend.

There is locality pay for all CONUS states. Why Congress is only targeting the 11,500 Foreign Service workforce is not clear. About 70% are not in the Senior Foreign Service and could be affected by this cut when deployed overseas. I mean really, that's about 7,600 federal employees serving overseas in over 260 posts. Mr. Reed's state is home to some 69,000 federal employees (not counting the feds working for CIA, DIA, NSA and the other "A"s who may be assigned in the state of New York). Look - that's 9 times the Foreign Service number. Imagine the savings there?"

The overseas locality increase, which is only about two-thirds implemented (it has been being phased in over a period of years since it's long-overdue approval) is being mis-cast as a payraise. And in the current economy, it's hard (politically) to make the case for payraises for diplomats. We get that.

It's why, along with all other federal employees, our salary scale is frozen. We get that too, and I've heard precious little squacking about that, even in private. We all have family and friends back home who're out-of-work or struggling and we get it.

But "getting it" shouldn't be a two-way street.

"(A)s Ed points out "the House bill as enacted has no hope of Senate passage or earning President Obama's signature, so this proposal -- while interesting and certainly controversial -- may not survive."

May not survive this time, that is not to say it won't happen ever.

All that did not preclude folks from slinging around their ignorance online --

You folks working overseas apparently do not pay the first $80K of your income overseas. Did you know that? Hah! That IRS has been cheating on FS folks again! It collected every tax penny from your salary including self-employed spouse's annual income of less than $700. If you believe everything you hear, that IRS did not have to collect anything from your $56K + $700 income? Really.

Go ahead and believe that crap, and you might end up sharing a jail cell with whatshisname actor and tax evader.

Foreign Service folks are not/not exempt from paying full federal, state, and Medicare/SS tax on salaries just because they live in Burkina Faso or whatever the name of the hellhole they're presently assigned to. They pay their taxes happily and willingly, 'cuz if they don't, they could get written up for atrocious unlawful uncivic unprofessional behavior, then they won't get promoted, then they get kick out, then they're just part of the 9% unemployment stats. The end."

Pushing back against this sort of recurring ignorance is one of the unstated purposes of this web log. Okay, it's a (former) mil blog as well as a diplo blog. And sometimes I try to bridge the cultural gap between the two, as well as the greater one with the larger public.

I don't be-grudge military members their being tax-exempt during combat deployments. We don't get that, even when deployed to the same places, because we have a different compensation system as foreign service officers. As a consular officer who's worked American Citizen Services, more than once I've encountered the expat American abroad who declares "I pay your salary."

Um. Unless you're making a lot more than you're letting on (and thus are liable for federal tax on your imcome above the $80 or $90k mark), no, you don't.

Not that it matters in terms of how helpful we can (or can't) be, but it's one of those phrases that can bring a (suppressed) smile to a consular officer's face when he hears it.

"(D)espite prevailing belief to the contrary, Uncle Sam's employees overseas are not exempt from paying taxes (unless they're civies at Gitmo). The foreign earned income does not include amounts paid by the United States or an agency thereof to an employee of the United States or an agency thereof. Congress wrote that up. It's the law of the land."

"You also -- supposedly ride around town in a $50,000 Cadillac with diplomatic license plates on the bumper like -- let me get this right -- "like you are better than the very citizens you are supposed to be serving." Ouch! Such sparkling prejudice. Really, a Cadillac? That must be the low level Qatari diplomat riding around in his regular car in DC streets. Have not seen any Cadillac at US overseas posts, not saying there's none, just haven't see any from the embassy compounds I've been to. Saw lots of armored Chevy where you can't roll down the windows. In case you think its armored for decoration, I can assure you it's not. It is armored from front to back and have bullet resistant glass because driving/riding around in a USG vehicle overseas is like driving around with a target mark on your back. What? Um, sorry, not target, they're called cross-hairs now. And in case you think this is vehicle security gone mad, it's not that either. See, the US ambassador to Lome got carjacked recently. And the ICE agents in Mexico who were recently killed/wounded in Monterrey were also using an armored SUV. If not for armored vehicles, not Cadillacs, mind you --- there would be many, many more names up on that memorial plaque on the wall."

Note to residents of and visitors to Washington, D.C., New York City, and other cities which host diplomatic and consular missions from other countries within the United States: the diplomatic and consular license plates you may notice on cars parked illegally or cutting you off in traffic? Not being driven by American diplomats.

Hard to imagine, but we don't get diplomatic plates (or immunity) when we're stationed at home.

Those annoying diplomatic luxury cars you may encounter? Driven by foreign diplomats.

"We have unarmed diplomats in Iraq and Afghanistan. Also in Pakistan where they hate/hate the USA terribly and now think all diplomats are spies. And you don't ever get a tax break for service in those posts."

It would be nice, don't get me wrong. But we don't expect that it will ever happen. And that's okay. Just don't erroneously assume and accuse us of getting what we don't receive and aren't entitled to, at least not as a pretext for denying that which we are.

"I just don't think the FS has the numbers. Even if the entire Foreign Service, and spouses and kids write to their congressfolks and senators, that may not really matter when push comes to shove. The diplomatic service needs to tell its story better. You need more than employees and family members to step up and say -- it's unfair to single out a small group of people for a pay cut."

This is a common lament. The Department of State and the U.S. Foreign Service (and its members) have no domestic political constituency of any consequence. Which is why I'm never shy, when I have a happy American customer who's thanking me profusely, about suggesting they drop their congressional representative a short note or email, if they really are that happy about the service and help they've received, and share their impressions.

They don't have to commend anyone by name, it's not about individual credit, but there are always plenty of congressional inquiries being initiated about complaints, fair is fair.

re: "Since you enjoy your job so much, Congress wants you to take a pay cut .... "

Domani Spero at Diplopundit ("Just one obsessive observer, diplomatic watcher, opinionator and noodle newsmaker monitoring the goings on at Foggy Bottom and the worldwide available universe.") has a locality pay-cut round-up.

Money quote(s):

"There is locality pay for all CONUS states. Why Congress is only targeting the 11,500 Foreign Service workforce is not clear. About 70% are not in the Senior Foreign Service and could be affected by this cut when deployed overseas. I mean really, that's about 7,600 federal employees serving overseas in over 260 posts. Mr. Reed's state is home to some 69,000 federal employees (not counting the feds working for CIA, DIA, NSA and the other "A"s who may be assigned in the state of New York). Look - that's 9 times the Foreign Service number. Imagine the savings there?"

"Could it be because you have "foreign" in your job title? Or it it because you work overseas and is not in real America? And by the way, who knows if you even vote when you are so far away!?!

I think of this as a simple fairness issue. Of course, nothing is ever simple when it comes to money, or politics."

"You folks working overseas apparently do not pay the first $80K of your income overseas. Did you know that? Hah! That IRS has been cheating on FS folks again! It collected every tax penny from your salary including self-employed spouse's annual income of less than $700. If you believe everything you hear, that IRS did not have to collect anything from your $56K + $700 income? Really.

Go ahead and believe that crap, and you might end up sharing a jail cell with whatshisname actor and tax evader.

Foreign Service folks are not/not exempt from paying full federal, state, and Medicare/SS tax on salaries just because they live in Burkina Faso or whatever the name of the hellhole they're presently assigned to. They pay their taxes happily and willingly, 'cuz if they don't, they could get written up for atrocious unlawful uncivic unprofessional behavior, then they won't get promoted, then they get kick out, then they're just part of the 9% unemployment stats."

There's a lot of popular/unpopular mythology and misinformation out there about diplomats, embassies, and the Foreign Service. Such as the erroneous belief that we somehow don't pay federal income taxes.

Not only do we pay federal income taxes, but we pay state income taxes as well, despite the fact that, for instance, I may not have actually lived in my home state for the entirety of the first ten years of my Foreign Service career.

(You're welcome, Old Dominion!)

"(D)espite prevailing belief to the contrary, Uncle Sam's employees overseas are not exempt from paying taxes (unless they're civies at Gitmo). The foreign earned income does not include amounts paid by the United States or an agency thereof to an employee of the United States or an agency thereof. Congress wrote that up. It's the law of the land. And we know that US diplomatic missions are part of that land, even if they are located all over the map, right?

You also -- supposedly ride around town in a $50,000 Cadillac with diplomatic license plates on the bumper like -- let me get this right -- "like you are better than the very citizens you are supposed to be serving." Ouch! Such sparkling prejudice. Really, a Cadillac? That must be the low level Qatari diplomat riding around in his regular car in DC streets. Have not seen any Cadillac at US overseas posts, not saying there's none, just haven't see any from the embassy compounds I've been to. Saw lots of armored Chevy where you can't roll down the windows. In case you think its armored for decoration, I can assure you it's not. It is armored from front to back and have bullet resistant glass because driving/riding around in a USG vehicle overseas is like driving around with a target mark on your back. What? Um, sorry, not target, they're called cross-hairs now. And in case you think this is vehicle security gone mad, it's not that either. See, the US ambassador to Lome got carjacked recently. And the ICE agents in Mexico who were recently killed/wounded in Monterrey were also using an armored SUV. If not for armored vehicles, not Cadillacs, mind you --- there would be many, many more names up on that memorial plaque on the wall."

I wonder sometimes if people mistakenly think that the cars being driven around D.C. and New York City with diplomatic plates issued by the State Department belong to U.S. diplomats.

Sorry to disappoint, but those are foreign diplomats assigned by their own foreign countries to foreign embassies, foreign missions, and foreign consulates located in the U.S.

So, if you got cut off in traffic by one, or saw one parked illegally, or were otherwise annoyed by one, be untroubled by the notion that it was a U.S. foreign service officer at the wheel.

"We have unarmed diplomats in Iraq and Afghanistan. Also in Pakistan where they hate/hate the USA terribly and now think all diplomats are spies. And you don't ever get a tax break for service in those posts."

Military members deployed to Iraq and Afghanistan (i.e., combat zones) get a federal tax vacation for the time they are in theatre. U.S. foreign service officers, even those "embedded" with military units in those countries, do not.

This is not a complaint; it's simply an observation as I note the contrast in benefits with regards to different career fields. It simply is. Comparing the military and diplomatic careers, and their respective benefits packages, is like unto the proverbial apples and oranges. They're all fruit, of course, but there are many differences.

Also, as someone who deployed to Iraq as an Army NCO, I "enjoyed" my 12-month federal tax holiday and don't begrudge that the benefit continues to date. The pay systems are quite different, which is why the more useful comparison is with other federal employees, such as the civil service.

"(I)t's not a complete line up of this United States of America unless you have some really wacky ideas thrown in like this one:

"Close the State Department. Hire mercenaries."

Oh! What a gem, dat! I bet the writer would not suggest that if he/she were ever evacuated out of Abidjan, Tunis, Cairo, Tripoli, etc. etc. But just in case Congress takes in that suggestion (because, hey, why not, huh?) -- close the State Department and Uncle Sam somehow hires 'em mercenaries -- here is my simple advice if you're an American in search of an adventure: Do not/do not go to Yemen. What's neat on paper is not always neat in real life. Mercenaries will not arrange an evacuation to bring you back home, they will not notify your next of kin of your welfare or whereabouts, they will not have spouses to cook meals and help check on you in jails or hospitals. And this one is really important -- they will not search morgues to ID your body and ship it home."

The really awful part of consular work are what are non-euphemistically known as "death cases." They are, as anyone with a shred of an imagination might suspect, a bit wearing on those who perform them.

They're also something that good consular officers recognize as being a privilege. It is our honor to be the person who helps take care of those unpleasant chores that an American citizen is simply, to be blunt, too dead to take care of for him- or herself.

Recently, I noted that it was exactly one year since a certain fatal plane crash that involved Americans in my consular district. Out of respect for the families of the deceased I'll omit any unpleasant details, but I will note that was a week when my spouse really helped me deal with the emotional aftermath.

But I wouldn't have ducked the duty, not for anything, because it was my job to be there for my deceased fellow citizens, when no one else could be.

An honor and a privilege and if you ever have a frank exchange of views with my more experienced consular colleagues, you'll quickly notice something: they'll fight for the opportunity to take on a tough job like an evacuation or a disaster. Because they know they've trained for it and they've got the bug that makes them want to help, that makes them run towards events others are running from, like firemen do at fires and like soldiers do when duty calls.

(So, getting back to the original topic, it absolutely dumbfounds me whenever I consider the bass-ackwards business model that financially disincentivizes FSOs from taking overseas assignments. Does. Not. Compute.)

re: "10 Possible Political Reforms"

Mark Noonan at Blogs for Victory ("Where Defeat Is Not An Option") shared some thought-provoking ideas.

Money quote(s):

"9. With the National Guard essentially the ready reserve of the active military, States lack a military force at their disposal in case of emergency (when the emergency comes, it is very likely that the US government will call up the Guard, leaving the State with, perhaps, insufficient military resources) - create State militias made up of older men and women (preferably former service members) who can never be used outside of US territory, but who can backstop the Guard when it is called to active duty and provide an armed security force for static defense (such as guarding ports, airports, bridges, tunnels, etc during a time of external threat to America, itself).

10. Make it illegal for the federal government to ever take more than 30% of a person’s annual income."