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Reduce Costs with a Better Policy Exceptions System

Sep 26 2018

Published in: Ask the Experts

| Updated Apr 27 2023

This article originally appeared in the September 2018 edition of Mobility Magazine.

Tips on developing a structured mobility process, tracking, and reporting.

Exceptions are unexpected allowances and benefits provided to an international assignee that are outside of the scope of an international assignment policy. Often managers sign off on exceptions, looking only at the direct cost and not realizing there can be large associated tax costs.

Besides cost issues, policy exceptions can create compliance risks, policy implications, and a lot of administration to track the exceptions, all of which could lead to significant budget overspend.

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Think Bold: The Future of Global Mobility: Cyborgs?

Where do you think the future of mobility is going? According to Christopher Chalk, CRP, SGMS of Siemens Corporation, the future is in AI. Christopher will moderate a panel at the Global Workforce Symposium – Artificial Intelligence: Disruption of Mobility Concepts. It’s an opportunity to hear panelists’ thoughts on the near and distant future of AI, what we can expect, and what we must ensure never, ever happens.

Don’t forget to sign up now for Global Workforce Symposium and save your seat for this inspiring and eye-opening discussion.

There has been lots of talk in all spaces about artificial intelligence (AI), robots and chatbots, including global mobility, but what does this really mean for global mobility professionals and our world? Robots packing and loading moving trucks? Not in my lifetime, but trucks that drive themselves with a human co-pilot? They’re already here.  

I believe we will see exponential investment in AI in the global mobility space and many of the strategic projects we are involved in will touch AI in some way.

Global mobility professionals are already laying the groundwork to roll out robotics (software robots, as opposed to physical robots) and AI. At Siemens, we have successfully deployed robotics in global mobility which is a big, first step. The ideal Robotic Process Automation (RPA), or more simply bot, is for repetitive, administrative tasks. Ordering tax services, expat allowances, household goods shipments and other service-type orders lend themselves to this readily.

The future of all global mobility programs will include AI, which, at its core, is a computer program that replicates human intelligence and decision making. Robots and AI are two distinct concepts but are sometimes confused and used interchangeably. The terms truly overlap when you consider an AI robot, which is where I believe global mobility is headed, along with many other business lines and functions. AI-powered bots are capable of processing and verbally responding to complex questions and will carry out approved requests even using voice recognition to authenticate the user.

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U.S. Congress Engaged on Transferee Data Privacy

Worldwide ERC® has long-supported efforts by the American Moving and Storage Association (AMSA) and International Association of Movers (IAM) to protect the personally identifiable information (PII) of transferees who ship household goods through U.S. ports.

Due to the importance of this issue for our members and the employees they help relocate, Worldwide ERC® will now be directly engaging Congress to act to protect the information.

The U.S. Customs and Border Protection (CBP) presently sells the manifest data on vessel shipments to companies that post the information online to paid subscribers. While not the intent of the companies to post the sensitive data of individuals, the information reflects all of the data provided by the CBP including the personally identifiable information of transferees shipping household goods. The PII can include personal data such as Social Security numbers, home addresses and passport information.

Related: GDPR Impact: 3 Months After Enforcement Date

The relocation overseas of a transferee can often require the shipping by vessel of personal goods. Making public the personally identifiable information of the transferee exposes them to identity theft, fraud and unwanted solicitations.

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Deadline Passed for State Regulations Assessment

In the U.S., states had until early August to enact regulations regarding the registration of appraisal management companies (AMCs). Forty-eight states made the deadline. Only Massachusetts and New York have AMC regulation legislation still pending in their state legislatures. However, the Appraisal Subcommittee of the Federal Financial Institutions Examination Council deemed both states as having made substantial progress toward regulations and thus as allowed under the Dodd-Frank Act have given the states a one-year extension.

The AMC regulations directly impact appraisal management companies, and regulators in certain states have determined the laws apply to relocation management companies as well.

This creates additional regulatory requirements for companies as well as increased costs associated with the application and renewal fees for registering as an AMC. RMCs should consult counsel as to whether a state regulation applies to RMCs and whether their company would be required to register in a particular state.

While the District of Columbia has now elected to participate in the registration and regulation of AMCs within the city, Puerto Rico, the Commonwealth of Northern Marinara Islands, Guam and the U.S. Virgin Islands have opted at this time not to participate.

As to the status of outstanding legislation, in Massachusetts where the state legislative meets year-round, HB 4566 has replaced the original bill (HB 577) to regulate AMCs. The last action on HB 4566 was a referral to the House Ways and Means Committee. In New York, legislation (AB 10831A) was introduced on May 22 on the regulation of AMCs which was substituted by SB 9080. The New York Assembly passed SB 9080 with the text of AB 10381A but the Senate adjourned for the year before passing the revised version of the bill.

If a state did not adopt AMC registration regulations by 10 August 2018, then AMCs with operations in that state, are regulated by the state and meet the thresholds, cannot perform appraisal services related to a federally related transaction. However, a 12-month extension can be granted as is the case with Massachusetts and New York. So, there is presently no state in which AMCs would not be eligible to perform services related to a federally-backed mortgage.

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The Work-Anywhere Future of Mobility

Last week, I had to go into a bank and make a transaction with a teller on behalf of my aging father. (Yes, they still have tellers!) Only Jasmine (the bank employee) and I weren’t face-to-face, unless you count the fact that she was speaking to me in Greenbelt, Maryland, USA from an ATM-like structure with a small screen from her facility in India. We could see each other just fine, and she handled my request in minutes. And I felt like I’d interacted with her in person.

It was a “work-anywhere” moment, where technology made it possible for Jasmine to start building a career with an employer in Maryland without moving across the world, and the company put the high-touch in their tech. It’s an illustration of how we will increasingly see changes in employers’ workforce options, and if the mobility industry is perceptive (and we know it is), it can optimize these changes.  

Related: Mobility: Global Assignment to Leadership Pipeline

There are lots of examples of the way work-anywhere technology brings change and promise for the future. In the Worldwide ERC® report, The Perfect Storm: Talent Mobility Leaders Decode the Future, Anupam Singhal, Monaeo, discussed how the ubiquity of mobile devices, augmented by cloud computing, have raised expectations that employees can use different devices to log in and access the information they want anywhere, anytime, without having to use multiple passwords for multiple systems.

“Wherever I am, the service needs to appear, do what needs to get done and then recede,” says Singhal, who studies the needs of mobile employees with an emphasis on business travelers.

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U.S. IRS Says 2018 Reimbursements for 2017 Moves are Tax Free

In Notice 2018-75, 2018-41 IRB 1, issued 21 September 2018, the Internal Revenue Service holds that 2018 reimbursements or employer payments for employee moves occurring in 2017 remain excludable from the incomes of the employees.

The Notice resolves a transition issue under the 2018 Tax Cuts and Jobs Act (TCJA) that had caused considerable uncertainty. The new law suspended the moving expense deduction/exclusion during the period 1 January 2018 through 31 December 2025. It was unclear whether payments made or reimbursements received in 2018 for 2017 moves would be subject to the new or old law.  

Section 132(g)(2) of the TCJA provides that the exclusion for qualified moving expenses in sections 132(a)(6) and 132(g)(1) does not apply for taxable years beginning after 31 December 2017 and before 1 January 2026. But it does not specify how payments or reimbursements in 2018 for 2017 moves are to be treated. The new Notice resolves that issue in favor of taxpayers by holding that the suspension of the deduction/exclusion applies only to payments or reimbursements for expenses incurred for moves that themselves occurred after 31 December 2017.

Consequently, if an employer pays a third party in 2018 for moving services provided to an individual prior to 1 January 2018, or reimburses an individual in 2018 for moving expenses incurred for a move prior to 1 January 2018, those payments and reimbursements are not includable in the employee’s income.    

The Notice says the employers who have included such amounts in the wages of employees for purposes of employment taxes may either use the adjustment process under section 6413 or the refund claim process under section 6402 to correct the overpayment of federal employment taxes.  

This transition issue had been the subject of considerable uncertainty and was resolved in different ways by employers. The new Notice is a welcome clarification by the IRS that will enable employers and employees to avoid taxes on relocation payments made in 2018 for 2017 moves.

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Rettig Confirmed as New Commissioner of U.S. IRS

On Wednesday, 12 September 2018, the U.S. Senate voted (64 – 33) to confirm Charles “Chuck” Rettig as the new IRS Commissioner.

Rettig’s term will extend through 2022 and he will take over from Acting Commissioner, David Kautter, who is a senior Treasury Department official. Rettig is a tax attorney from Beverly Hills, California, who for the past 35 years, has worked at his firm, Hochman, Salkin, Rettig, Toscher & Perez, P.C.

Mr. Rettig has extensive experience representing individuals and companies in both civil and criminal tax matters both in court and in front of the IRS. Rettig is a past Chair of the IRS Advisory Council (IRSAC), which serves as a public forum that brings IRS officials and the public together to discuss tax issues. Rettig has extensive knowledge of the tax code and is generally very well respected within the tax field.

During Rettig’s confirmation, Democrats went after a policy change by the Trump administration that would allow political nonprofits such as Planned Parenthood and the National Rifle Association to shield the names and addresses of big donors from the IRS. Democrats argued that this change decrease transparency will make it harder for people to know who is funding political ads. That being said, most Democrats had few objections to Mr. Rettig himself.

As new IRS Commissioner, Rettig will be tasked with the implementation of the $1.5 trillion tax law passed by the Republican Congress earlier this year. There remains a lot of work to be done preparing the IRS for the first tax filing season under the new law. Additionally, Rettig will be responsible for helping modernize the agency’s computer systems after a high-profile glitch on Tax Day last year that delayed millions of people from submitting their returns online. Rettig will have to face all of these challenges with an IRS that has been weakened after years of budget cuts. IRS staff has shrunk by 14% since 2012 and last year, the rate of IRS audits was its lowest since 2002.

Related: U.S. IRS Reiterates Position Limiting Deduction of Pre-Paid 2018 Property Taxes

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Think Bold: Controlling Mobility Costs with Flexibility

Are you using flexible benefits in your mobility program? If not, are you considering them? Jennifer Connell, SCRP, SGMS of Weichert Workforce Mobility will moderate a panel at the Global Workforce Symposium: Blueprints for Success: Building a Mobility Program That Balances Cost and Flexibility. It’s an opportunity to hear panelists’ thoughts on program flexibility and optimization.

We asked Jennifer to share some findings and data to help shape the conversation – have a look and then register to participate in the in-person discussion in Seattle on Thursday, 18 October from 11:45 a.m. – 12:15 p.m.

Managing the mobile employee has become exponentially more complex as all industry sectors experience shifting demographics, increased globalization and tighter competition for talent.

In response, companies are pursuing greater agility and flexibility to accommodate rapidly-changing business goals and seize new opportunities quickly.

An “optimized” workforce mobility program is one that equips HR and hiring managers with the flexibility they need to accelerate decision-making, meets the needs of the business and provides opportunities that sync their mobile employees’ personal and professional desires.

Optimizing Benefits Through Mobility & Flexibility

When developing a menu of flexible benefits, consider provisions that will support your recruitment and talent development objectives.

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Are We Creating a Serious Retirement Issue in Mobility?

This article originally appeared in the September 2018 edition of Mobility Magazine.

Examining the effects of localization on long-term planning.

When I moved from an in-house function to a role in mobility search, one of my questions was, “How do I ensure my knowledge of the industry stays current?”

Fortunately, my present colleagues and I have partners, candidates, and clients with whom we discuss trends within mobility. Sitting on a number of committees and boards at the forefront of the future of our industry also provides a different view of mobility, and we are regular speakers at events and with client teams.

Since my career in mobility started more than 20 years ago, one theme has stayed constant—the desire to reduce costs. From the feedback we have received, this continues to be the case. In this regard, one very clear theme is the push toward local-to-local moves.

Some organizations have moved away from the idea of long-term assignments altogether, and others are using them far less often. The world is getting smaller, and work in its traditional sense is changing. The idea of a borderless workforce is definitely moving forward. However, in some cases, corporations and governments have a very different thought process and are at a different point in this regard. This is and will continue to be a real challenge to our industry.

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France’s Wage Withholding Set to Begin in 2019

France’s long-delayed shift to a system of withholding on wages and retirement income will take effect beginning in 2019, according to Prime Minister Philippe.

Implementation had again been in doubt after President Macron questioned whether software, training and other readiness issues had been resolved.

The system has been undergoing implementation testing for some time, and reports have suggested that there have been significant problems. However, authorities have forcefully denied serious problems.

France is alone in the European Union in allowing taxpayers to pay income tax a year after the income was received. The Budget Minister has stated that switching to a withholding system will bring in an additional 700 million euros simply by preventing fraud.

The new system will be implemented beginning 1 January 2019. The government has posted mandatory educational videos for all employees, and employers with less than 20 employees are eligible for free help in setting up their withholding.

Under the new system, employers will withhold an amount based on each employee’s tax rate and will pay over those amounts to their local corporate tax center. Timing for payments is based on the company’s size, but is no less frequent than monthly.

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Congress to Make Tax Cuts Loss of Deductions Permanent

U.S. House Republicans announced new legislation on 10 September 2018, that would make individual tax cuts enacted late in 2017 permanent, and also make permanent the loss/limitations of a number of individual tax breaks.  

Those include the elimination of the deduction/exclusion for moving expenses and the limitation of deductions for state and local taxes to $10,000.  

When the Tax Cuts and Jobs Act (TCJA) was enacted in December of 2017, changes to tax rates and other provisions affecting individuals were made temporary, rather than permanent. The reduced tax rates were to be in effect only through 2025, and then revert to the old rates. Likewise, certain tax breaks that were targeted for removal or limitation were only affected through 2025. For example, the deduction/exclusion for moving expenses was characterized as “suspended” for the years 2018 through 2025, after which it would revive.

The temporary nature of the tax cuts was made necessary by the budget process which permitted tax reform to be enacted by only a 51-49 majority in the Senate, rather than the 60 votes ordinarily necessary to pass legislation in that body, and by restrictions on the cost of the legislation.

Since then, a Republican goal has been to make those tax cuts permanent. That effort has been characterized as “tax reform 2.0.”

The bills introduced 10 September would do just that. They would also make permanent the increase to the standard deduction. In addition, they would make the repeal of or changes to a number of tax breaks permanent. These include:

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SPONSORED CONTENT: Innovation and Iteration in the Ever-Changing Relocation Landscape

In a world of 24/7 connectivity, when technology has crept from your desk to your lap to your pocket to your wrist, the relentless pace of change and constant access to information can sometimes seem overwhelming.

Maybe you love the idea of being able to see what’s in your refrigerator without opening the door or having your water bottle tell you to hydrate more often. Or maybe you long for a time when the only “single source of truth” was the Encyclopædia Britannica and the only thing that happened in the cloud was rain or snow.

Either way, in order for companies to remain relevant and successful, it’s vital to stay aligned with the trends of the day—while also looking far enough ahead to create your own trends. In 1955, a small company from Wilton, Connecticut, named Associated Homefinders innocently founded the corporate relocation industry when it began offering a single service: home-finding assistance to employees relocating to another city within the United States. Sixty-three years and a few name changes later, Cartus Corporation is now a leading global mobility firm worldwide, managing nearly 162,000 moves in 2017 alone.

The secret to Cartus’ success is no secret at all. Without the right people, it would be impossible to become and remain a leader in an industry devoted to assisting customers during one of the most stressful times in their lives. These days, however, having the most talented and dedicated professionals on your side isn’t enough. With advances in physical and digital tech changing the way we access information, the next generation of relocating employees needs the next generation of relocation technology to ensure their moves are as successful as possible.

Building Next-Gen Tools for Next-Gen Moves

According to demographer and mobility researcher Thomas J. Cooke of the University of Connecticut:

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India: Positioning to Do Business in a Digital World

Preparing business operations and talent acquisition to “go digital” is the overarching theme driving today’s business trends in India.

That’s according to a recent survey of some 600 business leaders from across India. The survey was conducted by Deloitte in India in collaboration with National Human Resource Development (NHRD) Network.

“Beyond digitizing HR platforms and nurturing digital workplaces and technology-savvy workforces, the focus is now on investing in technology that can help further efficiency levels of its human resources. With advances in this realm and clear benefits of embracing technology, there is an increased level of acceptance of the concept of truly digital organizations,” noted Dhananjay Singh, Director General, National HRD Network. “Job role redesign is in the cards.”

The study found that virtually every Indian company surveyed (96%) acknowledged the need to redesign their organization to succeed in a digital world. Yet many continue to struggle with how to do that. Only 14% said they felt fully capable of redesigning their company for the future.

Related: Survey: Mobile Assignments on the Rise in India

Addressing talent acquisition and what researchers dubbed “the augmented workforce” ranked among the top areas of focus as Indian companies adapt to the digital reality in an era of rapid growth. In positioning to compete for top talent globally, Indian businesses are rapidly adjusting their talent acquisition strategies. In fact, some 88% have recently updated or are currently updating their talent acquisition and programs.

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Legal Marijuana: What’s its impact on mobility

This article originally appeared in the September 2018 edition of Mobility Magazine.

Globally, mobility is at a critical mass with disruptions that will change workforce dynamics.

Ten years ago, insights were focused on the next generation of international assignments for 2020.

Fast-forward to 2018, and include automation, robotics, digitalization, the employee/consumer-based experience, the culture dynamics of multigenerational workforces, and health and wellness, to name a few. These external issues continue to push us away from the traditional employment and assignment models, and the global mobility, human resources, talent management, and related workforce functions that take proactive measures to strategize and align mobility’s policies and programs will win in the war for talent.

A steadily growing issue over the past two decades is the legalization of marijuana. It’s not a new issue, but laws are changing fast. Consider whether its use will have an impact on our industry—and if we agree that it will, what are we strategically planning with respect to operational disruptions, safety and performance issues, employment/labor relation/law frameworks, immigration disruptions, the new travel workforce, criminality exposure, and talent management?

The High on Green Effect

At the time of this writing, marijuana is 100 percent legal in Uruguay and Portugal. Chile allows cultivation for personal and medicinal purposes. Medicinal marijuana has become legal at a federal level in Australia; only medicinal cannabis is legal with a cannabis card in Victoria and New South Wales. Medical marijuana is completely legal in Colombia, similarly for the Czech Republic and Estonia. Recreational use will become legal in Canada in October.

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Mobility: Global Assignment to Leadership Pipeline

“Leadership pipeline.” It’s a term that conjures up a mental picture of men and women shuttling through multiple channels that lead, ultimately, to fewer, more select positions.

In actuality, developing future influencers is less pipe-like and more leader-focused!

Employers know that global assignments build leaders, and in a globalized world, weaving such experience into their workforces is an imperative for growth.

In the Worldwide ERC report, The Perfect Storm: Talent Mobility Leaders Decode the Future, Mark Frederick, PhD, Global Talent Management Consulting points out that adults learn best experientially, and a mobility experience presents an excellent learning and development opportunity.

He notes that in the current business environment, which business analysts describe with the acronym “VUCA” (volatile, uncertain, complex and ambiguous), international experience is an especially valuable teacher. VUCA attributes are heightened when employees are working in another country and culture; consequently, global assignments help develop leaders with the skills to cope in a VUCA business place.

Because so many younger professionals crave global experience in their work, companies can leverage that preference to boost their recruiting and retention initiatives, creating a career path for employees and a leadership conduit for the company at the same time. There’s a hurdle, though.

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Brexit Agreement Still Evades EU and UK

While the transition phase of Brexit isn’t slated to occur until March of next year, negotiators for the European Union (EU) and United Kingdom (UK) don’t have much time left to reach an agreement.

Once a deal is reached, it will take several months to initiate. Negotiators initially had given themselves until October, but since have provided more flexibility.

The alternative to a deal is a hard exit in which the UK simply withdrawals from the EU. Both sides are looking to avoid such a scenario. The key sticking points include the border between Northern Ireland as part of the UK and the Republic of Ireland as an EU member. UK negotiators are concerned about treating Northern Ireland differently in regard to customs or regulatory systems with the EU negotiating to keep much of the current systems intact.

UK Prime Minister Theresa May and her cabinet are pushing the components of their Cheques plan, which outlines their vision of the post-Brexit relationship with the EU, which was presented in July. However, high-profile members of her party have voiced opposition to the plan which puts the UK negotiating positions in question. To address much of the uncertainty, the EU will likely announce soon a meeting in November as a backstop to the negotiations.

As part of the plan, the UK would end the free movement of people but would create a mobility framework for EU and UK citizens move between the two jurisdictions for travel, studies and work. This would have a direct impact on the ability to transfer employees between the UK and much of the rest of Europe. There are also broader implications regarding Brexit which could result in businesses relocating offices and employees between the UK and EU.

Related: Mobilizing Your Brexit Strategy

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U.S. Rep Unveils Freddie, Fannie Reform Proposal

On September 6, Congressman Jeb Hensarling (R-TX), Chairman of the U.S. House of Representatives Committee on Financial Services, released a draft legislative proposal to reform the secondary mortgage market in the U.S.

Hensarling released the proposal on 6 September to mark the ten-year anniversary of when Fannie Mae and Freddie Mac entered government conservatorship. Committee Member John Delaney (D-MD) is the lead Democrat on the proposal.

The Bipartisan Housing Finance Reform Act of 2018 would revoke the charters for the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac). The two government sponsored enterprises (GSE) are responsible for purchasing mortgages on the secondary market and pooling the mortgages into securities for investors.

Ginnie Mae, another GSE which backs investments in Federal Housing Administration (FHA) and other loans, would replace Fannie Mae and Freddie Mac and guarantee privately-insured mortgage-backed securities. Loan originators, however, would first need to acquire coverage from a private mortgage credit guarantor before Ginnie Mae would back the security. Loans would need to include a minimum 5% down payment as opposed to the current 3% minimum. The proposal would make numerous other reforms to the system.

Related: U.S. Senate Passes Provisions on Crumbling House Foundations

The secondary mortgage market has a direct impact on the availability of lenders to provide mortgages to consumers. Since the relocation of an employee often involves the sale or purchase of a home with the transferee securing a mortgage, the stability of the secondary mortgage markets effects our industry.

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Worldwide ERC® Welcomes Angela Goldberg as VP, Marketing

Sep 07 2018

Published in: Mobility

| Updated Apr 27 2023

Worldwide ERC® is proud to announce that Angela Goldberg has joined its senior management team as VP, Marketing.

With extensive marketing and brand management experience, Angela will oversee Worldwide ERC®’s integrated marketing and content strategy.

"Today, successful marketing and branding are a powerful combination of using the right tools and understanding one's customers as individuals and professionals," Angela said. "I'm looking forward to applying these modern marketing principles to Worldwide ERC®'s greater purpose. It is an honor to be part of a team that has the vision, tools, and talent to take the organization to new regions and new heights."

Her expertise was cultivated and focused over more than 20 years of high-performance marketing and brand strategy development in diversified, global organizations.

"Angela brings to Worldwide ERC® contemporary marketing insight, proficiency in automation platforms, and an ability to deliver an exceptional customer experience. These are important assets as we broaden our community of individuals and companies with an interest in issues that impact mobile people," said Worldwide ERC® President and CEO Peggy Smith, SCRP, SGMS-T. "Angela's collaborative nature, expert perspective and demonstrated return on key initiatives offers the kind of marketing leadership we need for a transforming organization and industry.”

Angela was most recently the Director of Marketing for Deltek, a software and information solutions company. Prior to this position, she was Chief Marketing Officer for advanced supply chain software provider I.B.I.S, Global Marketing Director for The Boston Consulting Group, Marketing Manager for PricewaterhouseCoopers and Director of Marketing for Courtroom Connect.

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Worldwide ERC®’s Top Articles of August: GDPR, Citizenship & More

Throughout the month of August, Worldwide ERC®’s articles highlighted a broad range of mobility topics – from far-reaching geopolitical regulations to overseas life for expats and their families. Check out the five most-read articles from August and discover valuable insights to drive your organization’s mobility programs and policies forward.

1. GDPR Impact: 3 Months After Enforcement Date

Three months ago, the European Union (EU) began enforcing compliance with the General Data Protection Regulation (GDPR). Learn what has transpired since.

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2. 10 Questions to Ask Your Employer Before Your Relocation

Relocating for your career can be a huge step. Here are 10 questions you need to ask your employer—and yourself—before relocating.

Continue Reading →

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Deadline for U.S. Overseas Accounts

On 4 September 2018, the U.S. Internal Revenue Service (IRS) reminded taxpayers that the Offshore Voluntary Disclosure Program (OVDP) is scheduled to close on 28 September 2018, and that applications thereafter will be rejected.

This is a program that in various forms has been running since 2009. It allows taxpayers who have failed to disclose and pay tax on offshore accounts to come forward voluntarily in exchange for relief from criminal prosecution and reduced penalties. The IRS announced in March that the program would end 28 September, and is now reminding taxpayers of that deadline.

Since 2009, more than 56,000 taxpayers have used the program to come into compliance with United States tax laws, and have paid a total of $11.1 billion in back taxes, interest, and penalties, according to the IRS. However, the number of taxpayers coming forward has steadily declined, with only some 600 applications in 2017.  

The IRS says it will continue to maintain a separate program, the Streamlined Filing Compliance Procedures, which is used by taxpayers who simply didn’t understand their reporting responsibilities but owe minimal taxes. About 65,000 taxpayers have used that program.

The IRS credits implementation of the Foreign Account Tax Compliance Act (FATCA), under which it receives reports of foreign bank accounts from the institutions in which the accounts are maintained, or from the countries in which those accounts are maintained, for increasing compliance and decreasing the need for the OVDP. It also credits aggressive compliance efforts with reducing foreign noncompliance. According to IRS, since 2009, some 1,545 taxpayers have been indicted and prosecuted for international tax avoidance.  

Related: U.S. Treasury Proposes Regulations to Stop Workarounds of State & Local Tax Deduction Limit

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