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Why expat Americans are giving up their passports

• karlcoelho1 11y ago
  Scared to turning my permanent residency into citizenship now.
  • ta250x 11y ago
    This is why I think getting a Green Card and relocating to the US is a bad idea. The idea that I'd have to keep paying crazy amounts of taxes even if I decide to move on with my life five or ten years from now and relocate to Japan or Germany is nuts. In my opinion working remotely from a nice and affordable country is the best bet for skilled tech workers. Right now the US market is good but maybe in the future the money will be in China. You can work for the same startups from your bungalow in a tropical country instead of having to live over there. Maybe you can rationalize moving there today because of high salaries but that will inevitably change and when that happens you might regret committing to the US.
  • Ovid 11y ago
    Sorry to break it to you, but if you're a non-US citizen but a permanent resident in the US, you're a "US person": https://www.law.cornell.edu/cfr/text/22/120.15 https://www.law.cornell.edu/cfr/text/22/120.15 This means that you're completely subject to US tax law, even if you leave the US. Congratulations! You're now subject to FATCA!
    • jacquesm 11y ago
      Except of course that if and when he leaves he ceases to be that US person because he's no longer a permanent resident.
      • i_don_t_know 11y ago
        You're a permanent resident until you formally renounce permanent residency at a US embassy or consulate. Some may permit mailing in your green card, others require you to appear in person. However, the process is or was free when I went through it. I think there are other ways of losing permanent residence, but the only guaranteed ways are when you renounce or when the US takes it from you. Either way, you better have written proof. If you're a long-term permanent resident (8 years or more), then you're subject to the same expatriation tax rules as US citizens. The IRS agents that I spoke to were all friendly and helpful, but unfortunately none of them knew the expatriation rules. It wasn't as bad as it may sound, but it wasn't fun either. You also have to file a preliminary tax return before you actually leave the country (informally called the sailing permit). Anyway, just leaving the US isn't good enough when you're a permanent resident and until you're through the process you're on the hook. And don't forget to meet FACTA requirements for the year in which you gave up PR...
        • true_religion 11y ago
          I wonder. You can lose your PR status simply by: > Fail to file income tax returns while living outside of the United States for any period. [1] But they do require you report your loss of PR status to the IRS. So I wonder if failing to file thus losing your status would count as good enough to the IRS. [1] https://www.uscis.gov/green-card/after-green-card-granted/maintaining-permanent-residence https://www.uscis.gov/green-card/after-green-card-granted/ma...
          • i_don_t_know 11y ago
            I don't know. My impression is that you don't officially lose your status until some US government official or agency confirms it. Presumably, you may not have intended to give up PR. Maybe you had a stroke or you were unable to meet the requirements through no fault of your own. But I'm speculating. I don't know. As for the IRS, the rules are in the instructions to form 8854[1]: > Date of termination of long-term residency. > If you were a U.S. long-term resident (LTR), you terminated your lawful permanent residency on the earliest of the following dates. > 1. The date you voluntarily abandoned your lawful permanent resident status by filing Department of Homeland Security Form I-407 with a U.S. consular or immigration officer. > 2. The date you became subject to a final administrative order for your removal from the United States under the Immigration and Nationality Act and you actually left the United States as a result of that order. > 3. If you were a dual resident of the United States and a country with which the United States has an income tax treaty, the date you commenced to be treated as a resident of that country and you determined that, for purposes of the treaty, you are a resident of the treaty country and gave notice to the Secretary of such treatment. See Regulations section 301.7701(b)-7 for information on other filing requirements if you are such an individual. [1] https://www.irs.gov/pub/irs-pdf/i8854.pdf https://www.irs.gov/pub/irs-pdf/i8854.pdf EDIT: These are the rules for long-term permanent residents (8 years or more). I don't know what the rules are for other permanent residents, if there even are any. But you're probably better off if you clearly state your intent and file I-407.
          • adekok 11y ago
            Can you use the systems rules to work around the system? My guess would be "no". The rules are interpreted by the system to benefit the system. If this means that the rules are arbitrary, capricious, and inconsistent... so be it.
      • deleted 11y ago
        [deleted]
      • mike_hearn 11y ago
        Sorry - that would make sense. The definition of "US person" just linked to is not accurate for FATCA. You are still considered a US person even after you leave, because you must have had a green card, and even after that green card expires you are still a US person for another decade if you don't get it explicitly revoked: http://www.ustaxfs.com/what-is-a-us-person-for-irs-tax-purposes/ http://www.ustaxfs.com/what-is-a-us-person-for-irs-tax-purpo...
  • deleted 11y ago
    [deleted]
• peteretep 11y ago
  America is one of the few countries that could get away with this, as being American has such a premium. It'd be nice to see them use their clout to force through legislation that stopped companies from playing silly beggars with their offshore profits if they wanted access to US markets.
  • k-mcgrady 11y ago
    >> "America is one of the few countries that could get away with this" There are actually only two countries that do it - the US and Eritrea.
    • wolfgke 11y ago
      I think China, too.
      • seanmcdirmid 11y ago
        That is a bit ambiguous, but it seems to be more of a reporting requirement and not the same thing. Anyways, even us expats are effected by it if we stay for more than 5 years without a 1 month break.
      • girzel 11y ago
        I've been in China for fifteen years, and haven't filed taxes for the past twelve, I think. I'm moving back to the States at the end of this year, and am deeply worried about integrating myself back into the good graces of the IRS. Luckily I'm poor as rocks!
      • analyst74 11y ago
        I never thought about this, but shit it's true, because they learnt from IRS when drafting the tax code back in the day. http://www.nytimes.com/2015/01/08/business/international/china-starts-enforcing-tax-law-for-citizens-working-abroad.html?_r=0 http://www.nytimes.com/2015/01/08/business/international/chi...
  • Swizec 11y ago
• youngbullind 11y ago
  This affects my girlfriend. She has a dual passport but only lived in the US to the age of six months. We are are British but live in Spain which already makes for complex tax arrangements, and this on top of things is just crazy. How the hell does the US think it has the right to tax people who haven't lived there for over 30 years?
  • masklinn 11y ago
    That's debatable but as the article notes citizenship-based income tax has been part of US law for a long time without that much issue (the standard deduction is already pretty high, it's just a pain in the ass that you have to declare it but most expats have been living with that for a long time). FATCA is utterly bonkers though.
    • cylinder 11y ago
      They couldn't enforce much before FATCA. Now they can easily see and potentially seize your account funds.
  • deleted 11y ago
    [deleted]
  • chrisseaton 11y ago
    Does your girlfriend have access to services as a US citizen? Such as embassies, entrance to the US without a visa, or evacuation in case of war? Who should pay for those services if your girlfriend doesn't want to?
    • mike_hearn 11y ago
      The USA charges people it evacuates from war zones, and may or may not do so at all. It is not obligated to do so. Additionally, if she has dual citizenship, she would get it for free from the UK anyway even if she lives in Spain. People with British passports also have 90-day visa free access under the Visa waiver program. Unless she intends to move there, there aren't really any benefits to being a US citizen, and certainly nothing that can justify extra-territorial taxation. She gets no services from the US government.
• 2a0c40 11y ago
  Relevant: http://isaacbrocksociety.ca/2011/12/14/about-the-isaac-brock-society/ http://isaacbrocksociety.ca/2011/12/14/about-the-isaac-brock...
• Fizzadar 11y ago
  One reason I'll never seek a Green Card or any kind of permanent residency. Such a shame for such an awesome country; I'd love to spend some years living in the US.
• dalke 11y ago
  American citizens have to pay $2,350 to renounce citizenship? What kind of paperwork costs that much? (Or, why not just add more paperwork and charge $100K?) http://www.greenbacktaxservices.com/blog/renouncing-us-citizenship-will-cost-422/ http://www.greenbacktaxservices.com/blog/renouncing-us-citiz... > 1. Consular officers must confirm that the potential renunciant fully understands the consequences of renunciation, including losing the right to reside in the United States without documentation as an alien. > 2. Consular officers must verify that the renunciant is a US citizen and they must conduct a minimum of two intensive interviews with the potential renunciant. > 3. Consular officers must review at least three consular systems before administering the oath of renunciation. > 4. The final approval of the loss of nationality must be done within the Directorate of Overseas Citizens Services in Washington, D.C. After that, the case is returned to the Consular officer overseas for final delivery of the Certificate of Loss of Nationality to the renunciant. "Intense"? http://hodgen.com/renunciation-interviews-intense/ http://hodgen.com/renunciation-interviews-intense/ gives a report from an interviewee: > Also, despite what the State Department says, I did not have “two intensive interviews”, unless two interviews at a window open to view of all waiting in the Passport Section at the London Embassy count. These were to make sure, first, that everything was correct on the (many) forms I had sent in, and, second, that I understood the seriousness of the step I was taking and finally to swear/affirm my renunciation. I thought it was all rather less intensive than it should have been, considering the seriousness with which I had approached it. The official estimate, reported at https://www.rt.com/usa/183972-fee-renounce-us-citizenship/ https://www.rt.com/usa/183972-fee-renounce-us-citizenship/ , is that: > the State Department notice gives an estimate of a consular officer’s time at $135 an hour working for 20 hours. and confirms: > “The questions are minimal and I didn’t spend more than 15 minutes at the window either time. It’s not intensive. They ask you: ‘Are you aware of the ramifications of your actions?’ And ‘Are you doing this of your own accord?” she said. Finally from http://worthly.com/news/cost-renouncing-u-s-citizenship/ http://worthly.com/news/cost-renouncing-u-s-citizenship/ I learn: > Prior to 2010 it was free to renounce U.S. citizenship, but in July of that year a $450 was established.
  • jacquesm 11y ago
    That sounds about as hard as cancelling comcast.
• toni 11y ago
  Doesn't US have bilateral tax treaties with (at least) Western European counties? And shouldn't such a treaty strive to protect American citizens from paying double taxes?
  • masklinn 11y ago
    The problem isn't citizenship-based taxation, it's an odd concept but it's been there for a very long time, there's a relatively high standard deduction and IIRC your local income tax is also deductible. Expats have dealt with that for more than a century. As the article points out, the problem is FATCA which doesn't come close to fixing the issue it's supposed to fix (income tax evasion) and completely breaks expats under the standard deduction limit.
    • toni 11y ago
      Let's say I am an American citizen living in France. Why US government doesn't close a tax treaty with French and demand 20% of the total amount I pay for all the taxes annually in France?
      • k-mcgrady 11y ago
        Why would the French agree to that?
      • xxs 11y ago
        Cause that's robbery.
      • masklinn 11y ago
        Because that makes no sense? Why would the french state give part of its (perfectly normal and standard) income tax back to the US for no reason?
        • gutnor 11y ago
          It makes sense if it is bilateral ( US giving money to France for French people working there ) and common enough that both countries don't want to deal with the hassle. The real problem is that the US is the odd one here. Every other country save 1 or 2 tax people income based on residence . So there is a legal clash that probably prevent any kind of sane and simple bilateral agreement like the one most of the first world countries have between themselves.
• crdoconnor 11y ago
  >Her voice cracks and her eyes well up. She is in the process of relinquishing her American nationality. Soon she'll visit the US embassy formally to renounce her citizenship, she says, under duress. >"I'm very proud of being an American. It's what I am when I look in the mirror. >"If it weren't for Fatca [the Foreign Account Tax Compliance Act] and the decision by the bank, I'd never be doing this. Never ever. It's just breaking me in half." Caterwauling by the 1%.
  • lokedhs 11y ago
    It can be a huge hassle for normal US citizens living outside the US. Most banks won't deal with them because of the risks involved. As a US citizen abroad, just getting a regular bank account can be next to impossible. I live in Singapore and when I was signing up for a stock trading account I asked what would have happened if I had to answer yes in the box that asked if I was liable to pay income tax in the US. The answer was plain: "you wouldn't be allowed to have an account with us".
    • crdoconnor 11y ago
      I lived in Singapore for 3 years and managed without a stock trading account. It's one of the easiest places to open a bank account, actually.
      • zrail 11y ago
        This is a recent development. How long ago were you in Singapore?
      • lokedhs 11y ago
        I wasn't clear. I asked the question when I was signing up for a trading account, but the question was about normal accounts. Thus was at DBS which is the largest consumer bank in Singapore.
  • ascorbic 11y ago
    " Jane has lived and worked in France for 30 years drawing what she calls a "humble" salary. She has filed a tax return every year even though she earns significantly less than $106,000 a year." Hardly the 1%
• IIAOPSW 11y ago
  I don't even have to click to know what this is about. God damn government wants to tax me despite being overseas. Don't get me wrong here. I love my country but hot damn do I hate our government. HK or UK or Canadian passport would probably be nearly as good but without any of the bullshit.
  • arto 11y ago
    The UK passport is the best in the world in every ranking: https://www.linkedin.com/pulse/top-10-most-powerful-passports-world-2015-stephen-palmer https://www.linkedin.com/pulse/top-10-most-powerful-passport...
    • jacquesm 11y ago
      That shows it tied with Finland and Sweden, and the only ranking it uses is how many countries you can travel to without a visa, which is a bit limited as a statement of 'power' (though it is definitely an important measure). Other important measures would be in how many countries there are consular services available for holders of a certain passport and a couple of others.
      • arto 11y ago
        There are other measures and rankings elsewhere. In addition to the additional metrics you mentioned, perhaps yet another to take into account is how hostile natives feel towards you when traveling in certain parts of the world--up to and including harassment, kidnapping, and (in limited locations) beheading risks. In places (even here in Europe) where people tend to by default assume good English speakers to be American, I get better treatment by managing to convey that I'm not.
        • jacquesm 11y ago
          Plenty of Americans travel abroad pretending they're Canadians, large maple leaf flags on their coats and all...
        • 11y ago
• madaxe_again 11y ago
  So, I know a us born billionaire who rescinded his citizenship last year to avoid fatca. He has successfully evaded both the US and UK tax authorities to the tune of half a billion or so, he tells me. The guy gives crazy amounts to philanthropic causes instead. He doesn't want his hard earned wealth pissed away by clueless bureaucrats. So. Anyone who tells you fatca has been a success is full of it. It penalises "normal" people, and the evaders keep on evading. Uruguay is where they've all now got citizenship.
  • paulsutter 11y ago
    He had to pay an exit tax on all his unrealized gains at the moment of rescinding citizenship, so it's almost certain that his taxes were much higher if he did so last year. Details please, or it didn't happen. Just for your own information: tax avoidance is legal and expected. Tax evasion is criminal and can result in prison. The distinction is that tax evasion is when you misrepresent the facts in your tax filings.
    • bmelton 11y ago
      To my knowledge, the exit tax didn't exist before 2008.
  • sklivvz1971 11y ago
    Billions are never "hard earned". Do the math :-)
    • BuckRogers 11y ago
      Yeah those must be some very long nights in the office. Makes me wonder where my billions went the many days I worked 9AM-3:30AM launching websites. Lost my sanity and health, but didn't even receive my million. Can't imagine how hard a billionaire worked.
  • youngtaff 11y ago
    >He doesn't want his hard earned wealth pissed away by clueless bureaucrats. Yeh, but guess he likes driving on roads and making use of many of the other public services taxes pay for
• rbehrends 11y ago
  For what it's worth, at least part of the problem should be fixed when the EU's Payment Accounts Directive [1] comes into effect [2]. It prohibits both discrimination on the basis of nationality (as long as the customer is legally resident) in article 15 and enshrines the right to a basic bank account in article 16. This does not solve the other problems with FATCA, but it should eliminate at least one practical and very real annoyance for Americans living in the EU. [1] http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32014L0092 http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A3... [2] Technically, the directive is to be transposed by September 18, 2016 at the latest, but some member states may be dragging their feet.
  • mike_hearn 11y ago
    It just represents total capitulation by the EU - all banks will be legally required to have a relationship with the IRS and do their bidding, as turning away US persons will not be possible any more. As that's extremely expensive, in turn, those costs will get passed on to all the non-Americans. So everyone else ends up paying through higher bank charges for the costs of IRS compliance.
    • rbehrends 11y ago
      It's not being done for the benefits of US citizens, that's just a side effect. The goal of the Payment Accounts Directive is to ensure that every EU resident has access to banking services.
• timthelion 11y ago
  I am an American living in Prague and will be among those to give up their citizenship. The new FBAR requirements and the recently pushed through changes that require foreign banks to report are really a huge burden. It is a significant legal risk to be an American overseas. The fines are insane for failiure to report, even if you owe no taxes! You can easilly land yourself with a $20 000 - $80 000 fine for having a hundred bucks in the bank and no income. Indeed, it's not just double taxation, it's tripple taxation, because I have to have a special bank acount that is for Americans, and the fees for the "American expat" bank account are much higher than the ones for a normal bank account. But I think that it is wrong to present this as a taxation issue. I would be fine with paying a percentage of my income in taxes. There are some benefits to being a US citizen, like that the army will rescue you if there is a civil war ;). But the fear uncertainty and doubt that surrounds these new regulations makes it nerve racking to be a citizen. Every expat I know here has nightmares about an audit comming and having all of their assets seized. And it has happened to some of them too! And that legal risk is no longer a form of taxation, because taxes are percentual (the more you earn the more you pay), but when you end up having to pay a fine that is higher than your net worth, that's just robbery. We used to be a free nation, but thanks to austerity the 'r' had to be removed.
  • rtpg 11y ago
    To my knowledge there's treaties with the vast majority of countries to avoid double taxation if you're not making more than a very large amount of money ( filed taxes last year and ended up with a giant goose egg)
    • timthelion 11y ago
      Yes, but the legal risk is that if you don't fill out the forms right, then you have your assets seized and you get a huge fine. It has nothing to do with how much you pay and everything to do with how good your accounting is.
    • josh_fyi 11y ago
      There are treaties with some countries, but most of these treaties have "reverse loopholes." E.g., on any freelance income, a 15.5% Social Security tax from the first dollar, with no exemptions. Also, you pay the higher of both countries taxes for each kind of income. E.g., if the US has lower taxes than the other country in general, but higher taxes on cap gains , you pay the US the delta on the cap gains.
• arto 11y ago
  For those looking to renounce their U.S. citizenship, Mike Gogulski has chronicled and documented the whole paperwork-heavy process on his blog: http://www.nostate.com/about/ http://www.nostate.com/about/ In his case, after submitting the paperwork and burning his passport on YouTube, he chose to not get another citizenship, which means he's now stateless.
  • jacquesm 11y ago
    Being stateless is not a good thing. It might seem that because you're member of none you are superior to all but having citizenship is not just a tax burden, it also allows you to partake in a lot of activities (such as travel, commerce and so on). Getting bank accounts and other goodies when you're stateless is rather troublesome.
    • rtpg 11y ago
      Citizenship is also not a tax burden for most citizenships
    • arto 11y ago
      > Being stateless is not a good thing. That's wholly a matter of individual preference. I know Mike Gogulski personally and I can attest to him being quite happy having made the choices he did, and no longer being part of what he perceives as an evil empire. The tax question never factored into his decision, it was moral questions that preoccupied him.
      • jacquesm 11y ago
        I applaud the mans morals but I foresee some practical complications in such trivalities as child-birth, hospitalization, estate planning (and eventual execution) and so on. None of those may apply to him and he's apparently thought this through very well but the wheels of government have a very annoying habit of grinding on with or without your consent and by placing yourself purposefully outside of the system you might find one day that this can backfire. I sincerely hope he has a back-up plan if he ever needs to be part of some formally recognized entity again, it's easier to lose a citizenship than it is to gain one.
• singold 11y ago
  I work at a non-US bank and we can't have US citizens as clients because of fatca. We would like to have them as clients but AFAICT fatca compliance would cost us a non trivial amount of money for the few (but relatively wealthy) potential clients
• pmontra 11y ago
  Every form I see about financial matters here in Italy has a checkbox that I must tick to state I'm not a US person. No financial institution wants to deal with them because of FACTA. An unintended consequence for sure and I hope they'll fix it. Still it's telling about the general attitude of lawmakers all around the world.
  • josh_fyi 11y ago
    Right. Imagine if every financial form had 200 extra checkboxes -- dictated by the Mongolian Treasury, the Namibian Treasury, etc. But that's not the case. Only the US imposes financial regulations on every bank in the world.
    • RyanZAG 11y ago
      Well other countries could try, but banks wouldn't really care because of limited exposure and inability for most countries to collect.
• farslan 11y ago
  Does this also affect H1B holder that are temporary living outside the US?
  • c4n4rd 11y ago
    If you work for a USA company, yes - it does.
• josh_fyi 11y ago
  For most tax forms, the IRS says "you have to fill out this form so as to pay the correct taxes." For FATCA, the IRS says "FATCA targets tax non-compliance by U.S. taxpayers with foreign accounts." https://www.irs.gov/Businesses/Corporations/Foreign-Account-Tax-Compliance-Act-FATCA https://www.irs.gov/Businesses/Corporations/Foreign-Account-... In other words, FATCA treats all Americans overseas as a priori criminals -- the form is being filled out to "target non-compliance."
  • Ensorceled 11y ago
    This is exactly how the IRS treats all non-resident US tax payers. My ex, a joint Canadian/US citizen, had a problem with her taxes one year. The CRA (Canadian Revenue Agency) sent a letter that basically said "You appear to have made a mistake on your taxes, we think you owe an extra $XXXX. Check with your accountant, sorry for the bother if this isn't correct." the letter from the IRS basically said "You have defrauded the US Government of $YYYY. You will be arrested if you return to the US. You will be extradited if your country of residence supports extradition for Fraud. Fraud of this amount can result in <list of horrible penalties>" Her accountant cleared it up in a few days, apparently someone at the IRS had made a mistake about Canadian Tax Law and reported the problem to the CRA which didn't verify it. It was a scary couple of weeks until we got the letter from the IRS which said the taxes were fine but included a warning about not letting this happen again. I'd have renounced just for that bullshit.
    • Relys 11y ago
      Whatever happened to innocent until proven guilty? People make simple mistakes all the time. With something as bloated and obtuse as the US tax code the margin of error for honest mistakes is drastically increased. Criminal action should be classified as preemptive malicious intent. Glad to hear things worked out to you. Props to the CRA for it's professional conduct.
      • Ensorceled 11y ago
        Also, many parts of the tax act have grey areas where even the CRA/IRS is unsure. You can call the CRA/IRS several times and get different opinions on a situation depending upon which agent you talk to.
• DCPOS_Anthony 11y ago
  That's an amazing story. I never knew those details.
• letitleak 11y ago
  "The US Treasury worked tirelessly to address many of these problems, and most have been resolved. If there are still problems with the law, then I believe Congress should hold hearings to see how it can be improved." I bet they are wondering how to stay motivated on this one. Well a minor update to the legal system should fix the problem: Welcome to Congress, we have now designated you a "US Congress Person" for filing purposes. Being or having been a Members of Congress will require you to file all forms that could be requested of any "US Person". In cases like FATCA you will also be required to disclose all accounts in your country of residence to meet our test of equivalence for "US Persons" abroad. Banks in the US will now be required to follow all procedures for FATCA for the special case of "US Congress Persons" or face 30% penalties. If Banks are unable to establish whether account holders are "US Congress Persons" they shall pay 30% penalties on all US sourced income. The penalties for failure to file any form as a "US Congress Person" shall be no less than the highest established for other "US Persons". Being convicted of some crimes and failures to file may limit your time in office but does not change your status and obligations as a "US Congress Person". If (Ex-)Congresspeople would like to renounce their citizenship they will automatically face the maximum 10 years of continued filing with the IRS as provided by the current regulations. "US Congress Person" like "US Person" can not be renounced separately. Children of US Congress Persons shall inherit all filing birthrights of being a "US Congress Person". (edit- fix mis-attribution of renunciation/IRS filing issue to FATCA)
• DyslexicAtheist 11y ago
  I just noticed that this year if you open a bank account in most EU places they all ask you if you are a US citizen or have a green-card for the US to tick a box on the account opening forms. I'd really hate it if my own country would force all the banks in the world to report back to the "mothership" and hence track my every move around the world for what? The IRS? Sure there are also other implications such as total control over the movements of a citizen. Can see why people renounce their citizenship. This isn't freedom any more.
  • aledalgrande 11y ago
    Switzerland has renounced any business with US citizens after changes in US law.
• personlurking 11y ago
  > "The United States is one of only two countries in the world that has citizenship-based taxation (the other is Eritrea)." I very recently read that Brazil does this too - that no matter where you currently live or work, as a Brazilian citizen, you have to pay taxes on it to Brazil (someone correct me if I'm wrong)
  • marcosdumay 11y ago
    You have to pay taxes on any income you earn on Brazil, even if you don't live here. You don't have to pay taxes on income taxed afar, even if you live here, and on any income not earned here if you live afar.
• MikeNomad 11y ago
  Doesn't the "I" in "I.R.S." stand for "Internal?"
• 0x2015 11y ago
  This makes America looking really dam pathetic and makes me less proud to be an American.
• sk3l 11y ago
  If you live abroad & give up your citizenship, I think you should sign a waiver clause giving US government release of liability for any security, diplomatic services, basically anything you'd ever ask for. The US is off the hook for your safety and comfort, forever. Perhaps this is already part of the process, not sure. IMO, depending on where you are living abroad, that might give one misgivings about turning in ones passport. Just my 2 satoshis.
  • lunchladydoris 11y ago
    I don't understand. If you've given up your citizenship, you are no longer a US citizen. Why would they have any liability?
  • kalleboo 11y ago
    Isn't that exactly what giving up your passport does? And as long as you've acquired a new one from a developed country, you're probably better off anyway for safety and comfort (e.g. other countries may cover your medical care)
• tsukikage 11y ago
  So, is it time to throw some tea in the harbour now?
• cbennett 11y ago
  Upset about this issue and want to make a positive difference rather than debating technicalities or simply waiting for the other shoe to drop? It may be no surprise that FATCA and FBAR present several consitutitional issues. Chief among them are the following: -As the IRS can unilaterally sign unauthorized pseudo-treaties with foreign governments, the Senate’s role in ratifying treaties is bypassed -Fourth amendment: Private financial data is collected indiscriminately -Eighth Amendment prohibiting cruel and unusual punishment, as well as excessive fines, may be leveraged when compliance is not perfect, and without Rule of Law provisions to ensure any protection for the accused. (My recapitulation of points in [1] ) Thankfully, several large scale legal challenges on exactly these grounds are now underway- by Sen Rand Paul and 6 other expats [2] , and perhaps even more promisingly, by super lawyer Jim Bopp (who took down Mc-Cain Feingold [3]). You can also donate a small amount to support the latter case: https://fatcalegalaction.com/contribute/ https://fatcalegalaction.com/contribute/ Thanks for reading, lets not give up hope, and remain fired up to the correctness of this cause because, in the words of Bopp - “The U.S. Constitution protects every citizen’s liberty and freedom, while FATCA undermines both,” We deserve better! Signed, An American living in Paris [1] http://www.thenewamerican.com/usnews/constitution/item/18253-critics-mount-constitutional-attack-on-dreaded-fatca-tax-regime http://www.thenewamerican.com/usnews/constitution/item/18253... [2] http://www.taxanalysts.com/www/features.nsf/Features/9D07FB48795BBF9285257EC1006BB907?OpenDocument http://www.taxanalysts.com/www/features.nsf/Features/9D07FB4... [3] http://www.washingtontimes.com/news/2014/may/5/superlawyer-jim-bopp-takes-on-mccain-backed-tax-ac/?page=all http://www.washingtontimes.com/news/2014/may/5/superlawyer-j...
  • ___ab___ 11y ago
    1. The IRS isn't signing binding international agreements, they're agreeing to cooperate with foreign governments in the reporting of financial assets, which is well within their legal privilege. 2. The fourth amendment doesn't apply to data you're legally compelled to surrender to the government. By your logic, every form 1040 that's ever been filed is a fourth amendment violation. 3. The eighth amendment has almost never been used in a constitutional case involving excessive fines. When it has, the court has primarily used it to prevent pseudo-fines that aren't really called fines in order to skirt the eighth amendment. Sure, FATCA might be annoying, but a legal challenge has almost nothing going for it. Don't get your hopes up.
• smazero 11y ago
  The use of the term "expat" rather than "immigrant" is interesting. I read a piece in the guardian the other day which framed that distinction in terms of white vs non-white (http://www.theguardian.com/global-development-professionals-network/2015/mar/13/white-people-expats-immigrants-migration http://www.theguardian.com/global-development-professionals-...), but it's obviously a bit more complicated than that. I don't think the two terms are synonyms, but they are very close, and once you try to pick apart the differences, I think the distinction does start to unravel. Thought experiment: think about how the article would have felt had it been titled: "Why American immigrants are giving up their passports". I think it would have felt different, and I wonder whether an American reader might have felt slightly insulted by that change. I'd be interested to know whether other languages/cultures draw that same subtle distinction between "immigrants" and "expats", or whether it's just some vestigial remnant of the UK's colonial past.
  • return0 11y ago
    There are rich arab or chinese expats in the west, are they called immigrants? I think expats refers to the temporary/revocable/definitely-not-forced status of the immigrant. In my greek native, expat and immigrant are used interchangably (ομογενής /μετανάστης) That said, "expat" is the wrong term for someone who renounced his original citizenship. I guess they should be called "pats" now.
    • dalke 11y ago
      In the US context, Mexicans who come to the US for work, with plans to return to Mexico after 5-10 years, are called immigrants. Thus, "immigrant workers" not "expat worker" and "undocumented immigrants" not "undocumented expats". The same is true in Europe. The places in town where North Africans, or Iraq, or Ethiopia live are often called "immigrant communities", not "expat communities." Even when the population has no plans to return, or are even native born. While on the other hand there are many British people who retire and live the expat life overseas where it's warm and cheap, and don't plan to return to the UK. Or Arthur C. Clark, a British expat in Sri Lanka who had no plans to leave. The Sri Lankan government created the category of resident guest status in 1975 so he could stay. This strongly suggests that 1) your understanding isn't correct, and 2) there is a social class distinction between "immigrant" and "expat".
• VLM 11y ago
  I'm surprised 10% of the comments are on the topic of Grenada-style evacuation from warzones. The total number of evacuee's vs total number of expatiates over the last couple decades must be a truly microscopic percentage. I have a long term goal of moving to Canada; better health care system, I love winter sports and weather, etc. I personally know people in Belgium and Sweden and Ireland. Evac sounds very unlikely, and if there were a military invasion, it would probably be the USA doing it, so I'm anticipating coordination would be complicated to the point of uselessness (First cross the front lines of the battle without getting killed to enter the USA sector, then evac? Seriously?).
• anothermouse 11y ago
  I am British, and am married to an american. My wife moved to the UK and has never worked since. I had no idea about her obligation to file anything. She's been here for over a decade. Like a lot of people we use a joint bank account. My salary, and anything else goes in there. A couple of years ago I sold my flat in central London, and had 400K (600K USD) in there at various points. I have no idea how to bring my wife into compliance, as if I do, she will be expected to hand over 25% of the maximum balance of this account for every year it was undeclared to a maximum of 5 years. I.E. 125% of the maximum balance! She remains unaware, and I don't file for her. We'd risk losing our house (brought with the proceeds of the previous sale), if I attempt to fix this. I live in absolute dread of the IRS, and what they may do to our happy family.
  • cylinder 11y ago
    I'd stay under the radar. I have dual citizen friends (Australia) who have been there for decades and don't file and don't have a clue about it. They visit US frequently. This law deserves no respect.
  • thisone 11y ago
    If you are both concerned, she can file back FBARs with a letter of explanation as to why she hadn't filed them (I had to do the exact same thing). I wasn't fined, and I was scared as hell. Yes, this is one person's story. Personally, if you can, I'd get in touch with a tax solicitor and get a real professional opinion on your options, including how to insulate your assets in the case of any idiocy by the US. One thing to keep in mind is that as stupid and horrible these laws are, they aren't meant for us. They're meant for real, actual tax cheats, and FINCEN has more interest in them than someone who's been ignorant and is now trying to make it right.
    • soft_dev_person 11y ago
      > they aren't meant for us I'm pretty sure child pornography laws weren't meant for teenagers sending nude snaps to each other, either.
  • ssmoot 11y ago
• mark_l_watson 11y ago
  This story hits close to home. My wife and I had wanted to buy a home in Central America (I really enjoy that area of the world) and live there about 2/3 of the time, but also maintaining a modest residence in Arizona. We gave up that dream when FACTA became a law. The US government is basically making it as nasty as possible for citizens to live abroad. Why is the government doing this? I think it is simple economics. Americans spending their social security checks, and savings, in other countries slightly weakens our economy. We also love living in Arizona, so life is good, but the FACTA laws are nasty shit.
  • noprocrastworks 11y ago
    Why does FACTA prevent you from moving to Central America? If you use a local bank account, report it if it exceeds $10k. It isn't necessary to do that, I lived for a years overseas (in countries with similar costs of living to Central America) only using U.S. banks.
• rbcgerard 11y ago
  In addition to excessive paperwork, potentially higher taxes, loss of privacy, inability to obtain financial services (bank accounts, mortgages), Americans living abroad also deal with punitive treatment of pensions earned while abroad if they have also earned u.s. pensions and poor political representation... I'd also suggest those of you living abroad to check out https://www.americansabroad.org/ https://www.americansabroad.org/ a political advocacy group (i have no affiliation)
• sakabaro 11y ago
  Isn't that fully a political issue? Current administration want to be tuff on foreign accounts, but some GOP candidates seem to reverse the law. Ref: http://www.repealfatca.com/index.asp?idmenu=4&idsubmenu=159&title=lets-get-republican-presidential-candidates-uon-the-recordu-for-fatca-repeal http://www.repealfatca.com/index.asp?idmenu=4&idsubmenu=159&...
• henridf 11y ago
  Another scenario: US Citizen living and working abroad buys a house for X in local currency. Later sells same house for the same amount X in local currency. That local currency has appreciated by 20% against USD in the timeframe. And the IRS computes capital gains in USD, not in local currency. Net result: the seller owes IRS "capital gains" taxes on 20% of the value of a house that was bought and sold for the same price.
• peter303 11y ago
  Its a tiny percentage too, less than 1 in 2000 living abroad. A higher fraction dies abroad every year.
• X86BSD 11y ago
  I've had questions about this for some time. 1) When you drop US citizenship and become "stateless", what happens? Are you deported from the US since you are no longer a citizen? To where? 2) Are you unable to get health insurance? A job, with no SSN? This has fascinated me for years but I have never seen anyone write about the real world practical impacts of what happens if you become stateless. Any links to that information?
• known 11y ago
  Reasons for giving up your US citizenship aren't officially listed, but one of the main reasons cited is Fatca - a 2012 law designed to target overseas accounts held by wealthy Americans.
• known 11y ago
  US dollar is a giant Pyramid scheme. http://www.zerohedge.com/print/502779 http://www.zerohedge.com/print/502779
• tokenadult 11y ago
  From the article, "In 2010, just 1,006 gave up being US citizens, but since then the numbers have risen every year." Let's think quantitatively to see if there is really a net trend here. In the most recently reported year, there were approximately 680,000 new United States citizens through naturalization.[1] So barely more than 1,000 United States citizens renouncing citizenship is swamped by several hundred thousand new citizens each year. I am an American citizen who has spent two three-year stays working and living abroad during my adult life. I've read about this taxation issue for decades, and filed United States tax forms from my place of foreign residence, but I've never seen a good reason to renounce my United States citizenship, nor has anyone else in my family. The most common complaint about United States policies around citizenship that I see here on Hacker News is the complaint that it should be much easier to come to the United States to work on an employment-based visa. (It's more difficult than many participants on Hacker News desire, but settling in the United States with an employment-based visa is sufficiently easy that I know people just in my own social circle here in the Midwest who have settled here from Britain, the Netherlands, Norway, Japan, Taiwan, China, India, Pakistan, Ghana, Nigeria, South Africa, Ecuador, Argentina, Korea, and a variety of other countries. Many people would like even more employment-based visas to be available, but they are already available by the tens of thousands. [1] https://www.uscis.gov/archive/archive-news/naturalization-fact-sheet https://www.uscis.gov/archive/archive-news/naturalization-fa...
• TazeTSchnitzel 11y ago
  > [Double taxation] has been the case in the US since the Civil War in the 19th Century That's a fascinating detail to me, as it explains why the US, and pretty much only the US, has double taxation. I'm guessing they instituted it so Union citizens still had to pay tax even when living in the Confederacy?
• maxlamb 11y ago
  I don't understand, isn't it easier to get around this by keeping your foreign bank account balance low (less than 10k) and transferring money on a regular basis to your US bank accounts to make sure it stays under 10k?
  • dalke 11y ago
    If you live overseas then you probably want to do thing like save up for retirement, or a house. While you can have a US bank account, it means taking a loss to change the money first to then from dollars. You also have to be very careful with your direct deposit. If it goes into your local account (because it's expensive and more complicated to wire the money to a US account) and make $5K/month then you have to be absolutely sure that your local bank account doesn't have $5K in it. And be sure to watch the exchange rates! If you sell a house, you can't put the profits into a local account but must figure out some way to have everything sent to the US. Which may not be easy. In some countries, like Sweden where I live, the government can fill out your taxes for you, because they know how much you make - except for foreign accounts. If you have, say, $100K in a US account, drawing interest, then you have to declare it appropriately. So no, it's not easier for the millions of Americans who live overseas to keep the bulk of their money in a US bank account.
    • geomark 11y ago
      I will also add that many (most?) US banks will not provide banking services for you if they know you live overseas. You have to maintain a US address. Even then, if they discover that despite having a US mailing address you actually reside overseas they will close your account. It's happening more frequently these days.
      • dalke 11y ago
        Wow, you're right! I looked into that just now. I figured USAA, which provides banking service to military and ex-military, and therefore likely has many members who live overseas, would be more likely to provide banking services to overseas Americans. https://communities.usaa.com/t5/Other/INVESTMENT-ACCOUNTS-WITH-OVERSEAS-ADDRESS/td-p/30680 https://communities.usaa.com/t5/Other/INVESTMENT-ACCOUNTS-WI... suggests that even banking with them may be problematical, at least if you have no US address.
• emiliobumachar 11y ago
  "...foreign banks to identify US citizens among their customers to US tax authorities. The penalty for failing to do so can be as high as 30% of all a bank's dealings with the USA." So, could any new, small bank start accepting americans as costumers but completely refuse to deal with the USA, not even a tiny transfer, or charge a 50% fee for each transaction? Would that be legal?
  • thisone 11y ago
    From what I understood of the law when I was wondering about my banks, yes. Though I have no idea how small and local the bank would be to not have to think about it.
• gyardley 11y ago
  For all the people from HN dreaming of American immigration, be aware that 'US citizens' in this article (any anything else pertaining to taxation) should generally be read as 'US citizens and permanent residents'. Also be aware that while renouncing permanent residency is much simpler (and you'll be sure to lose it if you're out of the country long enough), you may be exposed to significant tax liabilities for doing so - especially if you're holding illiquid startup stock.
• serge2k 11y ago
  Is it because of incredibly dumb tax laws? reads article yup. Fatca is a pretty gross law.
• NTDF9 11y ago
  So is America still the land of the free? It looks more like a prison: - Follow rules (that you are supposed to somehow know) - Forced to take on debts to survive - Hope you don't get penalized or - God forbid you need healthcare It's a great country for people with money and resources. The common man is just screwed.
• letitleak 11y ago
  I wasn't familiar with Charles Rangel until I read this article.. For anyone who suspects the US is engaged in a "Buy American" (or else) campaign to sell domestic evasion/financial services, the man who apparently wants to be identified as behind FATCA seems to be the poster child of evasion the patriotic way: https://en.wikipedia.org/wiki/Charles_Rangel#Unreported_assets_and_income https://en.wikipedia.org/wiki/Charles_Rangel#Unreported_asse... The World’s Favorite New Tax Haven Is the United States (bloomberg.com) https://news.ycombinator.com/item?id=10978847 https://news.ycombinator.com/item?id=10978847
• pvaldes 11y ago
  I wonder how bitcoin could fit in this scenery.
• whazzis 11y ago
  Part of the problem is how difficult it is to understand what your obligations are, even if you intend to comply. And then there are things that are just plain unfair. Let's say that you live in Canada and you bought your house for $500,000 Cdn. Five years later you sell it for the same $500,000. Except during that time, due to exchange rate fluctuation, the house increased in value relative to the US dollar, going from, for example, $400K to $600K US. (Entirely possible, given how much change there has been in the two currencies over the last few years.) The US considers you to have made $200K US in speculation and expects you to pay taxes to the US on that gain. Even though there was no gain -- you live in Canada and bought and sold the house in Canadian dollars. Capital gains exemptions don't apply here--they consider this to be currency speculation. Mindboggling. And easy to get yourself in trouble over without realizing.
• garfieldnate 11y ago
  I live in Japan, and when I went to open a bank account there was a lot of paperwork, including this funny form that said they would notify the American government of my address and how much money I had. I felt pretty violated by it- as if the NSA stuff wasn't enough, they now track me outside of the US. I don't make enough money to be taxed, but I don't like being tracked, either.