4 ms·

This article is posted every single year without fail[1], the number of people giving up passports is absolutely inconsequential. This number is further minimi

This article is posted every single year without fail[1], the number of people giving up passports is absolutely inconsequential. This number is further minimized since the US has one of the lowest tax rates to begin with, so the vast majority of dual-citizens owe 0 in additional tax. [1] - https://www.google.com/#q=site:https:%2F%2Fnews.ycombinator.com%2F+americans+passport https://www.google.com/#q=site:https:%2F%2Fnews.ycombinator.... I'm not sure what the benefit to these repeated articles is.. Anti-tax fervor? Some country-specific PR?

hapless 11y ago
In 2015, they completed the phase-in of new reporting requirements for ex-pats. Some of which are quite onerous. Among other things, you will need special banking services in your new home country, because foreign banks do not necessarily make FACTA reports for all accounts. Some won't even open accounts for Americans.
- ics 11y ago
  Additionally the fee to renounce is now $2,350 which is almost 5x what it was before.
  - brbsix 11y ago
    I think $2,350 is the least of anyone's concern when renouncing their citizenship, particularly if they're wealthy. There are massive exit taxes if you follow the letter of the law.
ma2rten 11y ago
The vast majority of dual-citizens owe 0 in additional tax. That's not the point. It's about all the paperwork you have to do. I live in the US, but I am not sure I would want to become a US citizen for this reason.
- parennoob 11y ago
  > It's about all the paperwork you have to do. I'm curious -- is there actual paperwork, or is it possible to do it electronically? If yes, why aren't there programs that do it for you? Would like to hear comments from a US expat. I wonder if there's an opportunity in simplifying this. I'm guessing most expats would rather pay, say $50 for a company to do this paperwork on their behalf? Or do H&R / Intuit have that market cornered as well?
  - davidw 11y ago
    You absolutely need a competent accountant for this, as they have to deal with your foreign income and figure out the US taxes. This involves a lot of complications and tricky stuff. First and foremost, when your earnings statements and tax documentation are all in Japanese or Russian or Italian or something, either you translate all of it yourself, or you find someone qualified to do your US taxes who can read it. This cost me $300 last year when I spent the entire year in Italy and did not have much US income, plus a half a day to go see the accountant and make sure everything was squared away correctly. Not worth giving up my citizenship for, but a big PITA nonetheless. The US is the only country in the world to do this BS.
  - _delirium 11y ago
    It's electronic, and you can use programs, but they tend not to be really targeted at this fairly small segment. So they're tedious to use and prone to letting you make mistakes. I personally used a CPA when I was an expat, partly because I know one who is familiar with this kind of paperwork (his own daughter is an expat, and he does her taxes, so he has some personal interest in it). He charged me about $200/yr. Considering I'd pay like $80 for the super-deluxe version of TurboTax, plus probably some hours to figure out how to do everything correctly, I considered the $200 well worth it. Although annoying, it's also way down the list of annoyances and expenses involved in being an expat. I don't think "regular" expats like me are renouncing their citizenship over the hassle/expense of paying a CPA $200, especially because renouncing your citizenship is also a considerable hassle (and reduces your future employment options). I'm almost certain this is mainly much wealthier people.
topspin 11y ago
It's reported every year because the number is growing rapidly and it's a recent phenomena. Who are these people? Is the US losing exceptionally accomplished citizens for tax reasons? I'd like to know because if so then it isn't inconsequential. Sorry if it bothers you that this prompts people to be critical of these tax and seizure laws, but I'd rather know what's going on than be ignorant because reporting it discomfits you.
- gamblor956 11y ago
  "Growing rapidly" is very easy when it's a very small number. I actually deal in this area for a living, and I have significantly more individual clients coming into the US then leaving (100+ vs none over the past 3 years), so I say to those who want out: good riddance.
  - jtheory 11y ago
    What's your reasoning here, actually? There are still fairly few expats who go to the trouble to renounce their citizenship... so "good riddance" to them? It's perhaps worth pointing out that these are people who've already left, some of them decades earlier, who hung onto their US citizenship possibly because it's been easier than the alternatives (I can tell you getting citizenship in, e.g., France, is non-trivial, particularly if you're not married to a citizen, but even so if you are). But now, for this little slice of expats, keeping US citizenship has become the more onerous option, and so they have a pragmatic reason to drop their old citizenship in a country they no longer inhabit, anyway. What's to get worked up about, really?
fabulist 11y ago
> This article is posted every single year without fail[1] This article reports its publication date as: February 8, 2016: 9:27 AM ET You seem to be confusing it with this one: http://www.wsj.com/articles/americans-pay-your-taxes-or-lose-your-passport-1447971424 http://www.wsj.com/articles/americans-pay-your-taxes-or-lose... Edit: Naturally, this doesn't invalidate what you're saying, this is just a clarification.
- mikeyouse 11y ago
  I was trying to avoid digging up the old ones.. but here are some previous examples; 2012 - https://news.ycombinator.com/item?id=3850929 https://news.ycombinator.com/item?id=3850929 2014 - https://news.ycombinator.com/item?id=8368174 https://news.ycombinator.com/item?id=8368174 2015 - https://news.ycombinator.com/item?id=10379308 https://news.ycombinator.com/item?id=10379308 But if you look at say, CNBC or Fortune, a nearly identical article is composed every year (or more) without fail. https://www.google.com/#q=site:cnbc.com+taxes+renouncing+us+citizenship https://www.google.com/#q=site:cnbc.com+taxes+renouncing+us+... It's an exceptionally narrow topic that gets an outsized focus, maybe because it highlights a wider narrative? Otherwise I'm at a loss why anyone would care.
  - linkregister 11y ago
    I think it's relevant to the HN crowd because many of us are dual citizens/permanent residents/work visa holders or aspire to live in a country outside the U.S. Given the huge amount of interest the digital nomad community generates on HN, the link is clear to me.
gozur88 11y ago
>...the number of people giving up passports is absolutely inconsequential. This number is further minimized since the US has one of the lowest tax rates to begin with, so the vast majority of dual-citizens owe 0 in additional tax. Right... so these two points might be related, as the people renouncing might be the people who do owe additional tax. Personally, I would feel a bit put out if I'd permanently moved to another country and had Uncle Sam looking to take a piece of my income.
- dalke 11y ago
  What you wrote makes no sense. Renouncing citizenship does not remove the legal obligation to pay owed taxes. Quoting http://travel.state.gov/content/travel/en/legal-considerations/us-citizenship-laws-policies/renunciation-of-citizenship.html http://travel.state.gov/content/travel/en/legal-consideratio... : > Persons who wish to renounce U.S. citizenship should be aware of the fact that renunciation of U.S. citizenship may have no effect whatsoever on his or her U.S. tax or military service obligations (contact the Internal Revenue Service or U.S. Selective Service for more information). In addition, the act of renouncing U.S. citizenship does not allow persons to avoid possible prosecution for crimes which they may have committed in the United States, or escape the repayment of financial obligations previously incurred in the United States or incurred as United States citizens abroad.
  - gozur88 11y ago
    As far as I'm concerned, when you renounce your citizenship you no longer have the obligation to pay (new) US taxes regardless of what the US government thinks. Even under US law after ten years you no longer have to pay income taxes.
    - dalke 11y ago
      The IRS doesn't care what you think. They say that expatriating doesn't change anything. And said 10 years would apply even without expatriation, so expatriating doesn't change anything their either. Thus, there is no advantage to expatriating in order to avoid owed taxes.
CyberDildonics 11y ago
> US has one of the lowest tax rates to begin with What are you basing that on? Hong Kong and Singapore (where Eduardo Saverin became a citizen to avoid paying 1 Billion USD in taxes from his Facebook windfall) have taxes in the %11 range.

hapless 11y ago

In 2015, they completed the phase-in of new reporting requirements for ex-pats. Some of which are quite onerous. Among other things, you will need special banking services in your new home country, because foreign banks do not necessarily make FACTA reports for all accounts. Some won't even open accounts for Americans.

ics 11y ago
Additionally the fee to renounce is now $2,350 which is almost 5x what it was before.
- brbsix 11y ago
  I think $2,350 is the least of anyone's concern when renouncing their citizenship, particularly if they're wealthy. There are massive exit taxes if you follow the letter of the law.

ma2rten 11y ago

The vast majority of dual-citizens owe 0 in additional tax. That's not the point. It's about all the paperwork you have to do. I live in the US, but I am not sure I would want to become a US citizen for this reason.

parennoob 11y ago
> It's about all the paperwork you have to do. I'm curious -- is there actual paperwork, or is it possible to do it electronically? If yes, why aren't there programs that do it for you? Would like to hear comments from a US expat. I wonder if there's an opportunity in simplifying this. I'm guessing most expats would rather pay, say $50 for a company to do this paperwork on their behalf? Or do H&R / Intuit have that market cornered as well?
- davidw 11y ago
  You absolutely need a competent accountant for this, as they have to deal with your foreign income and figure out the US taxes. This involves a lot of complications and tricky stuff. First and foremost, when your earnings statements and tax documentation are all in Japanese or Russian or Italian or something, either you translate all of it yourself, or you find someone qualified to do your US taxes who can read it. This cost me $300 last year when I spent the entire year in Italy and did not have much US income, plus a half a day to go see the accountant and make sure everything was squared away correctly. Not worth giving up my citizenship for, but a big PITA nonetheless. The US is the only country in the world to do this BS.
- _delirium 11y ago
  It's electronic, and you can use programs, but they tend not to be really targeted at this fairly small segment. So they're tedious to use and prone to letting you make mistakes. I personally used a CPA when I was an expat, partly because I know one who is familiar with this kind of paperwork (his own daughter is an expat, and he does her taxes, so he has some personal interest in it). He charged me about $200/yr. Considering I'd pay like $80 for the super-deluxe version of TurboTax, plus probably some hours to figure out how to do everything correctly, I considered the $200 well worth it. Although annoying, it's also way down the list of annoyances and expenses involved in being an expat. I don't think "regular" expats like me are renouncing their citizenship over the hassle/expense of paying a CPA $200, especially because renouncing your citizenship is also a considerable hassle (and reduces your future employment options). I'm almost certain this is mainly much wealthier people.

topspin 11y ago

It's reported every year because the number is growing rapidly and it's a recent phenomena. Who are these people? Is the US losing exceptionally accomplished citizens for tax reasons? I'd like to know because if so then it isn't inconsequential. Sorry if it bothers you that this prompts people to be critical of these tax and seizure laws, but I'd rather know what's going on than be ignorant because reporting it discomfits you.

gamblor956 11y ago
"Growing rapidly" is very easy when it's a very small number. I actually deal in this area for a living, and I have significantly more individual clients coming into the US then leaving (100+ vs none over the past 3 years), so I say to those who want out: good riddance.
- jtheory 11y ago
  What's your reasoning here, actually? There are still fairly few expats who go to the trouble to renounce their citizenship... so "good riddance" to them? It's perhaps worth pointing out that these are people who've already left, some of them decades earlier, who hung onto their US citizenship possibly because it's been easier than the alternatives (I can tell you getting citizenship in, e.g., France, is non-trivial, particularly if you're not married to a citizen, but even so if you are). But now, for this little slice of expats, keeping US citizenship has become the more onerous option, and so they have a pragmatic reason to drop their old citizenship in a country they no longer inhabit, anyway. What's to get worked up about, really?

fabulist 11y ago

> This article is posted every single year without fail[1] This article reports its publication date as: February 8, 2016: 9:27 AM ET You seem to be confusing it with this one: http://www.wsj.com/articles/americans-pay-your-taxes-or-lose-your-passport-1447971424 http://www.wsj.com/articles/americans-pay-your-taxes-or-lose... Edit: Naturally, this doesn't invalidate what you're saying, this is just a clarification.

mikeyouse 11y ago
I was trying to avoid digging up the old ones.. but here are some previous examples; 2012 - https://news.ycombinator.com/item?id=3850929 https://news.ycombinator.com/item?id=3850929 2014 - https://news.ycombinator.com/item?id=8368174 https://news.ycombinator.com/item?id=8368174 2015 - https://news.ycombinator.com/item?id=10379308 https://news.ycombinator.com/item?id=10379308 But if you look at say, CNBC or Fortune, a nearly identical article is composed every year (or more) without fail. https://www.google.com/#q=site:cnbc.com+taxes+renouncing+us+citizenship https://www.google.com/#q=site:cnbc.com+taxes+renouncing+us+... It's an exceptionally narrow topic that gets an outsized focus, maybe because it highlights a wider narrative? Otherwise I'm at a loss why anyone would care.
- linkregister 11y ago
  I think it's relevant to the HN crowd because many of us are dual citizens/permanent residents/work visa holders or aspire to live in a country outside the U.S. Given the huge amount of interest the digital nomad community generates on HN, the link is clear to me.

gozur88 11y ago

>...the number of people giving up passports is absolutely inconsequential. This number is further minimized since the US has one of the lowest tax rates to begin with, so the vast majority of dual-citizens owe 0 in additional tax. Right... so these two points might be related, as the people renouncing might be the people who do owe additional tax. Personally, I would feel a bit put out if I'd permanently moved to another country and had Uncle Sam looking to take a piece of my income.

dalke 11y ago
What you wrote makes no sense. Renouncing citizenship does not remove the legal obligation to pay owed taxes. Quoting http://travel.state.gov/content/travel/en/legal-considerations/us-citizenship-laws-policies/renunciation-of-citizenship.html http://travel.state.gov/content/travel/en/legal-consideratio... : > Persons who wish to renounce U.S. citizenship should be aware of the fact that renunciation of U.S. citizenship may have no effect whatsoever on his or her U.S. tax or military service obligations (contact the Internal Revenue Service or U.S. Selective Service for more information). In addition, the act of renouncing U.S. citizenship does not allow persons to avoid possible prosecution for crimes which they may have committed in the United States, or escape the repayment of financial obligations previously incurred in the United States or incurred as United States citizens abroad.
- gozur88 11y ago
  As far as I'm concerned, when you renounce your citizenship you no longer have the obligation to pay (new) US taxes regardless of what the US government thinks. Even under US law after ten years you no longer have to pay income taxes.
  - dalke 11y ago
    The IRS doesn't care what you think. They say that expatriating doesn't change anything. And said 10 years would apply even without expatriation, so expatriating doesn't change anything their either. Thus, there is no advantage to expatriating in order to avoid owed taxes.

CyberDildonics 11y ago

> US has one of the lowest tax rates to begin with What are you basing that on? Hong Kong and Singapore (where Eduardo Saverin became a citizen to avoid paying 1 Billion USD in taxes from his Facebook windfall) have taxes in the %11 range.