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It is low - my initial take was this law was written in the 1970s when US expats were rare and only the really wealthy lived overseas. I was thinking of the peo

It is low - my initial take was this law was written in the 1970s when US expats were rare and only the really wealthy lived overseas. I was thinking of the people I've read about who had 100k etc stashed in Swiss bank accounts and the like. The problem is the potential fines if you get caught not filling out the forms - I forget the exact numbers, but it's like 50% of the balance (or all your assets?) and a fixed fine ... It is pretty much an attempt to borderline bankrupt you. In reality, however, enforcement is lax - the IRS is getting decimated thanks to Trump and co. and so going after the small fry is not cost effective. High profile cases, e.g. Boris Johnson who has American citizenship, are just as much for PR purposes as enforcing the law. The IRS went after him because he was selling his house, something like that, and so it was profitable to get him for avoiding US tax law.

thisone 7y ago
indeed, the penalties for not filing or even making an honest mistake on the FBAR are severe. The FBAR is not under the IRS for the enforcement though, it's FinCEN.
kingosticks 7y ago
I think the Borris one was more for PR rather than being financially profitable. It was for less than £100k if I remember correctly. Surely there are much bigger fish to fry out there.
a_humean 7y ago
I'm no fan of Johnson, but he did absolutely nothing wrong in that case, and his personal connection to the US was very weak. He renounced his citizenship shortly after that episode as are record numbers of very ordinary (income wise) Americans abroad since FACTA was introduced. The IRS makes overseas compliance for ordinary and accidental (just happening to be born on US soil, but otherwise no connection) American citizens very difficult and opaque, and the penalties are extraordinarily disproportionate when most of the time they usually owe absolutely nothing to US tax authorities other than paperwork. It also makes access to financial products for American citizens and ex-citizens abroad difficult because local banks don't want to risk dealing with the millions on non-compliant citizens because they also face very high penalties for providing services to non-compliant citizens. Essentially no other country taxes on the basis of citizenship instead of residency, and they are making a pig's ear of it.
johnnycab 7y ago
>Boris Johnson who has American citizenship, are just as much for PR purposes as enforcing the law. He renounced his American citizenship, also mentioned by another commenter, over the matter you described i.e. US Tax ($50k+) for sale of his home in the UK. https://www.theguardian.com/politics/2017/feb/08/boris-johnson-renounces-us-citizenship-record-2016-uk-foreign-secretary https://www.theguardian.com/politics/2017/feb/08/boris-johns...

thisone 7y ago

indeed, the penalties for not filing or even making an honest mistake on the FBAR are severe. The FBAR is not under the IRS for the enforcement though, it's FinCEN.

kingosticks 7y ago

I think the Borris one was more for PR rather than being financially profitable. It was for less than £100k if I remember correctly. Surely there are much bigger fish to fry out there.

a_humean 7y ago

I'm no fan of Johnson, but he did absolutely nothing wrong in that case, and his personal connection to the US was very weak. He renounced his citizenship shortly after that episode as are record numbers of very ordinary (income wise) Americans abroad since FACTA was introduced. The IRS makes overseas compliance for ordinary and accidental (just happening to be born on US soil, but otherwise no connection) American citizens very difficult and opaque, and the penalties are extraordinarily disproportionate when most of the time they usually owe absolutely nothing to US tax authorities other than paperwork. It also makes access to financial products for American citizens and ex-citizens abroad difficult because local banks don't want to risk dealing with the millions on non-compliant citizens because they also face very high penalties for providing services to non-compliant citizens. Essentially no other country taxes on the basis of citizenship instead of residency, and they are making a pig's ear of it.

johnnycab 7y ago

>Boris Johnson who has American citizenship, are just as much for PR purposes as enforcing the law. He renounced his American citizenship, also mentioned by another commenter, over the matter you described i.e. US Tax ($50k+) for sale of his home in the UK. https://www.theguardian.com/politics/2017/feb/08/boris-johnson-renounces-us-citizenship-record-2016-uk-foreign-secretary https://www.theguardian.com/politics/2017/feb/08/boris-johns...