4 ms·

you still have to pay exit taxes on renouncing, so not clear this is a good way of avoiding tax.

dschuler 6y ago
Exactly, he couldn't avoid expatriation taxes on anything he currently owns. (https://www.irs.gov/individuals/international-taxpayers/expatriation-tax https://www.irs.gov/individuals/international-taxpayers/expa...).
jasode 6y ago
Also... if the renunciation is motivated by avoiding taxes, the person is banned from re-entering the USA. excerpt[1]: If the Department of Homeland Security determines that the renunciation is motivated by tax avoidance purposes, the individual will be found inadmissible to the United States under Section 212(a)(10)(E) of the Immigration and Nationality Act (8 U.S.C. 1182(a)(10)(E)), as amended. EDIT REPLY to : "Would they have to prove intent?" Probably not because granting admission into the USA of a non-citizen (ex-citizen) is at the discretion of the Executive Branch of government and doesn't go through "due process" of any court system. So no "burden of proof" required. [1] https://travel.state.gov/content/travel/en/legal/travel-legal-considerations/us-citizenship/Renunciation-US-Nationality-Abroad.html https://travel.state.gov/content/travel/en/legal/travel-lega...
- nielsbot 6y ago
  Would they have to prove intent?
- gnicholas 6y ago
  Then COVID is the perfect cover for shifting citizenship. It gives a plausible non-tax reason for making the change. Someone who is worth $15B would be very well-advised, and if he's been thinking about doing this in the past, his advisors may have decided that now is the right time to pull the trigger. Also helps to have plenty in the news these days, to avoid becoming 'the story' on a slow news day/week.
  - FDSGSG 6y ago
    Why would COVID be perfect cover for giving up your US citizenship? It might be good cover for getting another, sure.
    - gnicholas 6y ago
      You got it — the timing is good for this step, which is adding a new citizenship. Then he can drop his US citizenship in the future, after his new one is established.
      - FDSGSG 6y ago
        But why would the timing of this step matter?
todd8 6y ago
USA expatriation taxes are quite steep. I'm not a lawyer, but I believe that all unrealized gains of all assets are taxed upon exit as if the assets were being sold. Further, I think that income generated by through US companies (like investments) are taxed as US income for ten years after renouncing citizenship. Also, forget about coming back (say for a friend's wedding or an important medical procedure), the laws assume that high net worth individuals are leaving to avoid future taxes.

Exactly, he couldn't avoid expatriation taxes on anything he currently owns. (https://www.irs.gov/individuals/international-taxpayers/expatriation-tax https://www.irs.gov/individuals/international-taxpayers/expa...).

jasode 6y ago

Also... if the renunciation is motivated by avoiding taxes, the person is banned from re-entering the USA. excerpt[1]: If the Department of Homeland Security determines that the renunciation is motivated by tax avoidance purposes, the individual will be found inadmissible to the United States under Section 212(a)(10)(E) of the Immigration and Nationality Act (8 U.S.C. 1182(a)(10)(E)), as amended. EDIT REPLY to : "Would they have to prove intent?" Probably not because granting admission into the USA of a non-citizen (ex-citizen) is at the discretion of the Executive Branch of government and doesn't go through "due process" of any court system. So no "burden of proof" required. [1] https://travel.state.gov/content/travel/en/legal/travel-legal-considerations/us-citizenship/Renunciation-US-Nationality-Abroad.html https://travel.state.gov/content/travel/en/legal/travel-lega...

nielsbot 6y ago
Would they have to prove intent?
gnicholas 6y ago
Then COVID is the perfect cover for shifting citizenship. It gives a plausible non-tax reason for making the change. Someone who is worth $15B would be very well-advised, and if he's been thinking about doing this in the past, his advisors may have decided that now is the right time to pull the trigger. Also helps to have plenty in the news these days, to avoid becoming 'the story' on a slow news day/week.
- FDSGSG 6y ago
  Why would COVID be perfect cover for giving up your US citizenship? It might be good cover for getting another, sure.
  - gnicholas 6y ago
    You got it — the timing is good for this step, which is adding a new citizenship. Then he can drop his US citizenship in the future, after his new one is established.
    - FDSGSG 6y ago
      But why would the timing of this step matter?

todd8 6y ago

USA expatriation taxes are quite steep. I'm not a lawyer, but I believe that all unrealized gains of all assets are taxed upon exit as if the assets were being sold. Further, I think that income generated by through US companies (like investments) are taxed as US income for ten years after renouncing citizenship. Also, forget about coming back (say for a friend's wedding or an important medical procedure), the laws assume that high net worth individuals are leaving to avoid future taxes.