5 ms·

At least from those expats posting here, the issue isn’t the actual real tax liability, but the burden of having to show the IRS every year that you don’t think

At least from those expats posting here, the issue isn’t the actual real tax liability, but the burden of having to show the IRS every year that you don’t think you have a tax liability.

emodendroket 5y ago
That’s a hassle but it seems hyperbolic to call it absurdly cruel and the other things people here are saying.
- dantheman 5y ago
  It is awful - I'm glad you never had to deal with. It provides little revenue and causes a huge amount of hassle and makes living overseas way more difficult.
  - ricksunny 5y ago
    American expat here - agreed with the other expats - it’s the filing that really, really sucks. Like really. Breaking the difficulty down in terms of priority. 1 - just trying to work through what all might possibly be owed and not owed to US as well as the country(ies) one operates in. 2 - Identifying through which paperwork to declare it, while also ensuring income / business reporting is copacetic with the tax regime of the country that same is actually earned in. As a business owner, (many operating overseas are looking after a business) I have to complete corporate accounts (which costs $$$$ and takes forever) before I can file American income tax for the same accounting year. 3 - the value of the tax liability itself is a distant third in terms of hassle than any of the above. (I’ll include in this bucket the fact that Americans are taxed on income earned abroad, putting us at enormous disadvantage for work opportunities vis—a-vis peer expats who come from other countries)
    - 1024core 5y ago
      Why doesn't the US reduce it to a flat tax? Say, $1000/year to send you your election ballot, and evacuate you in case something goes horribly wrong.
      - javert 5y ago
        The US government doesn't work like that. There isn't some logical person making logical decisions. For this change to occur, many senators and representatives would have to be directly and personally incentivized to make the change. They aren't.
        mbg721 5y ago
        Moreover, they're incentivized to do the opposite. Expats aren't a sympathetic group to any major voting demographic.
      - kingosticks 5y ago
        And how about they make this service opt-in. I was born in the US but I have had nothing to do with the place for 95% of my life and I don't want their help. Why must I fill out their paperwork every year or pay them money to opt-out (which I can't even do anymore because of the current backlog).
  - emodendroket 5y ago
    Perhaps the revenue is not very great but if there were a blanket exception I think you’d suddenly find a lot more people gaming then system to not technically be US residents and thereby escape large amounts of liability.
    - ElFitz 5y ago
      Most countries don’t tax citizens living abroad on foreign revenue, and just forget about them once they become residents elsewhere (unless they still have income from their country of origin).
      - deleted 5y ago
        [deleted]
      - robin_reala 5y ago
        And by most here, you mean every single country in the world apart from the US, Eritrea, Myanmar and Hungary.
        randomchars 5y ago
        Hungary does not tax it's citizens living abroad.
        robin_reala 5y ago
        I was going by the table at https://en.wikipedia.org/wiki/International_taxation#Individuals https://en.wikipedia.org/wiki/International_taxation#Individ... but it’s entirely possible that it’s incorrect.
        naniwaduni 5y ago
        It looks like Hungary technically taxes nonresident citizens except in almost every case where it would matter.
    - 5y ago
- BeetleB 5y ago
  If you are not allowed to open financial accounts for investments in the country you are living in because they do not want to have information sent to the IRS, you'll think differently. I know at least one country that will not let you even open a bank account if you have a green card or US citizenship. Actually, even if you're a foreigner living in the US (student, H-1, etc), that country will not let you open a bank account - even if you are a citizen of that country. The rule is simple: If you have ties to the US that could require you reporting your bank account to the IRS, then you cannot open a bank account.
  - emodendroket 5y ago
    Which country is this?
    - BeetleB 5y ago
      I'm aware of restrictions in France and Pakistan from coworkers on H-1 visas from those countries. Note that both probably do provide a way to open it if you go through some lengthy "exceptions" process, but it wasn't worth the hassle. Basically, ever since the IRS required you to report foreign accounts (2007 or 2008), some countries have made it harder for people based in the US to get accounts. They see it as an indirect means to collect intelligence by the US.
  - pacomerh 5y ago
    I don't understand how the IRS can know what you do in foreign banks
    - BeetleB 5y ago
      The IRS requires you to report all bank accounts you have in foreign countries when you file taxes: https://en.wikipedia.org/wiki/Foreign_Account_Tax_Compliance_Act https://en.wikipedia.org/wiki/Foreign_Account_Tax_Compliance... > FATCA also requires such persons to report their non-U.S. financial assets annually to the Internal Revenue Service (IRS) on form 8938, which is in addition to the older and further redundant requirement to report them annually to the Financial Crimes Enforcement Network (FinCEN) on form 114 (also known as 'FBAR') What's ridiculous is that it also "requires" foreign banks to report details of accounts by US holders - even if the bank has no relation to the US.
walshemj 5y ago
And the fact that most UK finace institutions wont deal with you makes opening ISA's etc v difficult

At least from those expats posting here, the issue isn’t the actual real tax liability, but the burden of having to show the IRS every year that you don’t think you have a tax liability.

emodendroket 5y ago

That’s a hassle but it seems hyperbolic to call it absurdly cruel and the other things people here are saying.

dantheman 5y ago
It is awful - I'm glad you never had to deal with. It provides little revenue and causes a huge amount of hassle and makes living overseas way more difficult.
- ricksunny 5y ago
  American expat here - agreed with the other expats - it’s the filing that really, really sucks. Like really. Breaking the difficulty down in terms of priority. 1 - just trying to work through what all might possibly be owed and not owed to US as well as the country(ies) one operates in. 2 - Identifying through which paperwork to declare it, while also ensuring income / business reporting is copacetic with the tax regime of the country that same is actually earned in. As a business owner, (many operating overseas are looking after a business) I have to complete corporate accounts (which costs $$$$ and takes forever) before I can file American income tax for the same accounting year. 3 - the value of the tax liability itself is a distant third in terms of hassle than any of the above. (I’ll include in this bucket the fact that Americans are taxed on income earned abroad, putting us at enormous disadvantage for work opportunities vis—a-vis peer expats who come from other countries)
  - 1024core 5y ago
    Why doesn't the US reduce it to a flat tax? Say, $1000/year to send you your election ballot, and evacuate you in case something goes horribly wrong.
    - javert 5y ago
      The US government doesn't work like that. There isn't some logical person making logical decisions. For this change to occur, many senators and representatives would have to be directly and personally incentivized to make the change. They aren't.
      - mbg721 5y ago
        Moreover, they're incentivized to do the opposite. Expats aren't a sympathetic group to any major voting demographic.
    - kingosticks 5y ago
      And how about they make this service opt-in. I was born in the US but I have had nothing to do with the place for 95% of my life and I don't want their help. Why must I fill out their paperwork every year or pay them money to opt-out (which I can't even do anymore because of the current backlog).
- emodendroket 5y ago
  Perhaps the revenue is not very great but if there were a blanket exception I think you’d suddenly find a lot more people gaming then system to not technically be US residents and thereby escape large amounts of liability.
  - ElFitz 5y ago
    Most countries don’t tax citizens living abroad on foreign revenue, and just forget about them once they become residents elsewhere (unless they still have income from their country of origin).
    - deleted 5y ago
      [deleted]
    - robin_reala 5y ago
      And by most here, you mean every single country in the world apart from the US, Eritrea, Myanmar and Hungary.
      - randomchars 5y ago
        Hungary does not tax it's citizens living abroad.
        robin_reala 5y ago
        I was going by the table at https://en.wikipedia.org/wiki/International_taxation#Individuals https://en.wikipedia.org/wiki/International_taxation#Individ... but it’s entirely possible that it’s incorrect.
        naniwaduni 5y ago
        It looks like Hungary technically taxes nonresident citizens except in almost every case where it would matter.
  - 5y ago
BeetleB 5y ago
If you are not allowed to open financial accounts for investments in the country you are living in because they do not want to have information sent to the IRS, you'll think differently. I know at least one country that will not let you even open a bank account if you have a green card or US citizenship. Actually, even if you're a foreigner living in the US (student, H-1, etc), that country will not let you open a bank account - even if you are a citizen of that country. The rule is simple: If you have ties to the US that could require you reporting your bank account to the IRS, then you cannot open a bank account.
- emodendroket 5y ago
  Which country is this?
  - BeetleB 5y ago
    I'm aware of restrictions in France and Pakistan from coworkers on H-1 visas from those countries. Note that both probably do provide a way to open it if you go through some lengthy "exceptions" process, but it wasn't worth the hassle. Basically, ever since the IRS required you to report foreign accounts (2007 or 2008), some countries have made it harder for people based in the US to get accounts. They see it as an indirect means to collect intelligence by the US.
- pacomerh 5y ago
  I don't understand how the IRS can know what you do in foreign banks
  - BeetleB 5y ago
    The IRS requires you to report all bank accounts you have in foreign countries when you file taxes: https://en.wikipedia.org/wiki/Foreign_Account_Tax_Compliance_Act https://en.wikipedia.org/wiki/Foreign_Account_Tax_Compliance... > FATCA also requires such persons to report their non-U.S. financial assets annually to the Internal Revenue Service (IRS) on form 8938, which is in addition to the older and further redundant requirement to report them annually to the Financial Crimes Enforcement Network (FinCEN) on form 114 (also known as 'FBAR') What's ridiculous is that it also "requires" foreign banks to report details of accounts by US holders - even if the bank has no relation to the US.

walshemj 5y ago

And the fact that most UK finace institutions wont deal with you makes opening ISA's etc v difficult