41 ms·

On Receiving my Certificate of Loss of Nationality

174 points by kyleblarson 5y ago

Trias11 5y ago
Absolutely! US citizenship essentially became IRS trap.
deleted 5y ago
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reedjosh 5y ago
The US doesn't like losing tax cattle.
- KennyBlanken 5y ago
  The US expects you to pay your bar tab before you peel out of the parking lot.
  - jacquesm 5y ago
    No, this goes much further than that. They also want a slice of all the other bar tabs that you will run up in the future abroad.
    - KennyBlanken 5y ago
      The author of the article in question very specifically complains about having to settle up her tax bill and fix her tax accounting before she's allowed to renounce her citizenship, like this was some massive travesty of justice. She also doesn't complain about paying taxes, but having her accounts reported to the IRS, and having to disclose the fact that she has access to funds in accounts not in her name....as well as not being as represented as she feels she should be from said taxation.
      - jacquesm 5y ago
        That's a very small detail, there are a whole slew of posts on this subject, why pick out that one item?
- rootusrootus 5y ago
  She wasn't paying taxes. And it costs more in enforcement than it brings in taxes anyway.
thatfrenchguy 5y ago
> FATCA forces me to hand over my private financial information, as well as my non-American husband’s, to an extent that homeland Americans don’t have to unless they’re suspected of a crime. Come on, it's your bank account numbers, that's only because the US government already knows what your account numbers are. > I pay almost $1000 per year to an accountant to fill out the forms—more and lengthier than they’d be if I lived in the US—only to prove I owe nothing, since I pay taxes here in the Netherlands. If I had to pay $1000 to an accountant, I'd probably learn how to do the forms myself.
- faut_reflechir 5y ago
  I did the tax forms myself when living abroad, precisely because I didn't earn enough income to afford the $1000 cost (in fact, it was perhaps twice this, in Switzerland, based on my cursory Googling at the time). It routinely took over a week of working days, which was only possible because I had a sympathetic boss and generous vacation time. It's also quite stressful, since there are many ambiguous questions, most of the proprietary tax software is ill-equipped to consider the situation of an American living abroad, and a wrong answer can subject you to audit.
  - Svip 5y ago
    What are the consequences to not filing? My wife is a US citizen, and she hasn't filed for two years. I've met other US citizens that don't file either. So far I have not heard of any issues relating to not filing.
    - asguy 5y ago
      I know a US citizen who hasn’t filed in 34 years. I wonder what the penalty would look like if she ever takes a job in the US again.
    - jfk13 5y ago
      Does she earn much? If her income is low enough, she may be exempt from filing. https://www.hrblock.com/tax-center/income/other-income/how-much-do-you-have-to-make-to-file-taxes/ https://www.hrblock.com/tax-center/income/other-income/how-m... (Note that I am not a tax professional and you should not rely on anything I say.)
kjgkjhfkjf 5y ago
It's not like a divorce, because there is no way to become a US citizen again after you've renounced your citizenship. e: I was wrong; see below.
- pavlov 5y ago
  Are you saying the immigrant visa path isn't available to former citizens? That seems surprising. Sure, it's a very difficult path in practice... But in theory I don't see why something like this wouldn't be possible: you renounced your citizenship, win the Nobel Prize 30 years later, get an EB-1 visa based on that achievement, then get naturalized five years later.
  - LadyCailin 5y ago
    There have been (so far unsuccessful, but possibly successful in the future) attempts to ban US citizens who renounce from ever stepping foot in the US again. > (E) Former citizens who renounced citizenship.— Any alien who is a former citizen of the United States who officially renounced United States citizenship is inadmissible. https://en.m.wikipedia.org/wiki/Reed_Amendment_(immigration) https://en.m.wikipedia.org/wiki/Reed_Amendment_(immigration)
    - 001Diana 5y ago
      This is banning reentry for those who have stated their reason for renouncing is due to tax avoidance. When I renounced I began telling them it was due to tax compliance, and they were very careful to not let me say tax avoidance. It is completely different. I’d be happy to pay an a amount to the US for citizenship every year but can’t deal with the thousands I pay accountants and the days I spend compiling and working out amounts for the calendar year as opposed to the Australian financial year. Also the anxiety over the ever changing laws and fines. This reentry ban has never been enforced but could be in the future, if anyone has actually been able to say they renounced due to tax avoidance.
      - LadyCailin 5y ago
marstall 5y ago
ELI5 why she renounced her citizenship? Not getting it from that post, a 3 minute wander on her site and the FATCA Wikipedia page.
- joiguru 5y ago
  Filling out tax forms and FBAR requirements were a pain.
- VWWHFSfQ 5y ago
  Americans living in other countries don't want to pay taxes anymore. Apparently the only option is to stop being an American, which she has decided to do.
  - Hamuko 5y ago
    >I pay almost $1000 per year to an accountant to fill out the forms—more and lengthier than they’d be if I lived in the US—only to prove I owe nothing, since I pay taxes here in the Netherlands. Apparently she wasn't paying taxes (to the US) anyways.
    - VWWHFSfQ 5y ago
      Then I'm even less clear on what her issues were. Somehow this is reminding me of that girl that took $350,000 in debt to get a Theater Management degree from Duke University and then blogged about how criminal the American higher education system is and how she was running off to Russia with her husband to escape the crippling debt. It's like, you took almost half a mil in debt to go to a PRIVATE SCHOOL to get a degree that you would have no hope of ever using to pay back your _crippling debt_. Student load debt is a real problem in USA..but that's not it.
      - Rapzid 5y ago
        The understanding I came away with from skimming was it had to do with an ideological railing against the FATCA reporting requirements. And shame; lots of shame.
nickthemagicman 5y ago
Her essentially 3 reasons for renouncing essentially and my responses: >I could vote in the US, but no one represents the needs of US citizens abroad because our votes are dispersed over all 50 states. * there's hundreds of millions of people and only two parties in the U.S. no one represents anybodies needs well >I pay almost $1000 per year to an accountant to fill out the forms—more and lengthier than they’d be if I lived in the US—only to prove I owe nothing, since I pay taxes here in the Netherlands. FATCA forces me to hand over my private financial information, as well as my non-American husband’s, to an extent that homeland Americans don’t have to unless they’re suspected of a crime. FATCA strong-arms our local banks into handing over our private financial information as well. It treats my local accounts as being equivalent to hiding money overseas. * Taxes and the FATCA issues....to me and I'm sure billions of other people: $1000$ bucks a year is well worth it for a U.S. citizenship...Turning over financial records of the non-American spouse...this one doesn't add up, just do Married Filing Separately status in tax return. >Without an address in the US, I can’t open an investment account there; with US nationality, it is becoming more and more difficult to do any investment or borrowing outside of the US. * this doesn't make sense. Why would having a citizenship affect if a Dutch bank loaned you money as long as your credit score was good? The reasons she gives don't make sense to me...something feels off here.
- unhammer 5y ago
  If you have access to your spouse's account you may need to enter that into the FBAR form https://en.wikipedia.org/wiki/Bank_Secrecy_Act#FBAR https://en.wikipedia.org/wiki/Bank_Secrecy_Act#FBAR Regarding the difficulty of investing/borrowing outside the US: Non-US banks are required to report stuff to the US if they have US customers. So they might not want US customers because it's a hassle for them.
  - jacquesm 5y ago
    And that in turn is not in line with EU law - if not in letter then at least in spirit so banks are caught between two powers and in turn offload that burden onto the citizens. Realistically as an American abroad you can do it but there is a continuous cost and stress associated with remaining a US citizen. I know several people that have gone down this path and a few who are doing it right now, the US seems outright vindictive against those that want to leave, a bit like an abusive spouse that can't imagine there is a life after them for you.
voisin 5y ago
The conversation here at this moment seems to be focused solely on whether or not it is complicated or costly to keep filing US taxes. This misses the point in that the US is the _only_ developed country to impose worldwide taxation on its citizens regardless of where they live. The only other country to do so is Eritrea and the US has routinely criticized them for doing so. Moreover, it makes expats ineligible for certain retirement savings in their country of domicile (as the US does not recognize pre-tax deductions for these investments, like those countries do not recognize investments in 401k’s). It also makes it challenging for expats to find banks willing to serve them because elf the added complexity. All of this adds up to making Americans less attractive abroad than say Aussies or Brits, which surely has some negative impact on US competitiveness. And for what? Even the IRS estimates the savings in lost taxes to be a mere fraction of the costs of enforcement. This makes literally zero sense. None. Cut your nose off to spite your face.
- matttproud 5y ago
  American who‘s been abroad for a decade: I 100% agree. It introduces a lot of friction, complexity, and annoyance. Beyond taxation, the limitations with American institutions when being domiciled abroad put you into a terrible edge-case with needing to crutch on someone stateside with an address. So much stupidity. One addendum: while FATCA is newish and bad, the concept of taxation of Americans abroad dates back to the Civil War period. FATCA only made an existing injury worse.
  - em3rgent0rdr 5y ago
    > "the concept of taxation of Americans abroad dates back to the Civil War period" I'm not surprised, but could you provide some references on this...I am curious to read.
    - withinboredom 5y ago
      Just guessing, but I assume the Union wanted to continue to tax the Confederates who no longer lived in the Union because even though the succeeded from the Union, they were still Union citizens by birth.
KennyBlanken 5y ago
[flagged]
- nickthemagicman 5y ago
  I agree. This is really melodramatic and makes me wonder if they're fully mentally healthy at the moment to be making this massive decision.
- jeffrallen 5y ago
  You should try living as an expat before assuming her experiences are exaggerated. She is telling it like it is.
  - colechristensen 5y ago
    Is there any other reason to renounce your citizenship other than paperwork? Or taxes if you make a lot of money?
    - Hamuko 5y ago
      Like the fact that your home country keeps an eye on your and your non-American family members' financial information on a level that is usually reserved for criminals?
      - jaywalk 5y ago
        Well, this blogger wasn't paying her taxes, so...
        Hamuko 5y ago
        Because she didn't owe any. And yet, she had to pay thousands out of pocket to prove it to the US government that she didn't owe any taxes and they still basically monitor her like a tax dodger (because obviously all Americans abroad are dodging taxes, right?).
deleted 5y ago
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hbrav 5y ago
I have a question about this, that I've never been able to find a good answer to: what happens if you unilaterally renounce US citizenship? Consider the situation: you're a dual US / Dutch citizen. You want to avoid paying US income tax (or just to avoid filling in a form each year that results in the IRS telling you that your tax bill is $0 because the Netherlands' tax rate is higher). But the State Department's renunciation route takes 3-4 years. So you mail them a letter instead announcing that you are renouncing your citizenship, and you include your US passport with the letter. You don't send the IRS a tax return in subsequent years, and you tell all your banks that you are not a US citizen and ask them to update your details accordingly. I assume that what happens next is that your bank has a procedure for asking the US State Department if you have renounced your citizenship, and they say "no". So the bank continues to treat you as a US citizen, with all of the reporting obligations that entails. Your method of enforcing this would (I assume) be to file a suit against the bank in the Netherlands and seek an order to prevent them from passing any information on you to the IRS. You would effectively be asking a Dutch court to rule on whether you can unilaterally renounce US citizenship. I have never heard of such a case (either in the Netherlands or elsewhere), so I assume this has never been attempted. I don't know if that is because there is a strong reason to suspect that it would fail.
- jacquesm 5y ago
  It will make you in violation of the law, and that could come back to haunt you in the future, for instance when and if you want to go and visit your family back in the USA. I would strongly recommend against going that route. Besides that, you still have to get your 'new' country to give you citizenship as well, which will go a lot smoother if the new citizenship is paired with renouncing the USA one, you really don't want to become 'stateless' for many reasons.
  - monocasa 5y ago
    In this example they're already a dual citizen before starting down this road.
  - Rapzid 5y ago
    Or you get married abroad and want to sponsor your spouse's VISA; they want to see your tax returns.
nonameiguess 5y ago
For what it's worth, there are a few other reasons a US citizen may be compelled to disclose quite a bit of financial detail without being criminals. Just from what I've experienced, joining the Army, getting a security clearance, and attempting to become an adoptive parent all required having to disclose basically everything, up to and including people coming to my house to interrogate me on why I got divorced 18 years ago, having to take a polygraph. All in spite of definitely not being a criminal. I'm not complaining. This is all voluntary (though I think the adoption licensing is excessive, given it's even worse than getting a security clearance whereas a biological parent just needs to inject sperm into someone). But living overseas is also voluntary. I completely agree that the US government is unnecessarily overbearing about this kind of thing compared to most other countries, but let's be honest about how widespread this is. It's not at all limited to burdening expats. Even down to cosmetology licensing, we do this kind of thing everywhere, at every level of government, to many types of people. This presumably contributes to why Americans are so anti-government compared to Europeans. Our main points of interaction with governments are often things like this. Just this morning, I finally managed to pay off four years worth of back property taxes. The stupid thing about it is I've been trying to pay the entire time. The money has always been sitting in an escrow account. But something about our deed was incorrect, the county had no record of my lot existing, and we couldn't pay! When they finally corrected the deed, we not only got the four years worth of charges, but late penalties on top of it, even though I'd been trying to pay! And because the past year's charges were all listed as supplemental, the escrow account didn't even pay it and I've been fighting with them for 8 months to give me back my money so I can pay my taxes. So you are not alone, Rachel Heller.
- kyleee 5y ago
  To be fair, hellish experiences with bureaucracies, licensing bodies, etc. are by no means unique to the US; I take it you've never experienced the joy of a French bureaucracy
rognjen 5y ago
What a whiny and melodramatic series of posts from a privileged person giving up one first class citizenship for another out of economics and convenience. Many of my compatriots wait longer, pay less in absolute but more in relative terms and celebrate afterwards. Lots of us would do well to be more grateful.
- voisin 5y ago
  Is it whiny and melodramatic to want banking and investment services in your country of residence? Is it whiny and melodramatic to want to be able to utilize the retirement savings plans of your country of residence? This isn’t just economics and convenience. It is basic living and Americans abroad are treated like second class citizens relative to those of other countries.
  - rognjen 5y ago
    Whiny and melodramatic is the tone. Banking and investment and retirement are entirely economical reasons. Convenience is not wanting to file taxes, etc.
  - demetrius 5y ago
    Yes, it's true that all these things are important and there is nothing bad with wanting them. But lot of people are treated like second class citizens because of their passport in Netherlands (or in America, for that reason). There are a lot of people who get treated worse in their native countries. And her story is nothing out of ordinary. Sure, it might be hard to get a bank account opened. But on the other hand, she most likely could travel to Netherlands without a visa -- this is very difficult, expensive and time-consuming process for the rest of us. I dare say the paperwork to just to get a work visa for a citizen of most countries in the world is probably greater than her taxes forms (and they also include information about the source of the money, by the way). Also, where I'm from, lots of young men would love to renounce their nationality just to avoid conscription. We don't have the chance: you need to have another country's citizenship just to renounce yours. So being in a position when you just can renounce your nationality is a great privilege, and I don't see her acknowledging that. The whole system with citizenships and visas is severely broken, and she is not the one who is harmed the most. So it's difficult to empathise with someone who has it much easier than we do.
MisterBastahrd 5y ago
I'm amused by her complaint that overseas Americans' votes are few and far between and thus she doesn't feel represented combined with her "no taxation without representation" quip. Just because you don't belong to a group that has enough power to force the changes YOU want doesn't mean that you aren't being represented. I have no idea why any single person would expect to have a disproportionate amount of power simply because of where they don't live.
- erulabs 5y ago
  But isn't this the same refrain you hear stateside as well? "I don't feel represented by the system". It reminds me of Chappelle's "Since when did America give a ** about any of us?"
- Hamuko 5y ago
  >I have no idea why any single person would expect to have a disproportionate amount of power simply because of where they don't live. What about the residents of Washington D.C.?
- dragonwriter 5y ago
  > I have no idea why any single person would expect to have a disproportionate amount of power simply because of where they don't live. Having disproportional political power based on residency is central to the American political system. What you probably don't understand is her particular preference as to how that disproportionality is arranged.
- dgellow 5y ago
  As a Swiss citizen living abroad I can participate in Swiss votations and I am represented by the Council of Swiss Abroad: https://www.swisscommunity.org/en/voting-co-determination/the-council-of-the-swiss-abroad https://www.swisscommunity.org/en/voting-co-determination/th.... That makes sense to me that expatriates have some level of representation to defend their interests. And of course I only have to pay taxes in the country where I live. US citizens living abroad seem to have it way more difficult than we do.
welder 5y ago
As a US citizen, being taxed while living abroad can dangerously trigger double taxation. Imagine being taxed 70% of your income... scary! I've been researching ways to live abroad without being double-taxed, and here's some resources I've found: * https://www.greenbacktaxservices.com https://www.greenbacktaxservices.com - give them your foreign tax return and they file your US return * https://wandererswealth.com https://wandererswealth.com - international tax consultant * https://nomadcapitalist.com/book https://nomadcapitalist.com/book - modern flag theory, talks about moving your life and business overseas to control your tax rate For bank accounts, I had trouble opening them in Germany (US citizens are to foreign banks like GDPR is to US companies) except for Number26 however that's an online-only account: * https://n26.com/ https://n26.com/ Edit: Why am I getting downvoted for sharing useful resources? I'm not affiliated with these links in any way.
- gumby 5y ago
  I have no idea why you might be downvoted, but it's extremely unlikely you'll end up owing more than 100%. I'm not an accountant but having filed multi-jurisdiction tax returns myself I don't see a mechanism by which this could happen.
  - welder 5y ago
    I edited my comment, since 70% tax rate is actually possible depending on the tax rate of the country you're living and whether they have a tax treaty with the US or not.
    - Scoundreller 5y ago
      You’d still be able to credit foreign taxes paid against any US tax owing, on income anyway, treaty or not. Where you get screwed is when countries have different philosophies on things. E.g. Canada doesn’t tax gains on your home, but you can’t write off mortgage interest on your taxes. Meanwhile USA taxes gains on your home but lets you deduct mortgage interest. If you’re a dual citizen living in Canada, you pay both. Or if you live in a country with predominantly sales taxes and no income taxes, well, now you get to pay lots of sales taxes and US income taxes.
vibrolax 5y ago
Canada Revenue Agency requires me to file an even more detailed annual report on my foreign assets than I must furnish the IRS / FBAR / FinCEN. It's the most time consuming part of my tax filing.
- Scoundreller 5y ago
  Such a pain that CRA makes you do this for US stocks you hold at a Canadian stock broker. At least it’s only acquisition price you need to worry about.
rossdavidh 5y ago
Not claiming that I know enough about FATCA to comment in an informed way, but Patrick Boyle did a recent video on the Pandora Papers, which has a brief discussion about FATCA and how it compares to other nations' laws, around the 21 minute mark: https://www.youtube.com/watch?v=INRs9rnciyI https://www.youtube.com/watch?v=INRs9rnciyI
noasaservice 5y ago
> then charging me $2350 to file the divorce papers. So, if I understand correctly, the very fact that I was squirted out here in this country puts me at a -$2350 just for being born. So US citizenship = -$2350
- op00to 5y ago
  Really? you were squirted out into a modern society managed by modern government institutions. Ignoring the fact that you’re discounting the miracle of life, you certainly took advantage of more than $2350 of services upon birth. Security, med school funding, Medicare hospital funding, road infrastructure…
  - Hamuko 5y ago
    You're assuming that the person in this scenario ever actually lived in the US. You can get an American citizenship without ever actually living there, which will then just make your life harder and if you want to make your life easier, that'll be $2350.
    - shapefrog 5y ago
      They walk the earth under the protection of the US government. Anywhere anytime they need it, uncle sam will save them, or bomb the shit out of anyone that dares harms them. A very cheap lifetime insurance policy for $2350. Civis romanus sum
      - kalleboo 5y ago
        This is a myth. It is not true. There are many cases where the US has deemed it not worth it to rescue a handful of citizens.
        shapefrog 5y ago
        >There are many cases where the US has deemed it not worth it And there are many cases where they have. This guy certainly got his $2,000 worth when Seal Team 6 swooped in, killed a bunch of people and rescued him. https://www.independent.co.uk/news/world/americas/us-election-2020/philip-walton-niger-us-citizen-rescued-kidnapped-operation-b1480313.html https://www.independent.co.uk/news/world/americas/us-electio... Trump administration had over the years rescued 55 hostages in 24 countries. Their only qualification of rescue, being american citizens. > This is a myth. It is not true. Thus it is true, and it is not a myth.
excalibur 5y ago
> I realize that I still believe in the basic strength of the US democratic system: it will survive whoever wins the presidential election, for example. Will it? It barely survived 4 years of Trump. If he gets another crack at it he'll know exactly where to strike to bring it down.
tehjoker 5y ago
I was hoping to read something about the crimes the US government has committed (of which there are an endless list) or another reason to feel a deep regret and bitterness at being betrayed by the country, but it's just banking and tax annoyances.
PKop 5y ago
Why is there an assumption that citizenship should extend to people living outside of a country as citizens of another country? There's a lot of complaints here about annoying and costly taxation of "expats" but there's no discussion of why it should be valid to have citizenship but not reside in that country's borders? What is citizenship for except to actually be a citizen? And what does that mean, living in another place and being a citizen there? Or should it mean actually contributing to the country you are a citizen of by living and working there, building the "community" you claim to be a part of? Should it not come with obligations to pay taxes to the country you are a citizen of? I don't get the mindset that views it as some right and not a privilege that comes with responsibilities.. I think it's even perfectly valid for nations to ban dual citizenship itself. People like the OP who produce dozens of posts documenting the supposed injustice following her own decision to move to another country are the epitome of the term "rootless cosmopolitan". What interest of a nation does it serve to cater to these people that have left for greener pastures?
- 317070 5y ago
  Because the alternatives are pretty bad (although a middle ground should be possible, like some countries cancel your citizenship automatically when you acquire another): - Being stateless makes it virtually impossible to travel - Most countries are hesistant to grant citizenship to visitors I see very little reason as to why rootlessness has been made really hard in our current global system. I am not sure in whose interest it is that this cosmopolitanism has been made so bureaucratic.
- namdnay 5y ago
  What interest does it serve to make their life hard? She just wants to pay taxes where she works and lives. And what’s wrong with being a “rootless cosmopolitan”? I don’t think anyone would mind losing their US citizenship as soon as they leave the country, if you could also regain it as soon as you enter
- LadyCailin 5y ago
  If the renunciation fee weren’t $2k, you might have a point. But it is extremely expensive to renounce, and that by itself completely invalidates your implied point that there is some underlying reason for the cruelty.
throwaway4711 5y ago
Apart from FATCA, there is also the Expatriation Tax, introduced after Facebook cofounder Eduardo Saverin took his money out of the country by renouncing citizenship [0,1,2]. This often referred to as Exit Tax. It also applies to Greencard holders for more then 8 years, defined as long term permanent residents. The Exit Tax is a huge tax penalty (37%) on anyone owning more than $2 million [3]. [0] https://taxfoundation.org/outraged-facebook-expatriate-sens-schumer-and-casey-propose-steep-exit-tax https://taxfoundation.org/outraged-facebook-expatriate-sens-... [1] https://www.politico.com/story/2012/05/ex-patriot-act-would-tax-facebooks-saverin-076440 https://www.politico.com/story/2012/05/ex-patriot-act-would-... [2] https://www.casey.senate.gov/news/releases/casey-schumer-announce-plan-to-stop-facebook-co-founder-from-dodging-taxes-by-dropping-us-citizenship https://www.casey.senate.gov/news/releases/casey-schumer-ann... [3] https://www.irs.gov/individuals/international-taxpayers/expatriation-tax https://www.irs.gov/individuals/international-taxpayers/expa...
- asdfasgasdgasdg 5y ago
  Is that right? From reading the third document you linked: "IRC 877A imposes a mark-to-market regime, which generally means that all property of a covered expatriate is deemed sold for its fair market value on the day before the expatriation date." Unless this document is leaving something out, the gains would not be taxed at the marginal income rate unless they are short term gains. Presumably most people with large amounts of unrealized gains would be paying long term capital gains taxes, which are currently a 20% rate. I thought this provision was simply to ensure that you didn't make large amounts of wealth in the US then skip out on paying taxes on your gains. That seems very reasonable to me, although perhaps I am missing something.
emarsden 5y ago
If you're an "accidental American" (holding US citizenship due to having being born in the US, though never having resided there as an adult) in a French-speaking European country, you may be interested in the "accidental Americans" association https://www.americains-accidentels.fr/ They organize various legal challenges concerning the consequences of FATCA legislation for EU citizens (in particular, difficulties in having a bank account) and the principle of extra-territorial taxation, as well as challenging the difficulty and unreasonable cost of renouncing US citizenship.
us-personality 5y ago
I registered this account to make this post in the hope that it helps readers of HN and others. Under U.S. law, citizenship and nationality are two different things. The common refrain, well-established and reified by no less a body than the Supreme Court, is, "All citizens are nationals, but not all nationals are citizens." In other words, the set of U.S. citizens is a subset of the set of U.S. nationals. (The set of U.S. nationals is itself is a subset of the set of U.S. persons; viz. U.S. entities such as corporations or LLC's are U.S. persons but not U.S. nationals.) The rights and privileges, and duties and obligations, conferred on the two groups, U.S. citizens and U.S. nationals, substantially overlap, but do not coincide. Both U.S. citizens and nationals have the right to enter or exit the United States of America at any time and for any reason, both have the right to reside indefinitely, and both are authorized to work without restriction. In general, U.S. citizenship confers all of the features of U.S. nationalship, plus some; U.S. nationals are barred from certain activities, such as voting in federal elections and, generally, are exempt from being called to serve on a jury. The author of this article found her U.S. citizenship to be too burdensome to maintain, and therefore relinquished her U.S. nationality, thereby indirectly relinquishing her U.S. citizenship. Was this necessary? You will notice that the IRS claims the authority to tax (a) the income of U.S. persons (which includes U.S. citizens, U.S. nationals, U.S. entities such as corporations or LLC's, and non-citizen and non-national residents), and (b) the worldwide income of U.S. citizens. But does the IRS claim the authority to tax the worldwide income of non-U.S. citizen, non-U.S. persons...such as non-resident U.S. nationals? It really makes you think.
- newnamenewface 5y ago
  Makes me think that your best bet is to find a lawyer with this domain knowledge or (more craftfully) become a lawyer with this knowledge and charge ann exorbitant but less than double tax fee to consult others how to achieve this.
dd_roger 5y ago
Honestly I find it pretty fucked up that someone would renounce their citizenship "for convenience". I can't really comprehend how their country could mean so little to someone, especially when that country is a democracy. Regarding the taxation when living abroad, doesn't it actually make sense? Sure it sounds like an oddity because the US are the only to do it, but most emigrants I know still use the consular services of their country of origin every now and then, benefit from its diplomatic protection, and can return any time if circumstances require it (implying they should be contributing to keeping the country safe and functional in the meantime, call it an insurance policy if you will), and probably many other benefits I'm not thinking of. Some countries will even send special forces abroad to recover citizens in danger. So yeah apparently the practicalities of it suck sometimes (and that should definitively be improved) but in principle it's not as outlandish as it sounds, imo.
- 001Diana 5y ago
  It would have sounded ridiculous to me too had I not lived it. It’s the tax compliance, not the paying of taxes that is the issue. Most of us will never pay, we already pay more in the country we live in. The tax compliance enforcement costs the US far more than it makes in collecting taxes from citizens overseas, and other countries refuse to allow dual citizens to open accounts or invest. There are MASSIVE, and I’m talking tens of thousands of dollars in fines that can be assessed if you are overseas a file a form too late. And it’s difficult for a specialist accountant to work it all out, let alone a regular person. It’s the anxiety of not knowing what is coming next. If there were a fee for living overseas and having the option of using consular assistance, sure I’d be happy to pay it.
- deleted 5y ago
  [deleted]
- PaulDavisThe1st 5y ago
  If you live more or less any other industrialized country, and work there, you will owe the US ZERO in taxes because you pay more to the country where you are resident (and perhaps a citizen). The complaint is not about having to pay taxes to reflect your status, it's about having to pay accountants etc. to complete forms that show you don't owe any tax to the US.
ajay-b 5y ago
I think she should have become a Dutch citizen. Why was it necessary to hang on to her American citizenship when she reasonably could be assumed to have no intention of returning? I’m surprised some countries don’t require a longterm resident to apply for citizenship.
otterley 5y ago
(2016)
ryanlol 5y ago
Rachel isn’t any better than the restauranteur displaying a “no blacks” sign. It’s not cool to block entire countries from your blog just because.
- Hamuko 5y ago
  I thought it was cool since American websites have been blocking European countries for years now.
  - ryanlol 5y ago
    At least there are actual legal reasons behind that, we Europeans made our choice. Blocking Russia because you don’t like the country is just shitty xenophobia.
pyuser583 5y ago
The shitty thing is the US is generally OK with its citizens living abroad, and even encourages it. Then in a completely separate line of decision making decides to make the lives abroad unnecessarily difficult.
Mikap 5y ago
It is very well written and resonates with a lot of Americans emigrants. As a spouse and mother of American emigrants for now more than 20 years, I have seen the situation degrading year after year. Every administration made it more penalizing for American emigrants. Writing to representatives or going to Washington to bring awareness of our situation didn’t help. If you got an answer it was a standardized letter not addressing the issue.thank you!

174 points by kyleblarson 5y ago

Trias11 5y ago

Absolutely! US citizenship essentially became IRS trap.

deleted 5y ago

[deleted]

reedjosh 5y ago

The US doesn't like losing tax cattle.

KennyBlanken 5y ago
The US expects you to pay your bar tab before you peel out of the parking lot.
- jacquesm 5y ago
  No, this goes much further than that. They also want a slice of all the other bar tabs that you will run up in the future abroad.
  - KennyBlanken 5y ago
    The author of the article in question very specifically complains about having to settle up her tax bill and fix her tax accounting before she's allowed to renounce her citizenship, like this was some massive travesty of justice. She also doesn't complain about paying taxes, but having her accounts reported to the IRS, and having to disclose the fact that she has access to funds in accounts not in her name....as well as not being as represented as she feels she should be from said taxation.
    - jacquesm 5y ago
      That's a very small detail, there are a whole slew of posts on this subject, why pick out that one item?
rootusrootus 5y ago
She wasn't paying taxes. And it costs more in enforcement than it brings in taxes anyway.

thatfrenchguy 5y ago

> FATCA forces me to hand over my private financial information, as well as my non-American husband’s, to an extent that homeland Americans don’t have to unless they’re suspected of a crime. Come on, it's your bank account numbers, that's only because the US government already knows what your account numbers are. > I pay almost $1000 per year to an accountant to fill out the forms—more and lengthier than they’d be if I lived in the US—only to prove I owe nothing, since I pay taxes here in the Netherlands. If I had to pay $1000 to an accountant, I'd probably learn how to do the forms myself.

faut_reflechir 5y ago
I did the tax forms myself when living abroad, precisely because I didn't earn enough income to afford the $1000 cost (in fact, it was perhaps twice this, in Switzerland, based on my cursory Googling at the time). It routinely took over a week of working days, which was only possible because I had a sympathetic boss and generous vacation time. It's also quite stressful, since there are many ambiguous questions, most of the proprietary tax software is ill-equipped to consider the situation of an American living abroad, and a wrong answer can subject you to audit.
- Svip 5y ago
  What are the consequences to not filing? My wife is a US citizen, and she hasn't filed for two years. I've met other US citizens that don't file either. So far I have not heard of any issues relating to not filing.
  - asguy 5y ago
    I know a US citizen who hasn’t filed in 34 years. I wonder what the penalty would look like if she ever takes a job in the US again.
  - jfk13 5y ago
    Does she earn much? If her income is low enough, she may be exempt from filing. https://www.hrblock.com/tax-center/income/other-income/how-much-do-you-have-to-make-to-file-taxes/ https://www.hrblock.com/tax-center/income/other-income/how-m... (Note that I am not a tax professional and you should not rely on anything I say.)

kjgkjhfkjf 5y ago

It's not like a divorce, because there is no way to become a US citizen again after you've renounced your citizenship. e: I was wrong; see below.

pavlov 5y ago
Are you saying the immigrant visa path isn't available to former citizens? That seems surprising. Sure, it's a very difficult path in practice... But in theory I don't see why something like this wouldn't be possible: you renounced your citizenship, win the Nobel Prize 30 years later, get an EB-1 visa based on that achievement, then get naturalized five years later.
- LadyCailin 5y ago
  There have been (so far unsuccessful, but possibly successful in the future) attempts to ban US citizens who renounce from ever stepping foot in the US again. > (E) Former citizens who renounced citizenship.— Any alien who is a former citizen of the United States who officially renounced United States citizenship is inadmissible. https://en.m.wikipedia.org/wiki/Reed_Amendment_(immigration) https://en.m.wikipedia.org/wiki/Reed_Amendment_(immigration)
  - 001Diana 5y ago
    This is banning reentry for those who have stated their reason for renouncing is due to tax avoidance. When I renounced I began telling them it was due to tax compliance, and they were very careful to not let me say tax avoidance. It is completely different. I’d be happy to pay an a amount to the US for citizenship every year but can’t deal with the thousands I pay accountants and the days I spend compiling and working out amounts for the calendar year as opposed to the Australian financial year. Also the anxiety over the ever changing laws and fines. This reentry ban has never been enforced but could be in the future, if anyone has actually been able to say they renounced due to tax avoidance.
    - LadyCailin 5y ago

marstall 5y ago

ELI5 why she renounced her citizenship? Not getting it from that post, a 3 minute wander on her site and the FATCA Wikipedia page.

joiguru 5y ago
Filling out tax forms and FBAR requirements were a pain.
VWWHFSfQ 5y ago
Americans living in other countries don't want to pay taxes anymore. Apparently the only option is to stop being an American, which she has decided to do.
- Hamuko 5y ago
  >I pay almost $1000 per year to an accountant to fill out the forms—more and lengthier than they’d be if I lived in the US—only to prove I owe nothing, since I pay taxes here in the Netherlands. Apparently she wasn't paying taxes (to the US) anyways.
  - VWWHFSfQ 5y ago
    Then I'm even less clear on what her issues were. Somehow this is reminding me of that girl that took $350,000 in debt to get a Theater Management degree from Duke University and then blogged about how criminal the American higher education system is and how she was running off to Russia with her husband to escape the crippling debt. It's like, you took almost half a mil in debt to go to a PRIVATE SCHOOL to get a degree that you would have no hope of ever using to pay back your _crippling debt_. Student load debt is a real problem in USA..but that's not it.
    - Rapzid 5y ago
      The understanding I came away with from skimming was it had to do with an ideological railing against the FATCA reporting requirements. And shame; lots of shame.

nickthemagicman 5y ago

Her essentially 3 reasons for renouncing essentially and my responses: >I could vote in the US, but no one represents the needs of US citizens abroad because our votes are dispersed over all 50 states. * there's hundreds of millions of people and only two parties in the U.S. no one represents anybodies needs well >I pay almost $1000 per year to an accountant to fill out the forms—more and lengthier than they’d be if I lived in the US—only to prove I owe nothing, since I pay taxes here in the Netherlands. FATCA forces me to hand over my private financial information, as well as my non-American husband’s, to an extent that homeland Americans don’t have to unless they’re suspected of a crime. FATCA strong-arms our local banks into handing over our private financial information as well. It treats my local accounts as being equivalent to hiding money overseas. * Taxes and the FATCA issues....to me and I'm sure billions of other people: $1000$ bucks a year is well worth it for a U.S. citizenship...Turning over financial records of the non-American spouse...this one doesn't add up, just do Married Filing Separately status in tax return. >Without an address in the US, I can’t open an investment account there; with US nationality, it is becoming more and more difficult to do any investment or borrowing outside of the US. * this doesn't make sense. Why would having a citizenship affect if a Dutch bank loaned you money as long as your credit score was good? The reasons she gives don't make sense to me...something feels off here.

unhammer 5y ago
If you have access to your spouse's account you may need to enter that into the FBAR form https://en.wikipedia.org/wiki/Bank_Secrecy_Act#FBAR https://en.wikipedia.org/wiki/Bank_Secrecy_Act#FBAR Regarding the difficulty of investing/borrowing outside the US: Non-US banks are required to report stuff to the US if they have US customers. So they might not want US customers because it's a hassle for them.
- jacquesm 5y ago
  And that in turn is not in line with EU law - if not in letter then at least in spirit so banks are caught between two powers and in turn offload that burden onto the citizens. Realistically as an American abroad you can do it but there is a continuous cost and stress associated with remaining a US citizen. I know several people that have gone down this path and a few who are doing it right now, the US seems outright vindictive against those that want to leave, a bit like an abusive spouse that can't imagine there is a life after them for you.

voisin 5y ago

The conversation here at this moment seems to be focused solely on whether or not it is complicated or costly to keep filing US taxes. This misses the point in that the US is the _only_ developed country to impose worldwide taxation on its citizens regardless of where they live. The only other country to do so is Eritrea and the US has routinely criticized them for doing so. Moreover, it makes expats ineligible for certain retirement savings in their country of domicile (as the US does not recognize pre-tax deductions for these investments, like those countries do not recognize investments in 401k’s). It also makes it challenging for expats to find banks willing to serve them because elf the added complexity. All of this adds up to making Americans less attractive abroad than say Aussies or Brits, which surely has some negative impact on US competitiveness. And for what? Even the IRS estimates the savings in lost taxes to be a mere fraction of the costs of enforcement. This makes literally zero sense. None. Cut your nose off to spite your face.

matttproud 5y ago
American who‘s been abroad for a decade: I 100% agree. It introduces a lot of friction, complexity, and annoyance. Beyond taxation, the limitations with American institutions when being domiciled abroad put you into a terrible edge-case with needing to crutch on someone stateside with an address. So much stupidity. One addendum: while FATCA is newish and bad, the concept of taxation of Americans abroad dates back to the Civil War period. FATCA only made an existing injury worse.
- em3rgent0rdr 5y ago
  > "the concept of taxation of Americans abroad dates back to the Civil War period" I'm not surprised, but could you provide some references on this...I am curious to read.
  - withinboredom 5y ago
    Just guessing, but I assume the Union wanted to continue to tax the Confederates who no longer lived in the Union because even though the succeeded from the Union, they were still Union citizens by birth.

KennyBlanken 5y ago

[flagged]

nickthemagicman 5y ago
I agree. This is really melodramatic and makes me wonder if they're fully mentally healthy at the moment to be making this massive decision.
jeffrallen 5y ago
You should try living as an expat before assuming her experiences are exaggerated. She is telling it like it is.
- colechristensen 5y ago
  Is there any other reason to renounce your citizenship other than paperwork? Or taxes if you make a lot of money?
  - Hamuko 5y ago
    Like the fact that your home country keeps an eye on your and your non-American family members' financial information on a level that is usually reserved for criminals?
    - jaywalk 5y ago
      Well, this blogger wasn't paying her taxes, so...
      - Hamuko 5y ago
        Because she didn't owe any. And yet, she had to pay thousands out of pocket to prove it to the US government that she didn't owe any taxes and they still basically monitor her like a tax dodger (because obviously all Americans abroad are dodging taxes, right?).

deleted 5y ago

[deleted]

hbrav 5y ago

I have a question about this, that I've never been able to find a good answer to: what happens if you unilaterally renounce US citizenship? Consider the situation: you're a dual US / Dutch citizen. You want to avoid paying US income tax (or just to avoid filling in a form each year that results in the IRS telling you that your tax bill is $0 because the Netherlands' tax rate is higher). But the State Department's renunciation route takes 3-4 years. So you mail them a letter instead announcing that you are renouncing your citizenship, and you include your US passport with the letter. You don't send the IRS a tax return in subsequent years, and you tell all your banks that you are not a US citizen and ask them to update your details accordingly. I assume that what happens next is that your bank has a procedure for asking the US State Department if you have renounced your citizenship, and they say "no". So the bank continues to treat you as a US citizen, with all of the reporting obligations that entails. Your method of enforcing this would (I assume) be to file a suit against the bank in the Netherlands and seek an order to prevent them from passing any information on you to the IRS. You would effectively be asking a Dutch court to rule on whether you can unilaterally renounce US citizenship. I have never heard of such a case (either in the Netherlands or elsewhere), so I assume this has never been attempted. I don't know if that is because there is a strong reason to suspect that it would fail.

jacquesm 5y ago
It will make you in violation of the law, and that could come back to haunt you in the future, for instance when and if you want to go and visit your family back in the USA. I would strongly recommend against going that route. Besides that, you still have to get your 'new' country to give you citizenship as well, which will go a lot smoother if the new citizenship is paired with renouncing the USA one, you really don't want to become 'stateless' for many reasons.
- monocasa 5y ago
  In this example they're already a dual citizen before starting down this road.
- Rapzid 5y ago
  Or you get married abroad and want to sponsor your spouse's VISA; they want to see your tax returns.

nonameiguess 5y ago

For what it's worth, there are a few other reasons a US citizen may be compelled to disclose quite a bit of financial detail without being criminals. Just from what I've experienced, joining the Army, getting a security clearance, and attempting to become an adoptive parent all required having to disclose basically everything, up to and including people coming to my house to interrogate me on why I got divorced 18 years ago, having to take a polygraph. All in spite of definitely not being a criminal. I'm not complaining. This is all voluntary (though I think the adoption licensing is excessive, given it's even worse than getting a security clearance whereas a biological parent just needs to inject sperm into someone). But living overseas is also voluntary. I completely agree that the US government is unnecessarily overbearing about this kind of thing compared to most other countries, but let's be honest about how widespread this is. It's not at all limited to burdening expats. Even down to cosmetology licensing, we do this kind of thing everywhere, at every level of government, to many types of people. This presumably contributes to why Americans are so anti-government compared to Europeans. Our main points of interaction with governments are often things like this. Just this morning, I finally managed to pay off four years worth of back property taxes. The stupid thing about it is I've been trying to pay the entire time. The money has always been sitting in an escrow account. But something about our deed was incorrect, the county had no record of my lot existing, and we couldn't pay! When they finally corrected the deed, we not only got the four years worth of charges, but late penalties on top of it, even though I'd been trying to pay! And because the past year's charges were all listed as supplemental, the escrow account didn't even pay it and I've been fighting with them for 8 months to give me back my money so I can pay my taxes. So you are not alone, Rachel Heller.

kyleee 5y ago
To be fair, hellish experiences with bureaucracies, licensing bodies, etc. are by no means unique to the US; I take it you've never experienced the joy of a French bureaucracy

rognjen 5y ago

What a whiny and melodramatic series of posts from a privileged person giving up one first class citizenship for another out of economics and convenience. Many of my compatriots wait longer, pay less in absolute but more in relative terms and celebrate afterwards. Lots of us would do well to be more grateful.

voisin 5y ago
Is it whiny and melodramatic to want banking and investment services in your country of residence? Is it whiny and melodramatic to want to be able to utilize the retirement savings plans of your country of residence? This isn’t just economics and convenience. It is basic living and Americans abroad are treated like second class citizens relative to those of other countries.
- rognjen 5y ago
  Whiny and melodramatic is the tone. Banking and investment and retirement are entirely economical reasons. Convenience is not wanting to file taxes, etc.
- demetrius 5y ago
  Yes, it's true that all these things are important and there is nothing bad with wanting them. But lot of people are treated like second class citizens because of their passport in Netherlands (or in America, for that reason). There are a lot of people who get treated worse in their native countries. And her story is nothing out of ordinary. Sure, it might be hard to get a bank account opened. But on the other hand, she most likely could travel to Netherlands without a visa -- this is very difficult, expensive and time-consuming process for the rest of us. I dare say the paperwork to just to get a work visa for a citizen of most countries in the world is probably greater than her taxes forms (and they also include information about the source of the money, by the way). Also, where I'm from, lots of young men would love to renounce their nationality just to avoid conscription. We don't have the chance: you need to have another country's citizenship just to renounce yours. So being in a position when you just can renounce your nationality is a great privilege, and I don't see her acknowledging that. The whole system with citizenships and visas is severely broken, and she is not the one who is harmed the most. So it's difficult to empathise with someone who has it much easier than we do.

MisterBastahrd 5y ago

I'm amused by her complaint that overseas Americans' votes are few and far between and thus she doesn't feel represented combined with her "no taxation without representation" quip. Just because you don't belong to a group that has enough power to force the changes YOU want doesn't mean that you aren't being represented. I have no idea why any single person would expect to have a disproportionate amount of power simply because of where they don't live.

erulabs 5y ago
But isn't this the same refrain you hear stateside as well? "I don't feel represented by the system". It reminds me of Chappelle's "Since when did America give a ** about any of us?"
Hamuko 5y ago
>I have no idea why any single person would expect to have a disproportionate amount of power simply because of where they don't live. What about the residents of Washington D.C.?
dragonwriter 5y ago
> I have no idea why any single person would expect to have a disproportionate amount of power simply because of where they don't live. Having disproportional political power based on residency is central to the American political system. What you probably don't understand is her particular preference as to how that disproportionality is arranged.
dgellow 5y ago
As a Swiss citizen living abroad I can participate in Swiss votations and I am represented by the Council of Swiss Abroad: https://www.swisscommunity.org/en/voting-co-determination/the-council-of-the-swiss-abroad https://www.swisscommunity.org/en/voting-co-determination/th.... That makes sense to me that expatriates have some level of representation to defend their interests. And of course I only have to pay taxes in the country where I live. US citizens living abroad seem to have it way more difficult than we do.

welder 5y ago

As a US citizen, being taxed while living abroad can dangerously trigger double taxation. Imagine being taxed 70% of your income... scary! I've been researching ways to live abroad without being double-taxed, and here's some resources I've found: * https://www.greenbacktaxservices.com https://www.greenbacktaxservices.com - give them your foreign tax return and they file your US return * https://wandererswealth.com https://wandererswealth.com - international tax consultant * https://nomadcapitalist.com/book https://nomadcapitalist.com/book - modern flag theory, talks about moving your life and business overseas to control your tax rate For bank accounts, I had trouble opening them in Germany (US citizens are to foreign banks like GDPR is to US companies) except for Number26 however that's an online-only account: * https://n26.com/ https://n26.com/ Edit: Why am I getting downvoted for sharing useful resources? I'm not affiliated with these links in any way.

gumby 5y ago
I have no idea why you might be downvoted, but it's extremely unlikely you'll end up owing more than 100%. I'm not an accountant but having filed multi-jurisdiction tax returns myself I don't see a mechanism by which this could happen.
- welder 5y ago
  I edited my comment, since 70% tax rate is actually possible depending on the tax rate of the country you're living and whether they have a tax treaty with the US or not.
  - Scoundreller 5y ago
    You’d still be able to credit foreign taxes paid against any US tax owing, on income anyway, treaty or not. Where you get screwed is when countries have different philosophies on things. E.g. Canada doesn’t tax gains on your home, but you can’t write off mortgage interest on your taxes. Meanwhile USA taxes gains on your home but lets you deduct mortgage interest. If you’re a dual citizen living in Canada, you pay both. Or if you live in a country with predominantly sales taxes and no income taxes, well, now you get to pay lots of sales taxes and US income taxes.

vibrolax 5y ago

Canada Revenue Agency requires me to file an even more detailed annual report on my foreign assets than I must furnish the IRS / FBAR / FinCEN. It's the most time consuming part of my tax filing.

Scoundreller 5y ago
Such a pain that CRA makes you do this for US stocks you hold at a Canadian stock broker. At least it’s only acquisition price you need to worry about.

rossdavidh 5y ago

Not claiming that I know enough about FATCA to comment in an informed way, but Patrick Boyle did a recent video on the Pandora Papers, which has a brief discussion about FATCA and how it compares to other nations' laws, around the 21 minute mark: https://www.youtube.com/watch?v=INRs9rnciyI https://www.youtube.com/watch?v=INRs9rnciyI

noasaservice 5y ago

> then charging me $2350 to file the divorce papers. So, if I understand correctly, the very fact that I was squirted out here in this country puts me at a -$2350 just for being born. So US citizenship = -$2350

op00to 5y ago
Really? you were squirted out into a modern society managed by modern government institutions. Ignoring the fact that you’re discounting the miracle of life, you certainly took advantage of more than $2350 of services upon birth. Security, med school funding, Medicare hospital funding, road infrastructure…
- Hamuko 5y ago
  You're assuming that the person in this scenario ever actually lived in the US. You can get an American citizenship without ever actually living there, which will then just make your life harder and if you want to make your life easier, that'll be $2350.
  - shapefrog 5y ago
    They walk the earth under the protection of the US government. Anywhere anytime they need it, uncle sam will save them, or bomb the shit out of anyone that dares harms them. A very cheap lifetime insurance policy for $2350. Civis romanus sum
    - kalleboo 5y ago
      This is a myth. It is not true. There are many cases where the US has deemed it not worth it to rescue a handful of citizens.
      - shapefrog 5y ago
        >There are many cases where the US has deemed it not worth it And there are many cases where they have. This guy certainly got his $2,000 worth when Seal Team 6 swooped in, killed a bunch of people and rescued him. https://www.independent.co.uk/news/world/americas/us-election-2020/philip-walton-niger-us-citizen-rescued-kidnapped-operation-b1480313.html https://www.independent.co.uk/news/world/americas/us-electio... Trump administration had over the years rescued 55 hostages in 24 countries. Their only qualification of rescue, being american citizens. > This is a myth. It is not true. Thus it is true, and it is not a myth.

excalibur 5y ago

> I realize that I still believe in the basic strength of the US democratic system: it will survive whoever wins the presidential election, for example. Will it? It barely survived 4 years of Trump. If he gets another crack at it he'll know exactly where to strike to bring it down.

tehjoker 5y ago

I was hoping to read something about the crimes the US government has committed (of which there are an endless list) or another reason to feel a deep regret and bitterness at being betrayed by the country, but it's just banking and tax annoyances.

PKop 5y ago

Why is there an assumption that citizenship should extend to people living outside of a country as citizens of another country? There's a lot of complaints here about annoying and costly taxation of "expats" but there's no discussion of why it should be valid to have citizenship but not reside in that country's borders? What is citizenship for except to actually be a citizen? And what does that mean, living in another place and being a citizen there? Or should it mean actually contributing to the country you are a citizen of by living and working there, building the "community" you claim to be a part of? Should it not come with obligations to pay taxes to the country you are a citizen of? I don't get the mindset that views it as some right and not a privilege that comes with responsibilities.. I think it's even perfectly valid for nations to ban dual citizenship itself. People like the OP who produce dozens of posts documenting the supposed injustice following her own decision to move to another country are the epitome of the term "rootless cosmopolitan". What interest of a nation does it serve to cater to these people that have left for greener pastures?

317070 5y ago
Because the alternatives are pretty bad (although a middle ground should be possible, like some countries cancel your citizenship automatically when you acquire another): - Being stateless makes it virtually impossible to travel - Most countries are hesistant to grant citizenship to visitors I see very little reason as to why rootlessness has been made really hard in our current global system. I am not sure in whose interest it is that this cosmopolitanism has been made so bureaucratic.
namdnay 5y ago
What interest does it serve to make their life hard? She just wants to pay taxes where she works and lives. And what’s wrong with being a “rootless cosmopolitan”? I don’t think anyone would mind losing their US citizenship as soon as they leave the country, if you could also regain it as soon as you enter
LadyCailin 5y ago
If the renunciation fee weren’t $2k, you might have a point. But it is extremely expensive to renounce, and that by itself completely invalidates your implied point that there is some underlying reason for the cruelty.

throwaway4711 5y ago

Apart from FATCA, there is also the Expatriation Tax, introduced after Facebook cofounder Eduardo Saverin took his money out of the country by renouncing citizenship [0,1,2]. This often referred to as Exit Tax. It also applies to Greencard holders for more then 8 years, defined as long term permanent residents. The Exit Tax is a huge tax penalty (37%) on anyone owning more than $2 million [3]. [0] https://taxfoundation.org/outraged-facebook-expatriate-sens-schumer-and-casey-propose-steep-exit-tax https://taxfoundation.org/outraged-facebook-expatriate-sens-... [1] https://www.politico.com/story/2012/05/ex-patriot-act-would-tax-facebooks-saverin-076440 https://www.politico.com/story/2012/05/ex-patriot-act-would-... [2] https://www.casey.senate.gov/news/releases/casey-schumer-announce-plan-to-stop-facebook-co-founder-from-dodging-taxes-by-dropping-us-citizenship https://www.casey.senate.gov/news/releases/casey-schumer-ann... [3] https://www.irs.gov/individuals/international-taxpayers/expatriation-tax https://www.irs.gov/individuals/international-taxpayers/expa...

asdfasgasdgasdg 5y ago
Is that right? From reading the third document you linked: "IRC 877A imposes a mark-to-market regime, which generally means that all property of a covered expatriate is deemed sold for its fair market value on the day before the expatriation date." Unless this document is leaving something out, the gains would not be taxed at the marginal income rate unless they are short term gains. Presumably most people with large amounts of unrealized gains would be paying long term capital gains taxes, which are currently a 20% rate. I thought this provision was simply to ensure that you didn't make large amounts of wealth in the US then skip out on paying taxes on your gains. That seems very reasonable to me, although perhaps I am missing something.

emarsden 5y ago

If you're an "accidental American" (holding US citizenship due to having being born in the US, though never having resided there as an adult) in a French-speaking European country, you may be interested in the "accidental Americans" association https://www.americains-accidentels.fr/ They organize various legal challenges concerning the consequences of FATCA legislation for EU citizens (in particular, difficulties in having a bank account) and the principle of extra-territorial taxation, as well as challenging the difficulty and unreasonable cost of renouncing US citizenship.

us-personality 5y ago

I registered this account to make this post in the hope that it helps readers of HN and others. Under U.S. law, citizenship and nationality are two different things. The common refrain, well-established and reified by no less a body than the Supreme Court, is, "All citizens are nationals, but not all nationals are citizens." In other words, the set of U.S. citizens is a subset of the set of U.S. nationals. (The set of U.S. nationals is itself is a subset of the set of U.S. persons; viz. U.S. entities such as corporations or LLC's are U.S. persons but not U.S. nationals.) The rights and privileges, and duties and obligations, conferred on the two groups, U.S. citizens and U.S. nationals, substantially overlap, but do not coincide. Both U.S. citizens and nationals have the right to enter or exit the United States of America at any time and for any reason, both have the right to reside indefinitely, and both are authorized to work without restriction. In general, U.S. citizenship confers all of the features of U.S. nationalship, plus some; U.S. nationals are barred from certain activities, such as voting in federal elections and, generally, are exempt from being called to serve on a jury. The author of this article found her U.S. citizenship to be too burdensome to maintain, and therefore relinquished her U.S. nationality, thereby indirectly relinquishing her U.S. citizenship. Was this necessary? You will notice that the IRS claims the authority to tax (a) the income of U.S. persons (which includes U.S. citizens, U.S. nationals, U.S. entities such as corporations or LLC's, and non-citizen and non-national residents), and (b) the worldwide income of U.S. citizens. But does the IRS claim the authority to tax the worldwide income of non-U.S. citizen, non-U.S. persons...such as non-resident U.S. nationals? It really makes you think.

newnamenewface 5y ago
Makes me think that your best bet is to find a lawyer with this domain knowledge or (more craftfully) become a lawyer with this knowledge and charge ann exorbitant but less than double tax fee to consult others how to achieve this.

dd_roger 5y ago

Honestly I find it pretty fucked up that someone would renounce their citizenship "for convenience". I can't really comprehend how their country could mean so little to someone, especially when that country is a democracy. Regarding the taxation when living abroad, doesn't it actually make sense? Sure it sounds like an oddity because the US are the only to do it, but most emigrants I know still use the consular services of their country of origin every now and then, benefit from its diplomatic protection, and can return any time if circumstances require it (implying they should be contributing to keeping the country safe and functional in the meantime, call it an insurance policy if you will), and probably many other benefits I'm not thinking of. Some countries will even send special forces abroad to recover citizens in danger. So yeah apparently the practicalities of it suck sometimes (and that should definitively be improved) but in principle it's not as outlandish as it sounds, imo.

001Diana 5y ago
It would have sounded ridiculous to me too had I not lived it. It’s the tax compliance, not the paying of taxes that is the issue. Most of us will never pay, we already pay more in the country we live in. The tax compliance enforcement costs the US far more than it makes in collecting taxes from citizens overseas, and other countries refuse to allow dual citizens to open accounts or invest. There are MASSIVE, and I’m talking tens of thousands of dollars in fines that can be assessed if you are overseas a file a form too late. And it’s difficult for a specialist accountant to work it all out, let alone a regular person. It’s the anxiety of not knowing what is coming next. If there were a fee for living overseas and having the option of using consular assistance, sure I’d be happy to pay it.
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PaulDavisThe1st 5y ago
If you live more or less any other industrialized country, and work there, you will owe the US ZERO in taxes because you pay more to the country where you are resident (and perhaps a citizen). The complaint is not about having to pay taxes to reflect your status, it's about having to pay accountants etc. to complete forms that show you don't owe any tax to the US.

ajay-b 5y ago

I think she should have become a Dutch citizen. Why was it necessary to hang on to her American citizenship when she reasonably could be assumed to have no intention of returning? I’m surprised some countries don’t require a longterm resident to apply for citizenship.

otterley 5y ago

(2016)

ryanlol 5y ago

Rachel isn’t any better than the restauranteur displaying a “no blacks” sign. It’s not cool to block entire countries from your blog just because.

Hamuko 5y ago
I thought it was cool since American websites have been blocking European countries for years now.
- ryanlol 5y ago
  At least there are actual legal reasons behind that, we Europeans made our choice. Blocking Russia because you don’t like the country is just shitty xenophobia.

pyuser583 5y ago

The shitty thing is the US is generally OK with its citizens living abroad, and even encourages it. Then in a completely separate line of decision making decides to make the lives abroad unnecessarily difficult.

Mikap 5y ago

It is very well written and resonates with a lot of Americans emigrants. As a spouse and mother of American emigrants for now more than 20 years, I have seen the situation degrading year after year. Every administration made it more penalizing for American emigrants. Writing to representatives or going to Washington to bring awareness of our situation didn’t help. If you got an answer it was a standardized letter not addressing the issue.thank you!