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Americans abroad are giving up their citizenship as banks shut down accounts

• oxalo 12y ago
  So are they policing all the corporations with this law too? Or just Average Joe?
  • sliverstorm 12y ago
    They are being more stringent with foreign banks that deal with Americans. The foreign banks respond: "Ok, we won't deal with any Americans", which makes life harder for Average Joe Expat
  • abruzzi 12y ago
    If I understand correctly, the law is aimed at banks to disclose assets of americans with more than 50k in savings, the banks are overreacting and not handling accounts of any americans as a result. So I wouldn't say the law targets the average Joe (I know very few average Joes with $5k in savings, let alone $50k), but the banks are. Perhaps its a calculated move to get people upset with the IRS/Treasury to create backlash. I have no idea whether the root law impacts US corps.
    • psuter 12y ago
      It's 50k in "financial accounts", which includes retirement funds, and the financial institutions expose themselves to enormous penalties if they fail to report a single customer.
    • Frozenlock 12y ago
      "the banks are overreacting" Really? The USA is considering everything as under its jurisdiction, but the banks are overreacting?
      • EGreg 12y ago
        Well technically it is not jurisdiction but treaties as well as leveraging economic clout and agreements.
      • abruzzi 12y ago
        I'm not using the word "overreacting" as a pejorative, but as a simple descriptive. The "overreaction" is simply doing more than the law requires of them. In this case, not taking americans as customers. The law does not require that of them, but they see it as too great a risk to their business. I would also say that if the IRS is able to enforce their rules without war planes, then it is technically within their jurisdiction. The jurisdiction comes from a) legal jurisdiction within the USA and b) treaties that allow them to enforce laws beyond the USA.
  • vessenes 12y ago
    It's part of a broad government push to repatriate American funds into American banks. There are similar regs coming (proposed?) related to Americans owning foreign corporations. All the same playbook; just keep funds on-shore, in this case by making life miserable for foreign companies that deal with American money.
    • aleyan 12y ago
      > It's part of a broad government push to repatriate American funds into American banks. Not exactly. US government wants to repatriate taxes earned by American people and capital abroad and making foreign banks accountable to US is part of making that enforceable. On-shoring of dollars into US accounts because they can't be kept easily abroad is unpleasant side effect. When US dollars leave US, economically it is the equivalent of the World giving US treasury an interest free loan. The return of those dollars is essentially a repayment of that loan and acts as inflation economically. This could be useful, but the US government already has a direct lever on the quantity of dollars in the US economy through the FED. To summarize, US Gov only wants the return of dollars that it will receive as taxes, but by all means don't bring back the rest.
• GFischer 12y ago
  As a citizen of Uruguay I find the last paragraph very funny: “I feel about the same obligation to file US tax papers as you would if the supreme court of Uruguay all of a sudden decided you were a citizen and had to file a tax return there,” he tells the Guardian. By the way, Uruguayan citizenship is VERY easy to acquire. American expatriates (and dollars :) ) welcome here :) Edit: easy as in requirements. There's a lot of paperwork involved. http://nomadcapitalist.com/2014/03/09/top-5-best-second-residency-programs-central-south-america/ http://nomadcapitalist.com/2014/03/09/top-5-best-second-resi... http://flagtheory.com/citizenship-in-uruguay/ http://flagtheory.com/citizenship-in-uruguay/ "It will take approximately 3 years for a married couple, with a good amount of time spent in country. For singles, it will take 5 years – with a similar amount of time in country. This makes Uruguay more attractive for married couples rather than a single applicant. Uruguay wants you to prove your residence by documentation – sometimes odd documents such as a doctor’s appointment slip, a library card. The idea is that they really want you to prove you are actually living in the country. This documentation is again, not always what you might expect – so document everything and when in doubt – shoe box it. After you have received permanent residency, you should talk to an abogado about citizenship and travel document options. Again, permanent residency is required to be able to receive any kind of travel documents. Further, a cedula is somewhat considered a travel document as well and can allow you to get around South America in many instances. Strong Travel Document A Uruguayan passport is one of the strongest in the world. Under this passport, you can visit Europe visa free, and most Uruguayans have a 10 year American visa."
  • toomuchtodo 12y ago
    Can I still maintain my US citizenship as an Uruguayan citizen if I so choose?
    • GFischer 12y ago
      Yes, although the U.S. will expect you to file and pay taxes (as the article above explains) :)
      • toomuchtodo 12y ago
• psuter 12y ago
  Note that if you are a green card holder, you are subject to the same rules, and face the same denial of service by the financial institutions.
  • goodcanadian 12y ago
    Even worse, if you are a non-american living in the U.S., you are subject to the same rules. I'm foreign for immigration purposes, but the IRS is happy to claim me as a USian.
• Someone1234 12y ago
  Random question: If you had dual citizenship (e.g. Canadian + US), do you even need to tell a bank about your US citizenship when opening an account? Can't you just open it as if you were a Canadian only? Even your US SSN wouldn't be associated with it, so for all the US G and the bank know you're just someone with the same name and birthday. As a random aside: The US Gov is practically the only country in the world who tries to collect income tax from US citizens living abroad. The fact that Americans who move away have to file US tax returns for the remainder of their life is bonkers.
  • rodgerd 12y ago
    > If you had dual citizenship (e.g. Canadian + US), do you even need to tell a bank about your US citizenship when opening an account? If they bank (or its parent) wants to be able to do business in the US, yes. This is part of the same overreach as insisting data resident in an Irish data centre, belonging to an Irish entity, is subject to the US courts in violation of Irish and EU law.
    • anigbrowl 12y ago
      That's not a good analogy. Microsoft is not really an Irish entity just because it owns an Irish subsidiary. Microsoft has a valid argument, but omitting the fact of the parent entity being American is disingenuous.
      • mariuolo 12y ago
        Actually it is. Or has the internet done away with the concept of law of the land?
  • wmil 12y ago
    I imagine it's more of a "check this box to verify you are not a US citizen" system. The bank could then charge your account fees if you lied and they had to deal with the IRS. I actually think the US tax return laws are reasonable -- there have to be some obligations for citizens to go along with the rights they have.
• deleted 12y ago
  [deleted]
• jeffdavis 12y ago
  "Steep penalties add muscle to the law. If a foreign bank – not just in Canada, but anywhere – fails to report even a single US citizen as a customer to the IRS, the US Treasury department would withhold 30% of the banks’ US income as penalty." What do they mean "US income"? How do they enforce it?
  • bcoates 12y ago
    What benefit do banks get for being multi-nationals exposed to every country's laws instead of just doing one bank per country? I thought that this was the norm for regular businesses.
    • tomp 12y ago
      Banks operate as "one bank per country" (actually, per currency), as the only way to hold e.g. USD is to be incorporated on US soil. However, these are just subsidiaries, owned by the multi-national corporation. Any country can say "comply to our rules or don't do business here", but only a few countries are lucrative enough to actually have any power over foreign subsidiaries.
      • viraptor 12y ago
        What do you mean by "the only way to hold e.g. USD is to be incorporated on US soil"? I have some USD and thankfully have no relation to the US. Do you mean bank regulations? That seems to contradict for example Lloyds Bank in the UK having current accounts in USD.
        • philiphodgen 12y ago
          All USD transactions clear through the Fed. If you are a bad bank they might not clear your USD transactions. That could be bad for business.
          • MichaelGG 12y ago
            What prevents another system being put in place, if other banks agree to use it?
• personlurking 12y ago
  Portugal just ratified the Convention on Mutual Administrative Assistance in Tax Matters. Basically, the convention is an agreement pursuant to which Portugal agrees to use its own courts and police to collect unpaid U.S. taxes from U.S. citizens living in Portugal.
  • oscargrouch 12y ago
    This is just absurd.. even that's a simbolic figure, they will be using Portugal tax income to support the collect of US taxes? I hope Brazil dont agree with that.. Now imagine the contrary.. would the US government help another country to collect tax from its citizens if they ask to?
    • personlurking 12y ago
      I'm imagining BOPE knocking down one's door at 2AM because of unpaid US taxes.
• sergiotapia 12y ago
  I'm going through this IRS bullshit -personally-. I was under the impression filing taxes was simple, hell why would they make it complicated. But nope, if you live abroad it's twice as complicated for an ex-pat. Worse still, if you're self-employed (like I am) and a freelancer it's ever more paperwork and edge cases to be careful of. And the cherry on top! Software engineers have a whole different set of tax rules. Fuck you IRS, you greedy pricks.
  • opendais 12y ago
    I think you meant "Fuck you, US Congress". The IRS is the enforcer, not the source.
    • DamnYuppie 12y ago
      Why can it not be both? Congress only passes the Tax Code, the IRS on the other hand has a liberal mandate into how they go about doing their job. They are quite tyrannical when it comes to fees and penalties. They also don't need a court order to garnish your wages or confiscate your property.
      • opendais 12y ago
        Because focusing on the IRS ignores the fact Congress can alter the IRS's mandate at-will to remove any of the policies of the IRS that is considered "bad". The President and his appointees can alter things within the mandate. Get angry at the people that make policy, not the people that enforce it. Sure, the IRS could be nicer. However, as someone who had to handle a policy enforcement role from time to time...I know the people I had to enforce policy on hate me, personally. However, I'm just enforcing policy. That enforcement is basically an email saying "No, disregard what X told you because Y is current policy." People at the bottom usually aren't assholes "just because". We become assholes because people get angry with us over stuff we have no control over [unless we quit].
        • vorg 12y ago
          > "Get angry at the people that make policy, not the people that enforce it." Ever heard of "Good cop, bad cop" ?
• matthewowen 12y ago
  The underlying problem behind all of this is that the USA's policy on taxing non-resident citizens is, fundamentally, absurd. As a permanent resident, it's the one thing that gives me pause about applying for citizenship (I know that the same rules apply to me whilst I'm a permanent resident, but I'm concerned about what happens in the future if I decide to leave the USA).
  • philiphodgen 12y ago
    As a permanent resident, you have a "do or die" date in your life. If you have the green card "in" at least 8 of the last 15 years, you have the privilege of paying the exit tax when you give up the visa status. (Well, you pay extra tax only if you are "rich" for certain definitions of "rich". You will certainly have a giant mountain of tax forms to fill in.) If you terminate your green card before that magic moment of holding the permanent resident visa "in" 8 of the last 15 years, then you can exit the United States cleanly and easily, with minimal paperwork and no risk of extra tax. That's why I tell people who want to come to the USA to avoid getting the permanent resident visa and get a different visa status instead. Disclaimer. I am a lawyer. I am an international tax lawyer. My office does a LOT of expatriation cases where we log people out of the U.S. tax system and the U.S. nationality system.
    • turnip1979 12y ago
      Can you explain the exit tax thing or give pointers? Does it apply to people on visa's like TN or H1B?
      • cylinder 12y ago
        No those are nonimmigrant visas.
  • sliverstorm 12y ago
    Why is it absurd? Or, from the other angle, why does it exist? (real answers please, not "becuz money-grubbing gub'mint") Considering you get to deduct $100k of your foreign earnings, it's not like they are trying to rake John Doe Expat over the coals.
• digikata 12y ago
  It seems like expat Americans need a political lobbying group to watch their interests. It would seem like large, international companies might have at least a passing interest too, as they might want at least some fraction of american staff to be posted internationally.
  • philiphodgen 12y ago
    The closest we have to such a lobbying group is American Citizens Abroad -- https://americansabroad.org/ https://americansabroad.org/ The two major political parties have organized themselves for citizens outside the United States but predictably they have other drums to beat. The D and R debates tend to be indistinguishable from the Itchy and Scratchy Show. The ACA is even-tempered and contains both D and R members.
• cujo 12y ago
  This is going to sound snarky, but I'm not sure how else to ask it: why should I (or anyone not an expat) care? It seems to me that the complaint is from people who don't live in the US and have very little attachment to it other than convenience.
  • ChuckMcM 12y ago
    If you are an American living in the states you should care because bad tax policy is like a cold sore that never heals, and indication of a much deeper systemic problem. Because it is systemic, it will likely come around and affect you directly. In many ways the tax code is the scab over the festering and oozing mass that is the budget that most represents the problems in the government that are going unsolved. If you want to find problems to solve, that is where you will find them.
    • cujo 12y ago
      I'm not saying you're incorrect, but this statement tells me nothing other than bad tax code is bad. Why is this new law bad?
  • mikeash 12y ago
    Isn't your last bit the whole point? These people have very little attachment to the US but are still undergoing hardship due to US government policy due to what is basically a technicality of legal status. For a more personal point of view, how sure are you that you will never, ever decide to retire to, say, Costa Rica?
    • cujo 12y ago
      First of all, I should have mentioned that I'm naive on the topic. From that point of view this seems like a very odd thing to be upset about, hence my question. Second, for having little attachment, they seem more than happy to house a respectable chunk of money resting abroad. I find it odd that their new home is so lovely except they don't want their money there. And to answer your question about say, Costa Rica, I guess I always assumed that if I were going to retire else somewhere it would be in such a way that I would commit to that location. I don't understand the idea of moving to another country and leaving all my shit back at the motherland. Again, I'm naive of this whole process, so that may be the silliest thing you read today. Sorry if it is.
• nagi2k4 12y ago
  Something worth noting is that FATCA essentially makes it impossible for an institution to remain "FATCA compliant" if they have any financial relationship with a non-compliant entity. Sure, they can have such relationships, but the U.S. Treasury department can then impose a 30% penalty on any transaction that passes through a U.S. bank. Given that the vast majority of international payments are made in USD, that 30% penalty is going to be very painful for any bank that purposefully decides to be non-compliant. The end result of that will be that the global financial system is going to be bifurcated into "compliant" and "non-compliant" institutions. Believe me, most banks/insurance companies/financial entities will find it worth their while to eventually become compliant. The reason that more countries aren't complaining about this (and most are actually entering into bilateral enforcement agreements with the U.S. Treasury department) is that they'll then be able to get access to the same sorts of information on their own citizens that the U.S. is getting on their own as a result of FATCA.
  • walshemj 12y ago
    And it imposes a large cost on non us citizens who have to pay for our uk institutions ro meet the cost of US regs out of our fees the Daly telegraph estimated that the cost of FACTA to uk investors with absolutely no connection with the USA was 1/2 a billion pounds. So when do I get my vote for president :-)
• ArtDev 12y ago
  Typical for the IRS to go after the small fry while letting the behemoths get a free ride! Meanwhile, Facebook and Apple are supposedly based in Ireland. http://www.businessinsider.com/how-much-money-apple-avoids-paying-in-taxes-2014-6 http://www.businessinsider.com/how-much-money-apple-avoids-p...
  • FD3SA 12y ago
    Precisely. Cases like this demonstrate exactly why democracy is meaningless when paired with an unrestrained capitalist system. Money completely triumphs votes in every policy issue. Income taxes are significantly higher than capital gains tax, and tax evasion becomes exponentially easier as a function of capital. Such is life. It appears the mean human society has always tended towards oligarchy. If you can't beatem, joinem?
    • ancap 12y ago
      Where can I find this "unrestrained capitalist system" you speak of? I'd love to live there.
  • MCRed 12y ago
    Apple is not based in Ireland. Apples European business is based in Ireland. The idea that the US government is owed taxes for transactions that happen in other countries is kind of absurd. What if the British declared that you owe them income taxes (after all, america was a british colony, they could consider us subjects)? You'd see that as absurd, yet Britian has more claim on US citizen income taxes than the US has on a chinese product being sold in europe.
  • Istof 12y ago
    as usual, the smaller the crime the larger the risk
• vonnik 12y ago
  This type of article appears every few years. Frankly, I don't think the numbers are very impressive, and they seem to be declining. "In 2013, 2,999 Americans renounced their citizenship; in 2014 so far, it’s a little more than 1,500 people." The population of the US in 2012 was about 314 million. So 0.000009% renounced their citizenship...
  • aroberge 12y ago
    I know, from news here in Canada, that they have introduce some delays that are preventing thousands of dual citizens to renounce their US citizenships until 2015 at the earliest. Furthermore, you can not renounce your US citizenship if do not have citizenship in another country. So, of course, most Americans can not do this and to use the population of the US as a relative base for your count is meaningless.
    • celticjames 12y ago
      Good point. According to wikipedia (http://en.wikipedia.org/wiki/American_diaspora http://en.wikipedia.org/wiki/American_diaspora) there are 6.3 million Americans living abroad or ~2% of Americans. So perhaps ~0.04% of Americans abroad renounced citizenship annually. To put it in context, though, you'd need to know how that rate change over time and the size of the American diaspora over time. So it's hard to judge how big or meaningful this story is. But anecdotally, I too am in Canada and I have definitely been hearing a lot recently from American friends who are finding US citizenship to be a PITA because of taxes.
  • philiphodgen 12y ago
    1. Canary in a coal mine. Are these (currently small) numbers an indication of an underlying problem? 2. Are the numbers reported by the U.S. government accurate? 3. To the contrary, the annual expatriation numbers appear to be increasing.
  • colanderman 12y ago
    Correction: 0.0009%. (You forgot to multiply by 100.)
• shortsightedsid 12y ago
  I wonder if there will ever be a time when there is a marketplace of citizenship. There are plenty of non-americans who want to become US citizens or immigrate legally. And at the same time there are US citizens going the other way. An example could be an Italian wanting to move to the US because he works in Tech and a US citizen wanting to move to Italy because he works in Fashion. A marketplace would allow the two to work out a citizenship swap, with the necessary immigration paperwork. In my view it is a win-win because a. The immigration is two way. b. In a global economy we can expect more and more people to move across countries. This service would facilitate that c. The immigrants would want to do such a thing out of real interest in improving their lives and thereby the lives of their chosen country. Given that Passports are a fairly new invention that's about a 100 years old, (thanks to the French and Germans just before WWI), I don't see why it can't be created.
  • lumberjack 12y ago
    The whole point of citizenship is that it is a sort of legal contract of sorts between the would be citizen and the rest of the citizens. It's not a simple matter between two people. If such a marketplace were to be legally implemented it should be far more complicated than a simple swap of citizenship between two people. Even then, the liquidity of citizenship would undermine its value, for better or worst.
    • shortsightedsid 12y ago
      If there is a marketplace then it's value will be determined by that market. If people can move into apartments and can be interviewed for it, the same could apply here. Obviously, I haven't thought this out completely and naturally there are all sorts of complications, but in reality, the question is - why can't people freely migrate from country to country? Naturally there are costs involved, a legal bearing, maybe even a quarantine timeline, but it should be possible. People did that all the time until the 20th century and therefore, it's an artificial barrier that's been put up.
• byoung2 12y ago
  As an American living in the US with a bank account abroad renouncing American citizenship isn't an option. What can people in this situation do?
  • mahyarm 12y ago
    Paperwork, lots of paperwork and four figure accountant fees.
  • refurb 12y ago
    You don't really have to do anything. You're already filing US tax returns (I hope) and as long as you declare all foreign holdings over $10K, you're fine. The kicker comes if you decide to move back home and either have a green card or US citizenship.
• mark_l_watson 12y ago
  My wife and I had tentative plans to buy a place in Costa Rica, but put the plans on indefinite hold. FATCA was a consideration. It is now a pain in the ass for foreign banks to have USA citizens as customers. Bill Clinton, way back when, signed a bill that would confiscate people's money, over a certain threshold if they renounced their citizenship (money that had already been taxed). My wife and I certainly do not want to renounce our citizenship, so that is not an issue, but spending a lot of time in a foreign home without a local bank account is a nuisance. I understand the motive behind FATCA (our government needs every bit of revenue it can get, except of course from corporations and the super rich :-) but FATCA is inconvenient. edit: that is confiscated a certain, sizable percentage of money, over a threshold
• MysticFear 12y ago
  The reason for digital currencies is becoming clearer.
• aroberge 12y ago
  In Canada, people can put money into a tax-deferred retirement fund (RRSP); the income tax is paid only when the money is withdrawn (sometimes 30 or 40 years later). The US does not recognize the RRSP as deserving of a tax-deferred status, but as a regular savings account. (https://www.tnvisaexpert.com/articles/how-canadian-rrsps-taxed-in-usa/ https://www.tnvisaexpert.com/articles/how-canadian-rrsps-tax...) Thus some dual US-Canada citizens suddenly have faced significant tax bills from the US. This includes people that have never set foot in the US since they were toddlers.
  • cylinder 12y ago
    Same with Australian superannuation.
• phunge 12y ago
  I was personally bit by this (FBAR non-compliance). I worked abroad and was unknowingly violating it; found out about it from reading the news and hired a pro to extricate myself from the situation. The bank account held five figures. The cost to come into compliance was low five figures. The potential penalties were easily high six figures. It was much larger than the either (a) my total earnings from 4 years abroad or (b) the maximum amount the account had ever held. I believe my tax guy was on the cheap end too. I'm still angry about it; I feel like I was guilty of nothing more than ignorance. IMHO this is case of strict policies that were intended for rich tax evaders. And they're being retargetted at millions of expats & foreign nationals.
  • MCRed 12y ago
    You're right on all accounts except the intent of the policies. The polices were intended for people like you. They are popularly SOLD as being against "rich tax evaders", but government, always and everywhere, wants more and more control, and that's why the requirements apply to people with 5 figure bank accounts rather than 8. Unless sufficient checks are in place, governments will grow their power and control every year, and this is one of the ways they do it. The more laws you unknowingly violate the more vulnerable you are to capricious prosecution. Aaron Swartz is a good example of this-- while he did break a legit law (arguably) the penalties and the illegitimate laws thrown at him were designed to give the prosecutors and the courts the power to effectively disappear anyone they want. If you think FACTA is bad, look at money laundering. Moving money between your checking and savings and a third account is "money laundering" under the federal law.
    • clamprecht 12y ago
      I agree with your comments except the money laundering part. For money laundering, doesn't the source of the proceeds have to be illegal?
      • Sambdala 12y ago
        No. It used to be an "ancillary" crime, but now it's simply illegal to move money while looking like you're trying to hide the source.
• jleyank 12y ago
  FWIW, Those in Canada with foreign funds must fill out pretty much the same information about these accounts as the US-ians have to fill out about THEIR foreign holdings. I guess each country knows all about the local holdings and really want to know about the foreign ones. US-ian expats have to file taxes each year. Unless they live in a country with a lower tax rate than the US, they don't actually pay anything... Can't talk about anything but wage slaves, but it's like 3-4 hours to do the US forms each year. There's at least two ways to make the US taxes disappear - expat forms and foreign tax credit forms.
• tokenadult 12y ago
  Disclosure: I am a United States citizen (by facts of birth) and my wife is a United States citizen (by naturalization). Both of us have lived and worked both in the United States and as long-term expatriates in another country (Taiwan, where my wife is from). During both of my stays in Taiwan, I went through the trouble of filling out United States tax forms each year related to income that was wholly derived from my employment in Taiwan. I'm a dot-the'i's and cross-the-'t's kind of guy that way. I make sure to follow the laws I know about, the better to protest against laws that really upset me. The saying in the newspaper business is that "'Dog Bites Man' is not news, but 'Man Bites Dog' is news." So we see news stories from time to time with the surprising story hook that some people with United States citizenship give up their citizenship, usually for tax reasons. But this is news precisely because it is very unusual. This influences the decision-making about citizenship of only tiny numbers of Americans. Most United States citizens are happy to have their citizenship, even if they live overseas for years at a time, as some of my friends and several participants on Hacker News do. There are still probably 100 million or more people around the world who be glad to immigrate to the United States.[1] On the basis of net immigration among all countries in the world, the United States is still by far the winner in gaining capable people from other countries on a net basis.[2] The exceptional cases of persons with high earned income overseas who come out ahead economically and dipomatically by renouncing United States citizenship are still exceptional cases. Most United States citizens abroad are quite happy to have the passports and the consular representation they have as United States expatriates, as contrasted with being citizens of the country they work in or expatriates with some other citizenship. [1] http://www.gallup.com/poll/161435/100-million-worldwide-dream-life.aspx http://www.gallup.com/poll/161435/100-million-worldwide-drea... [2] http://www.theatlantic.com/international/archive/2013/09/232-million-people-left-their-countries-for-new-ones-where-did-they-go/279741/ http://www.theatlantic.com/international/archive/2013/09/232...
  • btown 12y ago
    Nobody is saying or implying that American expatriates are, as a general rule, renouncing their citizenship. The issue is that a nontrivial number of American expatriates are being incentivized to renounce their citizenship, to the point where some of those feel they have no choice but to renounce. It's an unintended consequence of a law that affects a minority, and this is precisely what news media should be covering. To dismiss the article because "most citizens are happy," and to set up a straw man argument about immigration into the United States (a phenomenon completely unrelated to the reaction of non-US banks to US policy), would likely be seen as offensive to that minority which was forced to renounce citizenship.
• _nedR 12y ago
  Is it just me that finds the situation rather ironic considering the fact that unfair taxes levied on emigrant citizens was the main reason for Americans to seek independence from the British in the first place?
  • walshemj 12y ago
    And now is costing us Brits as our UK banks have to pay for US IRS rules
• syntern 12y ago
  Note, that some of this (from FATCA) applies to visa workers who are not US citizen or greencard holders. I work in the US on H1B, and I have been already declined to open an investment account in my home country in Europe, just because I was subject of US tax and have SSN. They told me that I'll be open the account once I move back to Europe and lose my US tax status.
• snake_plissken 12y ago
  FACTA is one of those laws that makes me cringe. It was attached to a jobs bill and passed under the veil of popular support for going after supposed tax scofflaws that hold money in overseas accounts. In reality it was just a power play to further extend the government's reach into peoples' personal lives, evidenced by the absurdly low reporting requirement for over-seas accounts with more than $50,000.
• anigbrowl 12y ago
  This story appears on HN like clockwork every 3 months. Why? Because the Federal register publishes quarterly figures, the articles write themselves with very little work, and there's a large contingent of people on HN who think taxes are evil. I do think the policy of taxing US citizens on overseas earnings is unwise and FACTA is somewhat unworkable, but it's worth noting that taxation of Americans living abroad (and at a higher rate, to boot) dates back to 1864, when it was introduced to defray the costs of the civil war. http://www.treasury.gov/resource-center/tax-policy/Documents/subpartf.pdf http://www.treasury.gov/resource-center/tax-policy/Documents... has all the information, and you can see the little quarterly blip on the search results graph as newspapers run the story reliably every 3 months. There has been a distinct uptick since the passage of FACTA but applications seem slightly down this year compared to 2013. http://en.wikipedia.org/wiki/Revenue_Act_of_1864 http://en.wikipedia.org/wiki/Revenue_Act_of_1864
  • arbuge 12y ago
    This has nothing to do with thinking taxes are evil. This has everything to do with the fact that the US tax regime on overseas Americans makes life miserable for those expats. Oftentimes you finish up paying thousands of dollars for expensive tax help* only to demonstrate that your tax liability is $0 because foreign tax credits cancel out your foreign tax obligations. Besides all the difficulties with opening bank accounts as noted. The solution is simple: the US needs to join the remaining 99% of the developed western world and switch to residence-based taxation instead of the current citizenship-based regime. In other words you tax people within your physical borders only (citizen or not), but suspend their tax obligations when they leave for as long as they leave, unless they still have income-producing assets within the borders of your country. * Taxes overseas are not something you can just whip up Turbotax to handle. You oftentimes need to reconcile foreign tax statements with your US ones to compute tax credits. Worse, the foreign tax ones are rarely due on the same deadlines as the US ones, and foreign currencies need to be converted and so forth. The whole thing is difficult for most people but almost completely unworkable for entrepreneurs owning corporations overseas, owing to the need to file obscure and complex Controlled Foreign Corporation tax forms. Budget around $5,000 in tax prep fees per corporation for those, even if your corporation is a dormant LLC with no money passing through it.