
Americans abroad are giving up their citizenship as banks shut down accounts - johanbrook
http://www.theguardian.com/money/2014/sep/24/americans-chased-by-irs-give-up-citizenship-after-being-forced-out-of-bank-accounts
======
GFischer
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-
resi...](http://nomadcapitalist.com/2014/03/09/top-5-best-second-residency-
programs-central-south-america/)

[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."

~~~
ggambetta
As a fellow Uruguayan, I want to add that citizenship comes without too many
obligations; no military service or anything like that. The only one I can
think of is that voting is compulsory.

On the other hand, I wouldn't recommend living in Uruguay; I had very good
reasons to leave and I don't see myself returning anytime soon. And I'd argue
any European passport is better than an Uruguay one - you can freely live and
work in Europe, and you can visit the US without any visa.

~~~
GFischer
Totally agreed on the European passports being overall superior (although some
do come with obligations like military service for an Austrian passport for
example), but they're much harder to obtain (I've been denied German
citizenship).

I've read about your reasons for leaving (security), and sadly, I have to
agree that they're still an issue (and I'd love living in Switzerland).

I think the risk can be minimized though. Ideally I'd want to live in Punta
del Este or Maldonado rather than Montevideo, and the countryside is still
pretty safe (though a computer nerd might die of boredom there :P ).

~~~
Vespasian
Out of curiosity:

If its not too personal can you share some general information what
nationality you have or had while applying to the German citizenship and what
were the main reasons it didn't work out.

~~~
GFischer
My grandfather was born to Prussian parents which came to Uruguay and then
back to Prussia, but he was born in Uruguay, and lived in Uruguay from his
teens onward.

When he went to obtain a German citizenship, he was asked to bring in a lot of
additional paperwork (a church birth certificate being one I think). One of my
uncles went to Germany to try to obtain it, but it was in vain.

I wasn't going to be granted German citizenship unless my grandfather, and
then my father, were granted German citizenship.

My grandfather was as German as they come, but due to those quirks he wasn't
granted citizenship, and so I wasn't able to.

~~~
Vespasian
A very interesting stroy. Thanks for sharing that!

------
matthewowen
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).

~~~
sliverstorm
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.

~~~
waqf
You mean to imply that being double-taxed after your first $100k is fair and
reasonable?

~~~
sliverstorm
If you own two houses, just because you aren't living at House A right now
doesn't mean you don't need to pay upkeep, and doesn't mean you aren't
deriving benefit from it.

Thought of differently- expats expect to be able to vote, right? Is it fair
and reasonable for someone who is _categorically_ excluded from paying taxes,
to be allowed to vote?

~~~
X-Istence
I am a tax payer in the United States, yet I am not eligible to vote ... Green
Card holder!

Why should someone living outside the united states, with no houses in the
united states, still pay US taxes, just because they have US citizenship?

------
phunge
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
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
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
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.

~~~
areyousure
I believe you, actually, but can you provide a source? Thanks.

------
anigbrowl
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...](http://www.treasury.gov/resource-center/tax-
policy/Documents/subpartf.pdf) 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
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.

~~~
anigbrowl
I agree completely, but there are a lot of people on HN who live in the US,
have no plans to depart, and just like to grumble about government overreach
and upvote threads about it, as you can see elsewhere in this thread, and in
previous threads on the same subject.

In the same way there are threads twice each year about the change to/from
daylight savings time which get lots of votes from people who hate the time
change and wish it were abolished, including myself - look out for the next
one in 5 weeks.

------
Someone1234
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.

~~~
wmil
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.

~~~
Someone1234
> there have to be some obligations for citizens to go along with the rights
> they have

US Citizens abroad have no real legal rights.

edit: All the downvoters want to weigh in on exactly what a US citizen living
outside of the US gains in terms of "rights?"

~~~
desdiv
The right to return to the US and live there permanently, for one.

~~~
Someone1234
But US citizens living abroad have to file tax returns even when they don't
exercise that right. They could live abroad for the remainder of their life
and have to file (under IRS rules).

That seems like a very flimsy argument for why US nationals abroad have to
file tax returns.

~~~
desdiv
If I have a second house that I never use I still have to pay tax on it. The
tax man doesn't care whether I use it or not.

------
nagi2k4
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
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 :-)

------
sergiotapia
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.

~~~
sitharus
As someone quite familiar with the situation, you're better off saying "Fuck
you Intuit". They spend millions of dollars a year lobbying to keep the tax
system complex.

You can start here: [http://www.propublica.org/article/how-the-maker-of-
turbotax-...](http://www.propublica.org/article/how-the-maker-of-turbotax-
fought-free-simple-tax-filing)

For what it's worth, as a dual citizen of UK and New Zealand I've only filed a
tax return twice in my life - when I was a contractor.

~~~
mcosta
It is nice the article mentions Spain. Here you can just give the OK via web
signing with a personal certificate issued by the government. But we have a
National Identity Document (direct translation from Spanish: Documento
Nacional de Identidad) with a nice chip where we can store the certificate
[1]. Cons: we must carry it any where we go and show it to the police on
request. I believe in USA that would be unimaginable because... you know...
government control.

BTW, thanks god Firefox supports client certificates and I sign from Linux.

1:
[http://www.dnielectronico.es/oficina_prensa/imagenes/modelo_...](http://www.dnielectronico.es/oficina_prensa/imagenes/modelo_dnie_g.jpg)

------
aroberge
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-
tax...](https://www.tnvisaexpert.com/articles/how-canadian-rrsps-taxed-in-
usa/)) 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
Same with Australian superannuation.

------
_nedR
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
And now is costing us Brits as our UK banks have to pay for US IRS rules

------
tokenadult
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-
drea...](http://www.gallup.com/poll/161435/100-million-worldwide-dream-
life.aspx)

[2]
[http://www.theatlantic.com/international/archive/2013/09/232...](http://www.theatlantic.com/international/archive/2013/09/232-million-
people-left-their-countries-for-new-ones-where-did-they-go/279741/)

~~~
btown
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.

~~~
tokenadult
_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._

Numbers matter in public policy discussions. I understand your opinion that
the numbers of Americans who have renounced citizenship for tax reasons is
"nontrivial," but I hope I make clear, as an American who has lived overseas
among many other expatriate Americans, and who still keeps up regular contact
with many expatriate Americans who derive all their income from overseas work,
that I think the reported numbers are indeed trivial. As an American voter and
taxpayer who cares deeply about the future of the United States and who knows
first-hand about the trade-offs involved in living and working overseas, I'm
not seeing a crisis here. I'm not seeing the numbers here I would need to see
to advocate a change in current policy, even if other people kvetch about the
current policy.

------
jeffdavis
"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?

~~~
philiphodgen
Let's say there is a tiny bank in Lichtenstein. It has two customers. Me, with
$10,000 in the bank; I am a U.S. citizen. And the Sultan of Brunei, who
deposits $1 billion.

I tell the banker to keep my cash in the bank in Lichtenstein, and I use that
bank account to pay my rent, buy food, and other ordinary things.

The Sultan of Brunei tells the banker to take all of his money and plow it
into the U.S. stock market.

Tiny Bank of Lichtenstein takes all of the Sultan of Brunei's money and plops
it into the U.S. stock market. Buys Google and Apple stock and all that fun
stuff.

One day the Sultan of Brunei calls up the bank and says "I would like $1
billion of my money back because I need spending money." The banker sells a
bunch of Apple and Google stock until there is $1 billion of cash ready to
wire back from New York to the Sultan of Brunei's bank account in Lichtenstein
so the Sultan of Brunei can spend his own money.

The Sultan of Brunei, by the way, is not taxable in the U.S. on the capital
gain that was made when the banker bought him Apple shares at $75 and sold
those shares at $100.

If Tiny Bank of Lichtenstein has the right kind of paperwork in its files
about me -- its only U.S. citizen customer, with a trivial amount of money in
his bank account -- then the Sultan of Brunei's $1 billion will be wired from
New York to Lichtenstein with no problems.

If Tiny Bank of Lichtenstein does NOT have the right kind of paperwork in its
files about me -- its only U.S. customer -- then the Sultan of Brunei's $1
billion will face a terrible fate. Thirty percent of that $1 billion will be
withheld, and 70% of the money will be wired to the Sultan's bank account in
Lichtenstein.

The Sultan of Brunei only gets $700 million in his account. He is grumpy and
yells at the banker.

Key metaphysical insights:

1\. The 30% problem is imposed on gross money leaving the United States. It
has no relationship to whether that money is taxable or not.

2\. The U.S. government is threatening the customers of foreign banks with
financial loss as a method for forcing the foreign banks to do its bidding. It
is not too far off from suggesting that the continued health of your wife and
children might be in jeopardy, so why don't you just do me this little favor.

3\. If the bank looks at its customer base, who are they going to throw under
the bus? Answer: me, the U.S. customer. My presence as a customer creates
enormous risk -- risk of penalties payable to the U.S. government, but more
importantly a risk that the bank will become unattractive to the Sultan of
Brunei. And they don't want to lose the Sultan of Brunei as a customer.

This is why FATCA is so evil. And this is why Americans abroad are
increasingly willing to give up their passports.

EDIT. There is a reporting threshold -- foreign banks don't need to report
small account holders like me. Adjust my little story to pretend I put
$100,000 in the bank. Or adjust my little story to assume -- correctly -- that
a bank account that has $10,000 in it today (and is thus fully compliant with
FATCA nonreporting) might have $100,000 in it tomorrow and land the bank in a
metric tonne of compliance shit.

~~~
chaziaik
Do you have more information on this ? If I understood you correctly this
would have severe repercussions for foreign investors. Suppose you are a
foreign investor, what can you do to protect yourself ?

~~~
MCRed
You don't do business with the USA. And increasingly, that's what they are
doing. It's a small effect now since these are relatively new laws, but they
are growing every year, and their impact will ramp up exponentially.

~~~
walshemj
yep and in the Uk working in the Uk most banks refuse to do business with you
- so no tax free ISA for you Buddy.

It's extremely unfair to US Expats.

------
mark_l_watson
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

------
ArtDev
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-p...](http://www.businessinsider.com/how-much-money-apple-avoids-
paying-in-taxes-2014-6)

~~~
FD3SA
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
Where can I find this "unrestrained capitalist system" you speak of? I'd love
to live there.

------
psuter
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
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.

------
personlurking
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
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
I'm imagining BOPE knocking down one's door at 2AM because of unpaid US taxes.

------
snake_plissken
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.

------
MysticFear
The reason for digital currencies is becoming clearer.

------
shortsightedsid
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
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
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.

------
digikata
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
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.

------
oxalo
So are they policing all the corporations with this law too? Or just Average
Joe?

~~~
abruzzi
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.

~~~
Frozenlock
"the banks are overreacting"

Really? The USA is considering everything as under its jurisdiction, but the
banks are overreacting?

~~~
abruzzi
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.

------
byoung2
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?

~~~
refurb
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.

------
syntern
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.

------
vonnik
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
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
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.

------
jleyank
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.

------
cujo
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
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
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?

