Charging for renunciation is the most ridiculous part. You are paying for a process that:
is expensive only since they want to investigate you as a presumed criminal or tax dodger (the movie Brazil comes to mind)
is a result of their non-compliance with international norms
is the result of the US declaring you have a status that was never requested
As an expat I consider all US citizens to be indentured servants due to this requirement to buy independence from the US and whatever it chooses to enact next. Effectively, these changes are not noticed by the US' domestics, but those who think they "can flee to Canada" when they have ethical problems with the US are now deluding themselves. "If you don't like it, then leave" may have been sarcastic BS, but at least it was a real choice that many people made in the Vietnam era, etc. If you don't like us leave us money (which we will use in the ways you probably object to)" is something else.
I will find it both funny and sad that when the people who supported the two party system are pissed by someone like Trump implementing fascist policies they will finally realize that their own willingness to destroy our basic civil rights makes it impossible for them to avoid helping a system they find morally repugnent and criminal.
I'm curious, what is stopping expats with foreign citizenship and an objection to the paperwork from just letting their US passports expire (or for the "accidental americans" not ever establishing one) and just not complying with all the annoying rules?
Foreign Banks will refuse you service if they discover you are a US person with no intention/ability to comply. If they don't they face tax penalties on any US holding and possibly local penalties due to treaties with the US.
*Over time the US will enlist more and more help with these kinds of methods (for example many foreign employers would have obligations from paperwork they signed to accept US customer payments) so at some point you will probably have to come into compliance if you aren't somewhere totally at odds with the US.
Holding a passport is simply an indication of your citizenship, it is not considered the sole record of it. You can't fail to be a citizen by ignoring rules and not having the right piece of paper.
Nope, if you are in Canada for example they'll just take your assets. They strongarmed the Canadian banks into forcing disclosure of all US citizens bank account contents.
And there are plenty of people around the world who have discovered they have US citizenship without knowing it before. And now they have to file with the IRS.
Glad I never got dual citizenship through my grandmother. In the past having USian citizenship would be nice. Now it would just be a pain.
As someone living abroad, I agree there is a lot of bull shit now, involving banking.
I only have bank accounts in the US because of the complicated laws. That's not a big deal.
What REALLY pisses me off, is that banks in the US are declining service because you live abroad. For example, holding investment accounts back in the US. If they find out I'm living abroad they will promptly close my accounts. I can't have a retirement accounts because I live abroad!?
What do I do? Maintain a mailing address back in the US, in a state that collects no income tax. Use a VPN to login to retirement accounts. Insane.
Edit: I don't even mind paying taxes over 100k. Why? I can still go home whenever I want. I can go to one of the many embassies around the world and get a new passport. Ask for help, etc. I'll still get social security later. (Huge maybe)
When you say "living abroad", do you mean you have a local job, get paid in the local currency, pay rent and bills in the local currency, etc.? Which you do all through a US bank? If so, what are you paying for international transaction fees? Surely much more than using a local debit card.
> I can still go home whenever I want. I can go to one of the many embassies around the world and get a new passport.
There's nothing special about the US in that regard. A citizen of Germany can do the same at any German embassy, even when not a resident in Germany and therefore not paying German income taxes, and also has the right to return to Germany.
This is one of those things that should be repealed. I've frankly gotten tired of the punishing of normal people by dumb privacy invading laws[1], or frankly, taxing them when they are not in the US. There are easier ways of going after people and companies (looking at you Monster Cable) that play fast an lose with our tax laws. I am all for only taxing income / revenue earned in the US.
1) we can get rid of all the BS $10,000 stuff in deposits in the US.
No, but people like Lyndon McLellan getting taken to the cleaners and having to spend money and time to prove innocence is not worth the theoretical crime.
Really FATCA is one of the most excellent laws that has been passed. Prior to this, you had expats who had milked the US and then they wanted to waltz off with their proceeds.
Americans gain huge benefits from the taxes paid by prior generations. The entire US system is the envy of much of the world--and how did it get that way? Americans paying their taxes. Whether or not you have kids--you must pay property taxes that fund your local schools. Unfair? Hardly. Those schools don't come out of thin air--taxpayers who came before you paid for them. Stop your whining. If you were born in the US, then you benefitted. If you are a US citizen and you get in trouble somewhere on earth, the US government will come to your aid. That's what you're paying for, in addition to paying for the next generation of Americans to have schools, roads, public utilities and the like.
Really, whining about having to pay your share--no matter where you have run off to--is ridiculous.
> If you were born in the US, then you benefitted. If you are a US citizen and you get in trouble somewhere on earth, the US government will come to your aid.
I don't know why Americans believe this fairy tale. It's simply not true. Case in point: Yemen, last year. American citizens were abandoned by State[1], only to be rescued by India[2]. What's the point of the taxes, again?
Also note that if the US does rescue you, then they also send you a bill for it. (It is capped at something like the price of a full fare economy plane ticket, which is still expensive.)
So, the State Department is supposed to maintain a worldwide set of consulates--with no charge to you--just so they can swoop in at your time of need and give you services that you then pay for. Do you think all those State Department resources just come out of pixie dust when you need them? Duh, no. We pay things called taxes to keep that worldwide network of consulates existing and available if you need them.
No, like so many expats, you just want to skate under the radar--gleaning the advantages of that blue passport--while expecting the "little people who pay taxes" in the states to float you.
No, all the expat whiners here can go right ahead and whine. Please renounce your citizenship. Your beef is not with the US Government that maintains this country for you to return to if you so choose based on your citizenship--but with all the prior tax evaders who caused the damned FBAR and then FATCA to exist in the first place. I have not heard a single whining expat here point the finger at the true culprits--the tax evaders who were so egregious that they caused FATCA to be passed with a bi-partisan majority in 2010.
> The UK embeds the cost of consular protection and embassy services into the renewal cost of a passport - approximately £15 in 2010, probably more now. It's an insurance payment that most people will never use, so it doesn't need to cost very much per person.
I would gladly pay an extra $30 for each passport renewal than pay my accountant $600 every year to tell the US I don't need to pay taxes on my $35K income. That would raise it from $135 to $160.
If you're going to complain that emigrants like me don't point the finger to "true culprits", then I can complain that people like you also never point out the true culprit - a messed up system at the State Department which requires taxpayers who never have and never will travel internationally to subsidize consulates so that emigrants like me can have a backup plan in case war ever comes to Sweden. The more equitable plan is to fund it through a passport fee so only those who may need those services, eg, tourists, business travelers, and yes, emigrants like me, pay for it.
It's amusing that you attempt to marginalize well-reasoned opinions you don't share by labeling their holder as having "anger".
Finally, do you think it costs $30 to maintain a consulate? Just stop your whining: either renounce or pay your taxes.
Finally, in a civilized society, when you encounter laws you don't like--you work to get them changed. Otherwise you're just a childish scofflaw--no different than the bank robber who complains about the laws against robbing banks. "emigrants like me can have a backup plan"--not sure if you meant this as a joke, as it entirely undercuts all your arguments. If you want a backup plan--you gotta pay for it. You could have just as well gone to Somalia as Sweden--so the unlikelihood of war there is not germane to the conversation.
> "do you think it costs $30 to maintain a consulate?"
I'll answer your question by quoting you: "Duh, no."
That's the cost spread across all the citizens with a passport for the extra citizen services which aren't included in the normal fees. There are 15M passports issued every year, so that's $750M each year. How much money do you think is needed?
I say "extra services" because there's no reason a passport fee should include the business promotion services of an embassy. There's no reason a passport fee should include the cost of the treaty negotiations and government-to-government liaison. There's no reason it should include the fees already captured elsewhere, like visa application fees or passport renewal fees. Nor is there a reason that a passport fee should include for paying for espionage done by the embassy.
It's amusing that you attempt to respond to my criticism by not understanding it.
I may be a whiner, but you are a liar if you call me a criminal. I pay $600/year in accounting fees to provide the necessary paperwork to the US to prove I owe them nothing. In addition to the taxes I pay the Swedish government.
Moreover, because I live in Sweden, my income and taxes is public information, so you can verify it for yourself if you think I'm lying.
Amusing rant. Incidentally the personal attacks are highly amusing because I AM NOT AN AMERICAN.
As for the last paragraph, I am subject to FBAR & FATCA. The burden of them falls disproportionately on those who are not egregious tax evaders. It is extremely expensive and time consuming complying with them when you are doing the right thing. The evaders can afford to hide what they should be declaring by virtue of having more money, and having more to gain. Plus they have more loopholes and other ways of obscuring their money thanks to the same legislatures.
There are many ways things could fairer. For example these little people who are spending lots of time and money on filings could have their costs reimbursed. If living in a country with a mutual tax treaty then the exemption limit could be raised (currently $10k across all accounts). Or perhaps fairest of all is requiring all US tax payers to do the same thing - list all their accounts and all balances everywhere including domestic.
>Americans gain huge benefits from the taxes paid by prior generations. The entire US system is the envy of much of the world--and how did it get that way? Americans paying their taxes.
This always amuses me. Previous generations didn't pay for things with taxes. They paid with debt. All those (crumbling) things that are "the envy of much of the world"? I and people my age paid for, decades after they were built. Just like future generations will pay for the things being constructed now.
>Whether or not you have kids--you must pay property taxes that fund your local schools. Unfair? Hardly. Those schools don't come out of thin air--taxpayers who came before you paid for them. Stop your whining.
How is that not unfair? Why should I have to pay for your kids to be educated just because you live near me? Educate your own damn kids. And if not, well, the world needs ditch diggers too.
> If you are a US citizen and you get in trouble somewhere on earth, the US government will come to your aid. That's what you're paying for...
Anybody who's actually been in trouble can fill you in on the limits of this fantasy. Assuming by "get in trouble" you mean get arrested, the US government will do things like contact your family, verify that you are a US citizen, and try to find you a lawyer.
If you're mistreated they will file a formal complaint with the host government. And I'm sure that's incredibly helpful.
In short, the US government will do pretty much what every government everywhere does for its nationals that "get in trouble".
>That's what you're paying for, in addition to paying for the next generation of Americans to have schools, roads, public utilities and the like.
This is all state and local stuff, except for highways. What does it have to do with the federal government?
>Really, whining about having to pay your share--no matter where you have run off to--is ridiculous.
The problem with this attitude is a lot of us have paid our share and your share too. There's a limit to the amount of rapaciousness a person should be expected to tolerate. Particularly if I'm living in another country, driving on that country's roads, sending my kids (if I had any) to that country's schools, etc.
I see you're experiencing some cognitive dissonance. You can't understand how it could actually be fair for you to have to pay for the services that remain available to you as a holder of a United States passport. Funny, you're claiming that the US is such a hellhole--well some parts of it are but still, why oh why are so many people from around the world clamoring to get to the United States? Because its infrastructure is so corroded? I don't think so.
They want to come here because the United States--at its best--is a perfect example of the benefits that come when people pool their money together to pay for roads, electric and water utilities, the court system that enforces contracts and makes modern life and business possible, the FDA that allows you to feed your children without worry, the EPA that sometimes acts as a watchdog. All of these things come when the vast majority of Americans pool their tax dollars and pay for these things. So, if you are a US Citizen--who went to school here--then you have already benefitted from all these things and it is only just and proper that you now take your turn to contribute during your life. If you don't want to--by all means renounce! Ingrate!
So, seeing that you flatly oppose the idea of a public school system, reveals that you're just a closet anarchist who is such a sociopath that you don't even want kids educated. Hmm. What do you think happens to uneducated kids? They can't get jobs and they rob your house. So, your 'cant' "Why should I have to pay for your kids"--is an example of Low Effort Thinking. You have exposed yourself as a Low Effort Thinker. Don't be flattered. Your "ditch digger" comment was precisely on the level of stupidity as was Marie Antoinette's "let them eat cake" comment.
So, you admit to the long laundry list of things that the US government will do for you. That's enough. Is Portugal, for example, going to come to your aid in lieu of the US. Is Panama? No government at all is going to help you unless you pay them.
In case you hadn't noticed, states all exist within the United States. If the US Federal government keeps a standing army--then the US States benefit from its existence. If the States levy taxes that educate the citizens of their state--then the US Federal government benefits directly. The taxes paid to the Feds and the States are mutually beneficial: fungible. So, it is meaningless to claim these are "state" expenses that don't exist in the exact same place as the overall nation.
I find it quite amusing that you somehow believe that you have paid these vast sums in taxes. I'm sure you're a diligent tax dodger at every opportunity. So--do, please, renounce.
If you inherited your wealth then you're a parasite.
If you earned your wealth in the US, again you did not do it in a vacuum. If you started a company, then you tacitly benefitted in the extreme from the pooled taxes. No matter how much in taxes you paid, you gained many more times in benefits than you paid.
That's why, from the time of the Ancient Greeks, the concept of a progressive tax system, where the percentage paid in taxes increases as a taxpayer goes up the income scale, has been seen as fair. Ben Franklin himself personally worked twice to get this exact same progressive tax system implemented. He mentions his hard work and belief in the idea of a progressive tax system twice in his autobiography.
No, if your viewpoint just makes you look like another Low Effort Thinker.
>I see you're experiencing some cognitive dissonance.
I see you're not afraid to insert your foot at the very start.
>You can't understand how it could actually be fair for you to have to pay for the services that remain available to you as a holder of a United States passport.
What services could you possibly be talking about here? The holder of a US passport has exactly one service from the US government that's worth anything at all - the right to travel to the US.
>Funny, you're claiming that the US is such a hellhole...
So here is where I started skimming. If you're not going to respond to what I say, the book you've written here has little meaning.
But I did get a laugh out of this:
>If you inherited your wealth then you're a parasite.
Projection. If I've inherited my wealth (sadly, not true in my case), that's between me and my parents. People who think they have a right to other peoples' wealth because it exists and they want it are the parasites.
It's a shame The Daily Worker went out of business, or I'd know a reliable place to find this kind of drivel.
And BTW, a person who's entire political philosophy is based on envy doesn't have room at all to call anyone a Low Effort Thinker.
Services: help from the consulate. Ability to return to the US without getting a visa. Ability of your children to return at will to the US and benefit from our universities at a much lower rate than do non-citizens. Your backup plan.
So, you want to ride in the wagon and have other domestic Americans pull the wagon? Do you think the whole consular system is just on ice until you need it? Boy wouldn't it be nice if none of us had to pay taxes--while still having the entire expensive governmental infrastructure on ice--ready for us?
Unfortunately, in the real world, if you want to benefit from something you need to shoulder its true cost. $50 a year won't cover that.
>So, you want to ride in the wagon and have other domestic Americans pull the wagon?
I think your life situation and mine are very different. I've been pulling that wagon my entire life. I've been a lead horse. I don't owe other Americans anything. It's quite the reverse, actually.
>Do you think the whole consular system is just on ice until you need it? Boy wouldn't it be nice if none of us had to pay taxes--while still having the entire expensive governmental infrastructure on ice--ready for us?
The consular system would be there regardless of whether or not expats needed it. That's not its primary purpose. And as I pointed out, the US government does about what a relative would do.
>Unfortunately, in the real world, if you want to benefit from something you need to shoulder its true cost. $50 a year won't cover that.
I generally expect to pay for the services I use. $50 is an overestimate.
Not quite clear how they can "waltz off with their proceeds." They would be required to pay taxes on any income they earned in the US, unless they figured out a way to actualize the income earlier (e.g. Eduardo Saverin renouncing before Facebook's IPO). Sure, by moving to the resident-based tax system used by nearly every other country in the world (China is trying to copy the US system and Eritrea requires you to pay an "expat" tax if you want a visa to return), the US expat could take their US-based K-12 education and leave and work elsewhere, but that's not quite the same. People pay for their college education. An excellent education system also serves the domestic purpose of having an informed citizenry to pass good laws, and attract the best and brightest immigrants from around the world.
I think the biggest reasons other nations don't tax overseas income is because they don't have the power to force a special exception for their expatriate citizens (e.g. Greek citizens working in Canada). The US is using its position of power to require these overseas banks to modify all of their accounting and reporting systems to continue to do business in the U.S. This has large issues of fairness and generates animosity.
I have friends who've barely been to America, but they have the passport, so they have to stupid paperwork every year. It's not reasonable.
>Americans gain huge benefits from the taxes paid by prior generations.
So do the citizens of countries with residence based systems.
>If you are a US citizen and you get in trouble somewhere on earth, the US government will come to your aid.
This is patently not true. When has the US ever intervened on behalf of an ordinary passport holder, in a way that citizens of countries with ordinary tax systems do not?
As someone who lives outside of the US: your political and economic system is at best illogical, and at worst incomprehensibly clueless.
Your government spends billions of dollars on wildly unsuccessful defense projects while at the same time arguing the there's no way to deal with poverty, access to education, homelessness, etc. By cutting back on defence spending, the US could still remain the most powerful military nation in the world and guarantee that every citizen gets a quality education and spends their lives healthy and well maintained. Instead, you insist on going trillions of dollars in debt and then complaining that the poor aren't paying their fair share while the people with so much wealth that it's literally impossible to comprehend use every loophole in the book to avoid paying anything at all. Warren Buffet himself has commented on how he pays less tax than his secretary does.
Meanwhile, your entire government is bought and run by corporations and lobby groups; because money runs the campaigns and the person with the most money wins, elected officials spend a huge portion of their time "in office" not serving their country, their electorate, or even their benefactors, in favour of travelling around, having meetings and dinners and fundraisers, so that they can ensure they get elected again. If you court the right interests then not only will they help pay for you to get re-elected over and over, when you're done with public life they'll offer you a consultancy position where you can make further millions for years convincing your old friends who are still in office to vote the way you want them to because you're old friends.
The entire US system, is, to much of the rest of the world, a farce made manifest. Many of us fail to understand how your populace even got into such ridiculous circumstances, let alone continues to tolerate them year after year.
To claim that someone overseas should pay thousands of euros to tell the US government that they owe no tax while millionaires are using fully legal loopholes that their rich congressional friends refuse to close to shirk millions of dollars of taxes is patently ridiculous.
Fix your system to stop exploiting the poor and giving rights, privileges, and power to the rich elite and you can claim that your system is the envy of the world.
And as for 'how it got that way'? Years and years of economic growth on the backs of slaves imported from Africa certainly helped. Being able to bootstrap your economy by cutting out the business owner's largest expense is certainly an effective way of getting ahead.
I don't think your characterization of the US is fair.
It is insulting and doesn't seem topical to the current post, which is about the paperwork burden of living abroad.
Suggesting slavery is "how it got that way" is uniquely tasteless. A lot of people gave their lives to abolish slavery. Many of us have relatives who were slaves or died fighting for its end.
I am really tired of this pro-pangada. It is so far from truth but one google search away from factcheck.
Majority of the Federal government expenditure goes into Military/Social Security/Medicare. All of which can be substantially reduced. These three components cover more than 70% of total Federal spending.
Out of this Medicare can be seen as taxing current generation to pay for the older generation. Almost all debt can be seen as taxation on future generation.
Also, I totally don't understand "public schools" arguments. Public schools in USA are the worst government institutions ever. Not only I paid taxes for this rubbish but now I have to send my kids to private schools paying full fees because the local public school is not differential from a mental hospital.
The federal government subsidizes some public school programs. But they are heavily regulated by the department of education. Another federal agency that should be abolished.
> Public schools in USA are the worst government institutions ever.
Clearly you've never dealt with the VA or IHS. Both of which are actually funded by the Federal Government as opposed to the States & Towns which mostly fund public schools.
> If you are a US citizen and you get in trouble somewhere on earth, the US government will come to your aid.
Agree this is worth something. I would propose a substantially decreased federal tax bracket (maybe 1-5%) for expats. Sort of like how you pay a decreased vehicle tax when it's not in use.
As a general rule the U.S. government does help citizens abroad. I don't know all the details surrounding this article so I can't comment on whether or not DOS was right or wrong. With a little digging I'm sure you can find thousands of articles about citizens who were helped.
Yep, looks like that's true. Seems like US hospitals need lawyers and accountants on staff to explain the liabilities a new born will have later in life and you guys need to have a law that allows parents to officially reject citizenship on behalf of a new born.
I think some small country should negotiate a deal with all other nations and come up with a citizenship program that gives good value for their passport and then allow Americans (or any other highly taxed nationals) to settle there. For example Lala-Land does some background checks and issues passport to its citizens which can then be used to travel almost all the countries in the world. Lala-Land will give passports to anyone who applies if they pay enough money and show some evidence that they arent criminals etc.
Having spent 10% of my life as a resident of another country, this hits home. If I leave the U.S. a second time, it will likely be a permanent departure with renunciation of citizenship. I know others who feel the same.
This is a duplicate of a submission I made 2 weeks ago.
Anyway, as an American abroad, I think about this periodically. Like the author, I never owe anything in taxes, but the stress and expense from making sure paperwork is correctly filed each year is really awful. If I mess something up on my FBARs, non-willfully, I would be fined enough to completely bankrupt me, the fines being way above the value of the accounts I might somehow misreport. How can you misreport an account? Well, you could use the wrong currency exchange rate, or you might not have access to information required on the form so you have o guess, or you could think that accounts with a balance of 0 all year do not need to be reported (turns out they do). Or maybe you think that an account with money for a loan does not need to be reported because it is not really your money (you do). And so on. Every mistake costs you 10k/account/year. It is true insanity.
Also, I currently have no tax deferred way to save for retirement because my employer funded pension account here (it is essentially a 401k, just based in Norway) is treated as a regular investment account by the IRS. So, I have to pay taxes on any gains each year on my pension. Luckily, this has always been below the standard deduction, but in some years, it will (hopefully) not be. I also cannot make any contributions myself to the account or else it turns into a PFIC (which is a Very Bad Thing).
That being said, I am hopeful that FATCA will be repealed, or at least revised so that it does not threaten to bankrupt middle class Americans with the ridiculous fee structure and recognizes foreign pension accounts. I do not want to give up my US citizenship, but will be forced to if something does not change in the next few years.
Amazing how every rich expat who hates FATCA attempts to complain that it goes after "middle class Americans". How convenient if FATCA were repealed and the good old days of Tax Evasion could resume.
It is precisely rich expats who have themselves to blame for FATCA.
If you find the paperwork onerous--why not just renounce your citizenship? Must be that you get some advantages you're not disclosing by keeping your US citizenship.
Every American who does their taxes has to deal with this stress. So, you're special and should get your US citizenship advantages without paying for them? You looking for expat welfare?
FATCA will never be repealed. On the contrary, it's being copied by other governments all over the world. But you had to have known that the tax evasion party was going to eventually come to an end. If you consider yourself a victim of FATCA, then your anger should be directed at other rich expats who abused the system so badly that they inspired Congress to pass FATCA with both Democratic and Republican support.
Did you miss the part where I do not have a way to save for retirement? And why on earth do you assume that I am rich? Because I live in Norway? I barely qualify as middle class. Thanks to student loans and zero support from my family, I still have a significant negative net worth, despite the fact that I live as thriftily as possible and have been working as an engineer since 2010.
If you are a US resident and mess up on your taxes, you do not get fined into bankruptcy. You just have to pay what you owed. The fee structure is the insane part of FATCA, not the taxes themselves.
As soon as I get Norwegian citizenship, if FATCA has not been repealed by that point, I will seriously consider renouncing. Because of the above reasons, not because I am some rich fat-cat wanting to evade taxes. If I wanted to evade taxes, I would move back to the US, which is a fantastic tax haven, instead of living my life here in Norway.
What the heck is "expat welfare"? The only relationship I have with the US government at this point is stress and expense from these forms every year, along with my inability to save for retirement. Literally no other developed country imposes this stress and compliance cost on their residents abroad. It is not welfare to expect to be treated like everyone else. And, if it was just filing regular taxes, and then getting it excluded with the FEIE, that would still be annoying, but fine. However, there is a whole extra set of insanely confusing forms to navigate, where you get fined into non-dischargeable bankruptcy if you mess them up, even non-willfully. People develop mental health issues and have even had their marriages destroyed from the stress of this prospect. It is not "just some extra forms" or "expat welfare" to want this onerous burden to be removed.
Sometimes I walk past the US embassy because it is in downtown Oslo (it looks like a prison and is a total blight on an otherwise charming neighborhood, btw), but I do not get any kind of "expat welfare" from it. I suppose I will visit there when my passport needs renewing in a few years, but that is it. If I wanted to contact them or voice my concerns about the pension issue (which could be resolved if they updated the tax treaty, like Germany has done), I have no way of doing so.
Why are you trolling this thread with support for FATCA when it is clearly a terrible thing for millions of people? You have no idea what you are talking about. Ugh!
> To get the same records in the US, law enforcement would have to get a subpoena
Don't any deposits over a threshold get reported domestically as well? IIRC 10k is the limit.
> At the same time, the US has worked out Intergovernmental Agreements (IGA’s) with many countries, including the Netherlands
Worked out... bullied. As I recall the threat was to stop allowing business with the US.
> By the US definition, they are US citizens as well, and should have been filing US income tax forms every year. Many only discovered this recently and are now under threat of huge fines if they do not get compliant with the US taxation laws. The same goes for children of US citizens, like my son, who are born abroad but qualify as US citizens.
Don't you have to apply to get citizenship? I thought it was more of you are entitled to citizenship. I can't imagine why anyone wouldn't tell the US gov't to get fucked in this situation, unless you actually are taking advantage of being a citizen.
So glad Canada (and nowhere else but what, 1-2 countries?) have this global taxation BS.
One can always reapply for citizenship under the same conditions as anyone else. If her parents are Americans and she was born here, she will very likely get citizenship back.
Interesting. Although I have always just assumed that since I need a social security number to open any kind of account in the US that the IRS already knows how much I have in the bank.
>If US citizens living in the US had to report the balance of every account they had in their local bank — all their assets, in other words, not just their income — they would be up in arms, protesting the government’s intrusion in citizens’ private business.
Millions of Americans every year don't pay taxes or file any tax returns. I would recommend that instead.
If you are a not particularly wealthy individual and you don't owe any back taxes to the IRS, the consequences of not any filing taxes are likely to be nothing.
I know the US is set in their ways but adopting residence based taxation like everyone else wouldn't cause many problems. You can always have an anti avoidance clause for capital gains to stop billionaire shareholders skipping abroad to sell their shares.
You complain about the US legal system, which based on the constitution protects everyone with due process rights, and like countries like the Netherlands which have no bill of rights?
Me and my family spent our life savings, endured the horrors of leaving everything behind to come to the US to enjoy the liberty and rights that are guaranteed to everyone, yet people like you are not happy and want lower standards.
Good riddance. If you don't want to be a citizen of this great country, it would be better than you.
Although I agree with you that this does not seem like a good reason to renounce your US citizenship over, it is pointing out some issues with the US tax code that need fixing.
Your response doesn't address that and reads more like an ad hominem attack.
Want to reduce stress and frustration in your life? Add this to your personal philosophy:
"If it's stupid, get away from it."
- dumb boss? job transfer or new job
- dumb family members causing you problems? Avoid them.
- dumb taxation? get away from the legal clutches of the taxing authority
Everything detrimental in life that can be avoided, should be avoided if possible.
There is enough unhappy other stuff that comes up in our lives that if you're not at least bailing on crappy situations, you're missing a chance at a happier less stressful life.
Her biggest complaint is that she has to report her overseas bank accounts. If she had done some basic research, she would have realized that this isn't specific to people residing outside the US, but any US national even within the US has to report foreign bank accounts with balances >$10k.
The rest of her post reads like whining about having to fill out forms.
Can confirm. US (dual) citizen living in Europe. Increasingly banks here will not take US citizens as customers as it is too annoying for them to deal with.
Worse than that, they're now starting to refuse customers that spend noticeable time (~60 days) in the US, even if they're not working there, and are not citizens. Having just moved to the US, two of my German banks pretty want to fire me as a customer.
On top of that, while visa holders (H1, H4 for sure) need to report their accounts at home, the bank in their home country may refuse them as clients. Been there, seen that, not pleasant.
The author herself doesn't seem to be experiencing outrageous banking pain, though. She's paying no US taxes, and could almost certainly fill out her own tax forms if the thousand-Euro fee is onerous. It's completely unclear what, exactly, is so burdensome about her citizenship.
I would say her experience and stress of that experience are shown in her "Violation of Privacy" section. The final part "If they do not match, the US threatens excessively large fines, entirely out of proportion to the totals reported in those accounts, enough to wipe out one’s entire savings. Many banks, meanwhile, are beginning to refuse to do business with US citizens in order to lower their compliance costs." seems pretty painful. I would worry a lot if an error could subject me to a lot of problems.
In general the IRS does not come after you if you make what they think is an honest mistake. I have had several friends get a letter with a correct tax return and simply had to make up the difference.
It's not the IRS to worry about, but a department within the treasury called the "Financial Crimes Enforcement Network." So the concern is very much still valid.
This is part of the reason I moved all my funds from my Indian account to my father and mother's account just because I dont want to feel 10 other forms.
I'm curious btw, what made you give up your Indian citizenship in the first place. Seems to me that an American citizenship isn't all that cracked up to be (if you already hold a GC, H1, etc).
Yup, if you work for a non-US based company that offers stock you have to file an FBAR as well. It's not overly complicated(although the timing is different than taxes which can be a tad annoying).
You already have to disclose your income so I don't see bank account balances as a large step up from that. I'm pretty certain all US based banks already do this so the FBAR just covers foreign accounts.
And I would've taken it in a heartbeat. This post seeps with privilege. Oh no, you're in a position to choose between two first-world countries. We're so sad for you. Not.
I could have become a US citizen long back but I have avoided taking that citizenship for the simple reason that I don't want to expose myself to American Tax Terrorism.
1. Having American citizenship allows her to travel easily and often visa free to many countries.
2. Allows her to work in America with no visa issues. Access to top companies in the world including most of the ones we see on HN.
3. Allows her potential kids to have access same benefits and go to universities cheaper and again easily work in the US even if they didn't grow up there.
Should renunciation chargers be changed? Probably. Maybe if you don't earn very much you could pay less. Are there somethings that could be reformed? Yes. But she is complaining about forms and doesn't even pay taxes.
Having Dutch citizenship gives her #1. The Dutch passport gives visa-free access to 156 countries. The US passport gives visa-free access to 155 countries. See https://www.passportindex.org/byRank.php?ccode=nl .
Her Dutch citizenship still gives her access to the EU, including many companies mentioned even on HN, a US-centric site.
LOL! 1) Her child has US citizenship - that doesn't go away after she renounced, 2) As an EU citizen, her children would have rights that US citizens don't have, and 3) Standard tuition fees in the Netherlands are about $2500, which is less than a community college tuition in the US.
It sounds like she didn't pay US income tax, she just had to file a tax return, which seems reasonable.
The idea that the US government doesn't track US citizens bank accounts if they live in the US is laughable. Of course they do. Banks have to report all kinds of details of large transactions and balances. We don't have to fill out forms because the government can go directly to the banks to get the information.
The way voting works I think is entirely reasonable. How else should it work? Is she suggesting there be senators and representatives just for expats? I would honestly expect the states would not want expats voting in their local elections, so the expats have more rights than I would expect there. For the Presidential election, yeah our voting system is screwed up there, but it is screwed up for everyone.
So it sounds like she left to avoid paperwork that felt intrusive. Meh. Welcome to life.
... and FBAR, which is not a tax return, and figure out if a retirement savings in the local country is taxable or non-taxable under US law, and take the risk of a rather large fine for getting it wrong. One of the comments goes into details, at https://medium.com/@john_12842/tony-antonetti-de63e9971d02#.... .
I pay about $600/year for an accountant in the US to figure things out.
On a purely financial sense, if I were to plan to never return to the US, it's cost-effective to renounce citizenship. I don't like how my country encourages me to make a cost analysis for being an American.
How much more would you pay in taxes each year in order to stay an American?
> "We don't have to fill out forms because the government can go directly to the banks to get the information."
Sure. Ditto for the Dutch government to her Dutch bank.
But that's not the real issue. Imagine that you live in the US, married and with a joint account to an American citizen whose is also a citizen of Canada and the UK.
What do you think your bank would do if the Canadian and UK governments demanded that your US bank send them the details of your account? Change all their accounting systems to meet the reporting demands? Or kick you out as a client?
The IRS is a nightmare to deal with abroad. I'm Canadian, do not owe any US tax returns. Once, they thought I did because a payee filed the wrong form.
Took three years to resolve. I had to physically visit an IRS office while on a trip to confirm it, because email, mail, and phone communications all resulted in form replies.
In fact, the IRS office couldn't even confirm it. All they could confirm is that there no longer were asking for a return.
Wait times of over an hour by phone. And incredibly complicated forms to figure out.
There's a reason people are paying $3000 to avoiding it. Not even getting into the banking difficulties for Americans abroad.
Nonsense. FATCA was started by the US but now the OECD and many, many other countries around the world are copying it--as they should.
Earlier, banks were more than willing to support the tax evasions of Americans. But in case you were living in a cave, the last few years have seen those tax-evasion-enabling international banks fall one by one, admitting they enabled tax evasion and paying massive fines. So, the banks don't want Americans because they know so frequently those Americans are practicing tax evasion. They were burned and never again want to enable tax evasion. Rightly so.
is expensive only since they want to investigate you as a presumed criminal or tax dodger (the movie Brazil comes to mind)
is a result of their non-compliance with international norms
is the result of the US declaring you have a status that was never requested
As an expat I consider all US citizens to be indentured servants due to this requirement to buy independence from the US and whatever it chooses to enact next. Effectively, these changes are not noticed by the US' domestics, but those who think they "can flee to Canada" when they have ethical problems with the US are now deluding themselves. "If you don't like it, then leave" may have been sarcastic BS, but at least it was a real choice that many people made in the Vietnam era, etc. If you don't like us leave us money (which we will use in the ways you probably object to)" is something else.
I will find it both funny and sad that when the people who supported the two party system are pissed by someone like Trump implementing fascist policies they will finally realize that their own willingness to destroy our basic civil rights makes it impossible for them to avoid helping a system they find morally repugnent and criminal.