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Why expat Americans are giving up their passports

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Re: Why expat Americans are giving up their passports

#31

Post by toni »

masklinn wrote: post #19
toni wrote: post #10

Doesn't US have bilateral tax treaties with (at least) Western European counties? And shouldn't such a treaty strive to protect American citizens from paying double taxes?

The problem isn't citizenship-based taxation, it's an odd concept but it's been there for a very long time, there's a relatively high standard deduction and IIRC your local income tax is also deductible. Expats have dealt with that for more than a century. As the article points out, the problem is FATCA which doesn't come close to fixing the issue it's supposed to fix (income tax evasion) and completely breaks expats…

Let's say I am an American citizen living in France. Why US government doesn't close a tax treaty with French and demand 20% of the total amount I pay for all the taxes annually in France?

Re: Why expat Americans are giving up their passports

#32

Post by jacquesm »

arto wrote: post #26

For those looking to renounce their U.S. citizenship, Mike Gogulski has chronicled and documented the whole paperwork-heavy process on his blog: http://www.nostate.com/about/ In his case, after submitting the paperwork and burning his passport on YouTube, he chose to not get another citizenship, which means he's now stateless.

Being stateless is not a good thing. It might seem that because you're member of none you are superior to all but having citizenship is not just a tax burden, it also allows you to partake in a lot of activities (such as travel, commerce and so on).

Getting bank accounts and other goodies when you're stateless is rather troublesome.

Re: Why expat Americans are giving up their passports

#33

Post by youngtaff »

madaxe_again wrote: post #17

So, I know a us born billionaire who rescinded his citizenship last year to avoid fatca. He has successfully evaded both the US and UK tax authorities to the tune of half a billion or so, he tells me. The guy gives crazy amounts to philanthropic causes instead. He doesn't want his hard earned wealth pissed away by clueless bureaucrats. So. Anyone who tells you fatca has been a success is full of it. It penalises "nor…

>He doesn't want his hard earned wealth pissed away by clueless bureaucrats.

Yeh, but guess he likes driving on roads and making use of many of the other public services taxes pay for

Re: Why expat Americans are giving up their passports

#34

Post by ascorbic »

crdoconnor wrote: post #13

>Her voice cracks and her eyes well up. She is in the process of relinquishing her American nationality. Soon she'll visit the US embassy formally to renounce her citizenship, she says, under duress. >"I'm very proud of being an American. It's what I am when I look in the mirror. >"If it weren't for Fatca [the Foreign Account Tax Compliance Act] and the decision by the bank, I'd never be doing this. Never ever. It's…

" Jane has lived and worked in France for 30 years drawing what she calls a "humble" salary. She has filed a tax return every year even though she earns significantly less than $106,000 a year."

Hardly the 1%

Re: Why expat Americans are giving up their passports

#35

Post by i_don_t_know »

jacquesm wrote: post #20
Ovid wrote: post #11

Earlier quoted context omitted.

Sorry to break it to you, but if you're a non-US citizen but a permanent resident in the US, you're a "US person": https://www.law.cornell.edu/cfr/text/22/120.15 This means that you're completely subject to US tax law, even if you leave the US. Congratulations! You're now subject to FATCA!

Except of course that if and when he leaves he ceases to be that US person because he's no longer a permanent resident.

You're a permanent resident until you formally renounce permanent residency at a US embassy or consulate. Some may permit mailing in your green card, others require you to appear in person. However, the process is or was free when I went through it.

I think there are other ways of losing permanent residence, but the only guaranteed ways are when you renounce or when the US takes it from you. Either way, you better have written proof.

If you're a long-term permanent resident (8 years or more), then you're subject to the same expatriation tax rules as US citizens. The IRS agents that I spoke to were all friendly and helpful, but unfortunately none of them knew the expatriation rules. It wasn't as bad as it may sound, but it wasn't fun either.

You also have to file a preliminary tax return before you actually leave the country (informally called the sailing permit).

Anyway, just leaving the US isn't good enough when you're a permanent resident and until you're through the process you're on the hook. And don't forget to meet FACTA requirements for the year in which you gave up PR...

Re: Why expat Americans are giving up their passports

#36

Post by rtpg »

timthelion wrote: post #24

I am an American living in Prague and will be among those to give up their citizenship. The new FBAR requirements and the recently pushed through changes that require foreign banks to report are really a huge burden. It is a significant legal risk to be an American overseas. The fines are insane for failiure to report, even if you owe no taxes! You can easilly land yourself with a $20 000 - $80 000 fine for having a…

To my knowledge there's treaties with the vast majority of countries to avoid double taxation if you're not making more than a very large amount of money ( filed taxes last year and ended up with a giant goose egg)

Re: Why expat Americans are giving up their passports

#37

Post by arto »

jacquesm wrote: post #28
arto wrote: post #21

Earlier quoted context omitted.

The UK passport is the best in the world in every ranking: https://www.linkedin.com/pulse/top-10-most-powerful-passport...

That shows it tied with Finland and Sweden, and the only ranking it uses is how many countries you can travel to without a visa, which is a bit limited as a statement of 'power' (though it is definitely an important measure). Other important measures would be in how many countries there are consular services available for holders of a certain passport and a couple of others.

There are other measures and rankings elsewhere.

In addition to the additional metrics you mentioned, perhaps yet another to take into account is how hostile natives feel towards you when traveling in certain parts of the world--up to and including harassment, kidnapping, and (in limited locations) beheading risks.

In places (even here in Europe) where people tend to by default assume good English speakers to be American, I get better treatment by managing to convey that I'm not.

Re: Why expat Americans are giving up their passports

#38

Post by rtpg »

jacquesm wrote: post #32
arto wrote: post #26

For those looking to renounce their U.S. citizenship, Mike Gogulski has chronicled and documented the whole paperwork-heavy process on his blog: http://www.nostate.com/about/ In his case, after submitting the paperwork and burning his passport on YouTube, he chose to not get another citizenship, which means he's now stateless.

Being stateless is not a good thing. It might seem that because you're member of none you are superior to all but having citizenship is not just a tax burden, it also allows you to partake in a lot of activities (such as travel, commerce and so on). Getting bank accounts and other goodies when you're stateless is rather troublesome.

Citizenship is also not a tax burden for most citizenships

Re: Why expat Americans are giving up their passports

#39

Post by k-mcgrady »

toni wrote: post #31
masklinn wrote: post #19

Earlier quoted context omitted.

The problem isn't citizenship-based taxation, it's an odd concept but it's been there for a very long time, there's a relatively high standard deduction and IIRC your local income tax is also deductible. Expats have dealt with that for more than a century. As the article points out, the problem is FATCA which doesn't come close to fixing the issue it's supposed to fix (income tax evasion) and completely breaks expats…

Let's say I am an American citizen living in France. Why US government doesn't close a tax treaty with French and demand 20% of the total amount I pay for all the taxes annually in France?

Why would the French agree to that?

Re: Why expat Americans are giving up their passports

#40

Post by timthelion »

rtpg wrote: post #36
timthelion wrote: post #24

I am an American living in Prague and will be among those to give up their citizenship. The new FBAR requirements and the recently pushed through changes that require foreign banks to report are really a huge burden. It is a significant legal risk to be an American overseas. The fines are insane for failiure to report, even if you owe no taxes! You can easilly land yourself with a $20 000 - $80 000 fine for having a…

To my knowledge there's treaties with the vast majority of countries to avoid double taxation if you're not making more than a very large amount of money ( filed taxes last year and ended up with a giant goose egg)

Yes, but the legal risk is that if you don't fill out the forms right, then you have your assets seized and you get a huge fine. It has nothing to do with how much you pay and everything to do with how good your accounting is.
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