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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

#51

Post by josh_fyi »

IIAOPSW wrote: post #15

I don't even have to click to know what this is about. God damn government wants to tax me despite being overseas. Don't get me wrong here. I love my country but hot damn do I hate our government. HK or UK or Canadian passport would probably be nearly as good but without any of the bullshit.

No, this is NOT primarily about taxes. It is about expensive reporting requirements -- the sort of paperwork usually done by billionaires and big corporations must be filled out by every American, even those with low-incomes.

Re: Why expat Americans are giving up their passports

#52

Post by crdoconnor »

lokedhs wrote: post #25
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…

It can be a huge hassle for normal US citizens living outside the US. Most banks won't deal with them because of the risks involved. As a US citizen abroad, just getting a regular bank account can be next to impossible. I live in Singapore and when I was signing up for a stock trading account I asked what would have happened if I had to answer yes in the box that asked if I was liable to pay income tax in the US. The…

I lived in Singapore for 3 years and managed without a stock trading account.

It's one of the easiest places to open a bank account, actually.

Re: Why expat Americans are giving up their passports

#53

Post by jacquesm »

arto wrote: post #42
jacquesm wrote: post #32

Earlier quoted context omitted.

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.

> Being stateless is not a good thing. That's wholly a matter of individual preference. I know Mike Gogulski personally and I can attest to him being quite happy having made the choices he did, and no longer being part of what he perceives as an evil empire. The tax question never factored into his decision, it was moral questions that preoccupied him.

I applaud the mans morals but I foresee some practical complications in such trivalities as child-birth, hospitalization, estate planning (and eventual execution) and so on. None of those may apply to him and he's apparently thought this through very well but the wheels of government have a very annoying habit of grinding on with or without your consent and by placing yourself purposefully outside of the system you might find one day that this can backfire. I sincerely hope he has a back-up plan if he ever needs to be part of some formally recognized entity again, it's easier to lose a citizenship than it is to gain one.

Re: Why expat Americans are giving up their passports

#55

Post by jacquesm »

arto wrote: post #37
jacquesm wrote: post #28

Earlier quoted context omitted.

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 Amer…

Plenty of Americans travel abroad pretending they're Canadians, large maple leaf flags on their coats and all...

Re: Why expat Americans are giving up their passports

#56

Post by masklinn »

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?

Because that makes no sense? Why would the french state give part of its (perfectly normal and standard) income tax back to the US for no reason?

Re: Why expat Americans are giving up their passports

#57

Post by true_religion »

i_don_t_know wrote: post #35
jacquesm wrote: post #20

Earlier quoted context omitted.

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 ha…

I wonder.

You can lose your PR status simply by:

> Fail to file income tax returns while living outside of the United States for any period. [1]

But they do require you report your loss of PR status to the IRS.

So I wonder if failing to file thus losing your status would count as good enough to the IRS.

[1] https://www.uscis.gov/green-card/after-green-card-granted/ma...

Re: Why expat Americans are giving up their passports

#58

Post by josh_fyi »

For most tax forms, the IRS says "you have to fill out this form so as to pay the correct taxes."

For FATCA, the IRS says "FATCA targets tax non-compliance by U.S. taxpayers with foreign accounts." https://www.irs.gov/Businesses/Corporations/Foreign-Account-...

In other words, FATCA treats all Americans overseas as a priori criminals -- the form is being filled out to "target non-compliance."

Re: Why expat Americans are giving up their passports

#59

Post by orbifold »

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…

It seems rather strange to rescind citizenship because of tax issues, aren't there qualified tax advisors that can handle all of that for you? At least here in Germany they are quite affordable and usually pay for themselves because of the tax savings you get due to their advice. If you consult one you can also be rather confident that you don't accidentally forget about some new regulation.

Re: Why expat Americans are giving up their passports

#60

Post by Ovid »

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)

Actually, no. The US has tax treaties with roughly 1/3rd of the countries in the world (source: https://www.irs.gov/Businesses/International-Businesses/Unit...). If you're not in one of those countries, too bad.

Further, these tax treaties differ from country to country and don't always offer the same protections. Here, read the 42 page US/France tax treaty (https://www.irs.gov/pub/irs-trty/france.pdf) and try to figure out how you'd be impacted if you were living in France.

We expats don't just have to hire accountants to do our taxes, we often have to hire international tax lawyers, EVEN IF WE DON'T EARN ENOUGH TO PAY US TAXES!

Studies have repeatedly shown that the majority of expats are abroad to find a job, to teach, to volunteer, or for love. We're taxi drivers, waiters, English teachers, farmers, computer programmers, and so on. We're normal people who are being massively screwed by rhetoric in the US.

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