I don't understand, isn't it easier to get around this by keeping your foreign bank account balance low (less than 10k) and transferring money on a regular basis to your US bank accounts to make sure it stays under 10k?
Why expat Americans are giving up their passports
301–310 of 411 posts
Re: Why expat Americans are giving up their passports
#302Earlier quoted context omitted.
yes, movies like Tears of the sun. considering the number of US citizens, they are all over planet and it's a rather unreasonable expectation. generally US citizenship meant much more in the past than it means now since there are more interesting places to live (albeit in long term US might still prove as best spot... or not).
When the most recent war broke out in Yemen, the Indian govt managed to evacuate its citizens from Yemen using their navy and if you take into account the size of the Indian diaspora in the Arabian Peninsula including Yemen, it wasn't an easy feat and I can't imagine that the USG wouldn't be capable of carrying out a similar evacuation plan or doing what it could to get their citizens out of harm's way abroad.
It would be said if poor Indians foot the bill for bringing back well off Indians who left for better life abroad.
Re: Why expat Americans are giving up their passports
#303I am British, and am married to an american. My wife moved to the UK and has never worked since. I had no idea about her obligation to file anything. She's been here for over a decade. Like a lot of people we use a joint bank account. My salary, and anything else goes in there. A couple of years ago I sold my flat in central London, and had 400K (600K USD) in there at various points. I have no idea how to bring my wi…
If you are both concerned, she can file back FBARs with a letter of explanation as to why she hadn't filed them (I had to do the exact same thing). I wasn't fined, and I was scared as hell.
Yes, this is one person's story. Personally, if you can, I'd get in touch with a tax solicitor and get a real professional opinion on your options, including how to insulate your assets in the case of any idiocy by the US.
One thing to keep in mind is that as stupid and horrible these laws are, they aren't meant for us. They're meant for real, actual tax cheats, and FINCEN has more interest in them than someone who's been ignorant and is now trying to make it right.
Re: Why expat Americans are giving up their passports
#304Earlier quoted context omitted.
I lived in Nigeria during a period of violence when thousands died. One of my enduring memories was the reactions of the Americans living there at the time. They were so sure that the army would come and save them and when it didn't they were dumbfounded. When someone from the US eventually turned up after the violence had all died down all the US citizens were offered was the opportunity to be part of the convey out…
Uh, did any of those American citizens make their way to the US embassy? That's how you get out of the country if violence is breaking out. Nobody in government would even know you're there beyond some database.
Actually, you are supposed to register if you live outside the USA with the State department.
Re: Why expat Americans are giving up their passports
#305Earlier quoted context omitted.
I've heard elsewhere that foreign banks were closing down accounts of American expats because the customers aren't worth the FATCA paperwork. Have you encountered any trouble with that?
This was literally in the article.
Yes, sorry I mean that I'd read about this in several other places had assumed that it's become a common occurrence. But nvarsj's comment suggests that it's been no big deal for him. I'm curious if he's personally run into banking problems, or just the pile of tax paperwork.
Re: Why expat Americans are giving up their passports
#306I am British, and am married to an american. My wife moved to the UK and has never worked since. I had no idea about her obligation to file anything. She's been here for over a decade. Like a lot of people we use a joint bank account. My salary, and anything else goes in there. A couple of years ago I sold my flat in central London, and had 400K (600K USD) in there at various points. I have no idea how to bring my wi…
I don't know if this applies to you, but state-side the sale of an asset wouldn't be counted as income.
According to this: http://time.com/money/2803550/income-taxes-on-home-sale/
If you lived in your previous home for at least 2 years, then you'd take it's original sale price plus closing/brokerage/etc costs as your "basis". Then take your later sale price subtracting those same costs. You get a $250,000 credit on profits.
So to me (a complete layman who's maybe not very good at taxes), that means if I buy a house for $200,000 plus 5% closing costs, my original expenses were $210,000. I later sell it for $450,000 minus 5% closing costs. That's $427,500. I've made $217,500 for holding onto the asset for two years. I should probably play the lottery. ;-)
Because I'm under the $250,000 single filing credit ($500,000 for joint filing couples, but I'm not sure how that'd work in your case since you're not a US citizen), I don't owe anything.
Say I did really well and made $400,000 in pure profit though (selling my $210,000 in the neighborhood of $600,000+).
You still get the credit so your taxable profit is $150,000 (assuming the joint filing credit wouldn't apply). That's taxed as capital gains. Not income. Which is a regressive tax. The highest rate is 20%. That'd be a $30,000 tax bill.
This all assumes you even put her on the title for the old property. If you didn't, then the sale doesn't mean anything necessarily. That she had access to the money through a joint banking account after the sale might complicate things?
In general I've found the IRS to be very helpful. They're not interested in prosecution (IME). They just want their due. And they're pretty flexible in making that happen.
Once upon a time I owed $15,000 in taxes from previous contract work, and hadn't filed in a few years because I was scared of the consequences. That's about the worst move. By not filing I racked up something like $1,000 in non-filing penalties each year as well as paying 10% interest on the amount owed.
When I finally did get my act together and contact them they waived further penalties, suspended the interest on the amount owed and set me up with a $300 a month payment plan.
There are a lot of horror stories out there. And bad things do happen to good people. But I'd like to imagine that most cases work out more like mine.
If I were in your position, I'd make it a priority to talk to a tax attorney, being sure they don't have a reporting obligation. It probably won't cost more than a few hundred dollars just to get some advice. Then I'd get a second opinion. Once I had some confidence I had a grip on the situation and how it was likely to play out, I'd talk to the IRS on my own, get on a payment plan if necessary, and put it behind me.
I'm not sure it applies in your situation, but stateside, simply avoiding filing properly is about the worst thing you can do. It doesn't just go away on it's own. That only makes it worse (interest and penalties).
But you know, I'm just some random guy on the internet. Figure out if tax attorneys have a reporting obligation and talk to one maybe? Good luck!
Re: Why expat Americans are giving up their passports
#307I 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…
Lived in Australia for 5 years. Was several months late filing FBAR my first year. Did it on time my second year. Completely forgot my 3rd and 4th year. Filed 3 at the same time on my 5th year. I was never contacted by the IRS for failing to file on time.
The point being, it's scare tactics. I filed a complaint with the https://www.irs.gov/Advocate and they are well aware of the issue. They have brought it up repeatedly in their report to Congress. The IRS's response is an FU and it shows how toothless the Advocate's office is. You can see their report on international issues here https://www.irs.gov/pub/tas/2011_arc_internationalmsps.pdf, The reporting requirements section is close to the bottom.
Re: Why expat Americans are giving up their passports
#308I 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…
> There are some benefits to being a US citizen, like that the army will rescue you if there is a civil war This is a common myth. If you don't intend to return to the USA there are no benefits to US citizenship, only downsides. The US may or may not rescue you if there's a civil war (see the fate of people in Yemen), but if they do, they will charge you for it at military rates you almost certainly cannot afford: ht…
$3-$5k is something you almost certainly cannot afford? For getting out of an active warzone that sounds like a steal to me :)
Re: Why expat Americans are giving up their passports
#309Upset about this issue and want to make a positive difference rather than debating technicalities or simply waiting for the other shoe to drop? It may be no surprise that FATCA and FBAR present several consitutitional issues. Chief among them are the following: -As the IRS can unilaterally sign unauthorized pseudo-treaties with foreign governments, the Senate’s role in ratifying treaties is bypassed -Fourth amendment…
1. The IRS isn't signing binding international agreements, they're agreeing to cooperate with foreign governments in the reporting of financial assets, which is well within their legal privilege.
2. The fourth amendment doesn't apply to data you're legally compelled to surrender to the government. By your logic, every form 1040 that's ever been filed is a fourth amendment violation.
3. The eighth amendment has almost never been used in a constitutional case involving excessive fines. When it has, the court has primarily used it to prevent pseudo-fines that aren't really called fines in order to skirt the eighth amendment.
Sure, FATCA might be annoying, but a legal challenge has almost nothing going for it. Don't get your hopes up.
Re: Why expat Americans are giving up their passports
#310Earlier quoted context omitted.
When the most recent war broke out in Yemen, the Indian govt managed to evacuate its citizens from Yemen using their navy and if you take into account the size of the Indian diaspora in the Arabian Peninsula including Yemen, it wasn't an easy feat and I can't imagine that the USG wouldn't be capable of carrying out a similar evacuation plan or doing what it could to get their citizens out of harm's way abroad.
It would be said if poor Indians foot the bill for bringing back well off Indians who left for better life abroad.
Indians in ME are across the economic spectrum, and mostly blue collar but there are also white collar. Yemen is very close to India. Your smug comments demonstrate your ignorance than anything else.