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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

#331

Post by dalke »

cylinder wrote: post #312
dalke wrote: post #289

Earlier quoted context omitted.

("NOT primarily about taxes" != "taxes are not an issue". My biggest complaint is precisely the expensive reporting requirements.)

Forms can be filled out. Look at Australia. If I want my retirement fund to be self-managed, I basically cannot because of inconsistencies in the tax treaty. And, what if I choose to live and work in Hong Kong or Singapore or the Cayman Islands? Why should the US have rights to tax my income above $100k if those states are tax-free? Did the US pay for my education? No. Not even my healthcare! The socialist states don…

The majority of people that I've read about who are complaining about the situation are not complaining about having to pay taxes, because they don't have to pay taxes. I don't have to pay taxes to the US because I don't make enough in Sweden.

But I do have to spent the time and money to have someone to fill out the forms.

I also have to worry that my bank might decide to cut me off, because they also have to "fill out forms", that is they also have "expensive reporting requirements". Even if you paid no taxes and had no problems with the tax treaty, you still might not be able to get a bank account in Singapore.

Yes, there are a lot of people who also don't like the taxes. It's an important point. But not the primary point, which is the expensive reporting requirements for both American citizens and banks which do business in the US and which have American citizens as clients.

Re: Why expat Americans are giving up their passports

#332

Post by bobby_9x »

SteveLAnderson wrote: post #319
oldmanjay wrote: post #290

Earlier quoted context omitted.

A prevarication is a lie in practical terms. Automatic budget increases are justified at the end of every fiscal year by spending all of the leftover money, i.e. unneeded money that was automatically budgeted is spent on crap solely to justify getting more unneeded money.

That may happen, but like the "cadillac welfare queen" is an exception, not the rule. For most departments, they run out of money before the end of the fiscal year.

I disagree. I worked in a few different government departments that depended on funding.

We always had a surplus at the end of the year and the boss would tell us to spend it on anything and everything because if we didn't, there would be less money in funding the next year.

The amount of waste was incredible and it made me angry. It's why I went into the private sector/started my own company.

You also almost could never get fired. We had so many bad employees that basically sat to get a paycheck and take up space. If you are really lazy, it's great.

Because of this game that is played, it's very difficult to tell if a department 'ran out of money' or just spent it to meet next year's budget.

Re: Why expat Americans are giving up their passports

#333

Post by Ensorceled »

gcb0 wrote: post #295
Ensorceled wrote: post #118

Earlier quoted context omitted.

My ex and I used to use the same accountant to file our taxes. As a Canadian citizen, our accountant charged me $100CDN, my ex who had joint US/Canadian Citizen was charged $500-$2000CDN depending on the year and the amount of work that needed to be done. So, yeah, there are qualified tax advisors who can help but it's painful.

and even after that $2k is gone every year, you're still not sure you can't be fined. I've had to fix my taxes every year that i had paid Ernest & young to prepare them for me. had i trusted them blindly as most people do, I'd be subject to a couple $20k fines. of course, those depends on you being big/of interest enough to be bothered by the irs. but i like to have clean books and not count on luck.

That's the real problem with the IRS. I've made mistakes on my taxes before and got a "Oops, you owe us $2000 more, pay by XXX to avoid interest and penalties" from the CRA. The IRS jumps straight to large fines and penalties, especially for ex-pats.

Re: Why expat Americans are giving up their passports

#334

Post by rhino369 »

youngbullind wrote: post #4

This affects my girlfriend. She has a dual passport but only lived in the US to the age of six months. We are are British but live in Spain which already makes for complex tax arrangements, and this on top of things is just crazy. How the hell does the US think it has the right to tax people who haven't lived there for over 30 years?

They are citizens of our country and are therefore responsible for funding the government. They have the right to just move back to the United States and enjoy the fruits of our country. Why shouldn't they have to pay up?

Taxes aren't a payment for services rendered.

If your girlfriend doesn't believe herself to be an American she should renounce citizenship. But you are asking to have her cake and eat it too.

Re: Why expat Americans are giving up their passports

#335

Post by dalke »

maxlamb wrote: post #301

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?

If you live overseas then you probably want to do thing like save up for retirement, or a house. While you can have a US bank account, it means taking a loss to change the money first to then from dollars.

You also have to be very careful with your direct deposit. If it goes into your local account (because it's expensive and more complicated to wire the money to a US account) and make $5K/month then you have to be absolutely sure that your local bank account doesn't have $5K in it. And be sure to watch the exchange rates!

If you sell a house, you can't put the profits into a local account but must figure out some way to have everything sent to the US. Which may not be easy.

In some countries, like Sweden where I live, the government can fill out your taxes for you, because they know how much you make - except for foreign accounts. If you have, say, $100K in a US account, drawing interest, then you have to declare it appropriately.

So no, it's not easier for the millions of Americans who live overseas to keep the bulk of their money in a US bank account.

Re: Why expat Americans are giving up their passports

#336

Post by gyardley »

For all the people from HN dreaming of American immigration, be aware that 'US citizens' in this article (any anything else pertaining to taxation) should generally be read as 'US citizens and permanent residents'.

Also be aware that while renouncing permanent residency is much simpler (and you'll be sure to lose it if you're out of the country long enough), you may be exposed to significant tax liabilities for doing so - especially if you're holding illiquid startup stock.

Re: Why expat Americans are giving up their passports

#337

Post by thisone »

emiliobumachar wrote: post #313

"...foreign banks to identify US citizens among their customers to US tax authorities. The penalty for failing to do so can be as high as 30% of all a bank's dealings with the USA." So, could any new, small bank start accepting americans as costumers but completely refuse to deal with the USA, not even a tiny transfer, or charge a 50% fee for each transaction? Would that be legal?

From what I understood of the law when I was wondering about my banks, yes.

Though I have no idea how small and local the bank would be to not have to think about it.

Re: Why expat Americans are giving up their passports

#338

Post by newman314 »

briandear wrote: post #138
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…

Army coming to rescue? Nope. Here's a story about the US specifically NOT going to rescue Americans in Yemen: http://www.bloombergview.com/articles/2015-04-22/americans-t... Have a look at this evacuation application: http://www.state.gov/documents/organization/211837.pdf Here's the key wording: "3. I understand that: (a) I will be billed for the cost of my/our transportation no greater than the amount of a full-fare…

While I generally have been supportive of Bernie's stance on things, it's disturbing to hear that he supports FATCA.

I went digging for more information and it seems that he now is potentially supportive of residence based taxation instead of citizen based taxation.

From reddit.com/r/expats4sanders, http://www.democratsabroad.org/our_candidates

There are many different scenarios which the law as it currently stands do not adequately cover for.

Scenario:

* Parent gains US citizenship through immigration. Parent inherits from grandparents.

* Person gains US citizenship through immigration. Person inherits from parents foreign bank accounts.

* Based on my understanding, US now has a claim on monies which have at no point entered the US, nor have been derived from US related activities.

* This is crazy.

I'm totally fine with paying taxes on income derived from being in the US but to have to pay US taxes on income derived elsewhere is just insane overreach.

Re: Why expat Americans are giving up their passports

#339

Post by analyst74 »

wolfgke wrote: post #18
k-mcgrady wrote: post #6

Earlier quoted context omitted.

>> "America is one of the few countries that could get away with this" There are actually only two countries that do it - the US and Eritrea.

I think China, too.

I never thought about this, but shit it's true, because they learnt from IRS when drafting the tax code back in the day.

http://www.nytimes.com/2015/01/08/business/international/chi...

Re: Why expat Americans are giving up their passports

#340

Post by Slippery_John »

smazero wrote: post #199

The use of the term "expat" rather than "immigrant" is interesting. I read a piece in the guardian the other day which framed that distinction in terms of white vs non-white ( http://www.theguardian.com/global-development-professionals-... ), but it's obviously a bit more complicated than that. I don't think the two terms are synonyms, but they are very close, and once you try to pick apart the differences, I think t…

The distinction is the focus on old vs new. The term 'expatriate' is much closer to emigrant than immigrant, where the emphasis is more on the fact that they left their home country rather than the fact that they came to another. It also lacks the emphasis on permanency that emigrant/immigrant have.

Additionally, the term 'immigrant' is much more ambiguous than 'expat'. An American expat is clearly an American citizen living abroad. An American immigrant could either be an American citizen who moved permanently abroad, or a non-American who permanently moved to the United States.

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