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FATCA Pushes “Accidental” Americans to Give Up US Citizenship

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Re: FATCA Pushes “Accidental” Americans to Give Up US Citizenship

#21

Post by jancsika »

> She received automatic citizenship by being born on U.S. soil, but has no other connection to the country, having left as a baby.

Sorry, but there is no way in hell a European wouldn't know they have dual citizenship by being born in the U.S. And there's no way they wouldn't have renounced it in all this time unless they saw that citizenship as a benefit that outweighs the costs, or at least as a potential benefit down the road.

This article imbues Accidental Americans with the stereotypical dumbassery of I-Am-A-Real-American's in an attempt to get me to sympathize with people who don't want to pay taxes.

Edit: added Hulk Hogan entry song reference for clarity

Re: FATCA Pushes “Accidental” Americans to Give Up US Citizenship

#22

Post by abellerose »

I tried to get rid of my US citizenship while residing in Canada. I found out about the $2.5k and cannot pay that while I’m not in a great financial situation to afford giving away that much. Also I suffered conversion therapy in Michigan against my will. So I greatly despise the idea of the US ever getting a dime from me. Luckily my name is different between citizenships and I’ve not disclosed being a US citizen to banks. Anyway I’ll be dead by cancer in the near future so I’m not that concerned but I wanted to share my experience. I contacted the US embassy by email about not being able to pay but greatly wanting to drop US citizenship because of past trauma that effects my health. The agent just sent an email that looks like a template explaining all must pay 2.5k and he didn’t respond to any following responses I sent. It feels like extortion and really should be considered unconstitutional. I’m writing from a hospital bed on my phone so I apologize for the bad grammar mistakes

Re: FATCA Pushes “Accidental” Americans to Give Up US Citizenship

#23

Post by icu »

The solution is to use your accidental US citizenship to your advantage. The US is actually a remarkable tax haven and has some amazing trust structures if you know what you're doing.

For example the Roth IRA, will in most cases due to reciprocal tax treaties, allow for a tax free pension even when your tax residency is in another county.

On top of the trust structures I've alluded to, there are few reciprocal data sharing arrangements with countries forced to comply with FATCA. In other words, the data sharing usually only goes one way.

Yes, this is a remarkable pain to learn and administer, but it's all possible to do without paying thousands in ongoing accountant and lawyer fees.

This means that it's possible to shelter your assets in a remarkably secretive way the US. So in one sense, you could consider US taxes as insurance against spurious lawsuits in say the EU, or bad faith spouses wherever you get married.

Re: FATCA Pushes “Accidental” Americans to Give Up US Citizenship

#24

Post by sjg007 »

I thought there were tax treaties, basically you don't pay taxes on the first $100k if you paid into the national tax system of the country you are in. I can imagine FICA taxes though might be difficult. Maybe US social security would deny benefits if you claimed them without any contributions and residence abroad.

Re: FATCA Pushes “Accidental” Americans to Give Up US Citizenship

#26

Post by mleo »

jancsika wrote: post #21

> She received automatic citizenship by being born on U.S. soil, but has no other connection to the country, having left as a baby. Sorry, but there is no way in hell a European wouldn't know they have dual citizenship by being born in the U.S. And there's no way they wouldn't have renounced it in all this time unless they saw that citizenship as a benefit that outweighs the costs, or at least as a potential benefit…

I have dual citizenship with another country and haven’t given it any consideration since I have not lived there since I was 18 months old. I wouldn’t know or consider tax implications of the country since I have lived my entire life here and identify as American.

Re: FATCA Pushes “Accidental” Americans to Give Up US Citizenship

#27

Post by andrepew »

jancsika wrote: post #21

> She received automatic citizenship by being born on U.S. soil, but has no other connection to the country, having left as a baby. Sorry, but there is no way in hell a European wouldn't know they have dual citizenship by being born in the U.S. And there's no way they wouldn't have renounced it in all this time unless they saw that citizenship as a benefit that outweighs the costs, or at least as a potential benefit…

I don’t think it is unreasonable for them to not know they had US citizenship despite being born in the US. Completely unconditional citizenship based on location of birth isn’t really a thing in Europe.

It is also possible they knew and they didn’t think it was a problem. The US is one of only two countries in the world that do taxes based on citizenship.

Re: FATCA Pushes “Accidental” Americans to Give Up US Citizenship

#28

Post by detaro »

jancsika wrote: post #21

> She received automatic citizenship by being born on U.S. soil, but has no other connection to the country, having left as a baby. Sorry, but there is no way in hell a European wouldn't know they have dual citizenship by being born in the U.S. And there's no way they wouldn't have renounced it in all this time unless they saw that citizenship as a benefit that outweighs the costs, or at least as a potential benefit…

Why would they definitively know that? It's not exactly a common thing and widely talked about.

Re: FATCA Pushes “Accidental” Americans to Give Up US Citizenship

#29

Post by eralps »

I am a green card applicant basically waiting to become a US citizen in the next 5 - 10 years. Comments are mostly blaming the person for not renouncing it but is renouncing really necessary?

If I end up going back to the country I was born in and leave the US what benefit do I have as a US citizen? This has been a scary scenario for a long time for me and I don't think I would be able to pay tax to the US with my income in that country.

If I basically stop being a citizen of the US by moving to another country why do I need to continue paying for it?

Is there any other country that does this?

Edit: This post made me finally read about this scenario. FEIE [1] exclusion for about $105,000 as of 2020. Is a relief because I can never earn that amount with the exchange rate in my country of birth.

1. https://www.irs.gov/individuals/international-taxpayers/fore...

Re: FATCA Pushes “Accidental” Americans to Give Up US Citizenship

#30

Post by elgatonegro »

nvarsj wrote: post #13

Being an American expat is a complete nightmare. The retroactive GILTI/transition taxes enacted by Trump and the republican Congress put a massive strain on my family and finances. Imagine getting a bill for a significant portion of your life savings despite paying already 50% tax in your foreign country and having dutifully filed US taxes at great expense. Never have I disliked being an American so much. Some people…

Looks like living abroad is not the issue here, being an owner of a foreign corporation is. There are millions of Americans living abroad, maintaining their US bank and retirement accounts.
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