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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

#31

Post by dragandj »

Mediterraneo10 wrote: post #19
muststopmyths wrote: post #9

So, these people chose to keep their US citizenship, but chose to not follow the rules ? The woman was brought over as a baby, but chose to keep the citizenship into adulthood, presumably acquiring a passport or other citizenship documents. Otherwise how are the banks finding out ? Why should she be surprised if the IRS eventually comes for her ? Seems like giving up citizenship is the right solution for these people…

> Also as far as owing onerous back taxes go, aren't taxes you paid in your country of residence deductible ? No, the USA has treaties with only some other countries that result in net-zero taxation of self-employed people. If you live in a country with which a tax treaty has not been concluded, and you are self-employed, you are liable to both your local country for income taxes etc., and to the USA for Social Secur…

OTOH, isn't there a poverty-line amount in USA that makes some income level practically tax-free (through deductions, etc.)? I imagine that in most countries $15.000 / year is a rich person's income, while in USA it puts you under "starving". What I want to say, if you're living in, say, Kazakhstan, earning a good fat paycheck of $1000 a month and living like a king, shouldn't you file "I'm starving poor at $12000" to the IRS and get zero taxes, or, perhaps, even some food stamps or something like that?

(Just guessing, I don't have experience with this)

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

#32

Post by mcv »

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…

This is not true. Many of these accidental Americans really weren't aware of this. Why would they? They never received a US passport or any other official US documents, never lived there, didn't go to school, and had no reason to be aware of their unintended dual citizenship until the US started bugging them for taxes.

Also, renouncing this accidental citizenship is far from trivial. That requires jumping through a lot of bureaucratic hoops. They never received any benefit from it, and if they knew at all, they ignored it.

And they have no problem paying taxes, they just pay their taxes in the country in which they live and work. They don't want to have to fill in tax forms for every random country that chooses to bestow unwanted citizenship on them.

Make no mistake, the only reason this is an issue at all, is because the US is too powerful to ignore. No other country does this (except maybe Ethiopia or Eritrea, I think), and no other country would get away with this. Only the US does.

It's rather odd that for a country where so many people question Obama's citizenship, the country is so eager to claim ownership over people who don't want it.

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

#33

Post by siberianbear »

sjg007 wrote: post #24

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.

The $100k you're referring to is the Foreign Earned Income Exclusion [1]. If you're an American working abroad, you don't need to pay income tax on your first $107,600. The exclusion does not apply to self-employment tax or investment income.

That's not even the real problem, though. The problem is that banks don't want to deal with the FATCA compliance issues and just refuse to deal with Americans, period. I've experienced this firsthand as an American expat and it is a colossal pain in the ass.

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

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

#34

Post by mantap »

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…

It's not easy to renounce American citizenship. The US considers itself entitled to taxes from citizens who live in other countries. Even if they haven't been to the US since they were a baby. If you want to renounce citizenship you have to pay up.

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

#35

Post by dunce2020 »

24gttghh wrote: post #16
dunce2020 wrote: post #7

Earlier quoted context omitted.

https://en.wikipedia.org/wiki/Anchor_baby but on accident.

You could have shared a more neutral article title like this[0] instead of that charged phrase: '"Anchor baby" is a term (regarded by some as a pejorative' [0] https://en.wikipedia.org/wiki/Birthright_citizenship_in_the_...

Yes, I could have. But I didn't. Oh well.

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

#36

Post by bitcharmer »

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…

> 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

Wrong on both counts. I know two people who fall under the category you deem "no way in hell"

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

#37

Post by elgatonegro »

eralps wrote: post #29

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 in…

If you become a US citizen you have to file yearly IRS tax returns, calculate and pay taxes. There is no getting around this, it does not matter where you live.

The US has bilateral tax agreements with certain countries to avoid double taxation. So if you happen to be in one of these countries, you will normally pay taxes to your host country and if those are greater than the taxes owed to the US (which in many cases they will be), your US tax will be zero. You still have to file the US tax return and you still need to pay taxes on income derived in the US (such as dividends and interest) as that can not be eliminated by foreign taxes.

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

#38

Post by clawoo »

icu wrote: post #23

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 s…

Yeah, I was surprised the article completely glossed over why nobody outside the US wants to deal with FATCA, because on face value it sounded like a good tool to prevent money laundering and tax haven stashing.

But based on FATCA, only the other countries have a responsibility of reporting wealth information about US citizens, while if you are a Russian or a Brit or whatever you can safely stash all your wealth in the US if the tax regime is more lenient than your own country.

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

#39

Post by bloodorange »

mcv wrote: post #32
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…

This is not true. Many of these accidental Americans really weren't aware of this. Why would they? They never received a US passport or any other official US documents, never lived there, didn't go to school, and had no reason to be aware of their unintended dual citizenship until the US started bugging them for taxes. Also, renouncing this accidental citizenship is far from trivial. That requires jumping through a l…

While I don't like that warmongering nation any more than you do, in this case, it is not a secret that people's citizenship can be affected by where they are born, their parents' citizenship etc.

So, if anything, their parents are to blame and not these folks who had no choice in the matter.

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

#40

Post by [deleted] »

Mediterraneo10 wrote: post #19
muststopmyths wrote: post #9

So, these people chose to keep their US citizenship, but chose to not follow the rules ? The woman was brought over as a baby, but chose to keep the citizenship into adulthood, presumably acquiring a passport or other citizenship documents. Otherwise how are the banks finding out ? Why should she be surprised if the IRS eventually comes for her ? Seems like giving up citizenship is the right solution for these people…

> Also as far as owing onerous back taxes go, aren't taxes you paid in your country of residence deductible ? No, the USA has treaties with only some other countries that result in net-zero taxation of self-employed people. If you live in a country with which a tax treaty has not been concluded, and you are self-employed, you are liable to both your local country for income taxes etc., and to the USA for Social Secur…

[deleted]
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