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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

#91

Post by math »

siberianbear wrote: post #33
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 expe…

I was affiliated with a company in Singapore which had it's bank account closed, I believe due to FACTA, even though at the time no one involved with the company had ever been to the US and didn't have any ties to the US. It was simply that the size of the account was too small to justify the associated administrative burden. FACTA has impact beyond US citizens - pretty annoying.

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

#92

Post by [deleted] »

sailingparrot wrote: post #87
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 I basically stop being a citizen of the US by moving to another country why do I need to continue paying for it? You don't "stop" being a citizen. Part of the process to apply for citizenship is education about what becoming a citizen means through the civics test, and it should be very clear to you that this is not meant to be just a convenient thing that you do as a formality. Citizenship comes with rights but…

[deleted]

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

#93

Post by throwawayiionqz »

koluna wrote: post #90

> countless accidental [...] Linked article says a bit more than 3,000 around the world. So, 0.001%. Article content is clickbait. Basically, a very small part of the population complains about something that others work decades on.

Non-accidental Americans and green card holders living in the EU also face major difficulties for opening bank accounts and basic investments. The accidental ones are the tip of the iceberg, but the problem need a fix for everyone.

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

#94

Post by rwmj »

Mediterraneo10 wrote: post #18
ttul wrote: post #5

Why it must cost over $2,000 to give up something that others spend much more trying to acquire is a total mystery. Surely it does not cost $2,000 to make a note of someone’s ex-citizenship.

> Surely it does not cost $2,000 to make a note of someone’s ex-citizenship. Of course. Still, doesn’t renunciation of US citizenship actually require an act of Congress annually, under which all recent applicants are included? That the price was jacked up to $2000 is outright exploitation of desperate people, but certainly there would be some administrative fee (like the earlier one, which was generally considered r…

> doesn’t renunciation of US citizenship actually require an act of Congress annually, under which all recent applicants are included?

That's strangely absurd! Also wouldn't it be a bill of attainder (thus against the Constitution)?

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

#96

Post by koluna »

throwawayiionqz wrote: post #93
koluna wrote: post #90

> countless accidental [...] Linked article says a bit more than 3,000 around the world. So, 0.001%. Article content is clickbait. Basically, a very small part of the population complains about something that others work decades on.

Non-accidental Americans and green card holders living in the EU also face major difficulties for opening bank accounts and basic investments. The accidental ones are the tip of the iceberg, but the problem need a fix for everyone.

But that’s a whole separate problem, no?

That’s like saying “Accidental lottery winners complain they have to pay taxes, but hey, we need to make sure the tax code is good for everyone” - totally, but don’t paint the article like it’s some massive global problem of lottery winners struggling.

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

#97

Post by sjg007 »

siberianbear wrote: post #33
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 expe…

What about a multinational bank like Citi bank or HSBC etc... I would assume they have experience in these issues.

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

#98

Post by gok »

The reason these laws exist at all is the moral outrage over rich Americans illegally hiding their money overseas. Predictably, the laws have had limited effect on rich tax evaders and huge negative impact on millions of non-rich expats. In general one should be extremely skeptical of regulations which are sold as "not even applying to most people," as the unintended consequences will almost certainly hurt a lot of people outside of the scope of the law's stated target.

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

#99

Post by academia_hack »

R0b0t1 wrote: post #54
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…

Your situation isn't normal. You need to be making quite a bit of money to be taxed. If you don't have any desire to return to the US why not just ignore it?

Even paying zero dollars you still have to file taxes, send in FBAR, invest in a FACTA compliant way, sort out redundant pensions, and deal with the IRS - all at comically inflated costs since software products (e.g. Turbotax) don't do overseas taxes well, if at all. And if you make a mistake navigating an incredibly complex web of under-documented treaty law and ambiguous paperwork you can quite literally end up imprisoned by a country with one of the developed world's most comically broken justice systems the next time you go on holiday. I once won a random prize drawing for a modest amount of cash ($15k) and ended up paying nearly $3k in accountant fees to navigate the double-taxation process safely. My US tax burden was $0, but the filling burden was way beyond that. I haven't benefited from US public services or anything in many years. The US is essentially the only country on the world that inflicts this nonsense on people.

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

#100

Post by true_religion »

rwmj wrote: post #94
Mediterraneo10 wrote: post #18

Earlier quoted context omitted.

> Surely it does not cost $2,000 to make a note of someone’s ex-citizenship. Of course. Still, doesn’t renunciation of US citizenship actually require an act of Congress annually, under which all recent applicants are included? That the price was jacked up to $2000 is outright exploitation of desperate people, but certainly there would be some administrative fee (like the earlier one, which was generally considered r…

> doesn’t renunciation of US citizenship actually require an act of Congress annually, under which all recent applicants are included? That's strangely absurd! Also wouldn't it be a bill of attainder (thus against the Constitution)?

No. Acts of Congress are also necessary to commission US officers.

Similar procedure is used to confirm people to federally appointed positions or allow individuals expidited paths to US citizenship.

Bills of attainer seems to refer solely to acts that render a person guilty and punish them outside of normal jurisprudence.

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