FATCA Pushes “Accidental” Americans to Give Up US Citizenship • Hacker News Board

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

#111

Post by KLexpat » Sun, Dec 27, 2020, 5:48 PM UTC

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 work in finance and it IS a colossal pain to deal with the FATCA compliance.

There is no official guidance to FATCA and its processes, and every country has passed its own FATCA related regulations. Therefore running a FATCA compliant entity in say france requires you to comply with all french laws around fatca. Which also leads to issues with GDPR. This creates a cost of several hundred thousand USD per year just to deal with US clients for most western finance companies, per country they do business in.

Or - simply flatly refuse to offer services to any US citizens and rest easy knowing the IRS isn't going to ruin your life just because a US citizen tried to open an account without even depositing a single cent, but you didn't file your IRS stuff correctly

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

#112

Post by centimeter » Sun, Dec 27, 2020, 5:48 PM UTC

sdenton4 wrote: post #85

Digit-Al wrote: post #76

Earlier quoted context omitted.

> A surprising number of Americans seem to think it's reasonable to tax non-residents, so such legislation may be hard to get passed. So let's get this straight. On one side you have Americans who think it's reasonable to tax people who don't live in the country and thus don't use any of the services that tax pays for and then on the other side you have Americans who believe that all tax is theft under the threat of…

The core psychology of populist American politics is "F$ck you, got mine." Taxing other people is great, putting other people's kids in cages is ok, cutting off University funding is fine once you've gotten yours, etc...

This is the coldest and most confused take on populism I’ve seen on this platform (as an anti-populist).

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

#113

Post by centimeter » Sun, Dec 27, 2020, 5:50 PM UTC

Digit-Al wrote: post #76

C4K3 wrote: post #50

Earlier quoted context omitted.

A surprising number of Americans seem to think it's reasonable to tax non-residents, so such legislation may be hard to get passed. If you support such legislation, consider supporting lobbying groups such as American Citizens Abroad https://www.americansabroad.org/

> A surprising number of Americans seem to think it's reasonable to tax non-residents, so such legislation may be hard to get passed. So let's get this straight. On one side you have Americans who think it's reasonable to tax people who don't live in the country and thus don't use any of the services that tax pays for and then on the other side you have Americans who believe that all tax is theft under the threat of…

Turns out that when you have 330M people with completely incompatible ethnocultural backgrounds, you end up with an untenably wide variance in political beliefs. Europeans take note; this is where many of you are heading.

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

#114

Post by throwawayiionqz » Sun, Dec 27, 2020, 5:50 PM UTC

koluna wrote: post #96

throwawayiionqz wrote: post #93

Earlier quoted context omitted.

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.

You can find a continuous spectrum of Americans suffering FATCA and IRS struggles while living abroad.

At the end of the spectrum are these accidental Americans.

In the middle you can find e everything, e.g. your kid studying in the EU that cannot open a bank account there or issues getting a real estate loan to buy a house in the foreign country you work and live in. Essentially opening a bank account abroad is a no-go unless you lie or have a lot of money.

Then you have ultra wealthy tax evaders that were the target of those regulations. Obviously these people don't have a hard time opening bank relationships anywhere.

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

#115

Post by Shared404 » Sun, Dec 27, 2020, 5:53 PM UTC

sdenton4 wrote: post #85

Digit-Al wrote: post #76

Earlier quoted context omitted.

> A surprising number of Americans seem to think it's reasonable to tax non-residents, so such legislation may be hard to get passed. So let's get this straight. On one side you have Americans who think it's reasonable to tax people who don't live in the country and thus don't use any of the services that tax pays for and then on the other side you have Americans who believe that all tax is theft under the threat of…

The core psychology of populist American politics is "F$ck you, got mine." Taxing other people is great, putting other people's kids in cages is ok, cutting off University funding is fine once you've gotten yours, etc...

> F$ck you, got mine.

My ext4 disk to my fat32 disk.

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

#116

Post by kingosticks » Sun, Dec 27, 2020, 5:54 PM UTC

C4K3 wrote: post #50

voisin wrote: post #6

The US could solve most of its expat issues if they simply said foreign accounts are those accounts foreign to your current place of residence. By saying foreign means foreign to the US, they’ve made it very challenging to form banking relationships in expats’ countries of residence. The next step would be to repeal citizenship based taxation in favour of residency based taxation like every other country on earth (ex…

A surprising number of Americans seem to think it's reasonable to tax non-residents, so such legislation may be hard to get passed. If you support such legislation, consider supporting lobbying groups such as American Citizens Abroad https://www.americansabroad.org/

If wonder if all those same Americans would think it reasonable the non-resident tax payers finally got something for their tax returns/hoop-jumping, in the shape of coronavirus support cheques. Thanks to that I think I've almost broken even. Apart from all the wasted time, of course.

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

#117

Post by KLexpat » Sun, Dec 27, 2020, 5:56 PM UTC

happynacho wrote: post #95

I would love if there was an option to buy their citizenship for that $2350 fee, hell even double would be a no-brainer. Strange how some people want to get rid of it and how others want it no matter what.

If you are a finance company that wants to take on US clients:

https://www.irs.gov/pub/irs-drop/rp-14-38.pdf, from the IRS.

Then lets say you're a company in... Germany

https://www.internationaltaxreview.com/article/b1f7nd0q58rfh...

It's such a nightmare. And if you don't get it right the US government will come after you - and the have the international treaty agreements in place where most national governments will shaft you on behalf of the IRS, because of another relevant aspect of US culture:

https://nationalinterest.org/sites/default/files/main_images...

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

#118

Post by throwawayiionqz » Sun, Dec 27, 2020, 5:57 PM UTC

NotPavlovsDog wrote: post #57

US citizenship comes with a big administrative burden even if you don't live in the US. Some parents with European citizenship sometimes do not file an American birth certificate when registering their child for a European birth certificate. I.e. if the country facilitates registration of child based on parent citizenship and not birth location of child, they just never declare the child was born in the US. "It was a…

What happens the day your kid shows the wrong passport at Port of entry?

TSA Officer: "Hi foreigner, you don't have ESTA?"

Kid: Oh sorry this is the wrong birthplace passport. Take at look at this one plz

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

#119

Post by KLexpat » Sun, Dec 27, 2020, 5:58 PM UTC

sjg007 wrote: post #97

siberianbear wrote: post #33

Earlier quoted context omitted.

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.

If you're in a country like Malaysia, the domestic branch of a multi-national bank may not accept US citizens, because the Malaysian branch doesn't deal with FATCA/US gov.

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

#120

Post by onetimemanytime » Sun, Dec 27, 2020, 6:00 PM UTC

NotPavlovsDog wrote: post #57

US citizenship comes with a big administrative burden even if you don't live in the US. Some parents with European citizenship sometimes do not file an American birth certificate when registering their child for a European birth certificate. I.e. if the country facilitates registration of child based on parent citizenship and not birth location of child, they just never declare the child was born in the US. "It was a…

>>Sure saves the poor kids the nightmare of not being able to open a bank account abroad, as a US citizen.

You save them nothing, soon or later Uncle Sam will crunch numbers and discover that the German version of John Doe is an American, as far as IRS is concerned.

USA can solve the problems for 99.99% of expats and accidental Americans by making laws for those with $million+ salaries /assets. They gain nothing by making every poor guy spend thousands a year to tell IRS that they owe nothing.

FYI: People from a lot of countries are paying and will pay tens of thousands to bring their kids to USA...illegally. So US citizenship is still valuable. Very valuable.