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FATCA Pushes “Accidental” Americans to Give Up US Citizenship

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181–190 of 210 posts

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

#181

Earlier quoted context omitted.

And take away their right to vote. I’m an expat and I’m not allowed to vote and I don’t owe my home country any taxes (Canadian in the US) That’s the way it should be. I shouldn't tell my home country how to live a life I have no stake in, and they should not charge me taxes for services they cannot render abroad. End taxation and voting abroad!

Spoken like someone who is not stationed abroad, just for one off the cuff easy example. Perhaps I'm wrong but there must be countless reasons and situations like that which make this simple idea in fact merely simplistic. I certainly expect to still receive all manner of services while abroad. I expect my property to still be mine and protected by the police. My home should not revert to being owned by the state jus…

Let’s look at these points separately.

> I certainly expect to still receive all manner of services while abroad. I expect my property to still be mine and protected by the police. My home should not revert to being owned by the state just because I went on vacation.

There are huge numbers of foreign owners of US real estate that enjoy these benefits by paying property taxes and income tax on any income that may be derived from such property. This is also the standard way foreigners and expats are taxed in every other country on earth save for Eritrea and the United States. So there is only an exception made for only one class of people in the United States, and that class is the group of citizens who move abroad and pay taxes abroad. They are punished for leaving, and I use this word very specifically - the law came into effect during the revolutionary war to punish US citizens that became turncoats for the British. It is a punishment that hasn’t been repealed. Oh, and if you do some Google searches you will find examples of the US criticizing Eritrea for citizenship based taxation, calling it an unfair punishment of its expats.

> If I move to some other country fully, and want to participate in it's policy direction, then I expect to do whatever is required to gain the new citizenship and reliquish the old.

Many, many, many US expats are trying to go this route, but the US has jacked up the renunciation fees in recent years, limited the maximum annual number of renunciants, and made it extremely difficult to “pass” the exit test which involves a ton of subjectivity on behalf of angry embassy employees.

> Maybe double dipping shouldn't be allowed, but being remote should mean essentially nothing by itself.

Except it means essentially everything for citizens of nearly every other country on the planet. Born in the UK and want to move to Papua New Guinea? No problem. Pay the UK only on income still derived from the UK and pay PNG based on any income derived there. Simple.

Also, don’t get me started on all those accidental Americans born prematurely while their parents were on vacation, or born to one American parent, or who lived in the US for their first year of life and have never been back. Citizenship and US taxation haunts them for the rest of their life unless they are one of the lucky few to be “allowed” to renounce.

> Even fairly extended residence where you have a local job and rent a home etc shouldn't constitute some sort of automatic change of citizenship. That should only happen if and when you actively choose to do it. People get sent places for work. People go places for school or research. People have to take care of family. People are in the military. There are all kinds of situations requiring a person to be somewhere other than home, for any amount of time, even years, without changing what is "home" and what is "away".

Residency has a pretty bright line legal definition that varies by country. In Canada, if you spend 183 days there you are a resident for tax purposes and need to pay Canadian income tax on your worldwide income. The US is the same. In some countries it is based on your “economic locus” so they take a bit more holistic approach to see whether your behaviour indicated you were a resident (resided in a home, had a job, etc etc).

What you refer to about “automatic change of citizenship” almost never happens (though, funnily enough, the US tried that shit too, stripping Vietnam draft dodgers of their citizenship until the US Supreme Court ruled it unconstitutional). We are talking here about tax residency - not citizenship. For example, in every other country you can retain your citizenship while automatically losing your tax residency obligations simply by becoming a tax resident of another country.

In the above, I’ve played fast and loose with some things to simplify and not bore people to tears, but everything is approximately correct.

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

#182

Earlier quoted context omitted.

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

Plenty of countries allow dual citizenship, including the US, Canada and most of the EU, so it's not that unusual to have and travel with multiple passports.

The Immigration and Nationality Act states that American citizens “shall” only enter or exit the USA with an American passport.

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

#183

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…

Many thoughts occurred while reading this, including: ‘Almost the pinnacle of first world problems’

LOL. Except literally no other first world nation does this to their citizens. Only the US and Eritrea. Good company.

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

#184

A lot of people in this discussion are unaware of the scope of the difficulty and dismissive of the extent of the problem. While the article focuses on the plight of "accidental Americans," the burdens they face are the same faced by all Americans living abroad, and that is not a small number of people. The number of American citizens living overseas is somewhere between 6 and 9 million last I read. That is around 2%…

I know many expats that have exactly the experiences you mention. My question: how can it be changed? It seems to hurt American competitiveness (i read a legal analysis by a US law school which seemed to support this) by putting Americans at such a disadvantage to citizens of other countries living abroad. Anecdotally, when I lived abroad, there were easily 10x the number of Brits or Aussies or Canadians to every American.

Also, there was a report that the revenue generated by FATCA was outweighed 100:1 by the worldwide banking industry’s compliance costs.

So how does it get changed? Why does everyone act like it is a forgone conclusion that it will never change?

The law was meant to tackle wealthy American residents hiding money offshore, not normal people living offshore for whom banking services are “local” to them.

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

#185

The best way out of this is the EU asking for reciprocal measures in future trade agreements and tax treaties (fatca reporting, residency based taxation). If US banks had the same reporting requirements to EU countries regarding EU dual citizens accounts, this absurd situations of being denied banking relationships in the country you work and reside would stop promptly.

They don’t have to ask. These reciprocity agreements were made during the FATCA implementation process. People have filed Freedom of Information Act requests (local versions) in countries all over the world to identify how many records were sent back to these countries by the US and it appears the number is zero. Not a lot of reciprocity it seems.

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

#186
post #180

Earlier quoted context omitted.

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.

If your total lifetime costs to date of compliance as an American abroad amount to the coronavirus support cheque value, you should be running a popular YouTube channel teaching others. For most people in this situation that I know, the costs are $4-6k per year, minimum. Heaven forbid they try to make use of their local country retirement schemes, or have anything but the basic banking services and do not participate…

I've kept my financial situation very simple, I've likely sacrificed some (potential investment) income from doing so. I used an accountant the first few times who taught me what I needed to know and then I waste part of my life each year remembering how it works and researching the changes. Perhaps I also don't earn as much as the people you know, no idea. Due to exclusion and the credit I thankfully (and IMO, fairly) pay very little US tax each year, my major costs have been those initial accoutant fees. That wasn't worth a youtube channel (the income from which would only complicate my future returns, no thanks).

But I would like to hold some investments and that's an area I have no US tax knowledge of. So that'd be another accountant hit. Maybe renouncing is the better investment, once it becomes available again.

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

#187

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…

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.

Wouldn't your thesis predict more political problems in areas of greatest diversity (ie, cities)? The cleft in the US runs mainly between rural and urban populations; ie, between high-diversity and low diversity areas. Each 'system' seems to find political equilibria just fine on their own.

(Or, in a more flippant form: I hadn't noticed Toronto had become a hellscape of inter-ethnic conflict...)

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

#188

Earlier quoted context omitted.

Many thoughts occurred while reading this, including: ‘Almost the pinnacle of first world problems’

Having your entire life shut down, through no fault of your own, by some entire remote country you have no dealings or relationship with and no power to fight, is a first world problem? Even in the thirdest of third worlds, people have some sort of shop which is their families livlihood, which could be taken away and destroyed, and which would be devastating. This insensitivity sure is first world though.

It's a first world problem because:

1. Getting a visa to be in the US is so difficult for citizens of third world countries that very few would find themselves in such a situation.

2. Only first world citizens would perceive an additional US citizenship as a mere nuisance, best to be avoided. For the vast majority of third world citizens, the benefits of an additional citizenship from the US far outweighs the difficulties of abiding by its rules.

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

#189

Earlier quoted context omitted.

Having your entire life shut down, through no fault of your own, by some entire remote country you have no dealings or relationship with and no power to fight, is a first world problem? Even in the thirdest of third worlds, people have some sort of shop which is their families livlihood, which could be taken away and destroyed, and which would be devastating. This insensitivity sure is first world though.

It's a first world problem because: 1. Getting a visa to be in the US is so difficult for citizens of third world countries that very few would find themselves in such a situation. 2. Only first world citizens would perceive an additional US citizenship as a mere nuisance, best to be avoided. For the vast majority of third world citizens, the benefits of an additional citizenship from the US far outweighs the difficu…

The people who got visas (however they got them) are not accidental citizens.

And, everyone else should just shut up and not cpmplain that something they didn't ask for is being done to them, regardless of it's cost or damage? Because you think it's valuable? Wow. I can only assume you didn't read the article you are commenting on, or are the last person whos opinion anyone should care about, given how thoroughly you just disregarded anyone else's. And at the same time having the balls to charge "first world problem"... holy cow.

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

#190
post #96

Earlier quoted context omitted.

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…

How is that different from any other country, where you can’t open a bank account unless you are a citizen or a resident?
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