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On Receiving my Certificate of Loss of Nationality

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Re: On Receiving my Certificate of Loss of Nationality

#171

Post by dd_roger »

Honestly I find it pretty fucked up that someone would renounce their citizenship "for convenience". I can't really comprehend how their country could mean so little to someone, especially when that country is a democracy.

Regarding the taxation when living abroad, doesn't it actually make sense? Sure it sounds like an oddity because the US are the only to do it, but most emigrants I know still use the consular services of their country of origin every now and then, benefit from its diplomatic protection, and can return any time if circumstances require it (implying they should be contributing to keeping the country safe and functional in the meantime, call it an insurance policy if you will), and probably many other benefits I'm not thinking of. Some countries will even send special forces abroad to recover citizens in danger.

So yeah apparently the practicalities of it suck sometimes (and that should definitively be improved) but in principle it's not as outlandish as it sounds, imo.

Re: On Receiving my Certificate of Loss of Nationality

#172

Post by a3e3 »

nickthemagicman wrote: post #128
JeromeLon wrote: post #28

Earlier quoted context omitted.

You mentioned it. FATCA is not targeting US citizens abroad, it's targeting financial organisations who have US citizens as clients. So, many banks around the world will have "Are you a US citizen" as one of the first questions to open an account, and if the answer is yes, they will politely decline any further requests.

Are there NO workarounds? I noticed you said 'many' and not 'all' banks. It looks like these banks work for expats. https://dutchreview.com/expat/best-banks-expats-netherlands/ Something doesn't add up. From a non rich persons perspective it appears that person gave up her citizenship so she could essentially have a better selection of banks and to not have to use a VPN? It seems like a US citizenship is worth it? Th…

That page describes the situation for expats in general. It's different for U.S. citizens.

Bunq, the first bank that's listed, has special requirements: https://together.bunq.com/d/2318-why-are-there-special-regul...

With an SSN you can open a basic checking and savings account. However, you'll be denied for any type of investments. This also means U.S. citizens can't participate in pension plans of Dutch employees.

Even local crypto exchanges are refusing service: https://bitonic.nl/en/faq/33/what-is-a-us-person

Meanwhile, banks and brokers in the U.S. require a permanent residential address. For example, Wealthfront states they don't "support clients residing outside of the U.S., including U.S. citizens residing abroad".

Additionally, The Netherlands has a wealth tax. Even on unrealized gains. Each year you pay taxes on stocks you haven't sold yet. Then, when you actually do sell, you can't use the previous years of Dutch taxes that you've paid to offset the U.S. capital gains tax.

It's especially complicated for so called Accidental Americans. Many of whom don't have or know their SSN. To get one you must submit your birth certificate and US passport. If you don't have those it's quite difficult to get them.

When you finally obtain your SSN, renouncing is a challenge in itself. It requires filing tax returns for the past 3 years + 6 years of FBAR (you'll most likely need an accountant for this or face steep penalties), pay $2300 to renounce, and then file another tax return for the year in which you renounced.

Re: On Receiving my Certificate of Loss of Nationality

#173

Post by 001Diana »

PKop wrote: post #121
digbybk wrote: post #54

Earlier quoted context omitted.

Citizenship is a meaningful thing to most people. Of course it's a legal fiction, but so is marriage. Personally I've never given up a citizenship, but I imagine that it'd be an emotional experience.

It's either a fiction or it's real. And given the privileges that come with being a citizen, of course it is not a fiction. But if it is meaningful, why should it not come with a cost? Nations as constructed obviously provide value to the people residing there, should this not come with corresponding responsibilities? Like paying taxes? And if there is value and meaning to being a citizen of a specific country why sh…

This is not “having your cake and eating it too,” it’s much more complex. It also is never a case of “the country wasn’t good enough to live in.” I would love to live in the USA. That is not where life took me. At its simplest Americans are not free to live anywhere in the world the way citizens of all other countries are (even Eritrea, the only other country that taxes it’s citizens based on citizenship, does not subject its citizens to the same tax complexity). All Americans should be outraged over their lack of freedom in this regard. 20 years ago I could not have imagined I’d end up living in Australia, but we don’t always know where life will lead us. Many people are born to American parents overseas and are required to spend thousands yearly to file or pay $2350 to renounce. Paying double tax to two countries is unachievable for the majority of us. There are treaties in place to avoid the is happening, however the cost of having a specialist accountant file every year is astronomical. I have paid over $25k to accountants and never once owed tax to the US. There are also some seriously unconstitutional and human rights violations going on. The surprise retroactive Transition tax of 2017 has financially ruined many small business owners, in some cases taking all their retirement savings. These are people who have worked and paid taxes in their residence country for their lifetime. There is a case in front of the Supreme Court challenging this right now.

Re: On Receiving my Certificate of Loss of Nationality

#174

Post by 001Diana »

OldHand2018 wrote: post #130
davidw wrote: post #98

Earlier quoted context omitted.

As someone who lived in Italy for years, it is a total hassle to file US taxes, because you need an accountant that gets all this, and most in the US do not. I agree with her that the system is really bad. We're in the US now, and my Italian wife has none of these hassles: we live in the US and pay taxes in the US and that's that as far as Italy is concerned.

> because you need an accountant that gets all this, As someone who has been through this, perhaps you can explain why this is. What makes it so different from US taxes for people living in the US? You definitely do not need an accountant here.

Americans living overseas generally go by a different financial year, for example, in Australia the financial year is July1-June 30. All income and business records need to be made to fit the US financial year. We also have different much more complex forms to fill out and have far more to report than the American citizen living in the US. All our bank details and highest balances must be reported. We also have to file forms with regards to our retirement investments. If you own your own business here it’s literally days of compiling and working out amounts. And if something is wrong, look out. The trust reporting form, 3520, (which most businesses must file) is due before your tax return, and if you don’t realise this it’s a 10k fine. Even for a trust with a balance of $0. Then another 10ks every month you are late after the fine is assessed. (It’s also worth mentioning that the IRS only communicates through snail mail and sends us letters out of some strange places, such as the Czech Republic, and they take 4 months to arrive) meaning you have tens of thousands worth of fines before you even know it. I wish this were a joke or I was exaggerating. For years accountants filed that trust form with tax returns, until the IRS suddenly realised this could be a money maker and quietly introduced the fine. There’s so much more I could write but I have to go to work. I’m just trying to say it’s a never ending nightmare, and in most cases too complex for the average person.

Re: On Receiving my Certificate of Loss of Nationality

#175

Post by 001Diana »

dd_roger wrote: post #171

Honestly I find it pretty fucked up that someone would renounce their citizenship "for convenience". I can't really comprehend how their country could mean so little to someone, especially when that country is a democracy. Regarding the taxation when living abroad, doesn't it actually make sense? Sure it sounds like an oddity because the US are the only to do it, but most emigrants I know still use the consular servi…

It would have sounded ridiculous to me too had I not lived it. It’s the tax compliance, not the paying of taxes that is the issue. Most of us will never pay, we already pay more in the country we live in. The tax compliance enforcement costs the US far more than it makes in collecting taxes from citizens overseas, and other countries refuse to allow dual citizens to open accounts or invest. There are MASSIVE, and I’m talking tens of thousands of dollars in fines that can be assessed if you are overseas a file a form too late. And it’s difficult for a specialist accountant to work it all out, let alone a regular person. It’s the anxiety of not knowing what is coming next. If there were a fee for living overseas and having the option of using consular assistance, sure I’d be happy to pay it.

Re: On Receiving my Certificate of Loss of Nationality

#176

Post by [deleted] »

dd_roger wrote: post #171

Honestly I find it pretty fucked up that someone would renounce their citizenship "for convenience". I can't really comprehend how their country could mean so little to someone, especially when that country is a democracy. Regarding the taxation when living abroad, doesn't it actually make sense? Sure it sounds like an oddity because the US are the only to do it, but most emigrants I know still use the consular servi…

[deleted]

Re: On Receiving my Certificate of Loss of Nationality

#177

Post by 001Diana »

LadyCailin wrote: post #161
pavlov wrote: post #9

Earlier quoted context omitted.

Are you saying the immigrant visa path isn't available to former citizens? That seems surprising. Sure, it's a very difficult path in practice... But in theory I don't see why something like this wouldn't be possible: you renounced your citizenship, win the Nobel Prize 30 years later, get an EB-1 visa based on that achievement, then get naturalized five years later.

There have been (so far unsuccessful, but possibly successful in the future) attempts to ban US citizens who renounce from ever stepping foot in the US again. > (E) Former citizens who renounced citizenship.— Any alien who is a former citizen of the United States who officially renounced United States citizenship is inadmissible. https://en.m.wikipedia.org/wiki/Reed_Amendment_(immigration)

This is banning reentry for those who have stated their reason for renouncing is due to tax avoidance. When I renounced I began telling them it was due to tax compliance, and they were very careful to not let me say tax avoidance. It is completely different. I’d be happy to pay an a amount to the US for citizenship every year but can’t deal with the thousands I pay accountants and the days I spend compiling and working out amounts for the calendar year as opposed to the Australian financial year. Also the anxiety over the ever changing laws and fines.

This reentry ban has never been enforced but could be in the future, if anyone has actually been able to say they renounced due to tax avoidance.

Re: On Receiving my Certificate of Loss of Nationality

#178

Post by 001Diana »

welder wrote: post #68

As a US citizen, being taxed while living abroad can dangerously trigger double taxation. Imagine being taxed 70% of your income... scary! I've been researching ways to live abroad without being double-taxed, and here's some resources I've found: * https://www.greenbacktaxservices.com - give them your foreign tax return and they file your US return * https://wandererswealth.com - international tax consultant * https:…

Owning a business in a country where the taxes are lower than the US corporate rate triggers double tax, as well as any passive income investments. The US can tax a residence that sells for a profit while the residential country will not. Disability support earners have been taxed on their income from their resident country as well.

Re: On Receiving my Certificate of Loss of Nationality

#179

Post by 001Diana »

noasaservice wrote: post #101

> then charging me $2350 to file the divorce papers. So, if I understand correctly, the very fact that I was squirted out here in this country puts me at a -$2350 just for being born. So US citizenship = -$2350

Yes, and if you aren’t 5 years tax compliant when you pay that $2350 you owe 20% of the value of all your assets too.

Re: On Receiving my Certificate of Loss of Nationality

#180

Post by 001Diana »

Svip wrote: post #8
faut_reflechir wrote: post #6

Earlier quoted context omitted.

I did the tax forms myself when living abroad, precisely because I didn't earn enough income to afford the $1000 cost (in fact, it was perhaps twice this, in Switzerland, based on my cursory Googling at the time). It routinely took over a week of working days, which was only possible because I had a sympathetic boss and generous vacation time. It's also quite stressful, since there are many ambiguous questions, most…

What are the consequences to not filing? My wife is a US citizen, and she hasn't filed for two years. I've met other US citizens that don't file either. So far I have not heard of any issues relating to not filing.

The issue is that the US can determine she didn’t file, file for her, and assess fines/tax. Once that gets to $50k she can’t renew her passport, and can no longer enter or leave the US as the law states she can’t use her foreign passport if a US citizen. If she lives in a country that assists the IRS with collection, they can reach in and take it. They have all her bank details from FBAR filing.
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