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Americans abroad are giving up their citizenship as banks shut down accounts

theguardian.com

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Re: Americans abroad are giving up their citizenship as banks shut down accounts

#21

Post by wmil »

Someone1234 wrote: post #8

Random question: If you had dual citizenship (e.g. Canadian + US), do you even need to tell a bank about your US citizenship when opening an account? Can't you just open it as if you were a Canadian only? Even your US SSN wouldn't be associated with it, so for all the US G and the bank know you're just someone with the same name and birthday. As a random aside: The US Gov is practically the only country in the world…

I imagine it's more of a "check this box to verify you are not a US citizen" system. The bank could then charge your account fees if you lied and they had to deal with the IRS.

I actually think the US tax return laws are reasonable -- there have to be some obligations for citizens to go along with the rights they have.

Re: Americans abroad are giving up their citizenship as banks shut down accounts

#22

Post by opendais »

sergiotapia wrote: post #13

I'm going through this IRS bullshit -personally-. I was under the impression filing taxes was simple, hell why would they make it complicated. But nope, if you live abroad it's twice as complicated for an ex-pat. Worse still, if you're self-employed (like I am) and a freelancer it's ever more paperwork and edge cases to be careful of. And the cherry on top! Software engineers have a whole different set of tax rules.…

I think you meant "Fuck you, US Congress".

The IRS is the enforcer, not the source.

Re: Americans abroad are giving up their citizenship as banks shut down accounts

#23

Post by csense »

jeffdavis wrote: post #11

"Steep penalties add muscle to the law. If a foreign bank – not just in Canada, but anywhere – fails to report even a single US citizen as a customer to the IRS, the US Treasury department would withhold 30% of the banks’ US income as penalty." What do they mean "US income"? How do they enforce it?

Probably if the bank itself files a US tax return. I don't know if they'd be able to enforce it on a strictly local bank that only does business outside the US, but a lot of banks are multinationals.

Re: Americans abroad are giving up their citizenship as banks shut down accounts

#24

Post by EGreg »

Frozenlock wrote: post #14
abruzzi wrote: post #5

Earlier quoted context omitted.

If I understand correctly, the law is aimed at banks to disclose assets of americans with more than 50k in savings, the banks are overreacting and not handling accounts of any americans as a result. So I wouldn't say the law targets the average Joe (I know very few average Joes with $5k in savings, let alone $50k), but the banks are. Perhaps its a calculated move to get people upset with the IRS/Treasury to create ba…

"the banks are overreacting" Really? The USA is considering everything as under its jurisdiction, but the banks are overreacting?

Well technically it is not jurisdiction but treaties as well as leveraging economic clout and agreements.

Re: Americans abroad are giving up their citizenship as banks shut down accounts

#25

Post by GFischer »

toomuchtodo wrote: post #20
GFischer wrote: post #3

As a citizen of Uruguay I find the last paragraph very funny: “I feel about the same obligation to file US tax papers as you would if the supreme court of Uruguay all of a sudden decided you were a citizen and had to file a tax return there,” he tells the Guardian. By the way, Uruguayan citizenship is VERY easy to acquire. American expatriates (and dollars :) ) welcome here :) Edit: easy as in requirements. There's a…

Can I still maintain my US citizenship as an Uruguayan citizen if I so choose?

Yes, although the U.S. will expect you to file and pay taxes (as the article above explains) :)

Re: Americans abroad are giving up their citizenship as banks shut down accounts

#26

Post by JackFr »

sergiotapia wrote: post #13

I'm going through this IRS bullshit -personally-. I was under the impression filing taxes was simple, hell why would they make it complicated. But nope, if you live abroad it's twice as complicated for an ex-pat. Worse still, if you're self-employed (like I am) and a freelancer it's ever more paperwork and edge cases to be careful of. And the cherry on top! Software engineers have a whole different set of tax rules.…

> Fuck you IRS, you greedy pricks.

That's blaming the bullet instead of the gun

Re: Americans abroad are giving up their citizenship as banks shut down accounts

#27

Post by tomp »

bcoates wrote: post #17
jeffdavis wrote: post #11

"Steep penalties add muscle to the law. If a foreign bank – not just in Canada, but anywhere – fails to report even a single US citizen as a customer to the IRS, the US Treasury department would withhold 30% of the banks’ US income as penalty." What do they mean "US income"? How do they enforce it?

What benefit do banks get for being multi-nationals exposed to every country's laws instead of just doing one bank per country? I thought that this was the norm for regular businesses.

Banks operate as "one bank per country" (actually, per currency), as the only way to hold e.g. USD is to be incorporated on US soil. However, these are just subsidiaries, owned by the multi-national corporation. Any country can say "comply to our rules or don't do business here", but only a few countries are lucrative enough to actually have any power over foreign subsidiaries.

Re: Americans abroad are giving up their citizenship as banks shut down accounts

#28

Post by philiphodgen »

matthewowen wrote: post #15

The underlying problem behind all of this is that the USA's policy on taxing non-resident citizens is, fundamentally, absurd. As a permanent resident, it's the one thing that gives me pause about applying for citizenship (I know that the same rules apply to me whilst I'm a permanent resident, but I'm concerned about what happens in the future if I decide to leave the USA).

As a permanent resident, you have a "do or die" date in your life.

If you have the green card "in" at least 8 of the last 15 years, you have the privilege of paying the exit tax when you give up the visa status. (Well, you pay extra tax only if you are "rich" for certain definitions of "rich". You will certainly have a giant mountain of tax forms to fill in.)

If you terminate your green card before that magic moment of holding the permanent resident visa "in" 8 of the last 15 years, then you can exit the United States cleanly and easily, with minimal paperwork and no risk of extra tax.

That's why I tell people who want to come to the USA to avoid getting the permanent resident visa and get a different visa status instead.

Disclaimer. I am a lawyer. I am an international tax lawyer. My office does a LOT of expatriation cases where we log people out of the U.S. tax system and the U.S. nationality system.

Re: Americans abroad are giving up their citizenship as banks shut down accounts

#29

Post by toomuchtodo »

GFischer wrote: post #25
toomuchtodo wrote: post #20

Earlier quoted context omitted.

Can I still maintain my US citizenship as an Uruguayan citizen if I so choose?

Yes, although the U.S. will expect you to file and pay taxes (as the article above explains) :)

Right right, no problems there. I'm comfortable, not wealthy, and a remote worker :)

Re: Americans abroad are giving up their citizenship as banks shut down accounts

#30

Post by nagi2k4 »

Something worth noting is that FATCA essentially makes it impossible for an institution to remain "FATCA compliant" if they have any financial relationship with a non-compliant entity. Sure, they can have such relationships, but the U.S. Treasury department can then impose a 30% penalty on any transaction that passes through a U.S. bank. Given that the vast majority of international payments are made in USD, that 30% penalty is going to be very painful for any bank that purposefully decides to be non-compliant.

The end result of that will be that the global financial system is going to be bifurcated into "compliant" and "non-compliant" institutions. Believe me, most banks/insurance companies/financial entities will find it worth their while to eventually become compliant.

The reason that more countries aren't complaining about this (and most are actually entering into bilateral enforcement agreements with the U.S. Treasury department) is that they'll then be able to get access to the same sorts of information on their own citizens that the U.S. is getting on their own as a result of FATCA.

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