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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

#171

Post by FbarVictim »

phunge wrote: post #65

I was personally bit by this (FBAR non-compliance). I worked abroad and was unknowingly violating it; found out about it from reading the news and hired a pro to extricate myself from the situation. The bank account held five figures. The cost to come into compliance was low five figures. The potential penalties were easily high six figures. It was much larger than the either (a) my total earnings from 4 years abroad…

You are not the only person angry. The IRS took me for a lot of money because my wife had mutual funds in the UK from a previous job earned before we ever entered the states. PFIC tax rules are meant to be a punishment and the OVDP penalties just add on top of that. All the gains gone and a chunk of the principle. We term this the IRS jackpot. Many people talk about this here: http://isaacbrocksociety.ca

You can help fund attacks against this stuff here:

http://www.adcs-adsc.ca/

and here stateside:

https://fatcalegalaction.com/

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

#172

Post by MichaelGG »

tomp wrote: post #169
MichaelGG wrote: post #91

Earlier quoted context omitted.

What prevents another system being put in place, if other banks agree to use it?

It's illegal (one of the missions of US Secret Service is to ensure that there are no other currencies used in the US, and they have cracked down e.g. on Las Vegas casino tokens being used in surrounding restaurants to pay for drinks).

I meant for non-US banks. What stops "London" from setting up its own USD clearinghouse and having non-US banks start using that? Simple pressure from the US?

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

#173

Post by tomp »

MichaelGG wrote: post #172
tomp wrote: post #169

Earlier quoted context omitted.

It's illegal (one of the missions of US Secret Service is to ensure that there are no other currencies used in the US, and they have cracked down e.g. on Las Vegas casino tokens being used in surrounding restaurants to pay for drinks).

I meant for non-US banks. What stops "London" from setting up its own USD clearinghouse and having non-US banks start using that? Simple pressure from the US?

> Simple pressure from the US?

Possibly. Basically, the US can force the banks to do what they want, because the ability to retail within the US is worth so much. So either they, or the banks they work with, could be pressured to comply.

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

#174

Post by matthewowen »

sliverstorm wrote: post #112
waqf wrote: post #111

Earlier quoted context omitted.

You mean to imply that being double-taxed after your first $100k is fair and reasonable?

If you own two houses, just because you aren't living at House A right now doesn't mean you don't need to pay upkeep, and doesn't mean you aren't deriving benefit from it. Thought of differently- expats expect to be able to vote, right? Is it fair and reasonable for someone who is categorically excluded from paying taxes, to be allowed to vote?

As a UK expat, I don't expect to be able to vote in the UK. I don't live in the UK. Why should I vote there? Why would I feel entitled to?

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

#175

Post by shortsightedsid »

lumberjack wrote: post #104
shortsightedsid wrote: post #37

I wonder if there will ever be a time when there is a marketplace of citizenship. There are plenty of non-americans who want to become US citizens or immigrate legally. And at the same time there are US citizens going the other way. An example could be an Italian wanting to move to the US because he works in Tech and a US citizen wanting to move to Italy because he works in Fashion. A marketplace would allow the two…

The whole point of citizenship is that it is a sort of legal contract of sorts between the would be citizen and the rest of the citizens. It's not a simple matter between two people. If such a marketplace were to be legally implemented it should be far more complicated than a simple swap of citizenship between two people. Even then, the liquidity of citizenship would undermine its value, for better or worst.

If there is a marketplace then it's value will be determined by that market. If people can move into apartments and can be interviewed for it, the same could apply here. Obviously, I haven't thought this out completely and naturally there are all sorts of complications, but in reality, the question is - why can't people freely migrate from country to country? Naturally there are costs involved, a legal bearing, maybe even a quarantine timeline, but it should be possible. People did that all the time until the 20th century and therefore, it's an artificial barrier that's been put up.

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

#176

Post by rajnil2003 »

phunge wrote: post #65

I was personally bit by this (FBAR non-compliance). I worked abroad and was unknowingly violating it; found out about it from reading the news and hired a pro to extricate myself from the situation. The bank account held five figures. The cost to come into compliance was low five figures. The potential penalties were easily high six figures. It was much larger than the either (a) my total earnings from 4 years abroad…

Phunge, When you say you were bit by fbar penalty - Did you enter the OVDI program? OVDI was really meant only for those who willfully evaded taxes and needed criminal protection. However, till recently that was the only option in the book for negligent minnows as well as criminals. Now there is the streamlined program.

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

#177

Post by rajnil2003 »

phunge wrote: post #65

I was personally bit by this (FBAR non-compliance). I worked abroad and was unknowingly violating it; found out about it from reading the news and hired a pro to extricate myself from the situation. The bank account held five figures. The cost to come into compliance was low five figures. The potential penalties were easily high six figures. It was much larger than the either (a) my total earnings from 4 years abroad…

Phunge, When you say you were bit by fbar penalty - Did you enter the OVDI program? OVDI was really meant only for those who willfully evaded taxes and needed criminal protection. However, till recently that was the only option in the book for negligent minnows as well as criminals. Now there is the streamlined program.

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

#178

Post by beeworker »

opendais wrote: post #157
beeworker wrote: post #135

Earlier quoted context omitted.

Getting enforcers to quit or be fired is the general idea of focusing in on them -- if there are no enforcers then nothing is enforced regardless what the policy makers say. It's another solution to solving the problem of bad policy besides the one of changing the policy. One could argue its results. The strategy seems to make a lot of TSA employees feel bad, so the turnover there is quite high, but enough people nee…

ROFLMAO. If you don't fix the policies, they just hire replacements. You even admit it is how it works. "The strategy seems to make a lot of TSA employees feel bad, so the turnover there is quite high, but enough people need any job just to make ends meet that the overall effect to their workforce isn't very much." You also didn't think about the logical result of pushing out the people who would feel bad about bad p…

If you read my comment carefully you'll see I don't advocate this strategy, I'm just exploring it. Extermination can be an attractive strategy, it just doesn't work very well against endless foes. The part you quote is sufficient for casting doubt on its efficacy -- that I didn't make the slam dunk of pointing out who's left seems irrelevant. Thanks for reminding me of that additional detail, though.

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

#179

Post by mikeash »

cujo wrote: post #132
mikeash wrote: post #64

Earlier quoted context omitted.

Isn't your last bit the whole point? These people have very little attachment to the US but are still undergoing hardship due to US government policy due to what is basically a technicality of legal status. For a more personal point of view, how sure are you that you will never, ever decide to retire to, say, Costa Rica?

First of all, I should have mentioned that I'm naive on the topic. From that point of view this seems like a very odd thing to be upset about, hence my question. Second, for having little attachment, they seem more than happy to house a respectable chunk of money resting abroad. I find it odd that their new home is so lovely except they don't want their money there. And to answer your question about say, Costa Rica,…

Catching up late, hope you still see this....

Anyway, I get the impression that you don't understand the problem being discussed. It has nothing to do with leaving stuff back at the motherland. The problem is that the US is placing onerous rules on foreign banks that do business with US citizens regardless of where those US citizens actually live. Those rules are so onerous that many banks are deciding that it's easier to just refuse to do business with any US citizen.

To take the example of retiring to Costa Rica, you say you'd commit to that location. Presumably that implies putting your money in a bank account in Costa Rica. The problem here is that a Costa Rican bank is likely to refuse to open an account for you because of these rules.

You can still be affected by this even if you are completely disentangled from the US in every way aside from not having explicitly renounced your citizenship. You could, I believe, be affected by this even if you never touched US soil, for example if you were born and raised in a country that allows dual citizenship and inherited US citizenship from an American parent. Of course, in that scenario, it's much more reasonable to renounce your US citizenship.

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