Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Why expat Americans are giving up their passports

bbc.com

Post reply on HN
Print view View original

351–360 of 411 posts

Re: Why expat Americans are giving up their passports

#351

Post by dalke »

rhino369 wrote: post #334
youngbullind wrote: post #4

This affects my girlfriend. She has a dual passport but only lived in the US to the age of six months. We are are British but live in Spain which already makes for complex tax arrangements, and this on top of things is just crazy. How the hell does the US think it has the right to tax people who haven't lived there for over 30 years?

They are citizens of our country and are therefore responsible for funding the government. They have the right to just move back to the United States and enjoy the fruits of our country. Why shouldn't they have to pay up? Taxes aren't a payment for services rendered. If your girlfriend doesn't believe herself to be an American she should renounce citizenship. But you are asking to have her cake and eat it too.

Because 1) the question is why the US - unlike every other country except Eritrea - has this policy, 2) it's difficult or at least expensive to renounce citizenship, and 3) it's only been in the last 10 years or so that many Americans have even heard of this requirement.

As you can read in this thread, it costs over $2,000 to file renunciation, and your taxes need to be in order. Resolving the tax situation in this case sounds quite expensive. Oh, and I think you have to pay taxes for up to 10 years after renunciation, and you can't renounce until you're 18 years old.

Suppose you were born in the US while your British parents were finishing up a college education. You left the US when you were 6 months old. You've not back to the US, you have no US relatives, you don't know anything about US taxes, or Selective Service requirements, or other obligations of US citizens, and have no plans to even visit the US. Then at the age of 40 you realize that you are under US law. You want to renounce citizenship, but learn you'll need to pay $150K in penalties, even though you've been paying UK taxes all your life and would never have needed to pay US taxes had you filed. You only have $50K in savings.

What do you do, and how do you think you would feel?

Re: Why expat Americans are giving up their passports

#352

Post by spiralpolitik »

newman314 wrote: post #338
briandear wrote: post #138

Earlier quoted context omitted.

Army coming to rescue? Nope. Here's a story about the US specifically NOT going to rescue Americans in Yemen: http://www.bloombergview.com/articles/2015-04-22/americans-t... Have a look at this evacuation application: http://www.state.gov/documents/organization/211837.pdf Here's the key wording: "3. I understand that: (a) I will be billed for the cost of my/our transportation no greater than the amount of a full-fare…

While I generally have been supportive of Bernie's stance on things, it's disturbing to hear that he supports FATCA. I went digging for more information and it seems that he now is potentially supportive of residence based taxation instead of citizen based taxation. From reddit.com/r/expats4sanders, http://www.democratsabroad.org/our_candidates There are many different scenarios which the law as it currently stands d…

I'm not a tax expert but don't think the scenario you describe is correct.

In most countries when you inherit it's the estate that is taxed and generally the estate is taxed in country of domicile of the estate rather than citizenship of the recipient.

In your scenario the estate would would be taxed by the country of domicile, and then the remaining money transferred to you. If you were a US person then you would be taxed on any interest or capital gains from that point onwards.

That said this kind of thing is generally fairly complex (determining country of domicile for example is not obvious) so generally you would involve an accountant or tax professional.

Re: Why expat Americans are giving up their passports

#353

Post by fapjacks »

rahimnathwani wrote: post #341
mike_hearn wrote: post #114

Earlier quoted context omitted.

> There are some benefits to being a US citizen, like that the army will rescue you if there is a civil war This is a common myth. If you don't intend to return to the USA there are no benefits to US citizenship, only downsides. The US may or may not rescue you if there's a civil war (see the fate of people in Yemen), but if they do, they will charge you for it at military rates you almost certainly cannot afford: ht…

"If you don't intend to return to the USA there are no benefits to US citizenship, only downsides." Seriously? US citizenship means you can travel with a US passport, which allows visa-free travel to many, many countries: https://www.passportindex.org/byRank.php

If you have a Euro passport, you might as well torch your American one. There is no benefit to being identified as an American overseas when you have a European passport. In fact I would argue it is more dangerous. My family that were stuck in Kurdistan were able to avoid violence against Americans because they had Swedish passports. That little blue book is a death sentence in some places where something else wouldn't be.

Re: Why expat Americans are giving up their passports

#354

Post by SteveLAnderson »

bobby_9x wrote: post #332
SteveLAnderson wrote: post #319

Earlier quoted context omitted.

That may happen, but like the "cadillac welfare queen" is an exception, not the rule. For most departments, they run out of money before the end of the fiscal year.

I disagree. I worked in a few different government departments that depended on funding. We always had a surplus at the end of the year and the boss would tell us to spend it on anything and everything because if we didn't, there would be less money in funding the next year. The amount of waste was incredible and it made me angry. It's why I went into the private sector/started my own company. You also almost could n…

Ask yourself, honestly, what percentage of the entire budget was that end of year splurge? In my experience it's very small, much smaller then the year to year cost inflation.

There's tons of waste in any large organization. In my experience, private companies have more waste (resources and personnel) then public organizations as they have much less oversight.

Re: Why expat Americans are giving up their passports

#355

Post by [deleted] »

randyrand wrote: post #327
ryaniscool wrote: post #307

Earlier quoted context omitted.

Lived in Australia for 5 years. Was several months late filing FBAR my first year. Did it on time my second year. Completely forgot my 3rd and 4th year. Filed 3 at the same time on my 5th year. I was never contacted by the IRS for failing to file on time. The point being, it's scare tactics. I filed a complaint with the https://www.irs.gov/Advocate and they are well aware of the issue. They have brought it up repeate…

Hi! I work for the IRS and we'd love to get this squared away. Please contact me at collection0010@irs.gov and we can resolve this immediately. Best

[deleted]

Re: Why expat Americans are giving up their passports

#356

Post by fapjacks »

gcb0 wrote: post #258
TheOtherHobbes wrote: post #230

Earlier quoted context omitted.

How does the US enforce this? What happens if someone with no plans to visit the US and no income from the US that could be garnished says "So - come and get it if you want it"?

the founder of a big french game studio filled for ipo two years after giving up his green card (not even citizenship). the irs got the french gov to freeze all his assets claiming he was giving up citizenship to evade taxes.

Seriously fuck the government.

Re: Why expat Americans are giving up their passports

#357

Post by oldmanjay »

SteveLAnderson wrote: post #354
bobby_9x wrote: post #332

Earlier quoted context omitted.

I disagree. I worked in a few different government departments that depended on funding. We always had a surplus at the end of the year and the boss would tell us to spend it on anything and everything because if we didn't, there would be less money in funding the next year. The amount of waste was incredible and it made me angry. It's why I went into the private sector/started my own company. You also almost could n…

Ask yourself, honestly, what percentage of the entire budget was that end of year splurge? In my experience it's very small, much smaller then the year to year cost inflation. There's tons of waste in any large organization. In my experience, private companies have more waste (resources and personnel) then public organizations as they have much less oversight.

The goalposts are all over the place. The only reply I have for this is that private institutions only waste my money if I own them, the government wastes my money by force.

Re: Why expat Americans are giving up their passports

#358

Post by fapjacks »

cylinder wrote: post #312
dalke wrote: post #289

Earlier quoted context omitted.

("NOT primarily about taxes" != "taxes are not an issue". My biggest complaint is precisely the expensive reporting requirements.)

Forms can be filled out. Look at Australia. If I want my retirement fund to be self-managed, I basically cannot because of inconsistencies in the tax treaty. And, what if I choose to live and work in Hong Kong or Singapore or the Cayman Islands? Why should the US have rights to tax my income above $100k if those states are tax-free? Did the US pay for my education? No. Not even my healthcare! The socialist states don…

It's about control, violence, and domination. It is a sociopath state.

Re: Why expat Americans are giving up their passports

#359

Post by dalke »

nkurz wrote: post #343
dalke wrote: post #329

Earlier quoted context omitted.

Actually, no. There is no "supposed to." You can register with the State Department if you live outside the US, just like you can register with the US if you travel outside the US. The web site is http://travel.state.gov/content/passports/en/go/step.html . Do you really think that every one of the millions of American citizens who travel or live overseas each year is supposed to tell the US about their current locati…

Do you really think that every one of the millions of American citizens who travel or live overseas each year is supposed to tell the US about their current location? I didn't presume there was such a requirement, but I also wouldn't have been surprised if the fine print somewhere made it a selectively enforced requirement. It doesn't strike me as more or less onerous than some other actions that are currently requir…

"Supposed to" implies either a requirement or a moral obligation. There is neither. "Should" doesn't have that same sense. Perhaps the word you meant? It would very much surprise me if that fine print exists as I looked for terms like that when I moved overseas, to make sure everything was legitimate.

Such a requirement is very unlikely for travelers. It's just not practical given how often plans can change. (I visited a salt mine in Austria. To my surprise we crossed into Germany during the tour. Would I need to tell the US about those 20 minutes in Germany, and when?) How much would it cost to run such a system? What happens if the system breaks - and we know the foreign tourist tracking system breaks? What are the advantages to the US?

It's more possible for permanent residency. But the US doesn't even require that of domestic citizens, despite the clear advantages there would be to know where people live. So I don't think it's going to happen any time soon. And what would be the penalty of getting it wrong?

Re: Why expat Americans are giving up their passports

#360

Post by newman314 »

spiralpolitik wrote: post #352
newman314 wrote: post #338

Earlier quoted context omitted.

While I generally have been supportive of Bernie's stance on things, it's disturbing to hear that he supports FATCA. I went digging for more information and it seems that he now is potentially supportive of residence based taxation instead of citizen based taxation. From reddit.com/r/expats4sanders, http://www.democratsabroad.org/our_candidates There are many different scenarios which the law as it currently stands d…

I'm not a tax expert but don't think the scenario you describe is correct. In most countries when you inherit it's the estate that is taxed and generally the estate is taxed in country of domicile of the estate rather than citizenship of the recipient. In your scenario the estate would would be taxed by the country of domicile, and then the remaining money transferred to you. If you were a US person then you would be…

To be clear, the money is not intended to transfer into a US bank account. So for all intents and purposes, it has remained outside the US and will continue to do so.

The point being that the US has no business trying to tax income generated from funds that has never entered the country. Residence based taxation (like the rest of the world) would address this immediately.

Post reply on HN