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Why expat Americans are giving up their passports

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Re: Why expat Americans are giving up their passports

#71

Post by bespoke_engnr »

timthelion wrote: post #24

I am an American living in Prague and will be among those to give up their citizenship. The new FBAR requirements and the recently pushed through changes that require foreign banks to report are really a huge burden. It is a significant legal risk to be an American overseas. The fines are insane for failiure to report, even if you owe no taxes! You can easilly land yourself with a $20 000 - $80 000 fine for having a…

I'm an American living in Europe. I report my income to the IRS every year, like you. Reading your comment gave me a scare -- what exactly would trigger the $20,000-80,000 fine or asset seizure?

Is it a failure to report income taxes at all? Or do you make so much more than $100k/year that the double taxation is killing you?

I'm just trying to figure out what, other than their already-reported income being audited, has got all of your expat friends so spooked...

Re: Why expat Americans are giving up their passports

#72

Post by timthelion »

bespoke_engnr wrote: post #71
timthelion wrote: post #24

I am an American living in Prague and will be among those to give up their citizenship. The new FBAR requirements and the recently pushed through changes that require foreign banks to report are really a huge burden. It is a significant legal risk to be an American overseas. The fines are insane for failiure to report, even if you owe no taxes! You can easilly land yourself with a $20 000 - $80 000 fine for having a…

I'm an American living in Europe. I report my income to the IRS every year, like you. Reading your comment gave me a scare -- what exactly would trigger the $20,000-80,000 fine or asset seizure? Is it a failure to report income taxes at all? Or do you make so much more than $100k/year that the double taxation is killing you? I'm just trying to figure out what, other than their already-reported income being audited, h…

When many expats came abroad, the rules were rather lax. They didn't have to file US taxes due to their low incomes.

Later the rules changed, and they had to file taxes. Those who didn't know about the change ended up having to pay a big fine.

Lately, a new requirement was the need to file FBAR forms for every foreign bank accound and security: https://www.irs.gov/Businesses/Small-Businesses-&-Self-Emplo...

Many people didn't know about the new requirement, and they had to pay big fines.

What will be the next new requirement that startles people who don't have any contact with the country? No one knows. That is the risk, the uncertainty that there might be a requirement that you don't even know about...

Re: Why expat Americans are giving up their passports

#73

Post by mbesto »

jacquesm wrote: post #62
mbesto wrote: post #48

Earlier quoted context omitted.

The US economy and quality of life commands that premium. Note - My fiancee is British and I've lived for 4 years overseas in the EU (UK 3 years, DE for 1). As the tax code as an American begins to squeeze more and more, I've become more reluctant to "pay" that premium, but there are indeed aspects of American life and opportunity that don't currently exist in the EU.

> but there are indeed aspects of American life and opportunity that don't currently exist in the EU. Indeed there are. Many in the EU would consider the 'life' part of that sentence a good thing. As for opportunity, I've never really felt that the EU limited me in ways that I would find less in the USA, but that's just anecdote, not research. Not all of life revolves around start-ups, and plenty of the upsides of th…

Yup totally agree. Everyone's interpretation of the quality of life is going to be different, and therefore the debate will be never ending.

Re: Why expat Americans are giving up their passports

#74

Post by seanmcdirmid »

wolfgke wrote: post #18
k-mcgrady wrote: post #6

Earlier quoted context omitted.

>> "America is one of the few countries that could get away with this" There are actually only two countries that do it - the US and Eritrea.

I think China, too.

That is a bit ambiguous, but it seems to be more of a reporting requirement and not the same thing. Anyways, even us expats are effected by it if we stay for more than 5 years without a 1 month break.

Re: Why expat Americans are giving up their passports

#75

Post by bespoke_engnr »

timthelion wrote: post #72
bespoke_engnr wrote: post #71

Earlier quoted context omitted.

I'm an American living in Europe. I report my income to the IRS every year, like you. Reading your comment gave me a scare -- what exactly would trigger the $20,000-80,000 fine or asset seizure? Is it a failure to report income taxes at all? Or do you make so much more than $100k/year that the double taxation is killing you? I'm just trying to figure out what, other than their already-reported income being audited, h…

When many expats came abroad, the rules were rather lax. They didn't have to file US taxes due to their low incomes. Later the rules changed, and they had to file taxes. Those who didn't know about the change ended up having to pay a big fine. Lately, a new requirement was the need to file FBAR forms for every foreign bank accound and security: https://www.irs.gov/Businesses/Small-Businesses-&-Self-Emplo... Many peop…

Ahh, thanks for the explanation (and the link). Much appreciated.

Re: Why expat Americans are giving up their passports

#76

Post by charlieflowers »

jacquesm wrote: post #22
dalke wrote: post #9

American citizens have to pay $2,350 to renounce citizenship? What kind of paperwork costs that much? (Or, why not just add more paperwork and charge $100K?) http://www.greenbacktaxservices.com/blog/renouncing-us-citiz... > 1. Consular officers must confirm that the potential renunciant fully understands the consequences of renunciation, including losing the right to reside in the United States without documentation…

That sounds about as hard as cancelling comcast.

If comcast could charge $2350 to cancel, they would.

Re: Why expat Americans are giving up their passports

#77

Post by 1stop »

cpursley wrote: post #64
madaxe_again wrote: post #17

So, I know a us born billionaire who rescinded his citizenship last year to avoid fatca. He has successfully evaded both the US and UK tax authorities to the tune of half a billion or so, he tells me. The guy gives crazy amounts to philanthropic causes instead. He doesn't want his hard earned wealth pissed away by clueless bureaucrats. So. Anyone who tells you fatca has been a success is full of it. It penalises "nor…

> The guy gives crazy amounts to philanthropic causes instead. This. As a someone who leans libertarian, folks give me the "you must be greedy" look when I mention that I have an issue with income taxation. Not at all - like your friend, I'm rather selective about where I donate my money - to causes that matter to me. I'm a generous person and consider the coercion of the state to be neither altruistic nor efficient.

So you took advantage of a system paid for by others and then decided you wouldn't contribute back. That's fine, but also pretty much the definition of greedy/selfish.

Regardless what your "hardship" story maybe, it would have been harder if everyone acted the way you do now.

Re: Why expat Americans are giving up their passports

#78

Post by morgante »

arto wrote: post #26

For those looking to renounce their U.S. citizenship, Mike Gogulski has chronicled and documented the whole paperwork-heavy process on his blog: http://www.nostate.com/about/ In his case, after submitting the paperwork and burning his passport on YouTube, he chose to not get another citizenship, which means he's now stateless.

> which means he's now stateless

Knowing some people who are involuntarily stateless, I can't imagine why someone would ever voluntarily give up their citizenship.

It makes traveling, financing, and generally living incredibly citizenship.

Re: Why expat Americans are giving up their passports

#80

Post by RyanZAG »

josh_fyi wrote: post #61
pmontra wrote: post #47

Every form I see about financial matters here in Italy has a checkbox that I must tick to state I'm not a US person. No financial institution wants to deal with them because of FACTA. An unintended consequence for sure and I hope they'll fix it. Still it's telling about the general attitude of lawmakers all around the world.

Right. Imagine if every financial form had 200 extra checkboxes -- dictated by the Mongolian Treasury, the Namibian Treasury, etc. But that's not the case. Only the US imposes financial regulations on every bank in the world.

Well other countries could try, but banks wouldn't really care because of limited exposure and inability for most countries to collect.
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