Thousands of Americans Will Be Denied a Passport Because of Unpaid Taxes • Hacker News Board

Re: Thousands of Americans Will Be Denied a Passport Because of Unpaid Taxes

#71

Post by perl4ever » Sat, Jul 07, 2018, 9:08 PM UTC

kybernetikos wrote: post #13

rosser wrote: post #6

Another (non-paywalled) article [0] on this says they're only denying/not renewing passports for people with at least $51,000 in tax debt. As such, this isn't exactly "picking on the little guy", and should probably be considered in that light. If you have an outstanding tax bill on the order of 1.5x (or more ) than the median per capita income — if you owe more in taxes than most people make — that's kinda on you, a…

America is one of I believe only 2 countries that demand tax on income from its citizens who live and earn abroad (and who have almost certainly already paid tax on that income to the country in which they are living). My understanding is that they won't always even accept a renunciation of citizenship if they believe you're doing it to avoid paying them taxes. It's no surprise to me that there are significant number…

"America is one of I believe only 2 countries that demand tax on income from its citizens who live and earn abroad"

When I pay taxes to a foreign country, I generally get a tax credit on my US taxes. Complaints like yours tend to lead me to infer you think you're entitled to lower than US tax rates in some tax shelter locale, but you are implying (for sympathy) the issue is being taxed higher than a typical citizen of the EU or US.

Re: Thousands of Americans Will Be Denied a Passport Because of Unpaid Taxes

#72

Post by perl4ever » Sat, Jul 07, 2018, 9:11 PM UTC

mdorazio wrote: post #17

kybernetikos wrote: post #13

Earlier quoted context omitted.

America is one of I believe only 2 countries that demand tax on income from its citizens who live and earn abroad (and who have almost certainly already paid tax on that income to the country in which they are living). My understanding is that they won't always even accept a renunciation of citizenship if they believe you're doing it to avoid paying them taxes. It's no surprise to me that there are significant number…

And? If you're that invested in another country, give up your US passport and get one with the new country. Alternatively, work to get the tax laws in the US changed. It's not like this stuff is a secret - if you want to work abroad you're going to get double taxed. Not paying the US portion of taxes is illegal. I don't understand the issue here, maybe you can explain it to me?

What do you mean double taxed? If you get a tax credit for foreign taxes, it's rather disingenuous to claim to be double taxed, although you could argue it's true in the sense you file for multiple jurisdictions.

Re: Thousands of Americans Will Be Denied a Passport Because of Unpaid Taxes

#73

Post by ohhellno » Sat, Jul 07, 2018, 9:19 PM UTC

nradov wrote: post #61

duxup wrote: post #47

Earlier quoted context omitted.

I wonder how likely it is people would renounce their citizenship.... that US passport / citizenship is pretty powerful.

During the past few years under 10,000 US citizens have renounced their citizenship per year. So basically negligible as a percentage of the population.

You should compare that number to how many renounced before FACTA passed and you will see it is not trivial. It is the main reason people renounce now.

Re: Thousands of Americans Will Be Denied a Passport Because of Unpaid Taxes

#74

Post by dang » Sat, Jul 07, 2018, 9:24 PM UTC

king_nothing wrote: post #54

And so the totalitarian demagogue builds their “Berlin wall” to keep citizens in... anyone crossing will be shot. Any unapproved thoughts or speech will lower one’s social credit, eventually making them ineligible for travel, banking, voting, government services, etc... too low and they will be sent to reeducation camps. Parents and children split apart and sent to concentration camps. Blaming certain groups for a co…

Could you please not use HN for ideological flames? It's not what this site is for.

https://news.ycombinator.com/newsguidelines.html

Re: Thousands of Americans Will Be Denied a Passport Because of Unpaid Taxes

#75

Post by Godel_unicode » Sat, Jul 07, 2018, 9:31 PM UTC

BeetleB wrote: post #48

Godel_unicode wrote: post #21

Earlier quoted context omitted.

You're aware that foreign tax can be taken as a credit or deduction, yes? Further not only are you incorrect about the whole "won't accept" thing, they have a whole process for exactly how you do it. Importantly, that process only applies to well-off expats (multiple years at $150k+ or >$2m in net worth) and anyone else who wants out can get out quickly and cheaply. This whole flap isn't about"can't pay", it's about…

A lot of the problem isn't that they owe taxes but that they have trouble filing correctly. You're required to file even if you owe no tax. The US has fairly high reporting requirements. Think of all the tax forms you've received in the US. W2. All the various 1099s. All the docs related to stocks, SPP, interest on mortgage, real estate transactions, etc. The IRS still needs all that paperwork even if you have these…

> You're required to file even if you owe no tax.

That's true above the $10k limit, yes.

> For those lower income folks it's cheaper to renounce than to keep paying these fees.

I guess it's a good thing that's easy for them, then!

Re: Thousands of Americans Will Be Denied a Passport Because of Unpaid Taxes

#76

Post by charlesdm » Sat, Jul 07, 2018, 10:04 PM UTC

duxup wrote: post #47

pembrook wrote: post #32

Have a feeling this will end up extorting American expats and people who grew up abroad without ever living or working in the US (who are only US citizens because of their parents). When FATCA was passed, it flipped a switch that automatically made tens of thousands of people around the world who have never set foot in the US into criminals by default since they'd never filed US taxes (the US has the only global taxa…

I wonder how likely it is people would renounce their citizenship.... that US passport / citizenship is pretty powerful.

Nothing any EU passport couldn't solve (with the added bonus of not having to pay taxes on your global income to the US government)

Re: Thousands of Americans Will Be Denied a Passport Because of Unpaid Taxes

#77

Post by throwaway2016a » Sat, Jul 07, 2018, 10:22 PM UTC

mankash666 wrote: post #10

I've had 2 instances where the IRS erroneously concluded that I owe them large tax bills. It took a few months of back and forth paperwork and phone calls to resolve, and have the IRS note on paper that I owe them nothing. With this law, an erroneous IRS decision can limit passport issuance and international travel. Three letter agencies are probably salivating at the prospect of 'errors' in possible suspects. This j…

Anecdotally, the two times I have had this happen it went...

1. Me, calls IRS: "Hey, this is wrong because ..."

2. IRS: "Ok, fill out this form and send it in"

3. Me: Fills out form and sends it in

4. IRS: Provides me a document saying I am all set

Probably about 3-4 weeks all said and done.

I was actually impressed with how painless it was and how friendly the people were. An audit is a different story.

Re: Thousands of Americans Will Be Denied a Passport Because of Unpaid Taxes

#78

Post by jandrewrogers » Sat, Jul 07, 2018, 10:30 PM UTC

mdorazio wrote: post #18

ci5er wrote: post #16

Earlier quoted context omitted.

If you live and work overseas, the IRS commonly miscalculates money owed. This can leave one stranded through no fault of their own and/or seriously interrupt a career. This law doesn't only sweep up tax evaders...

How much are you making that a miscalculation leads to an erroneous $51,000 tax bill beyond what you supposedly already paid?

I once received a mistaken IRS tax bill of $600,000, more than I had earned in my entire life up to that point. After much paperwork filing, they decided I actually owed them nothing but I still had to go through the process contesting it and providing stacks of documentation. Ironically, they already had the exact same information I had, they simply didn't bother to look at it. So I can easily imagine that it wouldn't be difficult for the IRS to make a mistake and come up with figures much higher than $51k.

To their credit, the IRS was fairly reasonable to work with while this was going on. I think the examiner caught on pretty quickly that something didn't make sense.

Re: Thousands of Americans Will Be Denied a Passport Because of Unpaid Taxes

#79

Post by [deleted] » Sat, Jul 07, 2018, 11:10 PM UTC

adventured wrote: post #58

pembrook wrote: post #32

Have a feeling this will end up extorting American expats and people who grew up abroad without ever living or working in the US (who are only US citizens because of their parents). When FATCA was passed, it flipped a switch that automatically made tens of thousands of people around the world who have never set foot in the US into criminals by default since they'd never filed US taxes (the US has the only global taxa…

> I'm sure we'll see the already record-high numbers of people renouncing their US citizenship accelerate. That sounds like a big deal, until you see how trivial the number is: 6,000 to 7,000 people per year, or 0.003% of US adults. The US hands out about one million green cards per year. There are typically five million or more green card applications pending in a given year. 150x more immigrants become citizens eve…

[deleted]

Re: Thousands of Americans Will Be Denied a Passport Because of Unpaid Taxes

#80

Post by pembrook » Sat, Jul 07, 2018, 11:13 PM UTC

nradov wrote: post #61

duxup wrote: post #47

Earlier quoted context omitted.

I wonder how likely it is people would renounce their citizenship.... that US passport / citizenship is pretty powerful.

During the past few years under 10,000 US citizens have renounced their citizenship per year. So basically negligible as a percentage of the population.

The point is not that the absolute number is high or that it has any net effect on the number of American citizens.

The point is that the number sky rocketed from basically nobody to thousands of people because FATCA is such a draconian, terrible law.

In absolute terms, only about 3.5% of Americans even travel abroad each year let alone live abroad. We could put a wall around the entire country and refuse to let anybody leave and a majority of Americans would not care. A majority of American citizens don't even have passports in the first place.

The small minority of people who live and travel abroad perform a very important function for US industry and international relations. Making life more difficult for them for no good reason is bad for our economy.