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

#91

Post by duxup » Sun, Jul 08, 2018, 12:32 AM UTC

pembrook wrote: post #80

nradov wrote: post #61

Earlier quoted context omitted.

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 anyb…

"skyrocketed" relative to thousands really still seems very small....and we don't know what each reason is.

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

#92

Post by contravariant » Sun, Jul 08, 2018, 1:33 AM UTC

V-2 wrote: post #4

git_rancher wrote: post #2

This makes the whole US a debtors prison of sorts. Not sure if this is a useful way to think about it though.

Technically the US doesn't prevent you from leaving the country for not having an American passport - it's other countries that are likely not to let you in.

Is that really how it works though? Does the US not also take away the passport of suspects to prevent them from leaving the country?

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

#93

Post by perl4ever » Sun, Jul 08, 2018, 1:39 AM UTC

pembrook wrote: post #82

perl4ever wrote: post #64

Earlier quoted context omitted.

"This proves burdensome enough that a lot of expats pay thousands a year to tax firms" It's a matter of opinion, but I don't think it's an intolerable burden if your tax prep costs are <10% of your total tax bill.

Is H&R Block doing sponsored posts on HN now?

10% would be excessive if it were typical for the general public, I would agree. But not so much for a tiny subset with high earnings and particularly complex affairs. It doesn't make one the moral equivalent of children locked in cages.

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

#94

Post by perl4ever » Sun, Jul 08, 2018, 1:44 AM UTC

BeetleB wrote: post #84

perl4ever wrote: post #64

Earlier quoted context omitted.

"This proves burdensome enough that a lot of expats pay thousands a year to tax firms" It's a matter of opinion, but I don't think it's an intolerable burden if your tax prep costs are <10% of your total tax bill.

>It's a matter of opinion, but I don't think it's an intolerable burden if your tax prep costs are And I do. For most of the world, tax prep costs are negligible. I'm not sure how many countries have tax prep for individuals as a big business like it is in the US.

In context, we're not talking about a big business, because the market is a small number of people with special needs. It seems quite inappropriate to compare them to "most of the world".

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

#95

Post by BeetleB » Sun, Jul 08, 2018, 3:26 AM UTC

perl4ever wrote: post #94

BeetleB wrote: post #84

Earlier quoted context omitted.

>It's a matter of opinion, but I don't think it's an intolerable burden if your tax prep costs are And I do. For most of the world, tax prep costs are negligible. I'm not sure how many countries have tax prep for individuals as a big business like it is in the US.

In context, we're not talking about a big business, because the market is a small number of people with special needs. It seems quite inappropriate to compare them to "most of the world".

>In context, we're not talking about a big business, because the market is a small number of people with special needs. It seems quite inappropriate to compare them to "most of the world".

I think we're talking about very different things. To directly address your comment: When you say the market is a small number, you are correct: The market is workers living outside the US who happen to be American. Foreign workers of pretty much every other country do not deal with this. It's a market very targeted to Americans.

And its smallness makes it expensive.

But when I said how your comment about paying for tax prep was a very American outlook, I was referring to the reality that so many in the US rely either on tax software or pay a company to do their taxes. This is a practice alien (AFAIK) to most countries - they have much simpler tax codes and rarely do they need to make special payments for tax prep. Having to pay a tax prep company because you happen to be American is effectively a tax on being an American. For many outside the US, saying "It's not a big deal - just pay a tax company to handle it" is like me telling a typical American "It's not a big deal. Just pay a company $500 annually to do the paperwork that gives you the right to own a pet" - it's a crazy notion. It's easy to dismiss it as "Less than 10% of your tax burden - what's the big deal?"

Just a few days ago I was reading a story of a Canadian/American dual citizen. She was born to American parents, but as a kid her parents migrated to Canada - she had lived most of her life in Canada, and had no real relations in the US. The old tax law was that she is not considered a US citizen unless she actively declares herself as one after she turns 18. That law changed recently (I think under Obama) to treat her like all other Americans for tax purposes. Suddenly she had to deal with filing paperwork, and getting taxed on certain retirement/investment benefits (that are tax free in Canada but not in the US - think stuff like Roth IRA in the US), etc.

When I was in school, I knew many foreign grad students - it can take 5-8 years to get a PhD - and if you're young and married, there's a good chance you'll have a kid or two during your stay at school. Some of them returned to their home countries (contractual obligations, etc). I don't know if their kids will eventually move to the US and claim citizenship, but they will have the burden of dealing with US taxes wherever they live in the world - whether they earn a good amount of money or not.

Finally, getting back to your original comment:

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

#96

Post by BeetleB » Sun, Jul 08, 2018, 3:33 AM UTC

perl4ever wrote: post #93

pembrook wrote: post #82

Earlier quoted context omitted.

Is H&R Block doing sponsored posts on HN now?

10% would be excessive if it were typical for the general public, I would agree. But not so much for a tiny subset with high earnings and particularly complex affairs. It doesn't make one the moral equivalent of children locked in cages.

>But not so much for a tiny subset with high earnings and particularly complex affairs.

I think this is where I think we're talking about different things.

It does not only affect people with high earnings. It affects all US citizens working abroad - including those who didn't exactly choose to live abroad.

Again, I'm not talking only about double taxation. I'm talking about the need to file (which is true even if you earn $20K/year in a Latin American or Asian country). In my other comment to you I gave examples of fairly ordinary people in other countries who will be considered as US citizens under current tax laws who are legally bound by the US to do all that paperwork every year. As someone else pointed out, if your income is over $11K/year, you have to file. Run a small store that barely pays the bills? You have to file. Do some stock transactions and gain/lose money? You have to file.

Just think of everything you have to include in your tax form (if you are in the US). Then think of all the tax docs you receive annually. You need to create all those tax docs yourself - including the ones you don't include with your return (in the US, the agency that issued the document already reported that info to the IRS). I got all these docs from various agencies even as a low earner in the US - this is definitely not about high earners.

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

#97

Post by Godel_unicode » Sun, Jul 08, 2018, 4:03 AM UTC

BeetleB wrote: post #85

Godel_unicode wrote: post #75

Earlier quoted context omitted.

> 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!

>I guess it's a good thing that's easy for them, then! I fail to see how you drew that conclusion - it was not what I said. If you consider paying $2K to avoid doing paperwork that gains you very little "easy", I would like to be your friend.

I'm aware that it's not what you said, this song ain't about you homie. (The rhetorical) you has a choice; fill out the paperwork you knew you were going to have to fill out (!), or renounce citizenship. If you make enough that this is a hardship, you can afford to pay someone to fix it for you. If not, renouncing (what I was talking about) is easy and cheap.

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

#98

Post by Godel_unicode » Sun, Jul 08, 2018, 4:05 AM UTC

slededit wrote: post #36

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…

You seriously underestimate the burden the US places on its expats and banks that do business with them. Its to the point most foreign banks will not do business with US nationals.

No, I really don't :)

:%s/most/a select few you shouldn't work with anyway

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

#99

Post by perl4ever » Sun, Jul 08, 2018, 5:29 AM UTC

BeetleB wrote: post #96

perl4ever wrote: post #93

Earlier quoted context omitted.

10% would be excessive if it were typical for the general public, I would agree. But not so much for a tiny subset with high earnings and particularly complex affairs. It doesn't make one the moral equivalent of children locked in cages.

>But not so much for a tiny subset with high earnings and particularly complex affairs. I think this is where I think we're talking about different things. It does not only affect people with high earnings. It affects all US citizens working abroad - including those who didn't exactly choose to live abroad. Again, I'm not talking only about double taxation. I'm talking about the need to file (which is true even if yo…

"think of all the tax docs you receive annually. You need to create all those tax docs yourself - including the ones you don't include with your return"

I find this inconceivable - it sounds absurd, because (a) not all income is reported on those forms anyway, even US based, and (b) fabricating them yourself eliminates their purpose as a means to prevent tax evasion.

What's the IRS going to do, say "well, you tried to file a tax return with 10K euros of income, but we didn't get a W-2, so you're in deep trouble now"? Are they going to add to that 10K or subtract from it?

If you are a US adult who has filed tax returns for a few years, I would expect you to have some experience paying taxes on income that wasn't independently reported. Surely you don't fabricate the documents that are normally sent by the income source, when they aren't present. I just don't believe that is a thing that is done.

I feel like my leg is being pulled here.

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

#100

Post by perl4ever » Sun, Jul 08, 2018, 6:00 AM UTC

BeetleB wrote: post #95

perl4ever wrote: post #94

Earlier quoted context omitted.

In context, we're not talking about a big business, because the market is a small number of people with special needs. It seems quite inappropriate to compare them to "most of the world".

>In context, we're not talking about a big business, because the market is a small number of people with special needs. It seems quite inappropriate to compare them to "most of the world". I think we're talking about very different things. To directly address your comment: When you say the market is a small number, you are correct: The market is workers living outside the US who happen to be American. Foreign workers…

"It's easy to dismiss it as "Less than 10% of your tax burden - what's the big deal?""

My heuristic is that a percentage of a percentage is quite small, in general. It's fundamentally different from $500, which could be a lot of money or not depending on context. Percentages scale.