[HN Gopher] On Receiving My Certificate of Loss of (US) National...
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On Receiving My Certificate of Loss of (US) Nationality (2016)
Author : kyleblarson
Score : 102 points
Date : 2021-10-14 17:24 UTC (5 hours ago)
(HTM) web link (rachelsruminations.com)
(TXT) w3m dump (rachelsruminations.com)
| noasaservice wrote:
| > then charging me $2350 to file the divorce papers.
|
| So, if I understand correctly, the very fact that I was squirted
| out here in this country puts me at a -$2350 just for being born.
|
| So US citizenship = -$2350
| hbrav wrote:
| I have a question about this, that I've never been able to find a
| good answer to: what happens if you unilaterally renounce US
| citizenship?
|
| Consider the situation: you're a dual US / Dutch citizen. You
| want to avoid paying US income tax (or just to avoid filling in a
| form each year that results in the IRS telling you that your tax
| bill is $0 because the Netherlands' tax rate is higher). But the
| State Department's renunciation route takes 3-4 years. So you
| mail them a letter instead announcing that you are renouncing
| your citizenship, and you include your US passport with the
| letter. You don't send the IRS a tax return in subsequent years,
| and you tell all your banks that you are not a US citizen and ask
| them to update your details accordingly.
|
| I assume that what happens next is that your bank has a procedure
| for asking the US State Department if you have renounced your
| citizenship, and they say "no". So the bank continues to treat
| you as a US citizen, with all of the reporting obligations that
| entails.
|
| Your method of enforcing this would (I assume) be to file a suit
| against the bank in the Netherlands and seek an order to prevent
| them from passing any information on you to the IRS. You would
| effectively be asking a Dutch court to rule on whether you can
| unilaterally renounce US citizenship.
|
| I have never heard of such a case (either in the Netherlands or
| elsewhere), so I assume this has never been attempted. I don't
| know if that is because there is a strong reason to suspect that
| it would fail.
| throw63738 wrote:
| It is good business for gov, so of course it fails.
|
| There is something similar that happens regularly.
|
| Perhaps look at gaining citizenship at country that allows only
| single citizenship. It should make American citizenship null
| and void.
| hbrav wrote:
| Germany is such a country. However, as part of granting you
| citizenship they do a search for other countries that you
| have citizenship of. I believe they will not grant you German
| citizenship until you have relinquished your other
| citizenship.
|
| I suppose another test case would be if you were to apply for
| German citizenship following your unilateral renunciation.
| voisin wrote:
| > you tell all your banks that you are not a US citizen and ask
| them to update your details accordingly.
|
| Banks abroad demand proof beyond just telling them that. You
| need to show the Certificate of Loss of Nationality or present
| a US Taxpayer Identification Number.
| hbrav wrote:
| This is why I suspect such an attempt would require going via
| the courts. You would say to the bank "I have unilaterally
| renounced my citizenship", the bank would not accept it, and
| you would be asking the court to order the bank to recognize
| that renunciation.
| eterevsky wrote:
| I've once had a pleasure of trying to convince a Swiss bank
| that I am neither US citizen nor resident. Fortunately it
| boiled down to a few phone calls and a couple of letter
| saying that I am really really not a US citizen, I swear.
| voisin wrote:
| > Your method of enforcing this would (I assume) be to file a
| suit against the bank in the Netherlands and seek an order to
| prevent them from passing any information on you to the IRS.
| You would effectively be asking a Dutch court to rule on
| whether you can unilaterally renounce US citizenship.
|
| This is incorrect. The method of enforcing tax obligations is
| spelled out in bilateral tax treaties. In this instance the US
| would lean on the Netherlands to enforce it and failure to pay
| the obligations to the Dutch would be punished by whatever
| their tax law says.
| Scoundreller wrote:
| It depends on the treaty, many are like you say, but not all
| include mutual collection/enforcement of tax debts.
| hbrav wrote:
| I expect there is such a treaty, but presumably it specifies
| that the Netherlands will have certain obligations regarding
| US citizens that reside in the Netherlands. I doubt it will
| be specific on who actually _is_ a US citizen.
|
| Further, you might still be able to prevail in a court. You
| would essentially be asking a court to find that you have a
| unilateral right to renounce a citizenship. Again, I doubt
| such a right is explicitly set out in any Netherlands law,
| but you would would be arguing that such a right is implied
| by some other principles. If the court were to find in your
| favor, the fact that the Netherlands has a treaty to the
| contrary would merely mean that the treaty was now
| incompatible with Dutch law.
| jacquesm wrote:
| It will make you in violation of the law, and that could come
| back to haunt you in the future, for instance when and if you
| want to go and visit your family back in the USA.
|
| I would strongly recommend against going that route.
|
| Besides that, you still have to get your 'new' country to give
| you citizenship as well, which will go a lot smoother if the
| new citizenship is paired with renouncing the USA one, you
| really don't want to become 'stateless' for many reasons.
| monocasa wrote:
| In this example they're already a dual citizen before
| starting down this road.
| Rapzid wrote:
| Or you get married abroad and want to sponsor your spouse's
| VISA; they want to see your tax returns.
| rognjen wrote:
| That's fascinating.
|
| I'm not a lawyer but I'd guess that since you're citizen at the
| time, you'd have to follow the law for renouncing citizenship.
| You "unilaterally" renouncing it wouldn't mean anything since
| the law of the country says different.
|
| Perhaps consult a lawyer and if they say that there might be
| something there try to crowdfund it.
| hbrav wrote:
| > since the law of the country says different.
|
| But this is exactly the point. US law specifies what you must
| do to give up US citizenship. And the US would continue to
| regard you as a citizen - you definitely put yourself in a
| position of not being able to set foot on US soil without
| consequences if you go this route.
|
| But remember, in this scenario you live in the Netherlands.
| You want Dutch law to agree that you are not a US citizen,
| thus relieving you of your obligations so long as you
| continue to live in the Netherlands.
| eterevsky wrote:
| I don't think citizenship in general can be unilaterally
| renounced, in the same way as you usually can't unilaterally
| divorce somebody. Citizenship includes obligations both from
| the state towards an individual and vice versa. In my
| understanding (IANAL) the easiest way to unilaterally renounce
| a citizenship is to seek political asylum.
| calessian wrote:
| At least in the US, unilateral no-fault divorce is possible
| in nearly all states.
| [deleted]
| us-personality wrote:
| I registered this account to make this post in the hope that it
| helps readers of HN and others.
|
| Under U.S. law, citizenship and nationality are two different
| things. The common refrain, well-established and reified by no
| less a body than the Supreme Court, is, "All citizens are
| nationals, but not all nationals are citizens." In other words,
| the set of U.S. citizens is a subset of the set of U.S.
| nationals. (The set of U.S. nationals is itself is a subset of
| the set of U.S. persons; viz. U.S. entities such as corporations
| or LLC's are U.S. persons but not U.S. nationals.) The rights and
| privileges, and duties and obligations, conferred on the two
| groups, U.S. citizens and U.S. nationals, substantially overlap,
| but do not coincide. Both U.S. citizens and nationals have the
| right to enter or exit the United States of America at any time
| and for any reason, both have the right to reside indefinitely,
| and both are authorized to work without restriction. In general,
| U.S. citizenship confers all of the features of U.S.
| nationalship, plus some; U.S. nationals are barred from certain
| activities, such as voting in federal elections and, generally,
| are exempt from being called to serve on a jury.
|
| The author of this article found her U.S. citizenship to be too
| burdensome to maintain, and therefore relinquished her U.S.
| nationality, thereby indirectly relinquishing her U.S.
| citizenship. Was this necessary? You will notice that the IRS
| claims the authority to tax (a) the income of U.S. persons (which
| includes U.S. citizens, U.S. nationals, U.S. entities such as
| corporations or LLC's, and non-citizen and non-national
| residents), and (b) the worldwide income of U.S. citizens.
|
| But does the IRS claim the authority to tax the worldwide income
| of non-U.S. citizen, non-U.S. persons...such as non-resident U.S.
| nationals?
|
| It really makes you think.
| marstall wrote:
| ELI5 why she renounced her citizenship? Not getting it from that
| post, a 3 minute wander on her site and the FATCA Wikipedia page.
| joiguru wrote:
| Filling out tax forms and FBAR requirements were a pain.
| VWWHFSfQ wrote:
| Americans living in other countries don't want to pay taxes
| anymore. Apparently the only option is to stop being an
| American, which she has decided to do.
| Hamuko wrote:
| > _I pay almost $1000 per year to an accountant to fill out
| the forms--more and lengthier than they'd be if I lived in
| the US--only to prove I owe nothing, since I pay taxes here
| in the Netherlands._
|
| Apparently she wasn't paying taxes (to the US) anyways.
| VWWHFSfQ wrote:
| Then I'm even less clear on what her issues were. Somehow
| this is reminding me of that girl that took $350,000 in
| debt to get a Theater Management degree from Duke
| University and then blogged about how criminal the American
| higher education system is and how she was running off to
| Russia with her husband to escape the crippling debt.
|
| It's like, you took almost half a mil in debt to go to a
| PRIVATE SCHOOL to get a degree that you would have no hope
| of ever using to pay back your _crippling debt_. Student
| load debt is a real problem in USA..but that's not it.
| ska wrote:
| > Then I'm even less clear on what her issues were
|
| I think the issues are pretty simple; if you are a US
| citizen but living and working in another country
| permanently with no US local income, she found the impact
| of FACTA and tax reporting obligations to be too
| expensive and or pain-in-the-butt to make it worth
| keeping her US citizenship.
|
| There are very real impacts and constraints on ex-pats in
| this situation; whether or not they are worth it to you
| is a personal evaluation I suppose.
|
| This is nothing like the schoold debt issue you describe.
| Rapzid wrote:
| The understanding I came away with from skimming was it
| had to do with an ideological railing against the FATCA
| reporting requirements. And shame; lots of shame.
| ezfe wrote:
| Paying $1,000 a year to file a form that says you don't
| owe taxes doesn't seem like a problem to you?
| andylynch wrote:
| If you're a US citizen living in another country you'll find
| many banks and financial institutions decline to have you as a
| client because dealing with FATCA makes it far more trouble
| than it's worth. No other developed country makes similar
| demands.
| colechristensen wrote:
| But like wouldn't you be fine once you found one?
| nicolas_t wrote:
| No, even if you can open a bank account as a US citizen,
| most services will be restricted. If you want to get a life
| insurance, they won't have anything for you, if you want to
| open an investment account, same issue, etc...
|
| So, first it's difficult to find banks that'll even accept
| US citizens and then once you do, it can still be very
| restrictive.
| atourgates wrote:
| Is dual citizenship any help with this issue?
|
| Say you're a dual US / German citizen. Will that help a
| German bank more easily bank with you? Do you even have
| to disclose to the bank that you're a dual citizen, or
| can you simply present yourself as a German citizen?
| fh973 wrote:
| In my experience, US tax residency (as a solely German
| citizen) is enough for German and Swiss banks to cancel
| services. So dual citizenship likely won't help.
|
| You may misrepresent your tax status towards the bank,
| but I'd assume that takes you on risky grounds, legally.
| Scoundreller wrote:
| It depends.
|
| Some countries won't let banks refuse to open an account.
|
| I'm sure some people lie to their bank (or continue to
| hold accounts from before they would ask these
| questions). But it's more complicated if your place of
| birth is USA. But that could be bypassable too if you
| have the right documents.
| cr1895 wrote:
| Doesn't matter, all that counts is if you are a "US
| Person":
|
| https://www.irs.gov/individuals/international-
| taxpayers/clas...
|
| Whether the bank finds out or not is maybe another thing,
| but in principle what matters is if you count as a US
| Person.
| swebs wrote:
| I haven't run into much trouble, though maybe I just got
| lucky with Nordea.
| marstall wrote:
| that does sound like a hassle.
| marstall wrote:
| oh ha. somehow thought it was much more sinister
| xxpor wrote:
| And yet the pandora papers aren't getting much coverage in
| the US because there aren't that many Americans named in
| them. Gotta wonder if the two are connected.
| gumby wrote:
| Actually the US has many ways to hide your assets (just
| looks at the South Dakota trust system). Look at the
| pandora papers and you'll see a lot of people hiding their
| assets in the uSA.
| dd_roger wrote:
| Honestly I find it pretty fucked up that someone would renounce
| their citizenship "for convenience". I can't really comprehend
| how their country could mean so little to someone, especially
| when that country is a democracy.
|
| Regarding the taxation when living abroad, doesn't it actually
| make sense? Sure it sounds like an oddity because the US are the
| only to do it, but most emigrants I know still use the consular
| services of their country of origin every now and then, benefit
| from its diplomatic protection, and can return any time if
| circumstances require it (implying they should be contributing to
| keeping the country safe and functional in the meantime, call it
| an insurance policy if you will), and probably many other
| benefits I'm not thinking of. Some countries will even send
| special forces abroad to recover citizens in danger.
|
| So yeah apparently the practicalities of it suck sometimes (and
| that should definitively be improved) but in principle it's not
| as outlandish as it sounds, imo.
| nickthemagicman wrote:
| Her essentially 3 reasons for renouncing essentially and my
| responses:
|
| >I could vote in the US, but no one represents the needs of US
| citizens abroad because our votes are dispersed over all 50
| states.
|
| * there's hundreds of millions of people and only two parties in
| the U.S. no one represents anybodies needs well
|
| >I pay almost $1000 per year to an accountant to fill out the
| forms--more and lengthier than they'd be if I lived in the US--
| only to prove I owe nothing, since I pay taxes here in the
| Netherlands. FATCA forces me to hand over my private financial
| information, as well as my non-American husband's, to an extent
| that homeland Americans don't have to unless they're suspected of
| a crime. FATCA strong-arms our local banks into handing over our
| private financial information as well. It treats my local
| accounts as being equivalent to hiding money overseas.
|
| * Taxes and the FATCA issues....to me and I'm sure billions of
| other people: $1000$ bucks a year is well worth it for a U.S.
| citizenship...Turning over financial records of the non-American
| spouse...this one doesn't add up, just do Married Filing
| Separately status in tax return.
|
| >Without an address in the US, I can't open an investment account
| there; with US nationality, it is becoming more and more
| difficult to do any investment or borrowing outside of the US.
|
| * this doesn't make sense. Why would having a citizenship affect
| if a Dutch bank loaned you money as long as your credit score was
| good?
|
| The reasons she gives don't make sense to me...something feels
| off here.
| sanedigital wrote:
| It's clear from your response that you're not at all familiar
| with the issues here. I'm a bit confused as to why you'd feel
| the need to share your opinion on a topic where you're very
| clearly not well informed.
|
| As an American expat for five years, I can assure you her
| complaints are accurate. 1. Not remotely the same. As a
| resident of a particular state, your senators and
| congresspeople are certainly looking out for your state's
| interests. As an expat, almost nobody cares. 2. FATCA doesn't
| care how you file. If you're married, your spouse is included.
| 3. Most investment banks will no longer accept expats as
| clients, and go so far as to monitor and close accounts for
| people consistently logging in from overseas. When we lived
| abroad we had to be very careful with VPNs, and often had our
| US-resident parents monitor our accounts for us just in case.
| nickthemagicman wrote:
| > It's clear from your response that you're not at all
| familiar with the issues here
|
| Im NOT! I'm trying to understand it.
|
| It appears that she's giving up her citizenship so she
| doesn't have to use a VPN and has a better selection of banks
| and to avoid paying $1000 a year?
|
| Seems like a citizenship is worth WAY more than that!
|
| Something doesn't add up here!
|
| Or do people with a lot of money just have a lot less
| tolerance for inconveniences than average moneyed people?
| callahad wrote:
| It genuinely is far more invasive and frustrating than
| you'd expect.
|
| I'm a dual US/UK citizen, living in the UK for four years.
| I have been turned away from local banks for being
| American. I have also had American banks and brokerages
| unilaterally terminate my prior accounts for moving abroad.
| I cannot reasonably purchase local life insurance policies
| nor mutual funds without tripping over IRS regulations that
| strip them of any preferential tax treatment _and_ impose
| unimaginably onerous reporting requirements (PFIC).
|
| As a dual citizen, you would think I could just bank with
| my British passport and conceal my American citizenship.
| Except foreign banks in countries with normal diplomatic
| relations with America are required to _proactively search
| their customer database for indications of potential
| American citizens,_ report their details, and possibly
| preventatively withhold 30% of all payments to those
| accounts (FATCA). This is a right pain in the ass, so those
| institutions will often preemptively exclude customers who
| seem too American from the outset.
|
| I have to rigorously report the highest monthly balance /
| value of _every single one_ of my foreign assets and
| accounts, every year, to both the IRS and FinCEN, on
| entirely separate and incompatible forms.
|
| And I get to pay thousands of dollars a year for the
| pleasure of being locked out of basic financial vehicles
| (life insurance policies!) and proving to Uncle Sam that I
| don't owe him anything. It's especially galling because
| this kind of reporting and taxation for foreign-domiciled
| citizens _is unique to America,_ at least of developed
| countries.
|
| Not to mention that all of this joy, and more, extends to
| your spouse, regardless of their citizenship.
|
| I keep doing it, year after year, because I still believe
| in America. But after a few years without stepping on
| American soil, the question _why am I still doing this_
| comes of its own accord.
| ezfe wrote:
| You can't open a bank account with just a VPN. You also
| need an address in the US. And even if you do, how do you
| get money into that account? Do you think your employer in
| the Netherlands would match your 401(k) deposits?
| nickthemagicman wrote:
| There's tons of ways to get an address in the U.S.
| several digitally.
|
| You can transfer money into that account via digital
| transfer?
|
| OF course your Netherlands employer won't match 401k,
| they prob don't even know what that is.
|
| Will they match it a 401k if you GIVE UP your
| citizenship?
|
| Doesn't make sense.
| wrl wrote:
| Right, there are retirement/pension investments for
| Dutch/EU nationals which she is not eligible for because
| of her status as a US person (in the eyes of the SEC).
|
| So, long story short, she's ineligible for investing as a
| US national unless she jumps through hoops to maintain a
| US address and appears to reside in the US. Meanwhile,
| she's ineligible for investing as a Dutch national
| because EU brokers won't deal with US nationals. Limbo.
| jaywalk wrote:
| >As a resident of a particular state, your senators and
| congresspeople are certainly looking out for your state's
| interests.
|
| You've apparently forgotten a whole lot in your five years as
| an expat.
| unhammer wrote:
| If you have access to your spouse's account you may need to
| enter that into the FBAR form
| https://en.wikipedia.org/wiki/Bank_Secrecy_Act#FBAR
|
| Regarding the difficulty of investing/borrowing outside the US:
| Non-US banks are required to report stuff to the US if they
| have US customers. So they might not want US customers because
| it's a hassle for them.
| jacquesm wrote:
| And that in turn is not in line with EU law - if not in
| letter then at least in spirit so banks are caught between
| two powers and in turn offload that burden onto the citizens.
| Realistically as an American abroad you can do it but there
| is a continuous cost and stress associated with remaining a
| US citizen.
|
| I know several people that have gone down this path and a few
| who are doing it right now, the US seems outright vindictive
| against those that want to leave, a bit like an abusive
| spouse that can't imagine there is a life after them for you.
| Ichthypresbyter wrote:
| As a US citizen who lived in the Netherlands until recently,
| at least one bank (ABN AMRO) is fine with US customers, and
| is also attractive to expats in other ways- for instance,
| they will do more of their correspondence in English than
| other banks. It required maybe 20 minutes in an office at my
| local branch when I opened my account for them to have dealt
| with everything, and then my banking experience was no
| different from anyone else's.
|
| The problem in the Netherlands isn't so much expats who grew
| up in the US, but "accidental Americans" who were born in the
| US and left as small children. They are US citizens, but
| don't have an SSN, which Dutch banks require to comply with
| US law (and with pandemic-related embassy closures, obtaining
| one isn't necessarily easy).
| Someone wrote:
| I don't think ABN AMRO is completely fine with US customers
| today, given that they have an US persons disclaimer and
| have a phone number for questions regarding it
| (https://www.abnamro.nl/en/personal/specially-for/us-
| persons....)
|
| Problem is that FATCA requires banks to actively send the
| US government personal information about its customers with
| US citizenship, while the GDPR forbids them from doing so
| without consent from their customers
| (https://americanexpatfinance.com/tax/item/632-eu-data-
| protec...)
|
| But yes, accidental Americans definitely are a weird case.
| Some of them don't even know they have US citizenship until
| the IRS sends them a message, or when, upon visiting the
| USA, border control requires them to show a US passport (ht
| tps://en.wikipedia.org/wiki/Accidental_American#Awareness_.
| ..)
| JeromeLon wrote:
| You mentioned it. FATCA is not targeting US citizens abroad,
| it's targeting financial organisations who have US citizens as
| clients. So, many banks around the world will have "Are you a
| US citizen" as one of the first questions to open an account,
| and if the answer is yes, they will politely decline any
| further requests.
| nickthemagicman wrote:
| Are there NO workarounds?
|
| I noticed you said 'many' and not 'all' banks.
|
| It looks like these banks work for expats.
|
| https://dutchreview.com/expat/best-banks-expats-netherlands/
|
| Something doesn't add up.
|
| From a non rich persons perspective it appears that person
| gave up her citizenship so she could essentially have a
| better selection of banks and to not have to use a VPN?
|
| It seems like a US citizenship is worth it?
|
| The actual real problems are not clear to me.
| bellyfullofbac wrote:
| She also wrote "Without an address in the US, I can't open
| an investment account there; with US nationality, it is
| becoming more and more difficult to do any investment or
| borrowing outside of the US.".
|
| Yeah, how to remain non rich: keep your money in a savings
| account and not invest in stocks, etc. Want to start a
| business? Need a loan for that? Sorry...
|
| Also that webpage doesn't even say those banks accept
| American clients, "expats" don't mean American, EU freedom
| of movement and ease of getting work visa means there's
| people from all over the world in the EU, either
| temporarily or permanently.
|
| Addendum: I've also talked to someone who said she couldn't
| take some jobs because if she has access to the company's
| bank account, she has to report that to the IRS, maybe even
| the amount in that account, which of course no foreign
| company would volunteer unless they really have to.
| a3e3 wrote:
| That page describes the situation for expats in general.
| It's different for U.S. citizens.
|
| Bunq, the first bank that's listed, has special
| requirements: https://together.bunq.com/d/2318-why-are-
| there-special-regul...
|
| With an SSN you can open a basic checking and savings
| account. However, you'll be denied for any type of
| investments. This also means U.S. citizens can't
| participate in pension plans of Dutch employees.
|
| Even local crypto exchanges are refusing service:
| https://bitonic.nl/en/faq/33/what-is-a-us-person
|
| Meanwhile, banks and brokers in the U.S. require a
| permanent residential address. For example, Wealthfront
| states they don't "support clients residing outside of the
| U.S., including U.S. citizens residing abroad".
|
| Additionally, The Netherlands has a wealth tax. Even on
| unrealized gains. Each year you pay taxes on stocks you
| haven't sold yet. Then, when you actually do sell, you
| can't use the previous years of Dutch taxes that you've
| paid to offset the U.S. capital gains tax.
|
| It's especially complicated for so called Accidental
| Americans. Many of whom don't have or know their SSN. To
| get one you must submit your birth certificate and US
| passport. If you don't have those it's quite difficult to
| get them.
|
| When you finally obtain your SSN, renouncing is a challenge
| in itself. It requires filing tax returns for the past 3
| years + 6 years of FATCA (you'll most likely need an
| accountant for this or face steep penalties), pay $2300 to
| renounce, and then file another tax return for the year in
| which you renounced.
| nonameiguess wrote:
| For what it's worth, there are a few other reasons a US citizen
| may be compelled to disclose quite a bit of financial detail
| without being criminals. Just from what I've experienced, joining
| the Army, getting a security clearance, and attempting to become
| an adoptive parent all required having to disclose basically
| everything, up to and including people coming to my house to
| interrogate me on why I got divorced 18 years ago, having to take
| a polygraph. All in spite of definitely not being a criminal.
|
| I'm not complaining. This is all voluntary (though I think the
| adoption licensing is excessive, given it's even worse than
| getting a security clearance whereas a biological parent just
| needs to inject sperm into someone). But living overseas is also
| voluntary.
|
| I completely agree that the US government is unnecessarily
| overbearing about this kind of thing compared to most other
| countries, but let's be honest about how widespread this is. It's
| not at all limited to burdening expats. Even down to cosmetology
| licensing, we do this kind of thing everywhere, at every level of
| government, to many types of people.
|
| This presumably contributes to why Americans are so anti-
| government compared to Europeans. Our main points of interaction
| with governments are often things like this. Just this morning, I
| finally managed to pay off four years worth of back property
| taxes. The stupid thing about it is I've been trying to pay the
| entire time. The money has always been sitting in an escrow
| account. But something about our deed was incorrect, the county
| had no record of my lot existing, and we couldn't pay! When they
| finally corrected the deed, we not only got the four years worth
| of charges, but late penalties on top of it, even though I'd been
| trying to pay! And because the past year's charges were all
| listed as supplemental, the escrow account didn't even pay it and
| I've been fighting with them for 8 months to give me back my
| money so I can pay my taxes.
|
| So you are not alone, Rachel Heller.
| reedjosh wrote:
| The US doesn't like losing tax cattle.
| KennyBlanken wrote:
| The US expects you to pay your bar tab before you peel out of
| the parking lot.
| jacquesm wrote:
| No, this goes much further than that. They also want a slice
| of all the other bar tabs that you will run up in the future
| abroad.
| KennyBlanken wrote:
| The author of the article in question very specifically
| complains about having to settle up her tax bill and fix
| her tax accounting before she's allowed to renounce her
| citizenship, like this was some massive travesty of
| justice.
|
| She also doesn't complain about paying taxes, but having
| her accounts reported to the IRS, and having to disclose
| the fact that she has access to funds in accounts not in
| her name....as well as not being as represented as she
| feels she should be from said taxation.
| jacquesm wrote:
| That's a very small detail, there are a whole slew of
| posts on this subject, why pick out that one item?
| rootusrootus wrote:
| She wasn't paying taxes. And it costs more in enforcement than
| it brings in taxes anyway.
| rognjen wrote:
| What a whiny and melodramatic series of posts from a privileged
| person giving up one first class citizenship for another out of
| economics and convenience.
|
| Many of my compatriots wait longer, pay less in absolute but more
| in relative terms and celebrate afterwards.
|
| Lots of us would do well to be more grateful.
| voisin wrote:
| Is it whiny and melodramatic to want banking and investment
| services in your country of residence?
|
| Is it whiny and melodramatic to want to be able to utilize the
| retirement savings plans of your country of residence?
|
| This isn't just economics and convenience. It is basic living
| and Americans abroad are treated like second class citizens
| relative to those of other countries.
| rognjen wrote:
| Whiny and melodramatic is the tone.
|
| Banking and investment and retirement are entirely economical
| reasons.
|
| Convenience is not wanting to file taxes, etc.
| Trias11 wrote:
| Absolutely!
|
| US citizenship essentially became IRS trap.
| thatfrenchguy wrote:
| > FATCA forces me to hand over my private financial information,
| as well as my non-American husband's, to an extent that homeland
| Americans don't have to unless they're suspected of a crime.
|
| Come on, it's your bank account numbers, that's only because the
| US government already knows what your account numbers are.
|
| > I pay almost $1000 per year to an accountant to fill out the
| forms--more and lengthier than they'd be if I lived in the US--
| only to prove I owe nothing, since I pay taxes here in the
| Netherlands.
|
| If I had to pay $1000 to an accountant, I'd probably learn how to
| do the forms myself.
| voisin wrote:
| The penalties for making a mistake are such that you would be a
| fool to take the risk to save $1,000.
| michaelhoffman wrote:
| The Foreign Earned Income Exclusion is USD 107,600. If you make
| less than that, then the forms (Form 2555) are pretty easy.
|
| If you make more, Form 1116 can be a pain to get right but if
| you have an accountant do it once you can figure out how to
| modify the form for subsequent years.
| voisin wrote:
| As the name implies, that only applies to Earned Income. Not
| investment or business income not taken as salary or any
| other form of income.
| faut_reflechir wrote:
| I did the tax forms myself when living abroad, precisely
| because I didn't earn enough income to afford the $1000 cost
| (in fact, it was perhaps twice this, in Switzerland, based on
| my cursory Googling at the time). It routinely took over a week
| of working days, which was only possible because I had a
| sympathetic boss and generous vacation time.
|
| It's also quite stressful, since there are many ambiguous
| questions, most of the proprietary tax software is ill-equipped
| to consider the situation of an American living abroad, and a
| wrong answer can subject you to audit.
| Svip wrote:
| What are the consequences to not filing? My wife is a US
| citizen, and she hasn't filed for two years. I've met other
| US citizens that don't file either. So far I have not heard
| of any issues relating to not filing.
| asguy wrote:
| I know a US citizen who hasn't filed in 34 years. I wonder
| what the penalty would look like if she ever takes a job in
| the US again.
| jfk13 wrote:
| Does she earn much? If her income is low enough, she may be
| exempt from filing.
|
| https://www.hrblock.com/tax-center/income/other-
| income/how-m...
|
| (Note that I am not a tax professional and you should not
| rely on anything I say.)
| toomuchtodo wrote:
| Eventual expat here (clock is running on citizenship elsewhere
| through an investment program). I would not recommend filing
| your taxes yourself if you're a non-US resident with
| citizenship. It's cumbersome because of mechanizations to
| prevent tax evasion. There's room for improvement, but expats
| have very little pull congressionally in getting reform done to
| improve the experience. These fees should also be made
| deductible (tax prep fees no longer are).
|
| With that said, $1k annually is a small price to pay to
| maintain your US citizenship through annual tax filings. The
| benefits (imho) outweigh the cost (employment access,
| residency, repatriation).
|
| Tangentially, this sounds like a startup opportunity.
| chadd wrote:
| it's extremely easy to file the FBAR forms. and the rest are
| standard tax forms, and you even get to file later. I lived
| abroad and ran a US and Argentine company and had 2
| accountants and a bookkeeper, so it can get complex when you
| have a lot of employees, but for the first few years abroad,
| when it was just me doing remote consulting, i just did it
| myself and it's not difficult.
| kjgkjhfkjf wrote:
| It's not like a divorce, because there is no way to become a US
| citizen again after you've renounced your citizenship.
|
| e: I was wrong; see below.
| DeRock wrote:
| Can you share a source for that? I know at least 1 person first
| hand who has renounced and then later on in their life regained
| citizenship. It's possible the rules around this have changed
| however.
| kjgkjhfkjf wrote:
| Yes, I think the rules might have changed. Apparently
| nowadays you can regain it "under very limited
| circumstances": https://www.usa.gov/renounce-lose-citizenship
| jerbearito wrote:
| When did the rules change? You may have just been mistaken.
| I thought it was always possible to gain citizenship again,
| assuming you're eligible like anyone else and are willing
| to go through the normal citizenship process.
| pavlov wrote:
| Are you saying the immigrant visa path isn't available to
| former citizens? That seems surprising.
|
| Sure, it's a very difficult path in practice... But in theory I
| don't see why something like this wouldn't be possible: you
| renounced your citizenship, win the Nobel Prize 30 years later,
| get an EB-1 visa based on that achievement, then get
| naturalized five years later.
| LadyCailin wrote:
| There have been (so far unsuccessful, but possibly successful
| in the future) attempts to ban US citizens who renounce from
| ever stepping foot in the US again.
|
| > (E) Former citizens who renounced citizenship.-- Any alien
| who is a former citizen of the United States who officially
| renounced United States citizenship is inadmissible.
| https://en.m.wikipedia.org/wiki/Reed_Amendment_(immigration)
| voisin wrote:
| The conversation here at this moment seems to be focused solely
| on whether or not it is complicated or costly to keep filing US
| taxes. This misses the point in that the US is the _only_
| developed country to impose worldwide taxation on its citizens
| regardless of where they live. The only other country to do so is
| Eritrea and the US has routinely criticized them for doing so.
| Moreover, it makes expats ineligible for certain retirement
| savings in their country of domicile (as the US does not
| recognize pre-tax deductions for these investments, like those
| countries do not recognize investments in 401k's). It also makes
| it challenging for expats to find banks willing to serve them
| because elf the added complexity.
|
| All of this adds up to making Americans less attractive abroad
| than say Aussies or Brits, which surely has some negative impact
| on US competitiveness. And for what? Even the IRS estimates the
| savings in lost taxes to be a mere fraction of the costs of
| enforcement.
|
| This makes literally zero sense. None. Cut your nose off to spite
| your face.
| KennyBlanken wrote:
| Some of her points are valid but the melodrama drawing
| analogies to stress from the death of a spouse, describing
| nearly breaking into tears every so often, and describing the
| consequences of her actions as something "done to her" are
| absurd.
| crumpled wrote:
| This comment has a sexist smell. I wonder if the same
| criticism would be leveled at an identical story written by a
| man.
|
| Obviously, I have no idea what goes on in other peoples
| heads.
| brighton36 wrote:
| As does yours. Chasing Boogeymen and demons online doesn't
| do anyone any good. Yourself, myself, or the poster.
| elefanten wrote:
| This comment has a blindered, dogmatic smell.
|
| If the only tool you have is a hammer...
| Dudeman112 wrote:
| Honestly? It would be worse if they were a man.
|
| People don't take kindly to men being "weak".
| digbybk wrote:
| Citizenship is a meaningful thing to most people. Of course
| it's a legal fiction, but so is marriage. Personally I've
| never given up a citizenship, but I imagine that it'd be an
| emotional experience.
| jkfdrsak wrote:
| Marriage is voluntary and almost always necessitates an
| emotional element.
| digbybk wrote:
| Based on this post, apparently citizenship is also
| voluntary. You might say that giving up citizenship is
| difficult and expensive, but you should talk to someone
| who has gone through a divorce.
|
| I would also counter that citizenship also almost always
| necessitates an emotional element. Citizenship is a
| primary part of many people's identity, and identity is
| the most emotionally charged thing of all.
| jkfdrsak wrote:
| Divorce might be expensive, but never getting married is
| cheep.
| bryanrasmussen wrote:
| I mean sure, but on the other hand WTF? I understand not
| sharing the emotions regarding the country, patriotism,
| the 4th of July, the standing for the pledge from school
| years onward etc. but despite your freedom from the
| effects of all this it should probably cross your mind
| that not everyone else is free in the same way.
| Lordarminius wrote:
| I'm interested in knowing:how is citizenship a legal
| fiction ?
| arcticbull wrote:
| I think its most clear at the extents. For instance, if
| you live in Point Roberts. [1]
|
| Most people also associate citizenship with right of
| abode, but that's not always true either. For instance,
| the BN(O)s from Hong Kong are British Citizens who on
| that basis cannot live in England or Hong Kong - or
| anywhere. A separate document, an HKID or a visa, are
| required for them to live in HK and the UK respectively.
|
| At the end of the day it's just paperwork that decides
| who negotiates your right to travel and is responsible
| for coming to get you if things go bad.
|
| It doesn't really mean much else. Where you live and the
| government you engage with regularly in my opinion has
| far more bearing on you, your obligations and your
| benefits.
|
| [1] https://goo.gl/maps/tmia7U6hef3Pvf4v8
| digbybk wrote:
| It exists only when people believe it exists. If no one
| believed in your citizenship, your passport would just be
| a little notebook with no value. When going from a world
| without citizenship to a world with it, nothing needs to
| change outside of the human brain. In that sense, it's a
| fiction.
| PKop wrote:
| It's either a fiction or it's real. And given the
| privileges that come with being a citizen, of course it is
| not a fiction.
|
| But if it is meaningful, why should it not come with a
| cost? Nations as constructed obviously provide value to the
| people residing there, should this not come with
| corresponding responsibilities? Like paying taxes? And if
| there is value and meaning to being a citizen of a specific
| country why should a nation not place restrictions and
| requirements on this privilege? I could even see for
| example the incentive to ban dual citizenship as one. Why
| is it just assumed that keeping a bunch of citizenships,
| not paying taxes to that country, all while not living in
| that country is a thing that should exist?
|
| It seems like these people want their cake and to eat it
| too. If the country wasn't good enough to live in, why
| would you expect to keep the citizenship if you leave?
| "Marriage" is a two-way street..
| 001Diana wrote:
| This is not "having your cake and eating it too," it's
| much more complex. It also is never a case of "the
| country wasn't good enough to live in." I would love to
| live in the USA. That is not where life took me. At its
| simplest Americans are not free to live anywhere in the
| world the way citizens of all other countries are (even
| Eritrea, the only other country that taxes it's citizens
| based on citizenship, does not subject its citizens to
| the same tax complexity). All Americans should be
| outraged over their lack of freedom in this regard. 20
| years ago I could not have imagined I'd end up living in
| Australia, but we don't always know where life will lead
| us. Many people are born to American parents overseas and
| are required to spend thousands yearly to file or pay
| $2350 to renounce. Paying double tax to two countries is
| unachievable for the majority of us. There are treaties
| in place to avoid the is happening, however the cost of
| having a specialist accountant file every year is
| astronomical. I have paid over $25k to accountants and
| never once owed tax to the US. There are also some
| seriously unconstitutional and human rights violations
| going on. The surprise retroactive Transition tax of 2017
| has financially ruined many small business owners, in
| some cases taking all their retirement savings. These are
| people who have worked and paid taxes in their residence
| country for their lifetime. There is a case in front of
| the Supreme Court challenging this right now.
| digbybk wrote:
| > It's either a fiction or it's real.
|
| This I disagree with. Nations are real in the sense that
| they have a material impact on the world, but are
| fictions in the sense that they only exist when people
| believe in their existence. It's like money. Obviously
| money is real - I have some in my wallet right now - but
| if no one believed in the currency then it wouldn't
| exist. It would just be pieces of paper.
|
| > Nations as constructed obviously provide value to the
| people residing there
|
| I would quibble with the assertion that this is the
| _reason_ nations are constructed, but I do agree that
| they provide value.
|
| Some people's lives are just more complicated. I'm a dual
| citizen myself, with two citizenships from birth. I was
| born in Canada from two American parents. I've had two
| passports all my life. I happen to live in the US but
| I've never really chosen one country over the other. I
| derive identify from being a citizen of North America.
| There are plenty of people with slightly more complicated
| than average stories, they should be able to exist.
| wrs wrote:
| Most people are strongly emotionally attached to their home
| country. Not sure why you would expect the breakup to be low-
| stress and unemotional.
| NikolaeVarius wrote:
| Thats so weird. Why do people give a damn about something
| that only matters with legal matters and not anything about
| identity.
| baryphonic wrote:
| If makes sense if we relax an assumption that the IRS and the
| agents therein are interested in optimizing tax revenue.
| cletus wrote:
| I don't disagree with the spirit of what you're saying. This is
| a burden for expat US citizens. A few notes and corrections
| though:
|
| > Moreover, it makes expats ineligible for certain retirement
| savings in their country of domicile (as the US does not
| recognize pre-tax deductions for these investments, like those
| countries do not recognize investments in 401k's).
|
| This is true but unrelated to taxing worldwide income.
| Basically, there has to be bilateral/multilateral agreements
| between countries about how to treat contributions to and
| distributions from retirement accounts and these are very few
| and far between.
|
| The US and Canada have such agreements but the US and Australia
| do not. So Australian superannuation accounts generally can't
| ever be closed so you have to keep reporting them to the US
| government every year, whether you're a citizen or not. Even
| those on work visas have to do this. Worse, it's unclear how
| gains in such accounts should be treated for US income tax
| purposes. There are literally no laws and no case law on the
| subject so everyone just has to guess.
|
| > It also makes it challenging for expats to find banks willing
| to serve them because elf the added complexity.
|
| So this is also mostly true but again (mostly) unrelated to
| taxing worldwide income. This is because of FATCA [1]. The US
| uses access to the US financial system as a wedge to get
| foreign financial institutions to report accounts of US
| citizens so being a US citizen imposes a reporting requirement
| on foreign banks that many don't want to deal with. It's easier
| not to offer services to US citizens. But again, FATCA
| reporting requirements aren't really the same thing as taxing
| worldwide income.
|
| > ... lost taxes to be a mere fraction of the costs of
| enforcement.
|
| The point here unfortunately isn't really to enforce anything.
| It's so if the US decides to get you, it's something else they
| can prosecute you for.
|
| > This makes literally zero sense.
|
| That's not strictly true either. The idea is that US
| citizenship is so beneficial that it justifies these costs.
| It's true that a US passport gives you a lot of access to
| various countries. I believe the US passport is right up there
| in the top 10 passports. I'd hazard a guess and say the only
| reason it's not even higher is Middle Eastern countries. Also,
| the State Department will make some efforts to recover and
| evacuate US citizens in certain circumstances.
|
| Is this worth the hassle? Probably not but for some it is, I'm
| sure.
|
| Still, there's definite room for improvement.
|
| [1]: https://www.irs.gov/businesses/corporations/foreign-
| account-...
| capitainenemo wrote:
| The US seems to be in 18th place worldwide along with France,
| Malta, Czech Republic, Greece, Poland, Hungary, United
| Kingdom, Canada. Based on
| https://www.passportindex.org/byRank.php
| smnrchrds wrote:
| The ratings are skewed because of COVID-19 related travel
| restrictions. Looking at the rankings in late 2019, US
| passport had an equal or higher rank than all but 5
| countries.
|
| https://web.archive.org/web/20191128002117/https://www.pass
| p...
| Rapzid wrote:
| In practice the 2021 108k per person foreign earned income
| exclusion is reasonably large and uncomplicated to claim. After
| that the list of countries we have tax treaties with is pretty
| large:
|
| https://taxsummaries.pwc.com/united-states/individual/foreig...
| throw63738 wrote:
| In practice US citizens have it difficult to even open simple
| bank account. Most foreign companies prefer not to deal with
| US gov.
| welder wrote:
| Yes! Banks in Germany would flatly say "we can't help you"
| when I pulled out my US passport. The only one I could get
| was Number26, which is technically only an online bank
| account.
| Rapzid wrote:
| It depends on the country and the financial institution.
| I'm a permanent resident of another country and had no
| problem opening an account there(on vacation there the
| first time no less). Another user here reports a very easy
| experience opening an account with an institution in the
| Netherlands.
| voisin wrote:
| As the name implies, that only applies to Earned Income. Not
| investment or business income not taken as salary or any
| other form of income.
| walshemj wrote:
| Not for things like ISA's in the UK
| Rapzid wrote:
| > After that the list of countries we have tax treaties
| with is pretty large
|
| Would need to look at the tax treaties for the specific
| country.
| davidw wrote:
| As someone who lived in Italy for years, it is a total hassle
| to file US taxes, because you need an accountant that gets
| all this, and most in the US do not.
|
| I agree with her that the system is really bad. We're in the
| US now, and my Italian wife has none of these hassles: we
| live in the US and pay taxes in the US and that's that as far
| as Italy is concerned.
| OldHand2018 wrote:
| > because you need an accountant that gets all this,
|
| As someone who has been through this, perhaps you can
| explain why this is.
|
| What makes it so different from US taxes for people living
| in the US? You definitely do not need an accountant here.
| LadyCailin wrote:
| You clearly never owned non-US mutual funds then.
|
| If you don't make much money, and what money you do make
| is cash, you spend that cash immediately instead of
| putting it in your bank account, and you don't care about
| retirement, then sure, it's easy. Dead simple, in fact!
|
| If you're pretty normal though, it's impossible to invest
| in mutual funds and ETFs outside the US unless you want
| to deal with PFIC filings (you don't) and if you live in
| the EU, you're double screwed, because they won't let you
| buy US mutual funds either. And by the way, the
| accounting algorithm for FATCA is complete nonsense,
| because you need the highest value of _each_ account over
| the year, a number that simply doesn't exist in most
| banks, so good luck digging that up properly. And if you
| don't, $10k fine if they prosecute.
|
| And for retirement, I'm honestly not even sure what to do
| there, so yeah.
|
| It's a shitshow, and I'm not sure what your situation was
| that you didn't feel like an accountant was useful.
| 001Diana wrote:
| Americans living overseas generally go by a different
| financial year, for example, in Australia the financial
| year is July1-June 30. All income and business records
| need to be made to fit the US financial year. We also
| have different much more complex forms to fill out and
| have far more to report than the American citizen living
| in the US. All our bank details and highest balances must
| be reported. We also have to file forms with regards to
| our retirement investments. If you own your own business
| here it's literally days of compiling and working out
| amounts. And if something is wrong, look out. The trust
| reporting form, 3520, (which most businesses must file)
| is due before your tax return, and if you don't realise
| this it's a 10k fine. Even for a trust with a balance of
| $0. Then another 10ks every month you are late after the
| fine is assessed. (It's also worth mentioning that the
| IRS only communicates through snail mail and sends us
| letters out of some strange places, such as the Czech
| Republic, and they take 4 months to arrive) meaning you
| have tens of thousands worth of fines before you even
| know it. I wish this were a joke or I was exaggerating.
| For years accountants filed that trust form with tax
| returns, until the IRS suddenly realised this could be a
| money maker and quietly introduced the fine. There's so
| much more I could write but I have to go to work. I'm
| just trying to say it's a never ending nightmare, and in
| most cases too complex for the average person.
| rev_d wrote:
| This paper lays it out pretty well. There's a parallel
| tax code that is more complicated, and that's before the
| nuances of tax treaties factor in.
|
| https://papers.ssrn.com/sol3/papers.cfm?abstract_id=37954
| 80
| arcticbull wrote:
| There's a ton of related frictions too, FATCA makes it
| impossible for US persons (including citizens) to open a bank
| account in a many foreign countries, especially European ones.
| SEC regulations preclude Americans from opening foreign
| brokerage accounts. Any aggregate bank account balances over
| $10,000USD at any time in the calendar year requires filing
| with FinCEN - [edit] and failure to do so may result in
| forfeiture of up to 50% of the balance of said accounts.
|
| Starting a business while abroad is especially painful as you
| are the beneficial owner of a controlled foreign corporation,
| and the tax reporting there is its own special hellscape.
| soperj wrote:
| >some negative impact on US competitiveness
|
| Negative impact on US citizen's competitiveness, which means
| they're less likely to get jobs outside of the US. Which means
| more looking for jobs domestically, leading to lower cost of
| labour for corporations inside the US.
| cr1895 wrote:
| None of this impacts a foreign employer's employment of an
| American.
| voisin wrote:
| Well I suppose that's one interpretation but I think it
| misses the forest for the trees. Everything I've come across
| has discussed how it exacerbated trade imbalances due to a
| relatively lower proportion of Americans living abroad than
| citizens of other nationalities. Americans want to trade with
| Americans, like Chinese want to trade with Chinese. So having
| Americans abroad in bigger numbers helps for trade which I
| think would have a much bigger impact than some small
| reduction in labour costs locally.
| soperj wrote:
| Why would the multinationals that set the agenda in the US
| care about any of that?
| nostrademons wrote:
| Most of them make more money abroad than they do in the
| U.S. Setting up foreign branches is critical for their
| ability to reach new markets. Most of these branches are
| setup by U.S. citizens or permanent residents who have a
| deep history with their U.S-based employer and often
| personal connections with the executives at the home
| office. It is much easier to retain and pay these people
| if the bureaucratic hoops for retaining American
| citizenship abroad are less, and they will be less
| tempted to jump ship and set up competing businesses that
| jumpstart a foreign country's industry if it's convenient
| for them to stay American citizens.
| soperj wrote:
| Once they've set up the foreign branch, they don't really
| care if they retain them. Most foreign branches aren't
| staffed by Americans. This is also a 1 time thing in each
| country that they start a branch in, not an on going
| concern.
|
| >they will be less tempted to jump ship and set up
| competing businesses that jumpstart a foreign country's
| industry
|
| The number of instances of this happening has to be close
| to zero.
| bingohbangoh wrote:
| I've always thought it was something like a middle finger to
| americans who leave.
|
| "You're not part of this project, get out and stay out." There
| was a bill in the 1990s to permanently ban any Americans who
| renounce from coming back, which is hardcore.
|
| But we're also a country that to war over a few states leaving.
| Whatever the reasons, it was equally hardcore to sacrifice so
| many to stop it. Maybe an intense dislike of people leaving is
| embedded in our blood.
| arcticbull wrote:
| Humorously enough, it was actually brought in as a way of
| punishing deserters in the civil war. [1]
|
| > Civil War lawmakers were clearly suspicious of Americans
| who chose to live overseas, especially during the nation's
| most desperate hour. In his fascinating study of citizenship-
| based taxation, Kirsch offers a particularly apt quote from
| one Union lawmaker: "If a man draws his income from our
| public debt, or from property here, and resides in Paris,
| skulking away from contributing his personal support to the
| Government in this day of its extremity, he ought to pay a
| higher income tax."3
|
| [1] http://www.taxhistory.org/thp/readings.nsf/ArtWeb/3AF72D2
| 9CA...
| matttproud wrote:
| American who's been abroad for a decade: I 100% agree. It
| introduces a lot of friction, complexity, and annoyance.
|
| Beyond taxation, the limitations with American institutions
| when being domiciled abroad put you into a terrible edge-case
| with needing to crutch on someone stateside with an address. So
| much stupidity.
|
| One addendum: while FATCA is newish and bad, the concept of
| taxation of Americans abroad dates back to the Civil War
| period. FATCA only made an existing injury worse.
| throw63738 wrote:
| >> This misses the point in that the US is the _only_ developed
| country to impose worldwide taxation on its citizens regardless
| of where they live
|
| Not really. Norway does that for 3 years after leaving.
| Australia is very opinionated and may not allow people to
| change tax residency, even after physically moving out...
| xunn0026 wrote:
| Of course, nowadays Australia won't even let people
| physically leave at all!
| Scoundreller wrote:
| I thought leaving was easy, but returning was the
| complicated part.
| LadyCailin wrote:
| There's no if ands or buts for the US citizen though, other
| than the normal ones like making less than $10k a year or
| whatever.
| KennyBlanken wrote:
| TLDR: somewhat wealthy travel blogger renounces citizenship
| because FACTA Step On Snek, regrets doing so.
|
| She was pissed that foreign banks got her non-US account balances
| and she has to report her husband's accounts because she's an
| authorized signer. Because nobody would ever abuse "have access
| to an account in someone else's name" to not report an account or
| income to the IRS...)
|
| She's also pissed the United States government asked her to be
| fully paid up on her taxes and to straighten up her misfiled
| taxes (presumably because with FACTA, the IRS said "AHEM, these
| accounts you never told us about?")
|
| What's next, restaurants expecting you to pay your bill before
| you walk to the parking lot? Your neighbors expecting you to
| return the tools you've borrowed and not returned in 2-3 years?
|
| Sample of the melodrama:
|
| > Every so often, as I'm going about my normal day, my thoughts
| flit back to my renunciation and I have to fight back tears
|
| > If you live in the US, think about how it would feel to be
| exiled from your home. That's what renunciation does to me.
|
| Note the wording: "What renunciation does to me." Not "this is a
| consequence of me choosing to renounce my citizenship."
|
| About the only thing I agree with her on: US citizens living
| abroad paying taxes maybe should have some sort of better
| representation arrangement than just "we'll toss your votes into
| the pot."
|
| But my response is: "think about how it must feel to be one of
| the millions of black people in the US living in an urban area,
| subject to decades of efforts by your party to make every part of
| voting as difficult and cumbersome as possible, and have your
| vote count for little to nothing because of gerrymandering and
| the electoral college."
| nickthemagicman wrote:
| I agree. This is really melodramatic and makes me wonder if
| they're fully mentally healthy at the moment to be making this
| massive decision.
| jeffrallen wrote:
| You should try living as an expat before assuming her
| experiences are exaggerated. She is telling it like it is.
| colechristensen wrote:
| Is there any other reason to renounce your citizenship other
| than paperwork? Or taxes if you make a lot of money?
| cr1895 wrote:
| It's a lot more than complicated taxes and paperwork.
|
| If you are a "US Person" you may find it impossible to
| invest, or deal with certain financial institutions and
| products at all.
|
| I live in the Netherlands. I will face restrictions with my
| earned pension compared to non-US persons. I am forbidden
| to use stock trading services like DeGiro. I am not allowed
| to buy or sell Bitcoin. Just some examples...read the T&Cs
| of practically any financial-related service and there is a
| prohibition on US persons.
|
| There's nothing illegal, of course, it's simply that the
| vast majority of these institutions can't be bothered to
| deal with the nightmare of compliance that is serving "US
| Persons." It's easier just to ban them.
|
| Fortunately, my bank is used to dealing with international
| clients and they still welcome me as a client. I see in
| other countries Americans have it much more difficult. I
| was even allowed to open an investment account! It's far
| from ideal, and I had to commit to selling off everything
| should I leave the country, but it's better than nothing..
| ezfe wrote:
| >If you are a "US Person" you may find it impossible to
| invest, or deal with certain financial institutions and
| products at all.
|
| That's literally taxes and paperwork... indirectly, of
| course, but all the same.
| cr1895 wrote:
| No, it really isn't. Everyone has taxes and paperwork,
| some easier than others. Not everyone has the same
| restrictions on normal financial activities.
| Hamuko wrote:
| Like the fact that your home country keeps an eye on your
| and your non-American family members' financial information
| on a level that is usually reserved for criminals?
| jaywalk wrote:
| Well, this blogger wasn't paying her taxes, so...
| Hamuko wrote:
| Because she didn't owe any. And yet, she had to pay
| thousands out of pocket to prove it to the US government
| that she didn't owe any taxes and they still basically
| monitor her like a tax dodger (because obviously all
| Americans abroad are dodging taxes, right?).
| jaywalk wrote:
| If I don't owe the IRS anything, I don't get to just _do
| nothing_ and be alright.
| niij wrote:
| In some cases you don't have to do anything. If your
| income is below the standard decudction you don't need to
| file. https://www.investopedia.com/ask/answers/052615/do-
| i-need-fi...
| andrewaylett wrote:
| While, at least in general, if a Brit doesn't owe HMRC
| anything then that's exactly what they do.
| jaywalk wrote:
| Ok? The blogger wasn't a Brit.
| jaywalk wrote:
| Where was it assumed her experiences were exaggerated? The
| point is that her experiences are the result of her own
| choices, not anything that was "done to" her.
| frosted-flakes wrote:
| It wasn't her choice for the US to require non-resident
| citizens to file taxes.
| monocasa wrote:
| The term "melodrama" implies exaggeration.
| MisterBastahrd wrote:
| I'm amused by her complaint that overseas Americans' votes are
| few and far between and thus she doesn't feel represented
| combined with her "no taxation without representation" quip.
|
| Just because you don't belong to a group that has enough power to
| force the changes YOU want doesn't mean that you aren't being
| represented. I have no idea why any single person would expect to
| have a disproportionate amount of power simply because of where
| they don't live.
| Hamuko wrote:
| > _I have no idea why any single person would expect to have a
| disproportionate amount of power simply because of where they
| don 't live. _
|
| What about the residents of Washington D.C.?
| dragonwriter wrote:
| > I have no idea why any single person would expect to have a
| disproportionate amount of power simply because of where they
| don't live.
|
| Having disproportional political power based on residency is
| central to the American political system. What you probably
| don't understand is her particular preference as to _how_ that
| disproportionality is arranged.
| erulabs wrote:
| But isn't this the same refrain you hear stateside as well? "I
| don't feel represented by the system".
|
| It reminds me of Chappelle's "Since when did America give a **
| about any of us?"
| dgellow wrote:
| As a Swiss citizen living abroad I can participate in Swiss
| votations and I am represented by the Council of Swiss Abroad:
| https://www.swisscommunity.org/en/voting-co-
| determination/th....
|
| That makes sense to me that expatriates have some level of
| representation to defend their interests.
|
| And of course I only have to pay taxes in the country where I
| live. US citizens living abroad seem to have it way more
| difficult than we do.
| rossdavidh wrote:
| Not claiming that I know enough about FATCA to comment in an
| informed way, but Patrick Boyle did a recent video on the Pandora
| Papers, which has a brief discussion about FATCA and how it
| compares to other nations' laws, around the 21 minute mark:
| https://www.youtube.com/watch?v=INRs9rnciyI
| PKop wrote:
| Why is there an assumption that citizenship should extend to
| people living outside of a country as citizens of another
| country?
|
| There's a lot of complaints here about annoying and costly
| taxation of "expats" but there's no discussion of _why_ it should
| be valid to have citizenship but not reside in that country 's
| borders?
|
| What is citizenship for except to actually be a citizen? And what
| does that mean, living in another place and being a citizen
| there? Or should it mean actually contributing to the country you
| are a citizen of by living and working there, building the
| "community" you claim to be a part of? Should it not come with
| obligations to pay taxes to the country you are a citizen of?
|
| I don't get the mindset that views it as some right and not a
| privilege that comes with responsibilities.. I think it's even
| perfectly valid for nations to ban dual citizenship itself.
|
| People like the OP who produce dozens of posts documenting the
| supposed injustice following her own decision to move to another
| country are the epitome of the term "rootless cosmopolitan". What
| interest of a nation does it serve to cater to these people that
| have left for greener pastures?
| namdnay wrote:
| What interest does it serve to make their life hard? She just
| wants to pay taxes where she works and lives. And what's wrong
| with being a "rootless cosmopolitan"?
|
| I don't think anyone would mind losing their US citizenship as
| soon as they leave the country, if you could also regain it as
| soon as you enter
| LadyCailin wrote:
| If the renunciation fee weren't $2k, you _might_ have a point.
| But it is extremely expensive to renounce, and that by itself
| completely invalidates your implied point that there is some
| underlying reason for the cruelty.
| 317070 wrote:
| Because the alternatives are pretty bad (although a middle
| ground should be possible, like some countries cancel your
| citizenship automatically when you acquire another): - Being
| stateless makes it virtually impossible to travel - Most
| countries are hesistant to grant citizenship to visitors
|
| I see very little reason as to why rootlessness has been made
| really hard in our current global system. I am not sure in
| whose interest it is that this cosmopolitanism has been made so
| bureaucratic.
| excalibur wrote:
| > I realize that I still believe in the basic strength of the US
| democratic system: it will survive whoever wins the presidential
| election, for example.
|
| Will it? It barely survived 4 years of Trump. If he gets another
| crack at it he'll know exactly where to strike to bring it down.
| tehjoker wrote:
| I was hoping to read something about the crimes the US government
| has committed (of which there are an endless list) or another
| reason to feel a deep regret and bitterness at being betrayed by
| the country, but it's just banking and tax annoyances.
| [deleted]
| throwaway4711 wrote:
| Apart from FATCA, there is also the Expatriation Tax, introduced
| after Facebook cofounder Eduardo Saverin took his money out of
| the country by renouncing citizenship [0,1,2]. This often
| referred to as _Exit Tax_.
|
| It also applies to Greencard holders for more then 8 years,
| defined as long term permanent residents.
|
| The Exit Tax is a huge tax penalty (37%) on anyone owning more
| than $2 million [3].
|
| [0] https://taxfoundation.org/outraged-facebook-expatriate-
| sens-...
|
| [1] https://www.politico.com/story/2012/05/ex-patriot-act-
| would-...
|
| [2] https://www.casey.senate.gov/news/releases/casey-schumer-
| ann...
|
| [3] https://www.irs.gov/individuals/international-
| taxpayers/expa...
| asdfasgasdgasdg wrote:
| Is that right? From reading the third document you linked:
|
| "IRC 877A imposes a mark-to-market regime, which generally
| means that all property of a covered expatriate is deemed sold
| for its fair market value on the day before the expatriation
| date."
|
| Unless this document is leaving something out, the gains would
| not be taxed at the marginal income rate unless they are short
| term gains. Presumably most people with large amounts of
| unrealized gains would be paying long term capital gains taxes,
| which are currently a 20% rate.
|
| I thought this provision was simply to ensure that you didn't
| make large amounts of wealth in the US then skip out on paying
| taxes on your gains. That seems very reasonable to me, although
| perhaps I am missing something.
| vibrolax wrote:
| Canada Revenue Agency requires me to file an even more detailed
| annual report on my foreign assets than I must furnish the IRS /
| FBAR / FinCEN. It's the most time consuming part of my tax
| filing.
| Scoundreller wrote:
| Such a pain that CRA makes you do this for US stocks you hold
| at a _Canadian_ stock broker.
|
| At least it's only acquisition price you need to worry about.
| emarsden wrote:
| If you're an "accidental American" (holding US citizenship due to
| having being born in the US, though never having resided there as
| an adult) in a French-speaking European country, you may be
| interested in the "accidental Americans" association
| https://www.americains-accidentels.fr/
|
| They organize various legal challenges concerning the
| consequences of FATCA legislation for EU citizens (in particular,
| difficulties in having a bank account) and the principle of
| extra-territorial taxation, as well as challenging the difficulty
| and unreasonable cost of renouncing US citizenship.
| welder wrote:
| As a US citizen, being taxed while living abroad can dangerously
| trigger double taxation. Imagine being taxed 70% of your
| income... scary! I've been researching ways to live abroad
| without being double-taxed, and here's some resources I've found:
|
| * https://www.greenbacktaxservices.com - give them your foreign
| tax return and they file your US return
|
| * https://wandererswealth.com - international tax consultant
|
| * https://nomadcapitalist.com/book - modern flag theory, talks
| about moving your life and business overseas to control your tax
| rate
|
| For bank accounts, I had trouble opening them in Germany (US
| citizens are to foreign banks like GDPR is to US companies)
| except for Number26 however that's an online-only account:
|
| * https://n26.com/
|
| Edit: Why am I getting downvoted for sharing useful resources?
| I'm not affiliated with these links in any way.
| gumby wrote:
| I have no idea why you might be downvoted, but it's _extremely_
| unlikely you 'll end up owing more than 100%.
|
| I'm not an accountant but having filed multi-jurisdiction tax
| returns myself I don't see a mechanism by which this could
| happen.
| welder wrote:
| I edited my comment, since 70% tax rate is actually possible
| depending on the tax rate of the country you're living and
| whether they have a tax treaty with the US or not.
| jaycroft wrote:
| Not only the US, but if you've ever claimed residence in
| California, they might decide to tax you for foreign income
| as well (if you accidentally leave any part of your life
| there behind when you move on, for example, leave a car
| registered there, or keep medical records with your doctor,
| even visit family there too often)! So add another
| potential 14% for high earners.
| Scoundreller wrote:
| You'd still be able to credit foreign taxes paid against
| any US tax owing, on income anyway, treaty or not.
|
| Where you get screwed is when countries have different
| philosophies on things. E.g. Canada doesn't tax gains on
| your home, but you can't write off mortgage interest on
| your taxes. Meanwhile USA taxes gains on your home but lets
| you deduct mortgage interest.
|
| If you're a dual citizen living in Canada, you pay both.
|
| Or if you live in a country with predominantly sales taxes
| and no income taxes, well, now you get to pay lots of sales
| taxes _and_ US income taxes.
| [deleted]
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