Cross posted from RenounceUScitizenship (where there is an updated version)
Learn why many U.S. citizens living outside the United States view the renunciation of U.S. citizenship as the only patriotic option.
Renouncing U.S. Citizenship as Self Defense – The Life Of A U.S. Citizen Living in Canada
I appreciate the help and I am on my way to start my letters tonight, coffee is brewing. I really hope we can open some eyes and the Canadian Government will help us with this issue as its really a huge concern for our innocent children, they need to be left out of it and our government needs to protect them and tell the US to back off with seeking them out. If people want to be US Citizens and assert their claim, the US will be the first to know with a passport application and SSN application on their desk, then our children will of course file and be subject to report to the IRS (like the rest of us who are registered and confirmed citizens now we know!). (Till I get my CLN this year!!!).
I wish I didnt have to go to that extreme with renounciation, its sad to come to this. I don’t make a large income or have dazzling assets, I live in a fixer-upper home and drive a rusted old beater truck….rather hard trying to make ends meet in our family…so I have nothing to hide from the US and I am not renouncing to evade taxes, I am just your average working mom trying to support two kids. But, the cost of just being compliant has made it impossible to do yearly, H&R block charged me 2500 to file back 6 years (as many of you), I dont have that kind of cash and with Christmas that was fast approaching after learning of this, sure made it tight for our family. I am not a tax evader or criminal as we are all being portrayed. I am a law abiding canadian citizen as our my children and husband who do not deserve to be dragged into this.
This has consumed my life and soul since the day I became aware of this, Sept 3, 2011 is a day I will never forget and that terrible knot as been in my stomach since. The endless hours spent searching frantically on the interent for learning how to become compliant with the IRS, calling them to find out answers (although, never getting any answers) searching through US website after website to determine the fate of my children and on top of that …trying to live my life and focus at my job/home and maintain some level of a normal life has been impossible. This has greatly affected my health and family life. I am not sure if the government cares, but do they realize how much this affects people…how its destroying families…hope..dreams..freedom. People like us, just trying to legally do the right thing, be honest people…and in turn…its killing us, physically and mentally. I will continue to do the right thing, being honest to the US government, IRS etc as I have been to this point. I will hopefully be able to regain the joy I had in my life once this is all said and done and try and find the peace I had before…I am not sure if I will ever step foot again across that US border now….not because I am a criminal, but because they have made us to feel like we are less of people, all because we have chosen to give our loyalty and allegiance to our great country of Canada and hold one citizenship. I am sure the CLN will cause huge issues for us crossing that border…and with my kids by my side, I can only imagine what questions may arise. I think we will stay far and clear from there….thank goodness we have done the Disney trip!
Yes, this is for real!
The obvious is finally being reported. The renunciation of U.S. citizenship is a growth industry. In 2011 1781 were reported to have renounced U.S. citizenship. (This article generated a number of comments that made it clear that far more that 1781 actually renounced.) The number of renunciations is poised to explode. People inside the United States see renunciation as unpatriotic. Many U.S. citizens living outside the United States view the renunciation of U.S. citizenship as the only patriotic option. It has become almost impossible for a U.S. citizen to live outside the United States and comply with the obligations of U.S. citizenship. U.S. citizens are renouncing their citizenship to protect themselves from the U.S. government. Here is why.
U.S. Citizens Living Outside The United States
Renunciation is an “act of self defense” for U.S. citizens living outside the United States. A recent renunciant wrote an interesting account of her experience of renouncing U.S. citizenship in Toronto. To put it simply U.S. citizens living outside the United States are under attack by their own government. Check out the following threads on the Isaac Brock Society blog. Pay special attention to the comments. They will reveal the extent of the IRS assault on hard working honest people. What was their mistake? Being ignorant of the FBAR and income tax filing requirements. For the most part the recent IRS assault is affecting older people near retirement. Why? The answer is simple: They have accumulated assets that can be taken by the IRS by imposing fines. Although the law applies to all, it can only effect those who have accumulated assets – making them victims of Obama Class Warfare. Furthermore, U.S. citizens living outside the U.S. have already paid tax on this money to the countries in which they reside!
“The law in its majesty prohibits both the rich and the poor from sleeping on the park bench.”
What follows is an excerpt from the NewAmerican.Com:
Two years ago Brian Knowlton, writing in the Wall Street Journal, noted the paradigm change taking place even then among wealthy Americans increasingly frightened about the economic and social situation in the country. He quoted Jackie Bugnion, director of American Citizens Abroad (ACA): “What we have seen is a substantial change in mentality among the overseas community in the past two years. Before, no one would dare mention to other Americans that they were even thinking of renouncing their U.S. nationality. Now, it is an openly discussed issue.”
One of the reasons given for considering renunciation is the increasingly onerous rules invading privacy and personal finances. The Patriot Act has made it more difficult for Americans living abroad to keep accounts with international banks. If those banks cannot verify an American address, the accounts are closed. Daniel Flynn, an American citizen who lives in Belgium, wrote a letter to the ACA:
It seems the new anti-terrorist rules are having unintended effects. I was born in San Francisco in 1939, served my country as an army officer from 1961 to 1963, have been paying U.S. income taxes for 57 years, since 1952, have continually maintained [my] federal voting residence, and hold a valid American passport. [And yet my bank] said that the new anti-terrorism rules required them to close our account because of our address outside the U.S.
Another American living in Canada had the same problem. Kathleen Rittenhouse said, “I did not know that the Patriot Act placed me in the same category as terrorists, arms dealers and money launderers.”
The United States is the only industrialized country that requires citizens to pay income taxes on earnings abroad that are also being taxed by the country where they live. Some are calling this, properly, double taxation and are sick of it. And the IRS began investigations into foreign accounts, calling it a “voluntary offshore disclosure program,” that threatens the privacy and financial security of those with legitimate offshore accounts. Joe Field, a partner in a law firm in Hong Kong that caters to American citizens seeking to renounce their U.S. citizenship, says his firm is experiencing an “exponential increase” in the number of American citizens wanting to get out. He said:
Many people who looked to America as the protector now see America is bent on coming after them. We’re getting a whole new class of client who is someone who says, “I want to go into the [IRS] disclosure program and as soon as I complete it, expatriate.”
Their numbers are likely to increase as a loophole allowing wealthy Americans to move their monies and wealth offshore closes at the end of the year. Americans with a net worth of at least $2 million will have to buy their way out of the country by paying hefty exit fees and taxes, even on assets that have unrealized gains. The loophole allows them until the end of the year to give away up to $5 million without the fee being applied, saving enough in taxes to pay the fee that is levied.
Check out the following posts and articles – which in way or another are examples of how difficult it is to be a United States citizen living outside the United States:
IRS News Room – Do You See Anything Wrong Here?
U.S. Passport Specifically Informs People About Taxes but is Silent on FBAR
Americans renouncing citizenship over onerous tax code – includes a great video!
Renunciation and Relinquishment of U.S. citizenship
Red, White and Through – Reasons to renounce U.S. citizenship
Andrew Mitchel – Number of Expatriates for 2011
Although Mr. FBAR was the number one news story of 2011, U.S. citizenship renunciations will be the number one story of 2012. U.S. citizens living outside the United States must choose one of the two choices:
1. Have a life
2. Be a U.S. citizen
Only the very rich or the very poor are able to remain U.S. citizens. The poor have nothing for the U.S. to take. The rich have the money to defend themselves. It’s Obama’s “Middle Class” that is being destroyed – the direct result of Obama “class warfare”. This week the American Thinker published an article which noted that U.S. citizenship renunciations are soaring under Obama. U.S. citizenship has been priced out of the market – it is too expensive both financially and emotionally.
The author comments that:
“Increasingly” is an understatement. In Fiscal Year 2008, George W. Bush’s last year, 146 Americans renounced their citizenship to avoid paying U.S. taxes. In FY 2010, that number soared to 1,534, an increase of 950% – and no, that is not a misprint. 950%.”
Andrew Mitchell notes that:
According to the I.R.S., an estimated five to seven million U.S. citizens reside abroad. Many of these individuals have never lived in the U.S. and never expect to live in the U.S. However, these U.S. citizens must annually file U.S. tax returns.
For example, I spoke with a Canadian the other day who was born to two U.S. citizen parents in Canada. This individual therefore is a U.S. citizen. However, he has never lived in the U.S. and never expects to live in the U.S. Despite that he has never lived in the U.S., he will have to file U.S. tax returns for his entire working life. In addition, his U.S. tax returns are quite complicated because he pays income taxes in Canada and because he has financial assets located in Canada.
Failing to disclose offshore assets to the I.R.S. can create huge potential penalties. The potential penalties can be so large that they can bankrupt even the wealthiest of taxpayers. Further, the cost of preparing a U.S. tax return for a U.S. citizen living abroad can be significant.
The I.R.S. has recently been doing a lot of “saber rattling” with respect to the potential penalties for failing to disclose offshore assets. The National Taxpayer Advocate, in her recent annual report to Congress, criticized the I.R.S. with respect to how it has handled recent offshore voluntary disclosure programs.
Lastly, with the recent enactment of the FATCA provisions, many U.S. citizens living outside the U.S. are unable to even open regular bank accounts. Foreign banks simply don’t want to deal with what they perceive as U.S. complicated and overreaching tax rules.
Speaking of tax – the IRS is hunting U.S. citizens living outside the United States while many U.S. residents pay no income tax. Yet a recent article on Allgov.com suggests that those who renounce U.S. citizenship are tax cheats. Go figure.
Ronald Reagan commented that he had never left the Democrats. Rather the Democrats had left him. In the case of many of those renouncing U.S. citizenship, there position is:
I never left the United States, the United States left me. As a result, I am forced to renounce U.S. citizenship.
Just read this forecast for US taxable persons/duals abroad for what it is worth http://www.moodystax.com/moodystax-blog/14-international-tax-general/194-why-canadian-residents-may-soon-owe-tax-to-the-irs.html
Apparently the US is doggedly set to race blindly faster and faster along on the same stupid path – to be insanely shortsighted, maltreating its citizen ‘ambassadors’ ‘abroad’, and encouraging the numbers of renunciants and relinquishers to continue to rise. Any lull in numbers is likely more due to people biding their time, or awaiting the right circumstances or opportunity, rather than deciding that it isn’t a necessary and desirable path. There are also many who would still not know about the issues. The unjust cost to us and our families, the pain, and the unethical and burdens imposed by citizenship-based extraterritorial US taxation continues apace. The need for protection from the US and its plan for world domination via FATCA continues.
*Moody’s ,like BDO is in the business of stirring up business.
@Cornwalliscal, you’re right, and that needs to be noted when digesting/weighing what they write and advise. Thanks for underscoring that.
@all, important caveat re the Moody’s blog link and ‘forecast’ I posted above on this thread at August 16, 2012 at 9:35 pm. I’m not endorsing them, or their advice, or their point of view re paths and options in relation to US taxes, ‘compliance’ and related issues, etc. They are after all, as Cornwallis points out so aptly; “in the business of stirring up business”, (and a very expensive one). Merely posted it to add to this thread and about the pitfalls, costs and drawbacks of US citizenship-based extra-territorial/taxable status as imposed on those living outside the US.
Anyone reading this should take into account their own specific situation, gather additional information, become better informed about possible options and carefully weigh the alternate paths available and most appropriate to them as individuals – as well as the very real financial costs and risks those choices may involve.
Renouncing US Citizenship Rises as IRS Hunts Middle-Class Ex-Pats
August 22nd, 2012
Laura Harrison McBride
Renouncing US Citizenship Rises as IRS Hunts Middle-Class Ex-Pats | Suite101.com http://suite101.com/article/renouncing-us-citizenship-rises-as-irs-hunts-middle-class-ex-pats-a410927#ixzz24QwhH6SD
There are plenty of reasons besides the treatment of US citizens living abroad, to decide that US citizenship is not worth preserving or acquiring.
From the ACLU site:
“…..Although the Canadian border is nearly 100 miles behind them—and Bangor,
Maine’s second-largest city, just 15 miles ahead—motorists are queried
about their citizenship and immigration status. Those who raise an
agent’s suspicions are sent to an adjacent weigh station for further
questioning and, sometimes, searches. Any foreign students or scholars
unable to produce all of their original documentation are detained and
could be arrested.”…….
and, see also
I wonder where FREEDOMADMIN is getting their renunciation numbers, claiming there were 3,805 in 2011 and predict 8,000 for 2012? I can’t find a contact for this person to ask.
I couldn’t find the source of the estimate prediction either.
What I really want to know is, how many US citizens would give up their US status tomorrow if they could do that successfully without extortionate specialist US tax/legal frees or IRS threats to their legal, post-tax non-US household savings? I think there would be a wholesale stampede for the exits. The renunciation numbers would be much much larger if people could figure out what to do next, and there are lots still hesitating to make a decision – because of the pitfalls that lie in the path of ‘compliance’. Not because they want to hold onto their US status, or owe any US tax, but because they don’t want to be exposed to life altering and life threatening confiscatory fines and penalties for all the obscure forms and the matching FBAR’nFATCA fundraising. And, judging by those I can think of, as is usually the case, they wouldn’t actually owe the US any tax, and are compliant where they live and hold dual citizenship. It’s the FBAR and other penalties that would be levied on their entirely legal, post-tax, registered and other savings – a sizable enough of a confiscatory threat to their whole non-US households. Those who hold joint accounts or property with a non-US spouse, or have signatory powers on the non-US family business for example. That threatens the wellbeing of the non-US business, the non-US partners and the non-US relatives. Awareness of the magnitude of this problem is continuing to grow, and hopefully those arriving late to this issue will take a turn putting pressure on Canadian politicians. A Canadian citizen I spoke to recently was horrified to hear about the overreach of FATCA and the whole citizenship taxation situation. I recommended a few MP names to contact and mentioned IBS. They said that the US is certainly acting pretty cavalier about alienating Canada as an ally, threatening and tormenting the > 1 million just across the shared border.
I’ve seen this 2011 number of 3,805 elsewhere too and are more than double what the Federal Register recorded. The 8,000 prediction seems totally off the chart if you base it on the Federal Register’s numbers, which are down over same Q1 and Q2 figures last year.
I too believe there would be a stampede out the citizenship door if it was less frightening and expensive to do so. The conditions that may prevent a US citizen (who doesn’t want to remain a US citizen) from renouncing or relinquishing US citizenship may be:
-unaware of the necessity of having to file US taxes.
-lack of resources to cover the cost of filing, paying US taxes and penalties.
-fear of the unknown and lack of confidence that one would be treated fairly by the IRS.
-an objection to the requirement to file US taxes.
-hoping for a miracle.
Can you think of others?
I came across an interesting anecdote. Yul Brenner renounced in 1965 because he stayed too long in the US and said that paying US taxes would have bankrupted him. Ah, the good old pre-Reed Amendment days.
@bubblebustin & badger: That 3,805 number seems to have originated with the NY Post back in June. I’m guessing someone took the official monthly renunciation rate for an earlier year, accidentally quoted it as a weekly rate, and then some subeditor thought it was unclear and multiplied by 52 to get an annual rate and stuck it in there without checking anything.
Or somebody leaked the real figures to the Post. A projected 8,000 by the end of the year sounds about right to me.
*I wouldn’t be surprised if that figure turns out to be correct or even higher. Assuming that the embassy here in Bern handles 4 renunciations a day and using the Swiss working days used for taxation purposes as 220 a year, that’s 880 a year just for Switzerland through one embassy. Canada, Australia and many other larger countries must be dealing with even more as they’ll have more embassies/consulates handling renunciations.
We are being threatened by the US, and paying thousands to crossborder tax experts to file null US returns, and to report our entirely legal post-tax LOCAL bank accounts where we live, earn and were born – outside the US, but inside the US we continue to see revelations that those who live and profit there are not ‘paying their fair share’ of the US taxes that Geithner and Shulman falsely accuse us abroad of owing. Not even the federal government’s own employees and agencies are paying up. And the IRS obviously isn’t bothered enough to do anything about it.
Whereas, US citizens living abroad – who pay taxes in full in the countries where we actually work and live are slandered without evidence, as ‘tax evaders’ (though we owe no US tax), and accused of being the source of a huge US tax gap:
Updates on the true sources of the storied and much flogged US ‘tax gap‘. If only the IRS and US felt equally motivated to look at home rather than arrogantly and disingenuously mischaracterizing those of us living honest and lawful lives abroad.
See 2012-30-094 “A Concerted Effort Should Be Taken to Improve Federal Government Agency Tax Compliance” by TIGTA
Report Date: 09/05/2012
“A TIGTA report in 2007 recommended that the Internal Revenue Service expand its efforts to make its fellow federal agencies compliant; the current report said that the IRS has not fully developed a process to resolve delinquent federal tax accounts“
…”The Treasury Inspector General for Tax Administration, the watchdog that oversees the IRS, found 126 delinquent federal accounts spread across 70 agencies. Forty of those accounts were at least three years
Meanwhile, 18 agencies failed to file altogether or were delinquent on filing employment tax returns.”……
“they owe $14 million in unpaid taxes“
…”Auditors redacted all details of which agencies were delinquent, citing exemptions from freedom of information laws.”
The painful irony continues, as those abroad are still prevented from any easy route to ‘compliance’ – whether for those filing regularly (as the demanded forms, reporting and penalties become ever more
incomprehensible and full of pitfalls) or for those attempting to come into compliance – ex. the ‘streamlined’ procedures for US taxable unicorns (and the only other imaginary creatures that fit the new ‘commonsense’ approach in force since Sept 1st 2012).
And, the list grows ever longer – of those actually resident in the US, using US services, who continue not to file or pay, including US federal agencies and employees. If the IRS can’t make those inside the US file and pay, why are they so obsessed with honest taxpayers in Canada, who would end up owing NO US Tax whatsoever, and whose bank accounts are fully transparent and registered with our tax agency where we live?
This is in addition to the already identified “Federal employees owe $1.03 billion in unpaid taxes“
And, the US banks who are helping to hide the assets of foreign alien non-residents and Colombian drug lords
“Colombian society has suffered to almost no economic advantage from the drugs trade,
while huge profits are made by criminal distribution networks in
consuming countries, and recycled by banks which operate with nothing
like the restrictions that Colombia’s own banking system is subject to.” http://www.guardian.co.uk/world/2012/jun/02/western-banks-colombian-cocaine-trade
and, if we can trust this as a source; http://wikileaks.org/gifiles/docs/1115826_re-us-bank-dirty-money-.html
Why are US citizens abroad and duals paying exorbitant sums and filing reams of paperwork to shed the burden of unwanted US citizenship? Wish I could just deliver copies of all these US reports to the consulate.
Comment made by a reader of Jack’s post contains this excerpt ;……… “I haven’t run into anyone involved in renouncing their citizenship, but
admittedly now, I remember hearing it referenced once or twice. I always
thought that it wasn’t possible for a US citizens to renounce or
“expatriate” as it were. This is undoubtedly another brilliant attempt for the tax-protester,
Sovereign-Freeman kook to try to get away with something that they were
probably getting away with anyway ………
Strangely, the commenter alludes to a (more than reluctant) role ….”dealing with these individuals that I have been destined to defend…” . He seems to be speaking of potential renunciants as unequivocably also tax ‘protesters’/evaders/ avoiders/ cheats – with no other possible legitimate reasons to give up US citizenship.
@ Lyoba, I like your questions http://isaacbrocksociety.ca/renunciation/comment-page-6/#comment-216010 , and probably you’re not the only one asking – as KalC said http://isaacbrocksociety.ca/renunciation/comment-page-6/#comment-216039 . But maybe we don’t discuss that scenario (renouncing without filing any returns or forms like the 8854) much because we don’t know the answer. Maybe people don’t feel comfortable sharing that particular decision. I am sure there will be those who have already gone ahead and decided to take their chances at renouncing and then refusing to file anything more. We do know that had been a significant problem for the US when renunciants were liable for 10 post-renunciation years of filing, and weren’t complying.
Some here have said that they renounced and then sent in the 5 backfiled years of returns and some FBARs. Or maybe just backfiled returns. Who knows if they’ll ever actually be pursued or not – as long as they stay out of the US. Unless someone shares, we’ll never know how these scenarios played out. It may be that since we only know what some people have chosen to share – we can only ever have a skewed and inaccurate idea of the true picture. There may also be a delay in results, or, a situation in flux.
I have wondered whether the US would truly choose to try to pursue ‘ordinary’ minnow people who live and remain outside the US who have renounced and didn’t file the 8854. To pursue them is to expend scarce resources, and also to heighten ‘foreign’ public awareness that the US has the arrogant and unique paradoxical position that not only can they tax for life those abroad with zero US presence or economic connection, but that they’ll even let the IRS – a tax agency dictate to the State department who is a ‘citizen’ or not.
Really, what is the true legal status of a status called ‘citizen for tax purposes’ applied to someone who has forthrightly sworn an oath of renunciation in front of a consular official – or performs a relinquishing act – and the State department affirms that they have done so? US law says they are NO longer a US citizen. They have none of the other hallmarks of citizenship. This is also the case for green card holders – who have left the US and whose card (and concomitant privileges) has expired. They were never ‘citizens’. The document that gave them the right to live in the US is defunct. So, would US courts agree that there can actually be such a thing as that IRS fantasy creature – the “‘citizen’-for-tax-purposes” – who all agree is emphatically no longer a ‘citizen’ in any other way – or who never ever was a ‘citizen’ – and is also no longer a US resident? Did the IRS and Treasury just make up the term in order to try and reconcile the irrefutable fact that the individual has IN FACT, renounced or relinquished via one of the relinquishing acts, or abandoned ‘permanent residence’, which they cannot completely prevent. They can refuse to witness it or certify it via a CLN, but the act has already taken place.
I’m not advising anyone to test this. I am not testing it myself, I am not a legal or tax expert. I don’t want to mislead anyone. But I have wondered about this, and wondered what would happen if anyone actually challenged it. The UN International Human Right to divest oneself of a citizenship and take up another, does NOT say anything about that right being subject to obtaining the agreement or consent or authorization of their country of origin – in theory, the right is the individual’s to exercise – not the State’s to deny.
Otherwise, we are merely economic hostages, and the US demands that we each pay a ransom price to be released and to receive our freedom papers – whether the freedom price is the renunciation fee (a ‘tax’?), the exit tax, or the insane accounting and legal fees to have forms and returns prepared, plus any US tax and penalties assessed. Some accountants are even mandating that the client sign an open-ended ‘letter of engagement’ just to prepare one fairly simple US annual return with zero US tax owed – and refuse to provide any estimate of price at all. I consider that part of the ransom.
You said; “the full cost of compliance may not be [‘within reach of most budgets’]… Tax compliance may therefore be a luxury that some simply cannot afford…”
I consider that we are being forced to ransom ourselves from the US, who is holding us hostage, or buying out our imposed indentureship or slave price. Whether we want our manumission paper (the US CLN, Certificate of Loss of Nationality), or alternatively, if we want to remain citizens, we are forced to pay a steep price. In some cases, the total cost of the preparation of the returns and forms, plus other related costs can far outstrip and exponentially exceed people’s actual total annual income – without owing any US tax. The cost of having the annual US reporting prepared from abroad (including some of the more complex forms) could represent a huge expense as compared to what someone actually earned if they only work part-time, or for low wages, or are retired. Why should we be compelled to pay that? The cost is rising too as the demand, complexity and risks rise.
We will never recover what our non-US households spent to ransom us – whether in money, time, LCUs, wellbeing or a combination. Many may never forgive the US what they judged to be the necessity of doing so. Some might have achieved freedom by expending mostly LCUs (Just Me’s ‘Life Credit Units’), but that can be very challenging to do depending on circumstances – even now that IBS and the resources here exist.
Excellent article. Lots of nuggets. I think it will be helpful to many of us.
More reports from abroad re the absolute necessity of renouncing US citizenship in self defence.
Thank you. Keep posting valuable comments, I read them and like to be informed.
Here are my reasons for renouncing US citizenship; I am happy to let this be widely shared, and thanks to the ‘Brockers’ and others who have committed their time and energies to this topic. It has been an ‘interesting’ 5 months of painful discover:
As a 13th generation American, I do not take this step of renunciation lightly. My ancestors were among the first European settlers to establish themselves in the US. They signed the Declaration of Independence and the US Constitution. They fought in the American Revolution. However I am increasingly uncomfortable with recent legislative amendments such as the reporting requirements for US citizens living abroad to annually notify the US Financial Crimes Enforcement Network (FBAR form FinCEN 114) of any and all financial accounts for which I have signing rights, if the aggregate balance exceeds $US 10,000. This feels like a threat, a punishment; that I am considered a criminal for not living in the US, with US bank accounts and US pension savings. My non US citizen spouse does not understand why our local to us joint account bank name, address, account numbers and account balances need to be reported annually to the US government.
I have lived overseas for 30 years, and have been married for 29 years, much of that time working as a teacher with young people. I live an ordinary life in my country of residence – my home, New Zealand. I pay taxes here on my income, up to 28% and 15% GST (Goods and Services sales tax). I find that I cannot show respect for both my husband and my country of birth. I worry that my ordinary teacher pensions and retirement savings plans are not understood by the provisions of US regulations. I worry about the punitive threats made in regards to non US accounts. How can my country of birth hold 166+ countries and 206,000 financial institutions under threat of withholding 30% of their banking monies that pass through the USA, if they don’t identify US persons (FATCA)? The cost of compliance for all these countries and institutions is enormous, and to what benefit? Citizenship based taxation simply does not add up.
I am retired as a teacher and now work in an office. Yet the simple step of handing over my US passport to the consulate in Auckland requires a processing fee of US $2350. This is nearly one tenth of my annual wages, and is the highest fee by far of any other country. Some countries charge nothing, other countries perhaps $100 to expatriate; a right guaranteed to all persons under the Universal Declaration of Human Rights. Again, this seems arrogant of the US government. And by the way, I do not live anywhere near Auckland, so have to count the cost of flights into this as well. I have no financial ties to the US, so this money is all being taken from my earnings in New Zealand by the US government.
Finally, I must make it clear that I do not take this renunciation of my country of birth citizenship for the purpose of tax avoidance or tax evasion. I have done my best to be compliant with filing FINCEN reports since I recently discovered it was required; US citizens must also file lengthy, difficult and onerous tax forms every year if they earn over $US4000 annually (married, filing separately), which usually need to be completed by international tax accountant experts, because the USA – unlike 204 other countries in the world – require anyone born in the USA to file tax returns and potentially pay taxes no matter where in the world they live.
I make this statement clear, as renouncing for tax reasons means that I potentially would never be able to visit the USA even briefly again, due to another punitive legislative law – the Reed amendment. I am renouncing because my home is New Zealand, and I no longer wish to be a dual citizen.
Welcome to Brock — and thanks for your heart-felt comment that speaks for many of us. You have picked the appropriate post to place your comment about your renunciation as self-defense.