55 thoughts on “U.S. citizenship and a possible marriage penalty”

1. to USXcanada : re inheritance I think that you are incorrect about the estate tax exemption for non US spouses- I quote the following from your link
   “Do spouses have to pay the tax when they inherit from each other? The new law doesn’t change this either. There is an unlimited deduction from estate and gift tax that postpones the tax on assets inherited from each other until the second spouse dies. This marital deduction, as it is called, applies only if the inheriting spouse is a U.S. citizen.”

   I have read various tax sites and I believe that I am correct that a non US citizen cannot inherit from a US spouse tax exempt. The $5 million exemption cannot be used by the non US inheritor. Also note above that it states “the unlimited deduction POSTPONES the taxes on assets until the second spouse dies” So I think this means that taxes are still owed to the IRS when the second spouse dies. I am not sure what these taxes would be. But in Canada the jointly owned house, RIFs LIFs are inherited tax free as long as the LIF and RIF are put into annuties. Therefore no tax until the remining spouse dies and assets are passed to to family.

   Also what about the other side of the coin? The US dual who cannot inherit their Canadian spouses assets US tax free? They could be living in poverty too!

   Also I believe that I read somewhere that US citizens cannot gift their home or money to a non US resident tax free. I may be wrong.

   When I married I never expected to potentially face a life of poverty in my old age because of the IRS. The “For richer or for poorer” vows were made to my spouse not the IRS. Divorce for those who cannot get their spouses to renunciate or for whose spouses cannot renunciate may be the only viable option to a life of poverty.
   To me it would seem to be a form of emotional abuse if your spouse refused to renunciate, because that spouse is leaving the non US spouse to forever worry that at any moment the bank may refuse to renew your mortage or close your bank accounts or a letter may arrive from the IRS. Even worse – no divorce would mean you still have the nightmare of estate issues when the dual US spouse dies. This is the reality of what the Canadian spouse faces each and every day until and if their spouse gets a CLN .

2. DTRHole –

   You think and believe a lot of stuff. I think you need to do more than speculate and fret on the basis of your interpretations of your internet “research.” Try this one.

   http://dir.rbcinvestments.com/john.archer/page_58919

   and click on the link to U.S. Estate Tax for Canadians in 2012

3. *DTRH    you are incorrect.  The 5 million exemption -( current value- it  could revert to 1 million if Bush tax cuts expire and are not extended- however the  exemption is widely expected to stay at 5 million) does not depend on the citizenship of the heirs.

   If I were a USC and died, the first 5 miilion of my estate , less any gifts previously made, would be exempt from estate tax no matter who I leave it to.

   The US system is different from others. The estate pays any tax owing.-not the heirs.  If my spouse were a non USC he would not pay any more.  5 million is exempt.

   The paper referred to by USX Canada refers to a different problem- that of whether or not taxes are owing by a Canadian cit. who dies owning US assets. That is an entirely different ball of wax and too complex for this discussion. Relax a bit

4. Even if I had died before I had renounced the United States, I seriously doubt that my wife would have paid any inheritence/estate taxes to the United States, even if I were wealthy.  Why?  Who is going to even tell the United States that I died, and who is going to volunteer tax on my 100% Canadian assets to the IRS, and who is going to make my wife pay it?  If we stop suggesting that the IRS is all powerful and that the CRA is just going to hand over the assets of Canadians to the IRS, we would gain a lot of perspective in these matters.  It is called a voluntary tax system.  That means that if you don’t offer your neck, the IRS can’t chop it off, because they don’t have any feasible collection method for stealing the inheritance of Canadian spouse.  If you are worried, then I would suggest two things:  (1) remove ALL assets from the United States immediately, i.e., condos, investment portfolios (US stocks, mutual funds); (2) inform the executor of your will that your ghost will haunt them if they ever try to pay even one red Canadian penny to the IRS.

   As for removing investments,  it is not that hard.  Today I sold my Crescent Point Energy because it invested in oil fields in Utah (in the USA).  I really don’t want to own a Canadian company that has assets in the United States (e.g., I sold Enerplus as well because of its stake in the Marcellus in Pennsylvania).  I don’t own any Canadian banks either, because they have US assets (which was stupid to allow them to purchase US assets, because that means they are now subject to the United States regulation of their Canadian affairs–FATCA being a case in point).  Slowly, I am purging myself of my connections to the United States.  I try to buy tomatoes from Mexico not the US as well. 

5. Thanks Petros for the perspective and advice. The fear of it all makes me think that if we live in fear the fear controls us.
   someone sent me this link to an advice book – maybe you start buying US tomatoes again or not? 🙂
   the title is ? laughable in the face of FATCA even it is it true.

   http://www.self-counsel.com/default/canadians-best-tax-haven.html
   A Canadian’s Best Tax Haven: The US
   By Robert Keats
   When Canadians think of tax havens, they rarely think of the US; but it truly is one of the best options available for Canadians today. Using the US as a tax haven will enable you to keep more of what’s rightfully yours — legally!

   Only $20.72

6. @dtrh, yes it is laughable to think the US would be a good tax haven since they have a reputation now for civil forfeiture, meaning that Federal, State, and local police now regularly seize millions in assets and cash from its citizens.  What will stop them from seizing the assets of foreigners too?  For those from countries where that happens and peopel seek to find a safe tax haven in the United States, out of the fry pan into the fire. 

7. @all

   The details of any spousal inheritance rules are irrelevant. Even if it’s a  5 million exemption today it could be 1 million tomorrow. Even if there is a mechanism for a non-citizen spouse to benefit today, they could take it away tomorrow.

   What is relevant is this:

   The US claims the right, through the Internal Revenue Code to determine taxes based:

   1. Not on whether you marry, but

   2. On who you marry!

   This is the problem and this is what is offensive. To put it another way:

   Well its okay to marry. Yes, we think that marriage is good for society. We think that marriage promotes family and that family is good. But, we will punish you if you don’t marry the right kind of person. In fact, to be clear, if you don’t marry, one of our own citizens, then we will NOT allow:

   1. YOU to have the same benefits to take care of your family that we would if you had married a US citizen; and

   2. We will not allow that “God Forsaken, Despicable Alien” to have the same benefits of marriage to you that one of our own citizens would have;

   3. If you so much as consider having children who are NOT U.S. citizens we will NOT allow you to claim the usual deductions for them;

   4. As a result of 1, 2, and 3:

    If you as  US citizen marry a non-citizen we are going to make it much harder for your family to survive.

   And this doesn’t include the problems of FBAR, FATCA and the other information returns that ensure that U.S. citizenship contaminates a family. 

   This is just plain and simple interference with the sanctity of the family. Getting into into the technical details of this obscures the true nature and scope of its offensiveness.

   Now, I want to extend this a bit.

   Under the “equal protection clause” of the 14th amendment “citizenship” is a “suspect classification”. This means that the government is held to a very high standard in trying to justify distinctions based on citizenship. The time  has come for a non-US citizen spouse (preferably a Homelander) to challenge this as violating the equal protection clause.

   This would be perfect because there is one and only way for Form Nation to justify this.

    Here is the justification:

   1. The government owns US citizens.

   2. Because the government owns the citizen the government owns the property of the citizen.

   3. Because the government owns neither the non-citizen spouse nor the property of the non-citizen spouse, if non-citizen spouses are able to inherit, the government will lose property that properly belongs to the U.S. And this is true even if none of the property has even the slightest association with the U.S.

   Again, forget the technicalities of this (they come and go). Focus on the real issue – are U.S. citizens and their property owned by the government?

   Actually, I just had a closing thought:

   Perhaps the government would justify discrimination against the non-citizen spouse as an “affirmative action program to help U.S. citizens find marriage partners! Yes, that would be it …

8. USCA, you are correct. Current rules are simply current. Tomorrow or next year, they could be something even more onerous.

   The bottom line is that my spouse is not really considered my spouse by the USG. He is an “illegal”. In fact when we were dating and he would drive down from Canada to see him, he was regularly harassed by border guards, pulled out of line, contents of his vehicle tossed, interrogated about his employment and whether or not we planned to live in the US or Canada after we married. He wondered at times if anal probing was awaiting him as well.

   To contrast, when I moved to Canada shortly before we wed, I was treated quite well at the border. I certainly wasn’t viewed as a potential parasite.

   I am tired of the USG and its “issues”. I am tired of worrying about the other shoe and when it will drop. I used to be rather indifferent about the rah-rah part of being an American but now I loathe it and if not for the worry about possibly being barred at some future date from seeing family and friends again, relinquishment would be as easy as changing outfits.

   Rabbit, someday this will be behind you. Don’t despair.

9. @A

   I strongly suggest that you renounce as quickly as possible. As Phil Hodgen says:

   Get out while the getting out is semi-good.

   You have two problems:

   First, the rules for renunciation may change.

   Second, sooner or later Canada is going to wake up to the fact that U.S. citizens in Canada are dangerous to the economy.

   One of these problems would be serious enough, but both together …

10. Thank you USCA for pointing out how current rules are irrelevant. Those are our thoughts exactly. No one knows what the next big tax rewriting will bring as the US goes ever deeper into debt. Japan ? has just devalued their money. I have heard that the US may have to do this as well, possibly after the next year. Imagine the effects on the market as well as the implications for the canadian dollar.

    a – it is a difficult decision to make especially if you have family and friends in the US. There is the unfortunate fact that ? Canada has already given up its autonomy at the international airports where you may have to go thru US customs if you are flying over US territory. So the ability to travel anywhere on flights that cross any part of the US may be restricted in the future.
    We also loathe what is happening in the US with the housing crisis, the lack of affordable health care (even with Obama care which many low income families cannot afford it provides only minimal coverage)- especially lack of healthcare for children, poor public school systems due to funding in many areas, lack of gun control, the whole Bernie Maddox situation I could go on but that is the reason why one of us took out Candian citizenship. At least until Harper came along we had fairly good foreign relations and were moving towardemissions control etc.

11. Lance Armstrong personifies America to me. You can get to #1 by cheating, and if you get caught you can absolve yourself of your sins in the public confessional and then likely write a book, where the real profits are. What is Lance Armstrong in the end? A non-champion who isn’t even good at cheating. In other words: a LOSER.

12. @bubblebustin, I was just saying this morning that Lance Liestrong is the quintessential American.  Just as he lied and cheated to win the Tour de France, so also the United States has been lying with its currency telling the whole world that it’s worth something when in fact they just print it with ordinary and nearly worthless ink and paper.  Just as Armstrong’s life has imploded, so will the United States.

13. USCA, I can only move as fast as Immigration Canada can process. I only became eligible to apply last spring and did so at once but I am stuck in “received” since August. Before the year is up, I am hoping.

    Rabbit, we stopped flying a few years ago. Long list of reasons but mostly we couldn’t allow our daughter to suffer through an enhanced pat-down b/c we won’t be scanned.

    My surviving parent is quite old but comes from a long lived family. I have but one sibling I care to visit but I still have friends I would like to visit. Land crossings haven’t been an issue since we married but crossing the border gives me the creeps anyway. Not rational and it predates the whole jihad on expats. I just don’t trust those people.

    As my husband pointed out to me, I lived nearly my entire life in one state, rarely traveled and never really felt deprived in any way, so if I were to be confined to the whole of Canada for the rest of my life (a considerably bigger place for shorter duration of time given my age now and life expectancies in general), would it really matter? And the answer is no. It’s just the idea of having been forced to take such a step that still rankles. The Catholic school girl in me really hates being backed into a corner by a bully. Makes me want to kick shins and shout out creative combinations of not quite swear words.

    A hundred years from now, none of this will matter and if you believe Jim Knustler, we’ll all be living in a world made by hand again long before that.

14. Petros, Armstrong! Ugh. He represents the contradiction that is America. Everyone knows he is a cheat but his cancer victory narrative protects him from scrutiny and in some ways, allows him to skate without suffering much by way of penalty for what he has done. I liken Obama to Armstrong in that respect. People know about his drone program and his continuation of building the police state, but he “gave us health care and is such a good husband and dad” and so he walks. A reminder to never underestimate the willingness of people to delude themselves knowingly.

15. Obama  continued…

    http://www.rall.com/rallblog/2013/01/16/third-term

16. @ USC, very insightful post about the issue of non-US spouses. This, and the issue of how the US shackles not just those it defines as ‘US taxable persons’, but also entire Canadian households, and non-US persons living entirely outside the US is very pressing for many. Our entire Canadian family cannot be free of the US and IRS burden when one member remains shackled.

    And you’ve aptly illustrated the issue of discrimination against non-US spouses – even if they and their family lives and jointly creates and saves assets totally outside the US – the US arrogantly asserts powers over their relationship, and tries to corral the estate and assets so that it may not pass from a US person to a non-US person without being siphoned off for US benefit. The US would like the assets to ‘stay in the US family’. The US State can effectively penalize you and certain classes of spouses – from abroad – based solely on citizenship.

    Is this not also a situation that applies to passing estate assets on to US status vs. non-US status children as well?

17. @Badger

    Not entirely (I think). I was discussing this in the context of the spousal relationship where there are specific rules for “rolling” the estate over to the surviving spouse. So, on the issue of the “spousal rollover” it would not (I think) apply.

    But, the basic “citizenship discrimination” would still apply to any law that discriminated on the basis of citizenship. So, perhaps one could develop the argument, based on pure citizenship/discrimination grounds, to the issue of non-citizen children.

    What I will say is that I think this is one more area that needs to be explored. The more that arguments can be made to the effect aspects of citizenship-based taxation violate US law, the better off we are.

18. I have to wonder just what environment or event will set the stage for these arguments against citizenship based taxation, because so far the momentum has only been against us. Consider this: like the marshal arts master who uses his opponents own power against him, can that momentum be turned, say, through FATCA? I know that if Canada enters into an IGA it will mark a crushing defeat and betrayal, but can we rule out that it may be the one event creating the awareness that may be the beginning of the end of our woes? I have to admit that I reeled a bit when the IRS recently came out with FATCA’s final guidelines, making it evident that FATCA wasn’t derailing so easily, however when I accepted that, I saw the IRS as finally putting their cards on the table which allows the world to see clearly the nasty force we are dealing with. Can the fury created by that force be used against itself? 

    Can sanity prevail?

19. @USCitizenAbroad, and @all, if you use this link:

    http://hdl.handle.net/2027/pur1.32754074746458

    fulltext access @ Hathitrust, try ‘classic view’ for faster download of the scan.

    United States. Congress. Senate. Committee on Foreign Relations., .
    (1980).

    U.S. law affecting Americans living and
    working abroad: Presidential reports submitted in response to section
    611, Public Law 95-426 (as amended by section 407, Public Law 96-60) : a
    report to the Committee on Foreign Relations, United States Senate.

    Washington: U.S. Govt. Print. Off..

    you can look at this report in entirety (which does not contain the more extensive supplementary report on taxation that is alluded to in the introduction, but not named – commissioned to look more specifically at details of taxation issues only), at the very end of this report, are very focussed and astute point-by-point rebuttals by ACA of the response or lack thereof from the government (addressed to the president specifically). There is a detailed section where the ACA specifically notes the discrimination against foreign non-resident spouses – and calls it  ‘the marriage penalty’.

    In the ACA comments, they describe the US government rationale, which seems to be that by deliberate design, those filing ‘separately from abroad’ are to be penalized by having a much lower reporting and tax threshold than those filing as ‘single persons’ – deliberately punishing those who do not choose to subject their non-US non-resident spouse’s ‘foreign’ income and assets to eternal US taxation – which the US would like to force on them from afar, within the borders of all other countries, even in the absence of any other US relationship other than having married someone deemed to be a ‘US taxable person’. The rationale is that this is because we are presumed to be avoiding paying tax to the US on the assets and earnings of the non-US non-resident spouse, which we are presumed to enjoy via our ‘share’ of ‘community property’. Which of course is generated and located in another country, and already taxed by that other jurisdiction – where the true owner of the assets is a citizen. This is a form of double taxation by proxy. The ACA wonderfully skewers this US claim that the IRS should be able to extend US taxation assessment and powers to non-US, non-residents ‘abroad’, merely because they married a US person. At issue also is that if we do not file ‘married jointly’, that is a decision that the non-US person has the right to decide on their own behalf – they have no obligation to the US – so why should they agree to take that burden on? Thus, the US uses the US taxable person spouse as a lever to get at the earnings and assets of non-US citizens, who do not live in the US, have no US taxable status, no US taxable income, no US citizenship, no US residency, enjoy no US services – based and rationalized only on some specious and fantastical claim that by mere association with a US taxable person through marriage, the US has the right to tax even foreign nationals outside its borders.

    Worth reading through the entire text at that link. Looks like most issues still the same – which is depressing. Wonderful to see how powerfully and assertively the ACA came up with their detailed list of discriminations against US citizens living ‘abroad’ and how they dissected each non-response or irrational assertion by the US government as to why the discrimination was justified. Obviously a very dynamic organization right from the beginning. Fulltext of this report and associated material needs to be digested, and to obtain the more tax focused report (unnamed) that was also commissioned as an adjunct. 

    You will see Joseph R. Biden on the list of members making up the Committee on Foreign Relations who received the report. 

    This report – plus supplementary reports from the time, would make very sound basis for comparison – as a baseline to compare with the state of things now, and see whether the US has addressed the discrimination brought to their attention more than 30 years ago. There were some changes to citizenship laws – and interestingly one of the obstacles the US government identified to making retroactive changes to how citizenship was granted to children of US parentage born abroad, was a ‘ripple effect’ related to taxation (as well as Social Security, etc.).

    Was not able to cut and paste excerpts (though didn’t try screen captures) to provide actual quotes here.

    Not certain how this is useful, other than it establishes (which the ACA already knows) how entrenched the issues are, and how dedicated the US is to extorting tax revenue from us abroad – while providing no services and no representation. The ACA comments point this out repeatedly. They also note that at just at the time when more of those abroad could qualify to vote absentee, some states were using that as evidence for establishing US residence and subsequently imposing tax. As a result, fewer of those outside the US, who then could vote from abroad, chose not to – for fear of yet another layer of tax burden imposed on them from stateside. Sound familiar? Note the most recent outcry prior to the 2012 election; “The Pentagon office with responsibilities for assisting U.S. military
    and civilian overseas voters is issuing a new ballot-request form that
    requires civilian voters to make an all-or-none declaration either that
    they plan to return to the United States or have no intent of ever doing
    so. Expatriate groups say the choice is confusing and unfair, carries
    potential tax ramifications and could depress voting in ways that might
    affect close elections in November……..” from http://www.nytimes.com/2012/05/10/us/change-to-ballot-request-form-angers-us-expats.html?_r=3&

    And interestingly, the ACA identified many issues specific to IRS policy and priorities; which you will all find entirely familiar from the TAS Reports to Congress : including;  the failure of the IRS and US to provide toll-free telephone assistance to those abroad, the failure of the IRS to provide and mail requisite forms (including the FBAR! – which is described as an example of a less common form), the failure to allow for sufficient time for IRS correspondence to reach those abroad and for them to respond, the issue of foreign postmark dates re ‘timeliness’, the problem of being required to provide information to the IRS before that information is available from foreign sources, the failure of the IRS to allow the payment of any outstanding US tax owed at a later date – to match the actual filing deadline from abroad, the failure of the IRS to dedicate sufficient resources to serve those abroad – while demanding compliance, the failure of the IRS to recognize that filings from abroad required more knowledgeable and dedicated IRS assistance – due to the complexity of the extraterritorial requirements, the failure of the IRS to allow common deductions given to those stateside – but denying the equivalent to those abroad, the lack of eligibility for US services (SS, Medicare, etc.) offered to other citizens – but denied those abroad despite taxing them, the failure of the IRS to consider those abroad important enough to dedicate assistance to – while insisting on more burdensome compliance, the IRS tax discrimination against non-US non-resident spouses and children, etc……..

    This may not be new at all to ACA members, but to me, after reading the evidence from an actual primary source more than 30 years old completely supports my present conclusion that the US and IRS really has no intention of addressing any of this discrimination and injustice.

20. It’s a rather not so subtle hint that we who’ve married outside our nationality aren’t considered good little citizens anymore. They can’t come out and say that marrying a non-citizen is a form of tax evasion but they can act like it is.

    I’ve never filed jointly with my husband and he would never consent even had I asked, which I didn’t. It’s an absurd notion. But this report really drives home the fact that the USG does regard expats as Trojan horses who can help them steal money from other nations that they have no right to. Not a surprise to any of us.

21. @bubblebustin, re; ..”who uses his opponents own power against him, can that momentum be turned, say, through FATCA“

    It’s an interesting idea, because FATCA exponentially raises the stakes – and also brings with it added visibility and scrutiny of the exceptional, arrogant and punitive nature of US extraterritorial citizenship-based taxation. The media and Canadian federal government silence can’t last forever – once all account holders are forced to prove that they are not Americans.

    But other than further demonstrating how FATCA builds on the existing unjust system – to create an even larger monster, and showing how it makes Canada and other sovereign and autonomous governments into IRS agents and an adjunct arm of the US government (an argument that Flaherty already made assertively in public), I’m not sure…. I would have thought that it would be too difficult for Flaherty and Harper to rationalize – since even if they say that any such agreement was one which was ‘acceptable’ to both parties, we know that there it is very obvious that there is NO additional benefit to Canada, and NO true reciprocity – only Canadian taxpayers footing the bill for useless ongoing implementation, possible Charter and Constitutional challenges for the Harper government, and an erosion of the Canadian tax base – with Canadian assets sent directly to benefit only the US. There is also the side effect that if the Bank of Canada and Flaherty think that Canadians aren’t saving enough, over 1 million will have to refrain from savings and investments that the US would then tax. Does the CBA want that? Because also, for advance planning purposes, even all the non-US persons around them would have to refrain – if they were thinking of making them beneficiaries. That widens the pool of those who would need to think twice about how they invest.

    At least the gross overreach of FATCA imposes costs on ALL non-US banks, non-US financial institutions, and non-US citizens and non-US taxpayers – through fees levied (but hidden) on all account holders, and on all of our fellow non-US citizens (but also to be hidden). That is a lever that demonstrates the absolute arrogance and overreach of the US approach to the entire world – and taxing or imposing costs on everyone  – while reserving all the (imaginary?) benefits for US institutions and US residents.

    But as James Jatras has pointed out, once FATCA is entrenched, it is far more costly to wait until all the failures, and disastrous ‘unintended’ consequences, and general ruination becomes evident, and then work to repeal it, than it would be to try and prevent Canada from entering into an IGA. The cost to individuals and families will be crushing – and even if FATCA was to be repealed, the IRS already would have obtained information that they otherwise wouldn’t have – whether it was obtained legitimately or not. I don’t know, maybe that is their plan B?

    Perhaps the sheer bloated size and complexity, and the rush to push it through a possibly illegal or unconstitutional route (ex. the FATCA is not a real treaty and is sidestepping Congress and abusing the limits of its authority angle discussed at the FATCA event in Toronto) will bring it down. Imagine how the countries like the UK will have to explain that they signed on to something that was not really legally what the US pretended it was, and so it would appear that IGA signatories were either dupes or collaborators. Imagine what that would look like for Canada – who already has the most extensive tax treaty and has already stated that FATCA was inappropriate here – if it turns out that the US is consciously and slyly pretending that an IGA is ‘merely an interpretation’ of a pre-existing agreement as handy but illegitimate workaround – knowing full well that they are being dishonest.  That will be very embarassing and hard to rationalize for the non-US countries who sign or who are contemplating their options. As well as the CBA and all those greedy entities who are urging our government to collaborate – no matter what the result to their account holders.

22. @a, re “They can’t come out and say that marrying a non-citizen is a form of tax evasion but they can act like it is“

    Yes, that is exactly what the US is saying. We are all presumed criminals until we prove we’re not, annually and forever. Revenue should be extorted out of us, and anyone associated with us, on the flimsiest of pretexts, despite paying to the country where we live, and despite our spouses only connection to the US being through our marriage.

    And that is consistent with their chosen gross application of the BSA FBAR, where we must report on everyone around us – even our non-US employer’s accounts. Deem us all criminals first, and turn the onus and burden of proof on us. Presumption of innocence is only afforded to those living inside the US.

    If this isn’t the case, then what do they have to lose by defending their rationale, and by appointing a Presidential Commission to look into the current situation? Only some public scrutiny of what they’ve been up to, and the position that we are to be revenue sources only,  not revenue expenditures. If the Commission is to cost 2 million, that far is less than .50 per US person abroad globally. It is about $2 per US person in Canada alone. So, they’re telling us that we aren’t worth even some pocket change or the cost of a Starbucks latte.

23. Adding to the discussion of ‘marriage penalty’ for US persons ‘abroad’, there is the associated ‘US parentage liability’, i.e. the burden of inheriting US status via parentage. Prof Maury Williams had repeatedly said ‘what about the children?’, and that is something we must not forget. In fact, their situation casts a negative light on the claims of FATCA and FBAR as a minor obviously is not a tax evader, money launderer, drug lord, terror funder, or ‘willful’ anything.

    Wanted to flag that the issue of the ‘citizenship penalty’ is the source of some ongoing discussion here:
    http://www.mumsnet.com/Talk/am_i_being_unreasonable/1685955-To-NOT-want-my-children-to-get-US-passports

    Unfortunately, some of the participants think that they and their children are protected from US double taxation, and don’t seem to know anything about FBARs or FATCA. Others seem to be up on the US tax burden, but don’t mention the financial reporting.

24. Badger, it’s frightening to see so much disinformation about US citizenship being given to a woman who, correctly, senses the danger to her children.

    My child, fortunately, won’t be able to pass on her US status to children. Plus. But she will have to renounce as soon as the US will allow her to (I think she can try it as early as 16 if I am understanding what I’ve read, but I have no intention of allowing her to be a dual and time/proximity is on my side in terms of making sure she will understand the implications. Just sending her to school in Canada has filled her with all sorts of anti-American sentiment that is adding the cause.)

    It’s hard to know how much worse the persecution of off-shore citizens will get. It could be that it won’t go on forever and that she and I will lose our right to easily visit the US for naught, but can’t take a chance.

    The marriage thing pisses me off the most. Ironically, gay marriage proponents have taken up the cause of easing the barriers of bringing foreign spouses to the US. If they only knew what they were asking for.

25. @a, re; “It’s hard to know how much worse the persecution of off-shore citizens will get. It could be that it won’t go on forever and that she and I will lose our right to easily visit the US for naught, but can’t take a chance.”

    I think that given what has happened so far, even if they were to demonstrate some kind of sense or fairness, or FATCA collapses under its own weight, or they back off somewhat due to international pushback and the Taxpayer Advocate, the US consistently shows no interest in how we are seriously impacted by the irrational and seemingly vengeful urges that bipartisan members of Congress turn into laws that affect us, but which we have no say in. As long as they have that power, and we have no way of safeguarding ourselves and our children from their dangerous whims and prejudices, they can reach us abroad, and make our lives intolerable – retroactively, and extraterritorially. Look at FBARs. They dusted that law off and gave it to the IRS to enforce – which wasn’t originally intended to be used in the way it is being currently wielded, and added penalties and conditions beyond what it originally contained. FATCA form 8938 goes way beyond anything that existed.

    Even a small unintended and inadvertent error on these complex forms can wipe a household out. There is nothing about the US that is worth that kind of potential jeopardy. Being compliant and maintaining that for a lifetime is far too complex, expensive and fraught with accidental peril, and when it becomes so so difficult to follow the law, with so much hanging in the balance, then it is time to get out for self preservation. I’m not being flippant about how difficult it is to get out either. I know what it entails, and am just worried that it may get even more difficult. Compliance also jeopardizes our ability to prosper where we live – and save using the incentives our home countries give us. We must forgo anything the US says it has the right to tax or doubletax, and they can change that at any time. Or invent new obligations like the Obamacare tax.

    I don’t think that those who renounce/relinquish will find that it was for naught.