By Margaret Collins and Richard Rubin
| Bloomberg News April 30, 2013
WASHINGTON — The IRS reaches every corner of Charles Allard’s world.
The 48-year-old US citizen, who lives in Hong Kong and works for a financial services company, is among a group of Americans living abroad who are seizing the debate over a US tax code rewrite to push for changing a policy that taxes citizens’ income regardless of where it’s earned.
[snip …]
Allard is among more than 100 people who have written to an international working group of the House Ways and Means Committee, urging Congress to change the laws. It’s an uphill political climb, as they need to sway lawmakers with limited resources who have constituents pushing for other changes.
Current rules expose US citizens to double taxation and hefty penalties for mistakes, the letters say. Also, the system reduces competitiveness because many companies avoid US workers because of the added costs they may have to cover, some of those living abroad said in the letters.
I guess that this is an older article from Bloomberg, but I like the new title. Let it be heard, again!
I found at least two misleading statements in the article:
In the second paragraph it says “The issue is one that affects many US executives who spend part of their career in other countries.”, leaving the initial impression that executives who are only out of the country for “part of their career” are the main people affected.
Later on it says “About 932 people gave up their US citizenship in 2012, IRS data show. That compares with 1,781 in 2011 and 742 in 2009.” We at Brock know that IRS data regarding loss of citizenship are incomplete and are manipulated. Don’t the authors know that the State Department, not the IRS, is the agency for tracking “people who gave up their US citizenship”?? (That reminds me that it’s almost time for the next quarterly “name and shame list” to be published in the Federal Register. Of course, the shame is on the IRS for publishing a deceptive list and on the State Department for not publishing the actual numbers of people giving up US citizenship.)
Anyway, the article is better than nothing but is sloppy journalism.
More misleading parts of the article:
A partly correct but incomplete statement: “There’s not an easy way out of the worldwide reach of the US tax system. Those who expatriate must renounce their citizenship to avoid taxation [sic] and pay exit taxes if they exceed a certain net worth.” (doesn’t mention the $450 fee nor the requirement to visit a consulate to renounce, nor the fact that one must definitely not be judged by the IRS as wanting to “renounce their citizenship to avoid taxation”.)
is followed a few lines later by a misleading one: “Corine Mauch, born in Iowa City, Iowa, returned her passport because she regards Switzerland as her home and does not want the IRS paperwork burden, she said in the statement.” (makes it sound like “returned her passport” was all that was required.)
I’m not going to pay the Boston Globe to comment on the article on their web site, because I’m no longer a US citizen.. But I hope someone with more of a stake in the issue will do so.
“Those who expatriate must renounce their citizenship to avoid taxation”, and makes no mention of the 5 years of tax compliance to completely extricate oneself from the US.
“The United States is the only nation in the Organization for Economic Cooperation and Development that taxes citizens wherever they reside”, try the entire planet save Eritrea (Eri-what-a?).
Over all, it’s sympathetic to American expats and at the end lets the reader know that there are those who still wish to remain US citizens, however difficult that might be at the hands of the USG.
@Swisspinoy
Patrick Temple-West deems your article “essential reading” and writes “FATCA hurts Americans Abroad”. From Americans Abroad ‘saying’ US laws hurt us to stating FATCA hurts us. That’s a welcomed improvement!
http://blogs.reuters.com/taxbreak/2013/04/30/essential-reading-fatca-hurts-americans-abroad-and-more/
At least they got the title right.