To be honest, 
I wasn’t sure if I was making the best decision. Some people advised against renouncing US citizenship while others recommended it. Yet, after unsuccessfully warning American politicians, I elected mission safety and handed in the blue passport.
To the left is a picture of my buddies and myself on the right, loading a ship to bring us to Somalia.
Now, it is official. I could hardly believe it when I read it, but it is true. Renouncing US citizenship saved the mortgage for our primary residence. Two days ago, the provider of my mortgage stated the following in press:
“In the mean time, we have distanced ourselves from almost all of our American customers. Currently, the bank has 5 investment accounts and 39 bank accounts belonging to US citizens. The only thing in the path of reducing that down to zero is that we haven’t been able to contact the clients yet.”
Source
To the right is a picture of my grandfather who fought for America during WWII.
There is no guarantee that I would have been able to refinance my mortgage with any other service as a US citizen and neither the US Veterans Administration nor the U.S. Department of Housing and Urban Development are willing or able to assist Americans living outside of US jurisdiction.
Unfortunately, the Office of Fair Housing and Equal Opportunity (FHEO) does not have jurisdiction to handle complaints outside of the United States.
STATUTE – It is the policy of the United States to provide, within constitutional limitations, for fair housing throughout the United States.
Sec. 802. [42 U.S.C. 3602] Definitions
(g) “State” means any of the several States, the District of Columbia, the Commonwealth of Puerto Rico, or any of the territories and possessions of the United States.
FHEO administratively enforces federal statutes, executive orders and regulations designed to afford all persons an equal opportunity to live in housing of their choice and to participate in HUD-assisted programs and activities without regard to race, color, national origin, sex, religion, familial status (families with children under 18), disability, or age.
Source
I volunteered to fight for America in the US Army, yet which American politician fought to save the home of an American veteran living abroad? I could care less about banking secrecy as long as the innocent are protected and I’m all for combatting money laundering. Yet, America needs to do much more to ensure that its policies do not cause harm to innocent Americans living overseas in violation of US federal laws prohibiting national origin discrimination.
Federal law prohibits housing discrimination based on your race, color, national origin, religion, sex, familial status, or disability.
Source
A residency-based tax system would prevent national origin discrimination against Americans for having a mortgage on their primary home or local checking account, and fighting for such would not violate US federal laws. Maybe it is time to fight for America and Americans like how my family and myself have done so.
I sent this story to @BLR13 on twitter. She is looking for impacts of FATCA, and this tells it clearly..
https://twitter.com/BLR13
I believe I am an example of this as an American Abroad. My life has been hell since I learned about FBARS in 2010. Like you, I don´t care if they want to know about all my bank accounts. But to penalize me for “crimes” that I did not commit is not fair and just. Besides I have no representation. Is this what America stands for?
This is another reason to live in one of the other 25 Kantons 🙂
Now if model 2 was ratified and implemented, would AKB be forced to take you on?
BTW – this is humbling – thanks for sharing. Likewise a lack of anti-discrimination laws by national origin in Swiss laws is also disappointing. At least in that regard you can collect signatures and work the system. Given it some thought?
@swisspinoy, what an impact this post has. The picture of you, and your father, who went ‘abroad’ on behalf of the US, contrasted with the statement by your bank that they were almost (good riddance!) at their stated goal of divesting themselves of all US citizen/US taxable person account holders.
The US would rather see us denied mortgages, accounts to receive our legal and post-tax wages, and opportunities to save those already taxed funds for the security of our families.
The real tax evaders (US RESIDENTS with money in the Caymans) money launderers, and terror funders are laughing – the US has chosen to continue to hurt it’s own citizens and allies
abroad’ – and already paying a full set of taxes to the countries where they live and receive actual services, with entirely local accounts held where they live – yet the US Treasury and IRS would rather prevent them from owning homes, or saving for old age or helping to send their children to college, rather than making the greater effort to locate the true criminals.
The US would rather shoot ducks in a barrel, and impose unjustified consequences on millions of US expatriates living outside the US – and their families, rather than make an effort to go after real criminals.
The US Treasury would prefer to invent ways to penalize US expats on their entirely legal and post-tax savings – registered and transparent to their home governments, and subject to layers of local law and oversight. The US would prefer to invent ways of sucking revenue from expats abroad who have no representation and receive no services or benefits, rather than to address its own made-entirely-in-the-US deficit.
The US has spoken – renounce your US citizenship if you want any possible chance at the ordinary lives that US residents take for granted given similar opportunities.
Contrast the penalty for $35 dollars of ‘unreported’ interest on a domestic US account with the FBAR penalty for the same amount in a legal account held where one lives outside the US – and where it has already been automatically reported and taxed by our local revenue agency.
Ask yourself what kind of a government could threaten us and/or impose such a penalty on the local legal post-tax accounts of ordinary people just because they live and bank outside the US?
Shame on the US Congress, the President, Treasury and IRS. What low scoundrels and exploiters.
Swisspinoy,
I am also an ex-pat veteran who renounced US citizenship. It was emotionally very difficult for me. But I, like you, had to do it in order to survive.
Abraham Lincoln rightfully freed the African-American slaves. However, he also set the precedent for enslaving Americans living abroad.
Every American ex-pat who renounces US citizenship is in their own way, like Rosa Parks, refusing to sit in the back of the bus of US servitude.
Swisspinoy, I salute you.
This is the case for my family as well. Although here in Canada I wouldn’t have lost my home all the other costs just kept mounting. The only way to insure the security of my family in Canada was to dump my US citizenship. For me this was not hard. I’ve been in Canada since age 13 and became a Canadian at age 19. Today I can say this was one of several best life decisions I’ve made.
Things to consider:
1. Congress is moving to implement a 3.8% tax on all Canadian retirement benefits received by anyone with US citizenship.
2. Cant’ get the deduction on my Canadian mortgage but I have to pay Capital Gains on the sale of my home.
3. US Tax lawyers coming to Canada to gauge fellow Americans
4. Estate Tax will make life difficult for your family. Take this one very seriously.
5. If you have no interest in the US just renounce. You will be better off.
6. FATCA
If your choosing not to renounce, that’s ok. Make sure you have good advice about Tax planning and your continued obligations to the US Government.
This is an excellent post and I would respectfully suggest that a copy of the post be sent to ACA, the House Ways and Means and other sites. This story, and all others similar, need to be told. To renounce seems to be the only final viable option, but note that for those expats living in a Visa Waiver country (like Canada or the UK or Japan or Singapore) renouncing is more viable. If the US expat is living in Thailand or other country not under Visa Waiver, the effect of renouncing means having to apply for a visa to visit family, kids and attend meetings in the U.S. This puts the power back in the hands of a State Department official to make a decision whether the former US citizen can visit the US and place of his/her birth. This whole situation of having to consider renunciation just to live a normal life outside the US is just absurd but very real.
itacaf.
In renouncing, what about the Exit Tax to do so?
I have read a little on it and it looked to be very scary in a monetary sense.
@Tortured,
Please keep in mind that Itacaf’s situation is quite different than yours. From what I understand, you were born a dual citizen versus Itacaf who became a Canadian citizen as an adult. The two situations are very different. Itacaf can claim that he relinquished US citizenship upon obtaining Canadian citizenship as an adult, and apply for proof of this in the form of a CLN (certificate of lost nationality).
You, unfortunately, did not make a choice to become a Canadian, and thus did not consciously decide to ditch your US citizenship upon obtaining Canadian citizenship since you were BORN into both citizenships. I am in the same boat, so I get this!
What this means is that you cannot simply apply for a CLN as proof of relinquishment. You have to actually RELINQUISH which means you have to RENOUNCE your US citizenship. This is where the exit tax comes in, but because you were born a ‘dualie’, you get an extra bonus of NOT having to pay the exit tax, BUT only if you swear that you will become tax compliant within a certain period after your renunciation. At least this is my understanding having spoken with a lawyer about my situation which is similar to yours. She said that ‘no one gets away with not catching up on their tax returns’.
So, you don’t have to worry about the exit tax, but you DO have to worry about the issue of 5 years of tax compliancy. You could always just renounce, forget about the 5 year tax compliancy,and take a chance that IRS won’t give you a hard time about it. You would have your CLN in hand to show to your banks at least, so that they could not claim you as a ‘US person’ and therefore not report on you to the IRS. However, I’m not sure how you would be ahead of the game here, because at this point you would already have ‘outed’ yourself when you renounced.
Currently the IRS knows nothing about you. Chances are, that if you don’t advertise your existence, they never will find out presuming you have not already told your bank about your other citizenship. Do you live in Canada? If so, you have more protection here. There are up to 1 million ‘US persons’ in Canada who will not put up with the US jihad for much longer.
Also keep in mind, this whole thing is very complicated. I have been reading here and elsewhere for 6 months since I found out I was considered a US taxpayer, and still don’t have it all figured out. It’s a crap shoot.
@Itacaf,
You said: ‘If your choosing not to renounce, that’s ok. Make sure you have good advice about Tax planning and your continued obligations to the US Government.’
Or, make sure your bank and the IRS doesn’t find out you are a JEW (err… I mean a US Person)…just sayin.
SwissPinoy,
I have read many of your heartfelt comments on several media articles, and wondered why you spent so much energy trying to educate people who don’t get citizenship-based taxation, and don’t understand FATCA, particularly since you had already renounced.
I am continually impressed by those (Just Me immediately comes to mind, but there are lots of others) like yourself who although they have escaped the clutches of the IRS monster, still hang around to warn and educate others of the dangers. This post helps me to understand your personal perspective, and as USCitizenAbroad says ‘its not what you take, its what you leave them with’. In your case (unlike the IRS) you leave us with a ‘good taste’.
Thank you for talking about your journey, for your effort in fighting the good fight, and for your empathy for those of us who have yet to face the monster.
ooops….I meant REnounced, not announced. Time for bed I think.
Swisspinoy,
This is just awesome.
Thank you.
Tortured. Don’t apply for a SSN! More to follow. There is no rush. You will be just fine once you figure out how to protect yourself. The IRS doesn’t have the resources or interest in pursuing minnows who don’t live in the US.
Well said, WhiteKat. And wonderful post of your personal story, Swisspinoy. Thanks to you both.
At least you won’t have to now have to resort to this.
‘Today’ show wrist-slasher explains: ‘The IRS ruined my life!’ (EXCLUSIVE)
Read more: http://www.nydailynews.com/new-york/today-show-anti-irs-wrist-slasher-irs-ruined-life-article-1.1364706#ixzz2VdnzDUEL
@AG, this is from a post re Americans trying to get a Swiss bank account over on the English Forum website:
The reason that banks can shut out US Persons is that this classification is not considered a nationality/ ethnicity, against which discrimination would be a criminal offense under Swiss law. Although most US Persons would be Americans, US Persons can be of any nationality because it includes US permanent residents (“green card holders”) and therefore discriminating against the US Person classification is not criminally discriminatory.
I too am a Veteran of the US Army, volunteered for service and volunteered to go to Vietnam, my father and all my Uncles fought in WWII. I later became involved in US Politics, became an elected Party Official and attended national conventions.
I tried my best to fix the US it is turning on it’s own citizens even within the borders of the country, but after a while I felt like I was giving CPR to a Corpse. For a host of reasons I eventually took my family and left the country that I once put my life on the line for. My family and I are no longer US Citizens those who could relinquished and the other renounced.
@All, thanks for kind words and support. I was worried that I published it too quickly.
@AG, I don’t think that any of the Kantonalbanks accept new US person clients. I still have an account with AKB. The bank never kicked me out and had reassured me that they would refinance my mortgage. I renounced because I figured that they would kick me out if the US increased its pressure, and such appears to be what happened.
@Steve Klaus, I emailed the link to Rand Paul. I’ll send it to ACA, House Ways and Means, Obama and maybe others next.
@Tortured, the National Law Review published an article yesterday which might answer your question: Leaving on a Jet Plane…But First, as an Expatriate, Have You Paid Your US Exit Tax?
@WhiteKat, I spend much energy trying to educate myself on the issue and enjoy discussing it to test what I’m learning. 🙂 My main motive, I think, is to support the efforts made by Americans abroad, but there are also several benefits in this for me. The financial aspect helps my career and personal financial planning and the social aspect is nice because I get to learn more about people around the world. I do have a few “nice to have’s” that I’d like to accomplish from my efforts, but I’m very pessimistic on that.
@Medea Fleecestealer, a Muslim or Jew may also be of any nationality or ethnicity and yet discrimination against them could be a criminal offense, I believe. I really don’t see how US citizenship is any different. So, the Eidgenössische Kommission gegen Rassismus (EKR) has room for improvement. In my view, the problem is the type of hostility towards a group of people rather than the type of hostility towards a certain group.
@SwissPinoy, discrimination against Muslims or Jews would be seen as religious discrimination, not national or ethnic. There are American Muslims and American Jews who are being refused bank accounts, but not because of their religion, it’s because of their US person status. The sort of discrimination we’re suffering from is simply not narrow enough to be legislated for, even if the Swiss government wanted to. To be fair they are trying to get something into whatever agreement they finally sign that banks won’t be allowed to discrminate against Americans, but whether they’ll ever get anything agreed in time to stop it is anyone’s guess.
SwissPinoy & MedeaF –
Perhaps USPersonhood also needs to be categorized as a matter of religious belief? Then if no belief, constraints are not applicable, and no further liability ensues — with benefit of immediate fee-free exit from shackles of sadistic Sam.
@Medea Fleecestealer & usxcanada, as far as I’m concerned, USPersonhood is a group like Muslims, Jews, Africans, Mulattos, gays, women, etc. and the hatred of any such group is racism, bigotry, anti-Semitism, hate-crime or whatever fancy name one wishes to brand it. Hatred of USPersons is, by definition, racism:
Making USPersons slaves or burning them in concentration camps is not more acceptable because they don’t have the same suntan shade or follow the same spiritual symbol. Humans just don’t get it. We are all the same members of the Homosapian race with the only difference being that we divide ourselves up into stupid groups like gringos, skinheads, blackpower, islamists, etc. in order to justify racism against the innocent to prove that one is better for the opposite sex, financial worth or power hunger.
When I first leaned about FATCA, my argument was that one should first protect the innocent and afterwards chase the criminal. My criticism towards FATCA was that it focused on chasing the criminal without protecting the innocent. As a result of ACA lobbying, model 2 might do more to protect the innocent, but we have yet to see what will come of this:
http://www.white-lighthouse.com/files/2013_FATCA_EN.pdf
At the going rate of things, the US will probably shut down my bank in response to national origin discrimination, resulting in it being completely impossible for me to not lose my mortgage with my bank, with or without renouncing US citizenship and due to US policy.