The good news is that renunciations of U.S. citizenship are getting publicity.
The bad news is that the article does not recognize the needless suffering, desperation, and fear of Americans Abroad.
That said, it is better than most articles coming out of the Homeland.
#Americansabroad severing ties with the U.S.: What you need to know http://t.co/0be5JMLRVs – It's about the life control stupid …
— U.S. Citizen Abroad (@USCitizenAbroad) August 17, 2013
Here is a comment that seems to me to be “right on”:
Once the state runs out of private cash to pay for their largess, they will confiscate out assets, … it's coming http://t.co/z6GbgsqDvL
— U.S. Citizen Abroad (@USCitizenAbroad) August 17, 2013
“The increase in renunciations is one sign that ordinary Americans who have lived and worked abroad for years, as well as green-card holders in the U.S. and overseas, believe they are at growing risk because of the intensifying government pursuit of undeclared foreign assets.”
Oversees banks are preventing Americans from opening accounts. They will be liable if they do not disclose all financial dealings with Americans. Now that the NSA can data mine (infiltrate) your emails, phone records, text messages, online financial records, etc….under the guise of terrorism, they will have accomplished exactly what they have intended all along, a mechanism to hunt down revenue.
Look for the unintended consequences as their Statist hand presses individual freedom and liberty creating a scenario where one is no longer their own property but the States property. There will eventually be civil unrest, unless these confiscation policies can be stopped. Once the State runs out of private cash to pay for their largess, they will confiscate our assets, just like Europe, it’s coming.
"Americansabroad who do NOT live EXACTLY as Homelanders living in the Homeland will have their assets CONFISCATED." http://t.co/hPwhpWyu7H
— U.S. Citizen Abroad (@USCitizenAbroad) August 16, 2013
It’s time to turn the narrative from:
“Tall tales from the Homeland” to
“The needless suffering of Americans abroad”.
Your mission if you choose to accept it, is to educate the Homelanders. So far the comments are much more intelligent than usual. Perhaps some of you can keep the momentum going.
@Hazy, even credit on pre-paid cell phone sims are to be reported, as these could be considered prepaid debit cards. Lmao
@Hazy, even credit on pre-paid cell phone sims are to be reported, as these could be considered prepaid debit cards. PayPal balances, perhaps even Amazon gift card balances. Penalty revenue generator.
Come on guys! The idea that a credit balance on your Oyster card, credit card, or phone card needs to be reported is ludicrous. All of this bullshit conjecture is not helpful. I suppose that making fun of them might be enjoyable but problem is someone might believe you.
@Duke, all I can say is that my tax preparer believes it’s safer to include these. Safer to over-report.
Does your tax person charge by the account?
@Duke tax preparers live in a crazy world where they believe over reporting is the best policy, because they have no idea what is necessary or not, and they don’t want fingers pointed at them or claims against their errors and omissions insurance.
Likely everyone living overseas is in violation of some sort or another, most likely on phantom capital gains not being paid on the pizza they had last week.
Do they want to know how much you paid in your country installment account.
OMG. I am so happy to be non-compliant!
Even I’m probably non-compliant for all I know, just for having a TFSA at one point, and choosing to close it instead of dealing with the 3520 form. Like I’m supposed to know that shit! I would never had known had I not run into this site!
Let me see if I can summarize the whole problem.
The US is giving its citizens the following mutually exclusive options:
1. Live in the US.
2. Spend a month of your time every year to fill in a myriad of useless forms.
3. Pay $5,000 every year to an international accountant.
4. Give half of everything you own to the US in penalties.
5. Renounce US citizenship. If you are “rich”, also give half of everything you own to the US, and never come back.
Is that right?
@Shadow Raider
Great job of distilling down the facts. Conclusion: the US is way too high maintenance to continue to have an intimate relationship with. D-I-V-O-R-C-E.
@Shadow Raider,
Yup, pretty much.
Sucks huh?
@Shadow Raider
You got it. :^/
@Shadow Raider,
Actually, there’s more, but I am too tired to list it all. Things like:
1. Can’t take advantage of the registered retirement savings plans of one’s resident country without having the tax incentive nullified by USA.
2. Can’t take advantage of the registered education savings plans for one’s children of one’s resident country without having the tax incentive nullified by USA.
3. Can’t take advantage of the registered disability savings plans for one’s children of one’s resident country without having the tax incentive nullified by USA.
4.Can’t collect unemployment insurance in the country one resides in without being double taxed by USA.
..etc.
….
@Shadow Raider,
And worst of all…can’t invest in Canadian Mutual Funds without being PFIC’d after all the MER fees are paid.
My mattress is my best friend!
@Shadow Raider,
Ooops. You said mutually exclusive, missed that. Add my list to your options #2 and #3 and #4.
For you WhiteKat …
Now I lay me down to sleep
I pray the bed
My dough will keep.
If I should die before I wake
I pray from tax
My cash escapes.
“4.Can’t collect unemployment insurance in the country one resides in without being double taxed by USA”
Seriously? Goddamn! Talk about being kicked in the head when you’re already down! (gasp)
Can’t cross borders (even within the EU) to get employment without an additional bag full of US issues.
@Em
That’s precious.
@mjh49783,
“4.Can’t collect unemployment insurance in the country one resides in without being double taxed by USA”
Seriously? Goddamn! Talk about being kicked in the head when you’re already down! (gasp)”
Yup. Sick,eh. VIctoria wrote about this on her blog, the Franco-American Flophouse. Sorry, I don’t have the link — no time to look right now.
In the list of “Can’t live normal lives in their country of residence” items, no one has mentioned real estate. Canada is the most obvious example, with capital gains being taxed in the US, but not in Canada. It is bizarre considering that for many the money that went into that residence never came from the US. I am still trying to justify that tens of thousands of dollars of tax paid to the US on the sale of my primary residence is paying my fair share for the services I receive from the US, which, in the past 6 years has been limited to having some documents notarized for a cost of USD 50 each.
For those in Sweden, currently, if one wants to upgrade to a larger/more expensive house or apartment, they are allowed to invest the capital gain from a previous apartment in the new apartment and in lieu of paying tax on the entire capital gain tax, they pay a tiny amount of interest as tax on the capital gain until they sell the apartment. As real estate in certain parts of Sweden is skyrocketing and the value of the currency is high, if one has owned property for a period of time, it is quite possible that the capital gain, when converted to dollars, could be more than USD 250k and tax is due to the US. This puts any US Person in Sweden at a disadvantage in upgrading to a larger home and leads clearly to double taxation.
@Shadow Raider
As I think I mentioned in another thread, I’m approaching this from the opposite perspective–a dual citizen originally from Canada and now living in the US with dual citizenship.
You know, I’m getting the definite sense that some people are being taken for a ride here by accountants who are charging way more for their services than are needed. $5,000 for filing a tax return!!!!???? I pay under $50 a year to file using TurboTax–and, yes, despite Mr. Geithner’s protestations to the contrary, TurboTax handles self employment tax quite well. Granted I don’t have any international tax issues as all my finances are in the US and Canada has resident-based taxation. So, yes, I’d expect it to be more for a cross-border return. But $5,000 seems just way over the top–something isn’t right there. These forms aren’t rocket science.
These days there are a lot of people who cross the border for employment and originally come to the US on TN and H-1B visas. Not everyone establishes US tax residency immediately so there are definitely qualified cross border accountants who handle these issues.
I’m not denying that there aren’t some serious tax issues involved here. But I’m also getting a very definite sense that there are some accountants and lawyers preying on people’s fears–and perhaps building up those fears–to charge far more than they should be.
I could see a one-time fee of $5,000 if someone has been out of compliance for years and they need some one off work to get back in compliance. But $5,000/year–something just isn’t right there.
As for the ridiculous types of cards that must be reported to the IRS, in Sweden, many grocery stores give you an automatic rebate on your customer card if you spend certain amounts of money. Often the grocery store is part of a chain of stores and you can apply the rebate to reduce your bill when your purchase something in other stores in the chain.
When I was in OVDI, I asked my lawyer if I should be declaring this kind of card and his response was, “Technically, yes.” I got the impression he did not see this as something the IRS was going to be really worried about, but as a tax professional he could not say “Don’t worry about it.” So I now declare the balance of the card to the IRS every year on the FBAR and on Form 8938. I wish I had never asked. The highest balance last year was $20. Reporting this has increased my accountant costs by about $50. I canceled the card for one year, but found out that as I did not have the card, I no longer received notice of promotions or sales and missed out on what people who can lead a normal life in Sweden receive.
We also get a lunch card at work. Our employer matches what we put on the card up to around USD 90 a month and under Swedish law that money is considered income and we pay tax on it in Sweden. It used to be that we could purchase coupons, but the system went electronic a year ago and is part of Master Charge, but can only be used in food establishments that sign up for this specific card. I also made the mistake of asking my lawyer if I should be declaring this card and received another “Technically, yes.” So I have an additional USD 50 accountant cost related to declaring this card. The law really needs to be modified here. I find it hard to believe that any tax criminal would choose to spend all his or her ill gotten gains on food in a restaurant. This is complete overkill and non-thinking of the realities of this reporting obligation for US Persons who live outside of the US.
@Dash, it’s because Expats inadvertently set up huge messes by investing locally in non-US mutual funds, thus creating the PFIC taxation; determining not only foreign tax credit but carry back/carry forward of such credit; oftentimes setting up locally compliant retirement accounts which, to the IRS, could be deemed foreign trusts, etc. Better safe than sorry, especially in the current environment.