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.
@ Lisa. Capital gains taxes. Trying not to think about it. House rich, cash poor. Want a job outside Sweden? Gotta pay taxes to Sweden if you have a residence there.
And gotta pay capital gains to USA if you sell the house. Or, if treated like a criminal, then act like a criminal
Mr Congressman, is it a crime for an American to live outside the USA?
“It most certainly is not”
Then why are Americans who live abroad being punished by the United States government?
“Because you live abroad”
When someone is being punished for something that isn’t a crime, it’s called persecution.
@Dash1729
If it wasn’t for the ridiculous tax policies of the USA in the first place, situations where tax preparers can fleece US persons living abroad, and further play upon their fears wouldn’t even exist.
There is more to citizenship based taxation than just paying your ‘fair share’ to a society that you’re not even benefiting from. It’s about treating people like shit for living abroad in a punitive, and divisive manner. To either force them to go back to the homeland, or to renounce and give up their right to live and work in the greatest country in the world ‘cough bullshit cough’ forever.
Overseas tax preparers have to learn a complex set of sometimes unwritten IRS rules. In addition they need to understand the tax laws of the host countries. These rules have no logic or beauty like Mathematics – they are ugly and no fun to learn. In addition, they need to deal with angry fearful people. So it’s not surprising they are well-paid. I wouldn’t change places with them. Most of them are honest people so I don’t have a grudge against them in general.
@Duke, I posted the link about the FATCA inclusion of the London transportation cards as an illustration of the absurd and draconian lengths the US is going to. And I am glad to see that type of lengthy opinion piece appear in a publication like the Economist http://www.economist.com/blogs/buttonwood/2013/08/tax . I hope that this type of illustration, and the examples that NotThatLisa gives (thanks for that real information NOTL !) will help those in the EU, Canada and elsewhere to illustrate to their own local representatives that FATCA goes far far beyond anything the US has done in their punitive confiscatory and parasitic extraterritorial taxation, pressing on, ever deeper and further into the land of Orwell and Huxley for those of us who are shackled by PrisonPlanetUSA.
I would like to show my local Members of Parliament this type of real life example that the US is criminalizing us at the micro and the macro level. I see your point that it might scare people into actually complying with these ridiculous demands – and as NOTL points out, those who unfortunately are/were under the microscope may have to comply at the ludicrous level, but don’t think it likely that others will. NotThatLisa, your comments are very good proof of that.
And I think it might help to sway US homeland politicians. The more absurd the examples, the more it discredits FATCA. Are US politicians ready and willing to pay for more IRS personnel to delve into the esoteric details of UK bus passes, or Swedish lunch cards? Is the US really ready to defend the processing of that level of FATCA reporting – and data-mining – using the argument that it is actually useful for the defence of the US against terror funders and drug lords? Another good argument to bolster the demands for a true cost/benefit analysis of FATCA.
Poor Nina Olson is given the task of making citizenship based taxation work. She never will and is fighting an uphill battle on all fronts.
@Johnson,
I basically agree with you. We are paying big dollars for US tax lawyers (best practicing in the countries in which we live, knowing both countries’ tax laws), and for knowledgeable US cross-border accountants.
I don’t have any problem with what I had to pay for the years 2005 through 2012 for the expertise of US tax lawyerS, US tax accountantS, US immigration / nationality lawyerS to get me to where I am today (OUT and DONE) — and, hopefully, thus no repercussions from the US. I want to move on with my life as much as I can (given that I will never be able to move completely on with hanging over my head the fear instilled by the US re the entrapment of “supposed” US citizenship of my developmentaly delayed adult son, born in Canada, raised in Canada, never lived in the US, never had any benefit from the US, not able to renounce himself because of “mental incapacity” and his and others like him Parent, Guardian, Trustee not given that right, even with a court order. But no one says that US law is just — just entitled.
I found that Canadian / Calgarian lawyers and accountants (mine a Certified Accountant) no longer want or will take on clients with US tax returns and information reporting. Why should they place themselves in untenable positions with their clients, not able to justify such high fees for the time it takes to prepare US returns outside the US? That leaves what we are calling the US tax compliance industry. What we pay for with these professionals will vary. Buyer beware. Know as much of the subject as we can before hiring someone to help us!
That said, I do absolutely resent that I had to pay from my hard-earned Canadian retirement savings
There are, I believe, MYRIADS of people not lucky enough, as I was, to have retirement or other savings to draw upon for the resultant fees. What are those people to do? Collateral damage of yet another big US industry.
Mosquitoes! You action is needed in the article’s comments section. I can’t log on for some reason 🙁
@monalisa1776 @mjh49783 @calgary411
I agree that one-time costs for a lawyer and/or accountant to get a dual citizen back into compliance if they haven’t been filing and have “created a mess” might reasonably be very expensive–many thousands of dollars.
But I still have a big issue with the concept that ongoing costs should be $5,000/year to file a tax return if dealing with an accountant who knows your situation and your situation hasn’t changed that much from one year to the next. Once the mess has been cleaned up, keeping it clean shouldn’t cost $5,000/year in accounting costs for an ordinary taxpayer. Once the taxpayer (or former taxpayer) has established that they aren’t Eduardo Saverin they shouldn’t continue to pay accounting fees like they were Eduardo Saverin.
New article from the Wall Street Journal: Why Fewer Americans Live Abroad
The author correctly identifies tax policy as one of the reasons why relatively few Americans live abroad, and recognizes the “uneven playing field” compared to expatriates from other countries. However, he fails to understand the fundamental concepts and arrives at a ridiculous proposal. He says that the UK doesn’t tax its nationals who live a full year abroad, and that the US should create an exemption for its citizens who live a full year in Africa, because supposedly Africa is the “next commercial frontier”.
No, neither the UK nor any other country “exempts” its citizens who live abroad. What happens is that they don’t consider citizenship in taxation at all, only residence and source of income matter. The reason is that residents and people who earn income in the country are the people who benefit from what the government of that country does, for which is collects taxes. Citizenship is irrelevant. This policy is based on the fundamental principles of taxation and why government exists in the first place, it has nothing to do with stimulating exports.
The US should not create any “exemption” for its citizens who move to Africa, Asia or Mars. Instead, it should erase every mention of citizenship in the tax code, like every other country in the world (with the sole infamous exception of Eritrea).
I tend to agree with you Dash1729. It cost my husband, his company and me about $25K in professional accounting fees/lawyer consultations to enter OVDI, which requires 8 years of tax returns. Mind you, my husband did our FBARs on the 42 bank accounts we held together and separately for ourselves, with our children, parents, businesses, mortgage providers, etc, etc. Last year the professional fees to file were about $1300 to pay $20 in tax to the US and my husband continues to do our FBARs. It it appears though, that we may again be out of compliance since he didn’t declare the $105 maximum balance we had on our BC Ferries Fare Savers card 🙁
@Dash1729, I agree, I think I exaggerated when I wrote $5,000 per year. However, it’s not $50 either. People who have foreign bank accounts, foreign retirement plans, foreign mutual funds or use the foreign tax credit, which are ordinary things for people who actually live in another country, have to complete many additional forms, and they are not simple. Even accountants take a lot of time to complete those forms and accordingly charge a lot of money for the job.
Yes, you’re right Shadow Raider, it isn’t $50, and it would actually benefit us if someone in the press did enough investigation to dispute that number, because CBT is punitive at even less than half the price! The US government has priced US citizenship out of the market. Certain homelands need to have it pointed out to them that ironically, it’s only the rich who can actually afford US citizenship.
I believe that one of the ladies from ACA also came up with a $5K to file US taxes.
@Dash1729
Indeed. It shouldn’t be $5,000 per year. However, even if the cost is free, it doesn’t fix the fundamental unfairness of the system.
Ultimately, it’s not about the money, and it’s not about the taxes. It’s the policy of CBT itself that is the problem.
@Bubblebustin, if I had maintained my US citizenship, I would have had to pay a bare minimum of $2000 to my accountant though she warned me that she would probably have had to start also filing foreign trust forms for both my pension plan and ISA. This would have doubled my annual fees. I concluded that I simply could no longer afford staying a US citizen.
I have no issues saying what my accounting fees cost me. I paid USD 12,250 for my US accountant to re-do 8 years of returns for OVDI. Income came from employment, savings accounts and up to 10 PFICs. I also took tax credits. I did my own FBARS. All returns were very straightforward. As you see, that’s a minimum of USD 1500 a year.
One year, I did not have an answer back from the tax authority in my country on my total taxes at the time US taxes were due. When I got the answer, we amended my return and that changed the amount of income and required an adjustment to tax credits. That amendment cost me USD 500. My accountant said any amendment he does will be a minimum of USD 300.
His rates are “low” because he works out of a home office. I tried contacting someone who was recommended to me at a bigger firm and after looking at some of my returns, I was quoted USD 2500 and above. I also checked with one of the big international accounting firms in the country I reside and they wanted a minimum of $4000 for the same work and said they would have to send everything back to the US for verification and that would be additional cost. The two US tax accountants (two lawyers from the US) who are used by many Americans in the city I reside are not taking new clients and will not take anyone with PFICs.
My situation these days is even simpler than it was before, although it seems that a new form is added onto the list every other year and that increases my costs. I am waiting to see what my bill for this year is.
What are people who simply cannot access that kind of money supposed to do? Try to fill it all out yourself and hope for the best? I do NOT have that kind of money. I went to H and R block at 400 dollars per year on very simple returns and they did them wrong! Twice! Even I can tell they are not done correctly. FATCA is backing people without $$ into a corner. Renounce and have to file but, can’t afford professional..sit and white knuckle it till you find out if they are after you. With each passing day I see one more expat who used to have decent even warm feelings towards the U.S. most of the time turning to feeling they are purely predatory.
P.S. this thread makes Jacobson’s comments seem even more ludicrous.
Yearly accounting fees obviously vary depending on your circumstances and choice of accounting firm. Without naming names of accounting firms, it might be valuable to have a separate thread where people can post an overview of their situation and how much they pay to reach/stay in compliance. It could help others in their decision making processes about what to do to know what the actual costs are.
@Monalisa1776, I seem to recall an exchange we had awhile ago where you mentioned your income and we then determined what percentage of that income you were paying to stay in compliance. When it’s put in those terms, it’s easy to come to the conclusion that US citizenship is way too high maintenance to hold on to.
My bill is 10 months of procrastination each year til I sit down for 2 weekends to pain it out.
IRA withdrawals make it more complex.
That was all before knowing about FBARs, which add more to it all.
What rate do I pay myself?
Thanks for the comments regarding the costs of filing as an expat. Yes, I’d think something in the $1-$2k range per year going forward would be reasonable. Something about $5k seemed too high.
Heads up. WSJ, just emailed me and wants me to call them and speak to them about U.S. tax issues. They saw my comments on the article and are seeking more information as to how I personally am affected. Some of the rest of you may get a message if you are a commenter or a member at WSJ.
bubblebustin and calgary411 are communicating with Liam Pleven and Laura Saunders. I was interviewed by Mr. Pleven for the first of these two most recent WSJ articles. He was good to converse with. I wish more of my story had been used, and I did give permission to use my name. I was glad to see when I got back from vacation that they did a follow-up to the first piece which allayed any regret — I saw they were “getting it.”
As an aside, because of that first article, someone (one of us!) I’ve been looking for saw my name, gained some trust seeing the same name in the article as in the email I had sent and contacted me. Atticus, you will be a good person for them to talk to — your situation and your advocacy for others may go a long way in further telling our story. Consider the opportunity.
That’s great AtticusinCanada. So far they’ve contacted Calgary411, Swisspinoy and me that I know of and I’ve sent others I’ve had personal contact with to them. Our efforts are getting noticed, mosquitos.