From Moodys Gartner Blog, Roy Berg, February 11, 2015: US proposes relief for some who renounce US citizenship: Is FATCA a motivating factor?
The details of the Proposal, and the chances of being given the effect of law, while interesting, are less so than the Administration’s motive for advancing it. Politicians don’t get re-elected by winnowing away their constituency base or enacting legislation that has the effect of raising tax (even in small measures). Normal people, even politicians, behave rationally so there must be a reason for the Proposal. Could the Proposal play a small part in a more subtle strategy that might involve foreign opposition to FATCA and IGA-partner domestic legislation?
- Some Canadian dual citizens who wish to renounce US citizenship may qualify
- Will the Proposal become law, and is the back door unlocked?
- Termination of United States Citizenship
- Why would the Administration propose relief to people who wish to renounce US citizenship?
- Is there another motive to relieve these dual citizens from tax and filing obligations?
- Conclusion – Regardless of the Proposal’s chance of being given the effect of law, the Administration’s motivation for bringing it forward, or the narrow class of individuals to whom it would apply, the Proposal is positive step. It is evidence that the unenviable predicament faced by dual citizens living abroad has been heard in Washington, DC and there may be the political will to affect change. Change may come quickly or not at all, but it will never come until there is understanding of the issue. The Proposal is an indication that understanding may be taking hold.
Eric’s February 3, 2015 post, “Obama FY2016 budget proposes limited relief for accidental duals-at-birth who give up U.S. citizenship”
and, one more, to keep analysis (so far) all together in one post:
Part 1 – The Obama 2015 Budget Proposal – Change you can believe in?
Part 2 – My thoughts on this part of the Obama budget proposal
Part 3 – Differing perspectives on exempting a “sub-group” of “technical U.S. citizens” from the compliance and tax horror which is part of the U.S. “Tax responsibilities of expatriation“
Part 4 – Can this Obama budget proposal be implemented by Treasury without Congress?