158 thoughts on “1,313 published expatriates in Q1 Federal Register honour roll; 1,484 renunciants added to NICS for same period”

1. “unpatriotic and unworthy of any voice or representation or consideration because we’re outside the US and act as if our citizenship means nothing to them and that no constitutional or legal or ethical duty – or even service is owed to us”

   Quote Cook v. Tait at them. Maybe they’ll get so angry they’ll lobby themselves to get it overturned.

2. “So, cynically, why not go whole hog and drop the pretense of being at all sovereign and autonomous?”

   Because then US citizens in the northern colony would be exempt from US CBT just like US citizens in Puerto Rico and Guam.

   (I almost said US non-citizen nationals in the northern colony like US non-citizen nationals in American Samoa, but that would be wrong because US non-citizen nationals are already better off than duals.)

3. I certainly wish there were a simpler way to renounce. My husband and I have yet again revived our quixotic attempt to do so. Yet, completely leaving out the cost of purchasing a citizenship of convenience–which we would have to do–we’ve roughly calculated the cost of renouncing in a tax-compliant manner.

   After a suggestion from Eric on another thread, we looked into a “1031 Exchange” to sell one “foreign” rental property where we live and buying another “foreign” property in a passport haven country (and, as an aside, f— you USA, for making me call my local property “foreign”). While the capital gains tax is “deferred” in this process, there are other, shockingly obnoxious taxes we’d need to pay the IRS. This is according to a so-called 1031 Exchange expert, a very specialized type of condor. But having spoken to one of the very few who handle “foreign” property exchanges, I found one who was not hard-sell and at least seems unlikely to run away with our money.

   Mortgage boot: ever heard of this? The IRS taxes us for paying off a mortgage at the full capital gains rate on the value of the mortgage. Yes, you read correctly: they tax us on money that was never ours. We have a US$150,000 mortgage; that money is not our $150,000, it is the bank’s money. When we sell the property and pay down the mortgage–again, giving back to the bank what has been theirs all along–the IRS taxes us 15% of that $150,000, as if it were free money we had received in our pockets! So…

   Mortgage boot tax: $22,500

   THEN they tax 25% of whatever depreciation may have taken as deductions even if we never claimed depreciation on our tax reports (because claiming depreciation allowance would have made no difference to the taxes owed, so why submit a complex form?). Thus, all the contents of the property–oven, aircons, curtains, etc.–would have given us a depreciation allowance over the years of around $5000. Even though we took no such deduction, we now “pay back” to the IRS what they call “recaptured depreciation”.

   Recaptured depreciation: $1250
   Fees for 1031 exchange: $3500
   Renunciation fee: $2350 x 2

   Fortunately, we don’t have enough assets to be “covered expatriates”.

   Total cost of renunciation: $31,950

   How f—ed up is that? Pardon my Anglo-Saxon, but this slave just wants to be free. It boggles the mind that freedom from “the land of the free” is so far removed from being free.

4. Badger, I hear you. Unfortunately no fixes work for 100% of the people. At least no fixes that are likely to happen within a reasonable time frame. This doesn’t necessarily make them worthless ventures or pipe dreams.

   You said to me (at least I think it was directed towards me) : ” It may make no practical sense for those born outside the US to ever come forward and identify themselves voluntarily in any kind of process even if an ‘easier’ method of renouncing were to become available, and it is probably in the short run better for them to just lie low since they have no US indicia.”.

   You won’t get any disagreement from me that people without a US birthplace for the most part can hide much more easily than those born inside the USA. This was not particularly the group I was thinking of when I suggested pursing support for easier, cheaper renunciation (whether that be via some sort of agreement with the USA or something such as a home country government subsidy). Having said that, I would still suspect there are a lot of non-US born US citizens who would jump at the opportunity to enter some sort of US legislated exit plan for tenuously connected US citizens, or who would love to get a subsidy from their home government to help pay for their renunciation fee or their compliance bill.

5. My wife renounced in 2014 and has never made the list. I renounced a few weeks before her and was on the list about 9 months later. Go figure. It’s random.

6. I’m afraid you’ll have to hang the “pipe dreams” comment on me.

   Have you read about why the State Department raised the fee? To cover costs, apparently. Here’s a little background on that, including some of the feedback given to DOS in the limited amount of time they allowed between announcing and implementing the increase.

   http://isaacbrocksociety.ca/2014/08/27/state-department-to-hike-renunciation-fees-to-us2350-says-no-public-benefit-in-respecting-human-right-to-change-nationality/

7. @Barbara
   Re mortgage boot..they are nothing but thieves.
   I know that you mentioned that you would be prepared to become stateless but your hubby did not like the idea.
   How about this scenario…
   You transfer the rental property solely into your (Barbara) name (as Americans you may gift to each other).
   Assuming your (Barbara) net wealth at that point is still below the 2,000,000, you Barbara alone renounce and become stateless. You then sell Barbara’s property and you then buy your citizenship investment property in both your names. Your hubby then renounces.
   I am not an expert but it looks like it should work. Hopefully others will pitch in with pros and cons.

8. @Barbara
   I know about this mortgage thing. I found an article about it during my early days of having my OMG moment and had another OMG moment after reading about that.

   Basically the IRS does not accept that we transact in any currency except dollars. That our functional currency is dollars. Depending on the exchange rate on the day of buying the mortgage and paying it off, there may be a gain. there could also be a loss but they don’t refund that. It’s criminal really. Even the exit tax can fall in this trap. You might renounce today and be under the exit tax at today’s exchange rate, or the exchange rate changes drastically and suddenly you hit the exit tax threshold.

   I benefited from brexit exchange rates which helped me out a lot but it could easily have gone the other way. One can control when one renounces but not always when one pays off a mortgage.

   The exit tax needs to go and if it isn’t going to go, it needs to be brought up to the level of the estate tax. the 2 million is very low and traps a lot of middle class people.

   The hike in the renunciation fee was deliberate. They saw the spike in renunciations and saw an opportunity for a new source of revenue.

9. @heidi – sounds like potentially an excellent plan. I don’t know much about US tax but the only possible snag that occurs to me – Barbara’s husband by the time of final filings would have acquired an interest in a property for which he would on paper have paid nothing. Might he risk getting taxed (on the final 1040), on the difference between what he paid ($0) and the value of his share?

   Speaking as devil’s advocate.

10. @Heidi: You are one clever girl! I’m going to put some serious thought into your idea. Somehow I suspect it’s too good to be true, that we’ll discover a hitherto unknown Phantom Foreign Property Recaptured Relinquishment Tax.

    As for UK Rose’s exchange rate issue, sounds like you were lucky. But the US dollar would have to collapse Weimar-style to make me a dual-millionaire in US dollar terms (though deep down I viciously wish that on the USA).

11. @Iota.

    On his final filing 8854 he would only have to do the first part of the 8854 and could list his share of a non specific ‘foreign’ house value.

12. @heidi – excellent!

    @Barbara – fingers crossed no phantoms appear

13. @ Barbara & Iota
    Once you have renounced you can sell what you damn well please without a US tax in the stratosphere tax.
    The address of hubby’s newly acquired foreign property does not get listed on his 8854, just the foreign property value.

14. Barbara & Iota
    Iota says..
    “Barbara’s husband by the time of final filings would have acquired an interest in a property for which he would on paper have paid nothing. Might he risk getting taxed (on the final 1040), on the difference between what he paid ($0) and the value of his share?”

    Gift of half the new house from New Alien Barbara to US Hubby, does
    does not trigger a tax liability but it officially requires reporting on gift form 3520.
    Form 3520 is an information return, not a tax return, because foreign gifts are not subject to income tax. However, there are significant penalties for failure to file Form 3520 when it is required.
    Your call.

    https://www.irs.gov/businesses/gifts-from-foreign-person

15. @Heidi, @Barbara – having read the link – perhaps US hubby’s share of the house can be less than $100,000, in which case no 3520 would be required. Does that work?

    Once he has renounced, of course, ownership can be adjusted as desired.

16. Sorry to have hijacked this discussion. It’s supposed to be about the Liberty List. I will take all these suggestions seriously, and hope to see my name on that list one day.

17. “I’m afraid you’ll have to hang the “pipe dreams” comment on me.”

    Which is more of a pipe dream? Easier renunciation of US citizenship or the USA ending CBT.

18. @Barbara
    It’s cos we all want to see you on that liberty list soon!
    @Iota
    Good thinking but
    When one buys a citizenship for investment property then there are rules regarding cost. They are all somewhat different but comparable.
    eg $300,000 property for one person + citizenship, $350,000 for two, 400,000 for a family of 4 etc.
    So having a smaller ‘share’ would not work.
    It looks like the 3520 should not be a problem, as it does not trigger any tax liability and first gifting US between spouses is perfectly legal. In fact Hodgen recommends doing this to more evenly distribute assets to avoid one spouse being covered by having over the $2,000,000. I know of two people whom have done just this before renouncing.
    Of course if Hubby is not covered he does not have to go into detail re foreign asset situs…it’s all ‘foreign’ to those folks at the IRS 🙂

19. @Barbara, not meaning to pretend to know what I don’t, but is it too late to just ignore these assets when filing? I mean seriously. I have sold real estate in the recent past, before knowing about FATCA and during a period when I was ignoring the IRS. I can promise you this information is NOT in any data that I carefully feed my tax preparers (I’ve started filing again, silently, now in year 4, soon 5). It will not (or would not be) in my renunciation paperwork either. It will also not appear clearly in my bank accounts. Just sayin’ — they want data and nice forms. No need to complicate life for them, eh?

20. @heidi – I did wonder if it might have to be even shares or community property in order to qualify for the citizenships. Makes sense I suppose.

    Allison Christians has got a great infographic showing prices around the world. It seems to be one of the fastest-growing commodities at the moment. Would be very interesting to know how many purchasers are USCs

    http://taxpol.blogspot.co.uk/2017/04/the-price-of-entry-latest-research-plus.html

21. @Iota
    I remember reading somewhere that Ireland used to have a citizenship by investment program, pity it isn’t still in effect.

22. @heidi – Ha! You are so right!

    I’d definitely be in the queue, and most of my family would be lining up also.

23. Bubblebustin: Re: “I was told by a US border agent that if I used my Canadian passport instead of my US I would be entering the US as a visitor only. It wouldn’t be the first time a border agent was wrong though.”

    I was told it was illegal. I don’t know what is right anymore but I’ve preferred (if that’s the right word in this case) to play it safe and just not go there. My exile is somewhat “self-imposed” but when I used that term in a comment to Petros a few years ago he reminded me that exile is exile no matter who imposes it.

24. @Fred B
    I believe Barbara is compliant, her bank reports her and husband’s accounts. She has no other citizenship.
    She needs to sell her business rental property, (known to the IRS) in order to buy a citizenship investment property. Any large sum posted in her account from that sale will be reported.
    She can transfer the original property solely to her name, renounce, become stateless then sell. (Her husband does not want to become stateless).
    She can then with her US husband acquire another citizenship through an investment property with this money. He as a US citizen can accept gifts from an Alien. Isn’t that good of them? (sarcasm).
    He can either declare half of the (new) property after renouncing as nondescript ‘foreign’ on his 8854.
    Up to him if he files a gift form for it from his Alien wife, any way, no tax triggered.

25. Paul S. says
    May 10, 2017 at 8:02 pm
    Just wanted to put the thought out there that it might be helpful to focus more on helping people renounce, rather than focusing so much effort on fighting FATCA and CBT, but [b]apparently there is little motivation or interest or others have tried already but given up. [/b]Good luck to everyone putting their efforts into fighting FATCA and CBT.
    ……………..

    Yup, I’ve given up.

    I am now SEVEN years out from the beginning of my nightmare. Result? I ignore the US, it is a black hole to me. My Canadian tourist dollars now go to Scotland and Mexico, instead of the US.

    Several years ago, I acted as one of the signatories on the human rights complaint sent to the UN. The result? ABSOLUTE SILENCE

    I have donated to the Canadian lawsuit. Result? In August it will be THREE YEARS since the initial claim was filed in that case. Second Canadian government dragging its feet, wasting taxper money.

    At this point, I feel I’ve wasted too much time on the US. I expect they will never change, so yes, I’ve given up on any change on the part of the US, or change on the part of my Canadian government. I have a 450 USD piece of paper that tells the US to go get bent if they decide to come after me.

    I feel for people still stuck in their US disease. Everyone needs to seek their own individualized treatment. I’m hoping the Canadian Charter challenge is complete in my lifetime, but at this point, I’m not holding my breath. As for the UN, they’ve proved what is said about them…absolutely useless.