Direct effects of U.S. tax compliance on residents of Canada or other countries
It's time for all #Americansabroad and those who oppose U.S. "taxation-based citizenship" to unite by agreeing on the "principle" and achieving the result that: "The United States should not impose worldwide taxation on people who have @taxresidency and live in other countries". https://t.co/OEYK4F29L9
— U.S. Citizen Abroad (@USCitizenAbroad) January 2, 2018
The most recent “Brock project” posts (here, here and here) have focused on the directs effect of the U.S. tax system on Americans abroad who have attempted compliance and on issues related to the “transition tax”. Those posts have focused on the punitive taxation, the compliance costs, etc.
Indirect effects of being subject to U.S. taxation as a nonresident
The purpose of this post is explore the “indirect effects” of being subject to the U.S. tax system. How has it changed your attitude toward basic financial and retirement planning? Over the years I have talked with a large number of people who simply say things like:
- I can’t have a TFSA
- I can’t have mutual funds
- I can’t have a life insurance policy
- I would have incorporated but I am afraid to
- I worry about having to report my spouse’s bank accounts to the IRS
- I am no longer the financially responsible person I was
- I see no point in attempting financial planning
- Because I have a Canadian Controlled Private Corporation for which I am filing Form 5471, I have to keep a separate set of books for my company
- I have been declined business opportunities or certain kinds of employment because I made the mistake of admitting I was a “U.S. Person”
Your comments and thoughts on the indirect effects of being subject to U.S. taxation would be appreciated. Comments from those who have attempted compliance and those who have not attempted compliance are encouraged.
Thanking you in advance!