Introducing the FBAR Marriage – A Marriage Between A US Citizen And A Non-citizen
If you're not "US" then you are not part of us: Americans abroad have lived with the consequences of the #FBAR Marriage for years. Now Homelanders are learning the consequences of marriage to an alien. https://t.co/TMlzn7UCRh
— U.S. Citizen Abroad (@USCitizenAbroad) April 23, 2020
In the early years of Brock I wrote a number of posts about the problems and difficulties caused by the “FBAR Marriage“. In it’s most basic terms, the “FBAR Marriage” is a marriage between a US citizen and an alien (non-citizen).
It doesn’t matter if you are in or out of the country where the USG is concerned when it comes to “foreigners” as spouses. My Canadian husband was routinely harassed by US Border guards when we were dating and it wasn’t until he told them that I was emigrating north as opposed to him coming south that it stopped. The USG simply hates extra-territorial dating/mating. The higher tax rate is a way to punish us though for not coercing our spouses into filing jointly so they too can be USP’s for taxable purposes. They see our marriages as tax evasion and while I would rule out entirely that someone somewhere at sometime may have married a non-USC for that purpose, I seriously doubt that the percentage of “mixed” marriages have tax issues to thank for their existences.
The Two Kinds Of FBAR Marriages – Determined by the immigration status of the alien (noncitizen) spouse
Some thoughts on each …
Type 1 – A US Citizen is married to a “resident alien”: A “resident alien” (AKA Green Card holder) will have a US Social Security Number and will be taxable on Worldwide income. It is probably more common for Homelanders to be married to resident aliens. The Type 1 FBAR Marriage is less offensive to the US Government. After all, the presumption is that “resident aliens” actually live in the United States, are subject to worldwide taxation and reporting and will become US citizens.
Type 2 - A US Citizen is married to a “nonresident” alien: A “nonresident” alien does not have a Green Card. (If a nonresident alien lives in the United States without a Green Card or other kind of visa that nonresident alien is an “illegal” (and subject to a whole new set of tax penalties)). It is probably more common for Americans abroad to be married to nonresident aliens. The Type 2 FBAR Marriage is extremely offensive to the US Government.
Marriage can be difficult – For both Americans Abroad and Homelanders, the “FBAR Marriage” is particularly difficult
The FBAR Marriage And Americans Abroad – Usually A US Citizen Married To A NonResident Alien
As you might expect, (at least for Americans abroad) there are tax penalties associated with a marriage of this kind.
Although there is no single decree coming from America that penalizes an FBAR marriage, there are various provisions of US tax laws that work to make the “FBAR Marriage” – well, shall we say:
“Contrary To The American Way – Definitely UnAmerican”
The penalties include (but are not limited to):
1. Most Americans abroad in an FBAR marriage will use the “Married Filing Separately” category. This is a very punitive tax category. At a minimum it means:
- higher tax rates at lower levels of income
- a lower threshold for Form 8938 reporting
2. In a pure marriage (a marriage between US citizens) property can be transferred back and forth between spouses without attracting “Transfer Tax” taxation. In an FBAR marriage, the US citizen donee is subject (if the gift exceeds more than approximately $150,000 USD per year) to the Gift Tax Regime.
3. In an FBAR Marriage, where the noncitizen spouse is a NONRESIDENT alien, a US citizen spouse who receives a gift from the nonresident alien, is required to report the gift on From 3520.
My point is that a US citizen who marries a non-citizen is entering a whole new, penalty laden regulatory regime. But, why not? The premise of the Internal Revenue Code is that the marriage between a US citizen and a noncitizen is a presumptive form of Tax Evasion. What other reason could there be for a US citizen marrying a noncitizen?
It’s clear that the Internal Revenue Code discourages (it’s contrary to the American Way) the FBAR Marriage.
The FBAR Marriage And Homelanders – US Citizens Married To Either A Resident Alien or NonResident Alien
It appears that certain Homelanders (part of a “Type 2 FBAR Marriage”) are about to learn what Americans abroad have long known.
The CARES Act payment (some Americans abroad are obsessed with getting one) is identifying which Homelanders are married to “nonresident aliens”. Once identified as having entered into an “FBAR Marriage”, the US citizen spouse is being punished. (Seriously, this really shows the problems that arise when benefits are administered through the incredibly complex and arbitrary US tax system.)
Have a look at this …
In what Peter Spiro describes as an “Aburd carve out” …
More than 1 million U.S. citizens won't get stimulus checks because they are married to immigrants who don’t have Social Security numbers. https://t.co/EYoV5akkzj
— Los Angeles Times (@latimes) April 21, 2020
Click on the blue “people are talking about this to see the incredible discussion. It’s clear that Homelanders don’t like the FBAR Marriage!