AnonAnon posted this comment on the Consulate Report Directory thread, sharing their thoughts on how the US could clear up the problems of unwanted dual citizenship. It’s an important topic, one worthy of a thread of its own.
“One way the US could lessen the burden on its consulates and on those of us born in the US who no longer are or want to be US citizens would be to change the default option: Get rid of the whole CLN concept, and require all US expatriates who DO want to remain US citizens to maintain valid US passports while living abroad. That way they could track their citizens, report them to the IRS, and so on, without bothering and having to deal with the rest of us.
Whether they would still tax their citizens who live abroad is an entirely separate issue.
US citizens abroad who subsequently decided to give up their citizenship could simply return their US passports, along with proof of citizenship elsewhere.”
@WhoaIt’sSteve;
Funny that ordinary individuals with modest incomes and assets can be banned from re-entry for renouncing – if the US thinks it was because they don’t want to pay hundreds or thousands annually to file 0 returns over a lifetime, but US corporations that employ large divisions of tax lawyers and specialists specifically devoted to creating and exploiting loopholes that cause the US to lose millions, aren’t banned from operating in the US http://taxprof.typepad.com/taxprof_blog/2011/03/ny-times-ge-tax.html http://www.heraldsun.com/view/full_story/9368448/article-Official–Wachovia-rescue-relied-on–usurpation–of-tax-law . And the state of Delaware is a legal domestic tax haven for Fortune 500 companies, but that is officially okay http://www.nytimes.com/2012/07/01/business/how-delaware-thrives-as-a-corporate-tax-haven.html?pagewanted=all&_r=0 Read the State of Delaware’s own promotional material “Why Choose Delaware as Your Corporate Home? More than 900,000 business entities have their
legal home in Delaware including more than 50% of all U.S.
publicly-traded companies and 63% of the Fortune 500. Businesses choose
Delaware because we provide a complete package of incorporation
services including modern and flexible corporate laws, our highly-respected Court of Chancery, a business-friendly State Government, and the customer service oriented Staff of the Delaware Division of Corporations. ” http://corp.delaware.gov/
US banks can aid money launderers http://www.guardian.co.uk/world/2011/apr/03/us-bank-mexico-drug-gangs and be guilty under the Bank Secrecy Act, but get IRS tax breaks, http://www.heraldsun.com/view/full_story/9368448/article-Official–Wachovia-rescue-relied-on–usurpation–of-tax-law and settle without facing court or jailtime, and continue to operate in the US.
US government agencies owe http://www.washingtonpost.com/blogs/federal-eye/post/federal-employees-owe-103-billion-in-unpaid-taxes/2012/01/20/gIQAv7KKJQ_blog.html14 million http://usgovinfo.about.com/b/2012/10/02/government-agencies-owe-14m-in-unpaid-taxes.htm US federal employees can hold jobs working for the US government, even if they are in arrears “About 98,000 federal, postal and congressional employees owed $1.03 billion in unpaid taxes at the end of fiscal 2010, according to records provided by the Internal Revenue Service. The total number of delinquent employees dipped slightly from 2009, but the amount owed jumped by $32 million.” http://www.washingtonpost.com/blogs/federal-eye/post/federal-employees-owe-103-billion-in-unpaid-taxes/2012/01/20/gIQAv7KKJQ_blog.html
But, an accidental dual, one of those born ‘abroad’ to a US parent, or someone who went to study or work or marry outside the US, may be penalized and denied re-entry on the mere suspicion that they renounced to stop having a potential US tax (or double tax) burden and draconian FBAR and other financial reporting pitfalls (ex. FATCA, 3520, etc). Babies and others didn’t leave the US to ‘avoid’ US taxes. Studies show that marrying a non-US person was one of the most common reasons to move and live permanently ‘abroad’ “In surveys of nearly 1,000 Americans living primarily in Western Europe,
Amanda Klekowski von Koppenfels, director of migration studies for the
University of Kent in Brussels, found that the largest single group —
nearly one-quarter — were overseas because of marriage to foreigners.
Only 10 to 15 percent had been sent abroad by their company or had
accompanied a transferred spouse.” http://www.nytimes.com/2012/08/27/us/politics/votes-from-expatriates-could-play-crucial-role-in-election.html
While some self-declared American patriots are busy trying to figure out how they can destroy America as quickly as possible, here’s a read that they won’t read:
This doesn’t do much to support the “denied re-entry” argument.
Hey I’m not advocating denying re-entry I was just postulating based upon what has already been enacted, just not yet enforced.
As for Delaware, my father has started a few businesses, one was with a group of partners and they incorporated in Delaware for the tax purposes. It’s just prudent, and good sense to utilize whatever tax breaks you can use. I think it sucks the tax implications for individuals living abroad, I don’t agree with them.
I’m all for legal immigration, and welcoming people with money with open arms, I think TSA and CBP are poorly run operations, the $14 tourism fee for the ESTA is dumb and discourages rather than encourages tourism, actually it should only really apply to the stupid Australians who instituted the ETA Visa with a $20 charge in the first place.
I really think Europeans, Australia/New Zealand, maybe the G8 basically, should have free and open movement of people between our nations, we’re all in the first world and mostly equivalent, we no longer really need borders between us specifically.
Just trying to explain it in 250 words or less to a Huffington Post audience…
http://www.huffingtonpost.com/social/FBAR_Compliant/the-great-american-passpo_b_1920287_192877374.html
Another masterwork of boiling down the unexplainable into a bite to try and tempt the uninitiated!
Thanks JustMe.
A gossipy Swiss publication reported this week that a well-known USC tax partner for a large international law firm in Switzerland will renounce his US citizenship in January. It cited “numerous sources independent of each other” without naming any. The publication accused the tax attorney of “preaching water while drinking wine” because he has recommended that USCs come clean with the IRS but was now “fleeing from Uncle Sam”.
Could this be a new tactic to embarrass USCs who have scheduled appointments to renounce? A Pre-Name and Shame list?
As mentioned above, the Swiss on-line publication “Inside Paradeplatz” carried an article this week called “Baker & McKenzie Attorney gives up his US Passport”. The article is in German:
http://insideparadeplatz.ch/2012/10/02/bakermckenzie-staranwalt-gibt-seinen-us-pass-ab/
Although this article makes the point that he/ Baker & McKenzie is hypocritical in that he has advised its US citizen clients to play with open cards when dealing with the IRS and now he is renouncing his US citizenship, I would assume that this “star” attorney’s motivation is similar to the rest of us: a desire to enjoy a less complicated life, the wish not to be turned down by business partners solely due to his US citizenship, and the need to have bank accounts beyond a simple current/ checking account that is now the only option for Americans in Switzerland.