Those tax compliant #Americansabroad who pay U.S. tax are actually "tax invaders!" bc they invade the US to pay taxes http://t.co/E1gTvU7OXW
— U.S. Citizen Abroad (@USCitizenAbroad) October 7, 2014
Some of you may be aware that Kelly Phillips Erb (@TaxGirl) is running a series of “Guest Posts” on topics of interest. The above tweet references a particularly creative and interesting article on the taxation of Americans abroad. I recommend you read the article. I also recommend that you get over to Forbes and comment on this article. You may want to consider this article in light of some of the recent Robert Wood posts, including:
Marilyn’s Letter to President Obama; and
Dear Son, Why You Should Leave American Now.
An excerpt from this particularly brilliant article begins with:
The Accidental Tax Invasion
By Dominic Ferszt
America’s hatred of tax evaders is at an all-time high. In recent years the media has reported that the IRS identified over 43,000 hidden offshore accounts from which they raised over $6 billion in revenue. Their hard work has elevated the tax evader to public enemy #3, after terrorists and pedophiles. Yet for every villain, there must be a hero. Perhaps now is the time to introduce America to the ‘Tax Invader’.
A tax evader is someone who uses the privileges of citizenship to generate income and then conceals that income to avoid paying tax. A Tax Invader is a foreigner who generates income offshore which they reveal, and on which they pay tax; specifically to the United States.
Owing to a unique combination of laws, the US is the only country that benefits from Tax Invasion. Principal among these is citizenship based taxation (CBT) which requires US citizens to pay tax on their worldwide income no matter where they live. Tax Invaders are distinct from Americans who have moved abroad in that they long ago severed (or never even had) meaningful ties with the US. They generally come from within three categories: foreigners who hold on to their green card; individuals born abroad to US parents who had previously emigrated (nominal citizens) and; individuals born to foreign parents who were temporarily in the US (accidental citizens).
All three groups are considered resident for tax purposes under US law, so they’re not paying tax voluntarily. However, their notion of patriotism was developed in a foreign country, so most could readily go down to their nearest US Consulate and renounce their taxing obligation along with their citizenship; an option not available to US residents.
Unfortunately all is not well with the Tax Invaders, and darker storm clouds are gathering.
sorry Bubblebustin, I missed your comment.
I don’t understand the “homelanders” resentment of those who leave the US. After all, their ancestors all left somewhere to come to the US. No one is more deserving of punishment, this is wrong for everyone. What happened to freedom to live where you want and have the citizenship of your choice? We are all caught in this mess, but it seems so hard to get the “homelanders” to understand. If a different approach gains some sympathy across the border, it will benefit everyone.
There is nothing more ingrained in a US homelander than “it’s the best place to live in & the best country to be from.” Why on earth would anyone want to leave such a place? I can remember thinking like that, as a very young person. Add Dubya’s famous “you’re either with us or you’re against us” & Voila! The American psyche!
Of course it’s possible, given that some of us hail from different cultures here, that you didn’t pick up the cultural reference in my titanium comment, so here it is, Gwen’s Ode to the IRS.
@heartsick, what Tricia Moon said and just a little bit more…
Look up American Exceptionalism on wikipedia, thats the starting point of understanding.
Homelander Hat now on—–
America is the home of the City on the Hill, it is an exceptional country endowed by God as a bastion of liberty, justice and freedom. Being so blessed by our Creator has great responsibilities which means doing what is right for all people on this planet earth. We lead the world because no one else in the world is so qualified and able to lead.
America has the greatest economy, the best health care system, the finest education system and the greatest military since the Roman Legion.
America is so great that everyday, the people of the world risk all to come here.
USA Number One, USA Number One, USA Number One
Homelander hat now OFF——-
First, I feel like I need a shower.
Second, Homelanders actually believe that about their country and themselves in being part of that country.
When someone leaves the homeland (Eden on earth), you are viewed as crazy because you are risking death with the socialist health care in Canada or Europe. You are also subjecting your children to inferior non-US schools, albeit a few small exceptions.
The Protestant Reformation was “heretical” in that it said the Mass should be in the language of the people not Latin and that a Priest was not needed to understand the Bible you could read it yourself!!
When you leave the USA and actually stay away, you are breaking a fragile homelander psyche because leaving and staying away is affirming that the USA is NOT number one. You are affirming that health care is pretty good elsewhere. You are confirming that there is plenty of liberty elsewhere.
Now when you talk about handing in “precious” US Citizenship, you are along the heretical path of Martin Luther hammering his thesis on the oak door!! You are not only saying that life elsewhere is good but the blue book is not needed!!!
US Expats = Heretic
Thanks for your comment, heartsick. I was placing the law is the law is the law (which a US tax lawyer used to expound here) upon an injustice is an injustice is an injustice of bubblebustin. God-willing that we somehow, someday get to RBT, which will provide that more level playing field for all of us.
All of us who have chosen to live outside of the USA, including the “Accidentals” on both sides of the US border — “accidental” by none of their doing, should benefit from the same law. Some of us were ignorant of the law — and I maintain we were not educated either in our US regular public schooling or afterwards and most would assume the whole world worked the same more fair way of taxing by residence. Many of us were caught by the bad and IMMORAL US tax law. No law should entrap anyone into a citizenship they did not choose if they must then inherit the consequences of “citizenship” based taxation.
[ As far as I’m concerned, I “renounced” my US citizenship twice — the first time when I became a Canadian citizen in 1975 and the second after I was caught up in all of this, made irreparable mistakes, and finally paid a huge price from retirement savings to again be “just a Canadian”. I will forever pay for the day I brought my own children into this mess. No parent would have done so if they had only known! None!]
Haha Domino – thanks! My kids LOVE that song! So I should have recognized what you were referring to since I have heard it over and over 🙂
@george-once again you hammer home the truth. US Expats = Heretic…….. the only way that fragile psyche can deal with this is to demonize expats who renounce… we are the classic “other”.
when are we going to start a London Lawsuit before UK withdraws from ECHR!
I, for one, would rather be a heretic, than an indoctrinated idiot.
America is not that great. After all, I left it for my wife, and I maintain that the US left me before I left the US. It still doesn’t compute with my family that remains stateside as to why I left, but it doesn’t even matter.
@ George Thank you for the information on homelanders. Unbelieveable. I am so glad that my parents decided to return to Canada, of course now they regret that they ever went down to the US in the first place. Their decision is causing major problems for their children.
Your parents aren’t the only ones… my parents & elders regret bitterly cause now they have tainted the next generation who has tainted the generation after with this nonsense… if it wasn’t for this nonsense… we would never have thought anything of it & enjoyed our lives… this has been the deep dark secret no one shares with anyone out of the family… People use to chit chat & say… oh.. yeah… some of our kids were born in the US but we came home… now we tell no one… we even warned the kids
Last night I watched with disbelief as the Canada’s own Jason Jones announced to the world on the Daily Show episode he was hosting how he had just become a US citizen last week. I wondered if he’d been warned about the pitfalls of US citizenship and felt a mixture of fear and anger at him for wanting US citizenship. Then I realized, yes, of course he is probably going into it fully informed and has a multitude of reasons why he’d want to have US citizenship, which are deeply personal to him and none of my business really. Also realized that I need to check myself from developing what I detest most in others, which is a stupid-ass sense of patriotism and dumb-ass intolerance for other people’s decisions to make a home elsewhere – even if it’s the US!
@ US_Foreign_Person You are so right, it is a deep dark secret. My parents made a decision based on the laws at the time. It was terrible having to inform them about this situation. It is not something I mention anymore, other to warn other people. It’s amazing how many of my relatives and close friends know someone this is affecting. It also causes arguments because no one can understand why the US will not “do the right thing” since so many of us are in the same boat. The presentation of FATCA as being for people who are “hiding” assets in “foreign accounts” leads people to believe it will not concern them, they only have local accounts. I fear we will be hearing some horror stories when the FATCA reporting starts and people are contacted by the IRS. The situation is so unbelieveable that it is difficult to convince people that there is a problem.
My sister recently said that she used to have some nice memories of living in the US, that’s all spoiled now – she was six when we left. Luckily none of us has passed on the US “taint”, it will remain only with our generation. I fear that the US may someday change the law yet again and somehow nab the next generation though. Since we have no ties to the US, none of us has any interest in ever setting foot there again, we are angry, vacations will be spent elsewhere.
I hope there is a light at the end of the tunnel for all of us one day. Not everyone can afford to buy their way out or feels they should have to pay anything to this foreign government. In the meantime we will continue to support ADCS.
If u are in Canada… everyone will know more then 1 person who will be effected by this since the US was not that far… so the number of people affected by this is more then the stated numbers given… No one gave it a 2nd thought if they gave birth in the US cause they would have the advantage of being both canadian & US & it would ensure a better future.. now there is no advantage at all… its a lifetime of being slaves to the US unless u pay dearly to get rid of it
Hey, I felt exactly the same way when I saw it! Jason and Samantha are working and living in the US, so if they want to continue to do so, it would make sense for them to become citizens.
It’s funny what our gut reaction was though. A couple of years ago, I wouldn’t have given it a second thought. Now, I can’t even bring myself to buy a bottle of Californian wine.
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