Why #Americansabroad do NOT renounce U.S. citizenship because of taxes http://t.co/sR9Qasjuge – Excellent article
— U.S. Citizen Abroad (@USCitizenAbroad) October 10, 2014
This superb guest post from @TaxGirl is one of the best I have seen.
As you read this consider this question:
Would you be less likely to renounce U.S. citizenship if the U.S. had tax rules for its citizens abroad that were more like those of Eritrea? A straight 2% of income?
Horrified by this story! I wish that I had the funds to help Trish renounce! I worry about the new citizenship laws and whether I could be stripped of my Canadian citizenship and deport to the US. I consider myself 100% Canadian, to have relinquished, but this just keeps getting scarier, and scarier! How would I survive in the US? I hardly know anything about the US. I have a few relatives still living, but don’t know them well. What about my husband, children, my elderly mother- in-law who has Parkinson’s and needs me? They are Canadians. As of today, I have sent 10 letters to 10 MPS in British Columbia. I plan to send all 36 MPS letters in the next couple of weeks. I think it is important as the lawsuit looms that they are blitzed with letters. I have called myself “I AM CANADA”. Also, I will send $25 every two weeks for the lawsuit in Canada. I wish it were more, but we don’t have deep pockets. Sigh!
I did NOT relinquish because of taxes as I likely would never owe any. In fact when I did my paper work the U.S. owed ME six hundred dollars which I let them keep in order not to be considered “high risk” by taking a refund owed to me. So no, it was not about taxes.
What part of having your bank records confiscated and those of your non American spouse with no evidence, suspicion of wrong doing or any warrant are some people missing as offensive as hell! We have lived our lives as law abiding and I did all I could, going out of my way to be a “good American” while living here. For that I was treated like a suspicious criminal and told to sit down and shut up if I don’t like it by treasury and worse. I relinquished because family first you know and I am a mother BEAR. I don’t care who it is that starts up with my kid or my spouse. I’m done with them if they do that and that included the U.S. of A. which is not the country I thought I grew up if it could do this sort of thing to innocent people.
I was over and out due to many reasons, mostly finding the way my family was being treated so offensive and not being able to keep my citizenship because of that. It had zero to do with the mythical taxes some say FATCA will garner. I hope it is worth it to them because it’s certainly immoral what they are doing.
The thing that jumps out at me was her description of how the U.S. system of taxing citizens abroad had so drastically changed over the years she was caring for her mother. When the Canada majority gov’t implemented the FATCA, they bought into the notion that since U.S. persons abroad were supposed to be filing all along with the I.R.S., they were simply enforcing long-held U.S. laws. No big deal.
Bullcrap! The costs of misfiling, late filing, willful non-filing or willful non-compliance have become egregiously excessive and punitive, requiring many times over the original amount. And look how the cost of renunciation has jumped to four or five times the original fee! Meanwhile, the only thing that hasn’t changed is the $10,000 reporting threshold. π
The reality is that the newer laws and penalties intended to punish the rich ends up hurting and scaring far more ordinary people barely scraping by. I’m glad “Tisha” wrote this post to give her story, because a lot of people need to hear it!
Her account was far to tender and understanding. The behaviour now seen in enforcing CBT is immoral and corrupt.
@Polly
Agreed.
Ann #1
Sending in $50 a month regularly is a valuable contribution – thank you!
Convincing one or two others to match your contribution and the effect snowballs.
We don’t have an accurate of how many so-called US-persons there are in Canada, and how many of those even know about this issue. The estimates vary widely: from about 300,000 in a Canada census a few years, to the widely-quoted “up to a million.”
BUT IF ONLY 500 PEOPLE CONTRIBUTED $50 @ MONTH FOR 1 YEAR IT WOULD = $300,000!!!
There MUST be at least 500 Canadians who are concerned enough about FATCA to spend the equivalent of $50 a month!!!
It’s unfortunate that increasingly draconian enforcement of US tax laws have made Tisha a tax exile, but would any of us find CBT acceptable if it was to revert back to when they were less so? Not me.
Anyone can feel just as much a citizen of a country without having to pay an annual tribute, ask any other citizen of any other country about that.
I am 10th generation American whose parents were subverted into the Socialist Movement by an original of the sleepers, sent here by Stalin and Lenin to start Communes, pretending to be a religion, when we know they were all atheists. Thank God the communes all failed but the sleepers stayed and some of the original converts, and all have children who are in congress (house and senate) I will no longer capitalize that branch of government when writing their names.
They are at least 50% Marxists in belief, if not outward Socialists The fourth branch of government that our founders were afraid would come into being, the permenant employees that Kruschev called the Apparachic, IRS being the worst and in descending order all the other acronyms,DEA,SEC,TSA, etc, etc,etc.
Sadly, even if we get what will pass as a conservative house and senate in 2014 and a republican president in 2016, they will all be big government, Tax and Spend, gimme, gimme,gimme, politicians.
Some will be descendants of the sleepers just as those they replaced and some will be stupid like the ones they replaced.
There has been a movement in the U.S. to scrap the entire tax code, abolish the IRS and institute the FairTax, a national sales tax paid on new goods purchased inside the borders of the U.S. It is the most researched tax scheme ever introduced into a law making body. They all know about it and if they were truly interested in saving the Republic they would pass it tomorrow or at least the first day of the next congress, along with a balanced budget.
The reason they don’t is they have found they can buy enough votes with tax money that would simply dry up if the FairTax was passed. Successive congresses have passed what they call ”Tax Extenders”. There are about 8000 of them on the books and they all expire on election year unless extended. Give a campaign contribution get your tax extender passed, no contribution, your tax extender goes away…….get it, yeah I thought you would.
We will have to have a shooting revolution in order to go back to constitutional government. i see no other way. The rich and the big companies are running away and us little guys are stuck with paying higher and higher taxes. City, County, State, Federal and a million hidden taxes takes about 65% of the money the payers work for.
We are down to 34% of the population involved in purely private business. Taxes and borrowed money pays the other 66%’s pay……we are past the tipping point, with the no return point just ahead, unless by some miracle the FairTax gets passed. It would void all the worries of the Expats and stop the employer and rich citizen and poor citizen exodus. God Help Us—nobody else will.!!!!!!
@Wilton Tidwell
I am not sure what part of the country you are from, but my suspicion is that you are a Yankee. One reason is because you fail to realize that many parts of the country are sick and tired of rule by Yankee bureaucrats based at the Fed in NY, Pentagon in Virginia, and the rest of the cesspool in Washington.
Further, as a Yankee you seem to be hung up on the necessity of the state, probably out of some misguided fantasy about American exceptionalism.
The real truth is that the US, and even more so the empire, is ungovernable. It has turned into a feeding frenzy of the elites on all our carcasses, and merely changing the tax code will not restore social cohesion. Secession and segregation are coming not only across the US, but across Europe and Canada.
Call me naive, but I can’t believe that US legislators would persist with this folly if they actually understood what they are doing. I see heart-rending posts like this one here, to say nothing of the couple of dozen first rate posts on the WSJ site yesterday: if any Senator or Congressman with a shred of honesty read those, how could they persist? And yet, politics is a dirty sport down there and the rational side of my brain kicks in and says “of course they would because there are points to be scored by pushing xenophobia buttons and no votes to scored by doing the right thing by people nobody cares about or hears”. It’s like Horton Hears A Who.
Ask any US expat “do you have free will?”. There is no way that can be answered “yes”. The US gov claims and enforces ownership of their expats by threat of severe punishment if they fail to comply to their demands. We are essentially slaves, stripped of our free will. What is happening to US expats is a clear violation of basic human rights. Ever since I began my journey of becoming ONLY a New Zealander, I’ve never felt so violated, trapped, and with no control of my own destiny. It’s just plain sick.
@Anne Frank.
I think they do understand. They have been drinking the kool-aid for so long they think expats deserve to be punished for reasons that are obvious, i.e. they are Americans who have deliberately chosen to live outside of the United States. They also believe there is a simple remedy for those who grow weary of the punishment; “just move back home”…problem solved.
I also think they believe additional punishment is due those who are impertinent enough to fight the abuse by relinquishing/renouncing. That’s why they have the exit tax regime aimed at those with sufficient net worth to justify a raid by the IRS.
Wilton Tidwell,
Your comments might do better on some other blog relating to homelander tax issues. Other than the immigrants who are caught up in FATCA horror in the US (and their plight is horrible), once we *expats* are finished fighting the FATCA fight, there will be few of us interested in what kind of tax system the US ends up with as long as it is not citizenship-based. We receive our benefits from and pay our taxes to the countries in which we have chosen to live. Perhaps you can find a blog of those RESIDENT in the US who are sending their untaxed monies offshore and convince them of the blessings of “Fair Tax”.
Anne Frank has it about right for the stupid and weak minded, however there is a large contingent of us who stayed home who want Americans to have the freedoms we are guaranteed by our constitution whether we stay put or roam the world. We need salesmen and women, Engineers, and technicians to service what we sell and they should be on site when needed. Our trade deficit is the result of all these democrats who hate capitalism so bad we’ve run a trade deficit every year since Carter started enforcing thie idiotic law in 1976.
That bunch of Democrats who hate capitalism and think we are over bearing when we want to sell our products abroad, have had the congress most of the last 80 years. They have had it so long that those who replace them cannot correct their errors without loosing their seats and the one and only job a politician has is to be re elected over and over until all his or her family is rich and powerful.
I love the idea that an American who believes in our constitution would live in another country and defend the last best hope for mankind, except for the democrats who think that anyone rich enoungh to live abroad should be punished.
Socialism always fails and whether they call themselves democrats, liberals, progressives, socialist, communists,Marxists, or cat people, they are the enemy of civilization.
I am on your side and you reject the one and only solution for us and you……
Anne Frank, yes politicians are that narrow and stupid that they think they get revenue when they loose more than they gain. They view their one and only job is to be re elected over and over until they and their family is rich.
@Wilton Tidwell
Actually authoritarians are the enemy of liberty, and they exist on both the right and left:
http://rare.us/story/the-opposite-of-libertarian-is-authoritarian/
Anne Frank:
I too have wondered, and continue to wonder, how can those in power (Obama, the Treasury, IRS, the Senate and those that passed FATCA in Congress) not see the damage caused by CBT, FBAR penalties and FATCA, and why it is not better to help US citizens living abroad and move to RBT to end this nightmare. I have listened to fools (like Reid, Rangle and McCain) and ‘educated’ people like Obama, who just keep pushing CBT and tightening the noose (even to the point of raising the fee to renounce by 400+%). This consumes me everyday because of the personal and financial costs as well as the threat of financial disaster if this issue is not fixed by moving to RBT. After much consideration, it seems to me that those in power (i) understand the issue but simply don’t care about us, (ii) are more worried about ‘catching’ the few rich who would move from the USA to overseas and no longer pay US taxes if there was a move to RBT rather than helping everyday Americans living this nightmare (iii) really don’t care if we renounce but want the one last dig of the high fee to renounce.
In response to the question would I pay a flat 1 or 2% of my gross income worldwide to keep my US passport – the answer is YES I would. I do not think any CBT is fair, but I would pay it to keep my US citizenship. I love America, I was born there, I grew up there, I served the country, I have family there, and I believe in the fundamental principles of the US Constitution. But I detest the US government and this Administration in particular, for doing what it is doing to US citizens living abroad. Sadly, renouncing is now part of my life roadmap and this was forced upon me.
Anne, You give Obama too much credit. He is using Saul Alinsky’s book ”Rules for Radicals” as his guide. He wants the rich and powerful to leave and renounce their citizenship and be replaced with the uneducated masses pouring over our SOUTHERN BORDER. I have nothing against the young uneducated immigrants coming in it is the swap that I detest.
McCain was last in his annapolis class and is a warhawk. He couldn’t win an election because he was too slow to answer a question. Obama wants a Socialist State with himself at its head. His grandparents were communist as was all his advisers, Bill Ayers, Frank Marshall Davis and Louis Farakahan, Rev Wright, as well as hting white people. He said so in his books. Dn’t think I am a racist, I am an anti socialist who is also half white, as he is half white.
Bubblebustin,
It isn’t the taxes that makes me want the citizenship based system repealed, it is all the detailed paperwork.
The government needs money to operate, but the income tax and all the paper is the worst possible system to get it. A 23% National Sales Tax would get the same amount of taxes collected, but would save 6.1 billion hours of paperwork and 4 billion dollars spent for tax preparation and well as all the evaders and tax lawyers and shutting off exports, not to mention doing away with the criminal penalties citizens get for missing the deadline, understating their gross incmes, taking deductions they don’t deserve, and thousands of things in a tax code 80,000 pages long, that we just don’t know are there. We’d keep some real patriotic people who are working for a living in places where they are needed, who will renounce their citizenship to get rid of the hassle.
My own grandson is working in Norway and can hardle make ends meet, but for his career he had to live there 3 years to train to run the American division of the company.
@Anne Frank Not like Horton. We have ADCS and fatcalegalaction.com
@Wilton Tidwell Yes interesting points yet perhaps that is for a different forum where this one deals with Liberty and justice for all United States persons abroad, and there are a few points of focus such as opposing FATCA, CBT, and FBAR penalties.
I am surprised by the responses to the posts about the FairTax. If there are any citizens that the FairTax would be fair to, it is expats. The FairTax would end CBT essentially as it would be a tax based on location.
And, while I think the FairTax has only a small chance of passing, I think it has a much higher chance of passing than any change in CBT by itself. Sad to say, the changes in tax laws recently show that the expat lobby is about as weak as a lobby can get. There is a much better chance of us benefiting as a tag-along on some other tax change than thinking the vultures in Washington are going to change a law specifically to help us.
All the excuses and reasons for CBT are “rationalisations”. All it really is, is abuse of power.
PS not just CBT but also the penalties…..
@Wilton Tidwell, I agree that the FAIR Tax would be good for the United States and by default very good for US Expats. I would urge you to write/call in to Neil Boortz who last I knew was a major proponent. The FAIR Tax promoters might also want to get with American Citizens Abroad as the reality is that FAIR Tax should be non-partisan.
With all due respect many on this board known as “Brockers” have either never considered themselves to be American being “accidental americans” with no ties to the USA. These individuals are either waiting to formally renounce, have already renounced or simply refuse to render any obedience or allegiance to any foreign government having given their sole allegiance to their home nation, largely Canada.
There is also another major cohort who have relinquished their former US Nationality and are deciding if they need or want to obtain a CLN from what is now a foreign government to them. But in no circumstance is either Relinquisher a USC regardless of documentation.
The relinquishers in particular have frankly given up on the USA. They relinquished because they were simply not left in peace.
There are many posting and lurking Brockers who have spent years serving in the US Military and/or working for the US Government. They have given up…………………..and said goodbye.
You will sometimes see on these boards that we have no commonality with the organization American Citizens Abroad (ACA). Why is that? First, we are not abroad!! We are home because the USA is a foreign land equally foreign as Timbuktu. Second, we are either not American Citizens having performed an act under 8 US Code or intend to perform an act under 8 US Code.
Renouncers can not vote in the USA, documented relinquishers can not vote in the USA, undocumented relinquishers should not vote in the USA and for those not mentioned, they probably no longer care and simply want to remain hidden from the USA.
I left and relinquished a decade ago under the former government which I might not have been happy with at times,yet it was generally OK. My relinquishment cost me legal fees of five figures in dollars.
Ronald Reagan said he did not leave the Democrat Party rather the Democrat Party left him.
The Frasier Institute just released its data on economic freedom worldwide. This shows a steady decline getting far worse after I left.
http://www.freetheworld.com/release.html
Taking the cue from Ronald Reagan, the USA left me I did not leave the USA.
I am very sorry to say that IMO the light has gone out in the city on the hill. The American Century is now past just as the British Empire went past.
Brockers sincerely appreciate your personal empathy for what your government has done to us. But the fight you have in the USA is not one where we can help with votes because it is not our home. But I will say that I believe most of us will always urge our home governments to stay OUT of the affairs of the USA!!! Canada, Ireland, France, Germany, Japan and all others have no business telling the USA what to do or not to do!!