128 thoughts on “Ending U.S. Citizenship-Based Taxation”
For IGA1 countries, one simple change to local law would do more to help their US-born citizens than any US legislation can possibly do – stop requiring/allowing banks to treat accounts as reportable on the basis of the accountholder’s place of birth.
Right on point about other nations giving the boot or starting the ball rolling ,the rest is BS for most AAs and people who have settled permanently elsewhere with no interest in US citzenship and its compliances.
T
Canadian government knows it is easy to hide from US person witch hunt in Canada. Doesn’t mean that isn’t a false assurance or that Canadians haven’t been sacrificed for greater good. Be happy for non US persons among us just as we are happy for US persons who find TTFI a solution. Perhaps think about organizing as a group of Canadians who reject US citizenship to actually do something about that instead of hoping other groups or individuals whose focus is not as pointed to do it.
The situation is different in every country, depending what rights exist and what cases may be brought. The Canadian case is well underway. I understand a case is underway in France; that one could have EU-wide implications.
It’s not surprising that few cases are brought. It costs money; far more than renouncing.
@Jules
One reason you don’t have an AA association in Canada is, well, because this organization exists, and has the lawsuit in progress.
My view is that US expats with only the one citizenship have a more difficult fight on there hands and may need to engage with US politicians. But duals/accidentals with no US ties are primarily concerned with laws in their home countries.
And in Canada, there’s actually not much for duals to get up in arms about, as long as the US cannot collect penalties, and as long as Canadian banks accept self-certification on FATCA question and will not restrict services to US persons who do identify themselves.
The more important enemy is the compliance business. We need to educate as many duals as possible, let them know that not filing US tax returns is safe, easy and fun.
“The more important enemy is the compliance business. We need to educate as many duals as possible, let them know that not filing US tax returns is safe, easy and fun.”
HELP! I am a dual US/British, married to a Dane and a legal resident of France. I am about to file FBARs and tax for the last 6 years, after receiving a tax obligation form from my Danish bank and being told by a CPA (compliance business!) that not filing “at least FBARs” is risky, esp. in France. Three questions:
– Is it possible to renounce without being compliant for 6 years? (I thought that one condition of getting a CLN was being compliant for years!?)
– “safe, easy and fun”… but if your bank makes you give them either an SSN number or a CLN, what chance do yo have of not being contacted by the IRS before RBT comes into law (if it ever does)?
– What is the chance that RBT will be adopted, and when?
Thanks for this wonderful site!
@ tobeornottobe,
Regarding your question on renunciation, it is not necessary to be tax compliant in order to renounce. Some people who have renounced are tax compliant and some aren’t. Citizenship status, or the termination of it, is not dependent on tax filing, so it does not affect issuance, or validity, of a CLN. There’s information about this and the interactions between Dept of State and IRS on this page, Interactions between Department of State and IRS regarding Renunciation/Relinquishment
Anyone got any idea on when this will be voted on?? Let’s hope sooner rather than later.
Nononomous, I presume you are referring to ADCS which is organization whose members post at this blog and moderate. ADCS is standalone organization in that only a few people can belong and sole action is FATCA lawsuit. Having a multi-pronged approach, not limited to lawsuit, within an organization that many could join might be less risky than putting all eggs in one basket. Capitalize on sympathy of poor Canadians who do not want to be American but can’t get rid of it. Like the French AA organization accept broader in scope.
But I agree with you that there does not seem to be much interest from Canadians to do anything other than wait for lawsuit. Most likely because Canadians can hide so easily currently unlike Europeans. As long as that never changes there won’t be any strong pushback other than adcs lawsuit. Should it fail first trial, will probably be end of Canadian fight as Canadians mostly over initial shock and have learned to live with unwanted US citizenship one way or other.
I am a dual US – Italian citizen. I am currently 16, when I turn 18 I am planning on moving to Italy with my Italian-born mother. My question is this – you say that if this bill is passed I would need to be tax compliant for 3 years in order to qualify. But here’s the thing, I’ve never filed a tax return but because I’ve never worked and am under 18 that’s ok, so I am being in compliance, so when I move to Italy when I turn 18 technically I will have already been in compliance for 3 years. Am I correct?
@tobeornottobe
Where were you born? If outside the US, this could be very easy for you.
Tobeornot. Answer to the second question. Depends on the country. . In Canada, simply don’t mention any other toxic citizenship. If your bank did report your account, we have no idea what the IRS will do. They have no resources.
Question 3. – zero chance
@Jules
If Canadian banks began behaving like Swiss banks, or the federal government announced that it was going to ensure that everyone who sold a house for a huge pile would be checked for US citizenship so they pay US capital gains, then you might have a mass movement.
But right now US laws are so easily ignored, people aren’t outraged. So just keep on educating, and pushing back against the condors.
Marco. Technically you have always been in compliance if you never earned enough to have to file.
If what bill is passed? Don’t count on any changes to UStax law.
@Marco
You are correct. IF this bill is passed.
You can also renounce US citizenship at 18 and be in full compliance if that is your wish .
@Jules
The AA organizations have only one focus-to free their citizens from unwanted US citizenship. Their actions/approach (understandably) address the issue from within their own countries. They are not concerned for example, with duals who are not accidentals. They are not involved with the efforts to urge the US govt to change legislation concerning tax reform (TTFI or the Transition Tax). I respect and support them in ways that I can but I do not see how it could be said that they have a wider focus than ADCS or any of the other expat “groups”.
Brock (which is an unorganized website community) has served as a starting point for all kinds of actions. ADCS grew out of people who were already on Brock as authors or commentors. Two “members” of ADCS were already involved in the edit/admin type work here. The other two have nothing to do with the day-in day-out functions here nor are they involved in any of the decisions taken by the Brock Committee. ADCS may well be involved in later work but for now, the lawsuit is quite enough for us.
Nobody has “put all their eggs in one basket.” If you look at the sidebar you will notice many different things going on. These efforts include long-term duals, AAs, green-card holders, spouses of expats etc.
I don’t know if there is a need for a separate AA organization or not. There is nothing to stop you, or anybody else for that matter, from starting one. Or you could start with an idea for one action and see if it grows. You could engage Brockers for help. The point is, all these groups or efforts start because someone cares enough to come forward and do something. And the Brock community has wonderful resources available. But it will have to come from you or other AA s willing to devote the time and energy necessary to engage.
“Don’t count on any changes to US tax law”… no, don’t count on it, but here is some recent discussion, plus info on the progress of a swelling movement:
Also, if you are in the EU, this could be of interest – people here are beginning to understand the real hardship caused to innocent citizens by this CBT menace.
Here is a very recent EU Resolution, passed as a resolution, not yet a law.
As Jules writes, being part of the protest and publicity and pressure will speed things along, benefiting everyone.
Thanks everyone for your answers.
Nononomous, we keep agreeing with each other. For the majority of Canadians deemed US persons, there does not appear to be much reason to do anything currently. Young people will avoid the traps their parents fell into and get in line with compliance from the start or will renounce. The rest of the noncompliant will die off. So why are we here even discussing this? Just a thought. No need to answer.
Marco, like Heidi suggests instead of checking in with USA every year, since your plan is to be compliant, maybe think about going all the way and renouncing?
If a born-dual renounces US citizenship between ages 18 and 18.5 (a six month interval), usually a single Form 8854 suffices to avoid becoming a covered expatriate, though there are a few exceptions. If the person’s income was below the threshhold where returns had to be filed, then the person was tax-compliant in those years.
“Also, if you are in the EU, this could be of interest – people here are beginning to understand the real hardship caused to innocent citizens by this CBT menace.”
There is no CBT menace; CBT is unenforceable. For individuals with a US birthplace there’s a problem with bank access.
“Here is a very recent EU Resolution, passed as a resolution, not yet a law.”
Adoped by the EU Parliament as a non-legislative resolution. Unfortunately, there is no “yet.” The resolution, and the study, have been hugely beneficial in publicising the IGA injustices, but the resolution doesn’t lead to legislation.
Eventually, if a legal challenge to an IGA gets as far as the ECJ, an EU Directive may force Member States to revise their bilateral agreements with the US. Don’t hold your breath.
The difficulties and outrage being caused by the CRS may necessitate changes to all the AEOI treaties in the end – resolving the IGA problems as a side/effect.
Jules: “Young people will avoid the traps their parents fell into and get in line with compliance from the start or will renounce. The rest of the noncompliant will die off.”
The significant distinction to be drawn is the distinction between individuals with a US birthplace who want to keep their US citizenship, and those who want to get rid of it.
In Canada, it seems, it’s very easy for US-born individuals to self-certify as tax-resident only in Canada. That seems like the ideal solution for US-born Canadians who don’t want or need the little blue book. Self-certify non-US-tax-residence, self-certify relinquishment.
A much better prospect for the future than “dying off.” 🙂
CBT is enforceable against people who only have a US passport.
CBT is enforceable against people who don’t know when to tell lies.
“CBT is enforceable against people who only have a US passport.”
Americans living outside the US can’t be forced to pay US top/up taxation on their non-US income/assets.
“CBT is enforceable against people who don’t know when to tell lies.”
Some of us have lived outside the US for decades without lying about US taxation or even thinking about it.
The FATCA IGAs brought problems with banking access, and loss of privacy rights; the FATCA IGAs did not bring US tax problems or a need to lie.
For IGA1 countries, one simple change to local law would do more to help their US-born citizens than any US legislation can possibly do – stop requiring/allowing banks to treat accounts as reportable on the basis of the accountholder’s place of birth.
Right on point about other nations giving the boot or starting the ball rolling ,the rest is BS for most AAs and people who have settled permanently elsewhere with no interest in US citzenship and its compliances.
T
Canadian government knows it is easy to hide from US person witch hunt in Canada. Doesn’t mean that isn’t a false assurance or that Canadians haven’t been sacrificed for greater good. Be happy for non US persons among us just as we are happy for US persons who find TTFI a solution. Perhaps think about organizing as a group of Canadians who reject US citizenship to actually do something about that instead of hoping other groups or individuals whose focus is not as pointed to do it.
The situation is different in every country, depending what rights exist and what cases may be brought. The Canadian case is well underway. I understand a case is underway in France; that one could have EU-wide implications.
It’s not surprising that few cases are brought. It costs money; far more than renouncing.
@Jules
One reason you don’t have an AA association in Canada is, well, because this organization exists, and has the lawsuit in progress.
My view is that US expats with only the one citizenship have a more difficult fight on there hands and may need to engage with US politicians. But duals/accidentals with no US ties are primarily concerned with laws in their home countries.
And in Canada, there’s actually not much for duals to get up in arms about, as long as the US cannot collect penalties, and as long as Canadian banks accept self-certification on FATCA question and will not restrict services to US persons who do identify themselves.
The more important enemy is the compliance business. We need to educate as many duals as possible, let them know that not filing US tax returns is safe, easy and fun.
“The more important enemy is the compliance business. We need to educate as many duals as possible, let them know that not filing US tax returns is safe, easy and fun.”
HELP! I am a dual US/British, married to a Dane and a legal resident of France. I am about to file FBARs and tax for the last 6 years, after receiving a tax obligation form from my Danish bank and being told by a CPA (compliance business!) that not filing “at least FBARs” is risky, esp. in France. Three questions:
– Is it possible to renounce without being compliant for 6 years? (I thought that one condition of getting a CLN was being compliant for years!?)
– “safe, easy and fun”… but if your bank makes you give them either an SSN number or a CLN, what chance do yo have of not being contacted by the IRS before RBT comes into law (if it ever does)?
– What is the chance that RBT will be adopted, and when?
Thanks for this wonderful site!
@ tobeornottobe,
Regarding your question on renunciation, it is not necessary to be tax compliant in order to renounce. Some people who have renounced are tax compliant and some aren’t. Citizenship status, or the termination of it, is not dependent on tax filing, so it does not affect issuance, or validity, of a CLN. There’s information about this and the interactions between Dept of State and IRS on this page, Interactions between Department of State and IRS regarding Renunciation/Relinquishment
Anyone got any idea on when this will be voted on?? Let’s hope sooner rather than later.
Nononomous, I presume you are referring to ADCS which is organization whose members post at this blog and moderate. ADCS is standalone organization in that only a few people can belong and sole action is FATCA lawsuit. Having a multi-pronged approach, not limited to lawsuit, within an organization that many could join might be less risky than putting all eggs in one basket. Capitalize on sympathy of poor Canadians who do not want to be American but can’t get rid of it. Like the French AA organization accept broader in scope.
But I agree with you that there does not seem to be much interest from Canadians to do anything other than wait for lawsuit. Most likely because Canadians can hide so easily currently unlike Europeans. As long as that never changes there won’t be any strong pushback other than adcs lawsuit. Should it fail first trial, will probably be end of Canadian fight as Canadians mostly over initial shock and have learned to live with unwanted US citizenship one way or other.
I am a dual US – Italian citizen. I am currently 16, when I turn 18 I am planning on moving to Italy with my Italian-born mother. My question is this – you say that if this bill is passed I would need to be tax compliant for 3 years in order to qualify. But here’s the thing, I’ve never filed a tax return but because I’ve never worked and am under 18 that’s ok, so I am being in compliance, so when I move to Italy when I turn 18 technically I will have already been in compliance for 3 years. Am I correct?
@tobeornottobe
Where were you born? If outside the US, this could be very easy for you.
Tobeornot. Answer to the second question. Depends on the country. . In Canada, simply don’t mention any other toxic citizenship. If your bank did report your account, we have no idea what the IRS will do. They have no resources.
Question 3. – zero chance
@Jules
If Canadian banks began behaving like Swiss banks, or the federal government announced that it was going to ensure that everyone who sold a house for a huge pile would be checked for US citizenship so they pay US capital gains, then you might have a mass movement.
But right now US laws are so easily ignored, people aren’t outraged. So just keep on educating, and pushing back against the condors.
Marco. Technically you have always been in compliance if you never earned enough to have to file.
If what bill is passed? Don’t count on any changes to UStax law.
@Marco
You are correct. IF this bill is passed.
You can also renounce US citizenship at 18 and be in full compliance if that is your wish .
@Jules
The AA organizations have only one focus-to free their citizens from unwanted US citizenship. Their actions/approach (understandably) address the issue from within their own countries. They are not concerned for example, with duals who are not accidentals. They are not involved with the efforts to urge the US govt to change legislation concerning tax reform (TTFI or the Transition Tax). I respect and support them in ways that I can but I do not see how it could be said that they have a wider focus than ADCS or any of the other expat “groups”.
Brock (which is an unorganized website community) has served as a starting point for all kinds of actions. ADCS grew out of people who were already on Brock as authors or commentors. Two “members” of ADCS were already involved in the edit/admin type work here. The other two have nothing to do with the day-in day-out functions here nor are they involved in any of the decisions taken by the Brock Committee. ADCS may well be involved in later work but for now, the lawsuit is quite enough for us.
Nobody has “put all their eggs in one basket.” If you look at the sidebar you will notice many different things going on. These efforts include long-term duals, AAs, green-card holders, spouses of expats etc.
I don’t know if there is a need for a separate AA organization or not. There is nothing to stop you, or anybody else for that matter, from starting one. Or you could start with an idea for one action and see if it grows. You could engage Brockers for help. The point is, all these groups or efforts start because someone cares enough to come forward and do something. And the Brock community has wonderful resources available. But it will have to come from you or other AA s willing to devote the time and energy necessary to engage.
“Don’t count on any changes to US tax law”… no, don’t count on it, but here is some recent discussion, plus info on the progress of a swelling movement:
It’s Time to Free American Expats from Our Ludicrous Extraterritorial Tax System
https://www.nationalreview.com/2018/08/american-expatriates-deserve-territorial-income-tax-system/
see also:
American.co.uk article on progress in RBT bill proposal
http://www.theamerican.co.uk/pr/ne-George-Holding-Residency-Based-Taxation.php
Also, if you are in the EU, this could be of interest – people here are beginning to understand the real hardship caused to innocent citizens by this CBT menace.
Here is a very recent EU Resolution, passed as a resolution, not yet a law.
http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//NONSGML+TA+P8-TA-2018-0316+0+DOC+PDF+V0//EN
As Jules writes, being part of the protest and publicity and pressure will speed things along, benefiting everyone.
Thanks everyone for your answers.
Nononomous, we keep agreeing with each other. For the majority of Canadians deemed US persons, there does not appear to be much reason to do anything currently. Young people will avoid the traps their parents fell into and get in line with compliance from the start or will renounce. The rest of the noncompliant will die off. So why are we here even discussing this? Just a thought. No need to answer.
Marco, like Heidi suggests instead of checking in with USA every year, since your plan is to be compliant, maybe think about going all the way and renouncing?
If a born-dual renounces US citizenship between ages 18 and 18.5 (a six month interval), usually a single Form 8854 suffices to avoid becoming a covered expatriate, though there are a few exceptions. If the person’s income was below the threshhold where returns had to be filed, then the person was tax-compliant in those years.
“Also, if you are in the EU, this could be of interest – people here are beginning to understand the real hardship caused to innocent citizens by this CBT menace.”
There is no CBT menace; CBT is unenforceable. For individuals with a US birthplace there’s a problem with bank access.
“Here is a very recent EU Resolution, passed as a resolution, not yet a law.”
Adoped by the EU Parliament as a non-legislative resolution. Unfortunately, there is no “yet.” The resolution, and the study, have been hugely beneficial in publicising the IGA injustices, but the resolution doesn’t lead to legislation.
Eventually, if a legal challenge to an IGA gets as far as the ECJ, an EU Directive may force Member States to revise their bilateral agreements with the US. Don’t hold your breath.
The difficulties and outrage being caused by the CRS may necessitate changes to all the AEOI treaties in the end – resolving the IGA problems as a side/effect.
Jules: “Young people will avoid the traps their parents fell into and get in line with compliance from the start or will renounce. The rest of the noncompliant will die off.”
The significant distinction to be drawn is the distinction between individuals with a US birthplace who want to keep their US citizenship, and those who want to get rid of it.
In Canada, it seems, it’s very easy for US-born individuals to self-certify as tax-resident only in Canada. That seems like the ideal solution for US-born Canadians who don’t want or need the little blue book. Self-certify non-US-tax-residence, self-certify relinquishment.
A much better prospect for the future than “dying off.” 🙂
CBT is enforceable against people who only have a US passport.
CBT is enforceable against people who don’t know when to tell lies.
“CBT is enforceable against people who only have a US passport.”
Americans living outside the US can’t be forced to pay US top/up taxation on their non-US income/assets.
“CBT is enforceable against people who don’t know when to tell lies.”
Some of us have lived outside the US for decades without lying about US taxation or even thinking about it.
The FATCA IGAs brought problems with banking access, and loss of privacy rights; the FATCA IGAs did not bring US tax problems or a need to lie.