Author Archives: Don Pomodoro

There have been tremors and blips for years, from Texas to Alaska and all the way back to Vermont we have heard of possible seccession movements building up in the US.  In the aftermath of the US election some 20 different states’ residents have even submitted official petitions to the White House with this very goal in mind, and the Texas petition has garnered enough signatures that the White House must officially respond to it.

US election: Unhappy Americans ask to secede from US

Whether or not this will come to anything is anyone’s guess.  Coming from the EU, where seccession is a real issue (especially in Flanders, Scotland, Catalonia and now even Venice), I find it difficult to compare public mood in the US to that in Europe – I personally believe that there will be at least one new European state within the next five years.

Continue reading →

Check it out – Canada has determined that many US nationals are going to try and attempt to move illegally to Canada  after the US election. One Canadian police officer joked that there weren’t enough places for 47% of the US in Canada, but has Canada also possibly considered this decision based on financial consequences of allowing so many bound by citizenship-based taxation to migrate? Closing the flood gates before the FATCA deadline perhaps?

http://www.newyorker.com/online/blogs/borowitzreport/2012/10/canada-tightens-border.html

Another article on famous entrepreneurs switching citizenship!

The Apple co-founder has resided for some time in Australia has recently stated that he is applying for citizenship and intends to remain there permanently:

http://au.ibtimes.com/articles/387219/20120924/apple-co-founder-steve-wozniak-guns-aussie.htm#.UGHEFkI_OlM

The author of this article seems to think that he become the next big tech person to renounce US citizenship, which I would imagine would result in a huge media storm in about a year’s time should his name appear on a quarterly registrar.  What do you think? Is he trying to get ready for FATCA?

Readers who live in Australia – How has FATCA been impacting your daily life or banking activities up to this point in time?

http://www.bbc.co.uk/news/magazine-19594334

A bit of satire to lighten the mood 🙂

David Hemler fled the US Air Force whilst stationed in Germany during the 1980s and ended up living in Sweden under the false identity of a Swiss immigrant born in Zurich.  He only revealed himself last month after deciding to make contact with his US-based family who hadn’t heard from him since that time. He has since become a Swedish citizen and works for the Swedish government and has also received legal assurances that he should’t be deported.

Too bad you don’t automatically lose US citizenship when you desert as a serviceperson, though I imagine that such a bill has probably been floated from time to time.  Could he, or anyone else in this situation, be arrested if he tried to go into the US Embassy to renounce/relinquish citizenship? I say this, because I imagine that he has absolutely no idea of all the paperwork and failure-to-file penalties that the IRS is now going to expect from him nor of the looming FATCA deadline. I’d say he picked a pretty bad time to publicly reveal to his banks that he wasn’t born in Zurich as well…

http://www.bbc.co.uk/news/magazine-19331209

Interesting article from the BBC today:

http://www.bbc.co.uk/news/19172065

Apparently the US claims jurisdiction over almost all banking transactions worldwide, because if a transaction is translated into US dollars, even for just a second (which apparently many unfortunately are), a US court has ruled that that is sufficient for the transaction to fall under US jurisdiction.

Other issues covered include Dodd-Frank, Standard Chartered bank, US anti-corruption laws claiming global jurisdiction, agressive US extradition requests (especially in the UK with its one-way extradition treaty with the US) and so on. The article doesn’t directly mention FATCA unfortunately, though it does mention the one-sided and completely unreciprocal US approach to regulating financial services.

http://www.nypost.com/p/news/national/ingrate_cashes_out_jbje8hIugWQjtOo6xJR8iI/0

Hall of shame +1!

Some of you might remember that during the French presidential campaign both Sarkozy and Hollande were proposing some sort of expat tax – Sarkozy wanted to tax those who “left for tax reasons”, that ever flexible political catch phrase, whilst Hollande wanted to implement a 75% income tax rate on earnings above 1 million Euros – A sure way to send many wealthy French expats flying towards London and Switzerland.

Anyway, I came across an article about the recent parliamentarian elections that have taken place and about how, for the first time, French expats will be represented by 11 deputies representing overseas constitutencies.  Here is an article from the Guardian which has an interesting graphic of how they divided the electoral regions up and how many of the 2 million French expats live in each.

Continue reading →

How would you react if your home country denied you the right to participate in the political process back home if you had been resident overseas for longer than 15 years?  Your home country does not overtly have citizenship-based taxation along the lines of the US, but refuses to let you go and claims that you will be tax-domiciled for your whole life, right up until your death.  Even if you change citizenship your home country would still considered you to be a domiciled tax resident and tax your estate accordingly, as if you had never left.

Sound familiar?  None of the above is hypothetical – The country that I am describing is the UK, and the above frustration is actually pushing some UK citizens to renounce their citizenship due to lack of representation and being made to feel like subjects and not citizens whilst overseas.  From a regional Iberian newspaper (in English):
Continue reading →

As reported by the Guardian here:

http://www.guardian.co.uk/business/2012/jun/15/us-property-attracts-foreign-buyers

A combination of the weak dollar and the collapse in the US housing market has resulted in US property starting to look more and more appealing to foreign buyers, the majority of whom apparently come from Canada, Mexico, China and the UK.  Four in ten homebuyers apparently want to live in the US full-time, whilst the others were purchasing holiday homes or time-shares.

I was surprised to see at the end of the article a mention that many buyers knew to stay out of the US for longer than 6 months each year “for tax reasons”, but do you think that they all really understand the implications of FATCA and the FBAR, especially the 40% of homebuyers looking to move to the US?

Also, my understanding of the “Substantial Presence Test” is that staying up to six months each year is much too long and could still trap most of these homebuyers into becoming “US persons”.  Here are the guidelines from the IRS’s own website:

You will be considered a U.S. resident for tax purposes if you meet the substantial presence test for the calendar year. To meet this test, you must be physically present in the United States on at least:

1. 31 days during the current year, and
2. 183 days during the 3-year period that includes the current year and the 2 years immediately before that, counting:

• All the days you were present in the current year, and
• 1/3 of the days you were present in the first year before the current year, and
• 1/6 of the days you were present in the second year before the current year.

If the above is met, then the person is considered to be “US resident for tax purposes”.  There are exemptions for foreign diplomatic staff, students, professional athletes and trainees temporarily in the US.  No exemption for holiday home-buyers.

How many people do you think are aware of this fact, not to mention the FBAR pitfalls that come attached to this?  Let us also not forget the new US government push to attract wealthy investors from overseas to purchase property in the US and be given a path to residency and citizenship, sponsored by no less than Schumer himself.  Conspiracy? Absolute indifference so long as money continues to flow towards the US?  Or maybe a bit of both of the above and total willful blindness to the damage that the US is doing to its image overseas and the goodwill that it is losing?