27. December 2013.  Translated by SwissPinoy from annabelle

Alice Neuhaus (27), Photographer, explains: How is it really, to voluntarily discard the US passport?

I only spent the first three years of my life in the USA. As such, discarding US citizenship should be staged emotionless.  What can one actually feel for a country in which one did not grow up?  When I was still a child, my family moved in a rhythm of every four years, internationally. From this, evolved the question to which country I feel that I belong.  I was a dual citizen through the European heritage of my parents and my birth in the USA with both passports being a symbol of my rootlessness.

Nevertheless, the day that I discarded my US citizenship was my saddest.  After all, US citizenship was my only nationality for the first 12 years of my life and I was greeted with “welcome home” whenever I travelled to the States.  Banal, but this feels good when one is constantly on the move.  Having to fill out a form to abandon a part of one’s identity feels like betrayal, like something that is right in the mind but wrong in the heart.

The appointment at the American embassy is led with a 45 minute telephone interview, in which I had to explain why I didn’t want to be an American anymore.  The passport, for which I was previously envied, has now become an obstacle. I felt myself as being disadvantaged in Switzerland.  It is a current form of racism. Over and over again, I was the objective of principle-rants to the tax dispute between the United States and Switzerland.  I was denied banking services because I was required as a US citizen to give information on my financial matters for the purpose of reducing local bank risks.  Other dual citizens also have problems finding employment in Switzerland since they are required to report to the US the business accounts that they would manage.

Being required to pay taxes to the US government never bothered me, even though I don’t live there.  Yet, the many deadlines, obligations and laws that I was unaware of made me feel insecure and the growing hostility against Americans made me angry.  I’m not responsible for American law and its financial system.

The waiting list in Bern to renounce US citizenship is one year.  Since I’ll be going to an embassy in a different country, the wait time will be reduced to three months.  I read forum contributions by other dual citizens and have had long conversations with Americans living abroad in Switzerland.  Each one tells me something differently: One is US taxable seven years after renouncing, another says ten years and again another claims that one would be prohibited from traveling to America.  In the meantime, I know two things for sure:  If and how long there will be a tax obligation depends upon one’s financial situation.  And, I can travel to America like any other tourist.

At the US embassy, patriotism is hanging in the air.  Americans are heartily welcomed.  I described my concerns to the lady at the counter – and I am no longer a member.  It is as if I changed teams with half a sentence.  I was questioned by the general consul, paid near 400 Euro and confirmed twice that I was aware of the consequences of this action: All American citizenship rights would be revoked. I’m not allowed to vote in America, cannot stay there indefinitely and am not allowed to work there.  Are you sure? The general consul asked.

If I’m not too young to make such a decision?  I’m not sure. I live in Switzerland and feel good here.  I don’t want to move anywhere.  The general consul believed me.  That is important because not everyone who wants to renounce is allowed to.  The request will be revoked if the belief exists that one is evading taxes or the law.  Three months later, the stamped invalid US passport and loss of citizenship papers lay in my mail box.  I should feel relieved.  Yet, I’m simply sad that I felt forced to decide between the nation where I live and work, and the land where I was born.

http://www.troymedia.com/2014/01/04/tax-predictions-for-2014/

2. Canada will execute an intergovernmental agreement with the U.S. to administer the U.S.’s Foreign Account Tax Compliance Act (“FATCA”)

Continue reading →

This post first appeared on May 22, 2012.

N.B.: I am bringing this post back to the front page as it is relevant in our 145 comment thread (so far), IRS insider explains why the United States has never enforced the Reed Amendment’s banishment provision, and he thinks its funny.  In particular, J.E. Gutierrez has questioned many of my positions regarding the constitutionality of the Ex Patriot Act and the Reed Amendment–and I hereby reproduce the arguments I made in 2012.

Continue reading →

Ok, so now that everyone has consumed the last of the holiday egg nog, booze and fattening treats, time to face reality: 2014 is not likely to be a celebratory year for US Persons. Robert W. Wood, frequent contributor to Forbes, has wasted no time in reminding us just how few and terrible are the choices facing most Americans abroad as the torturous countdown to FATCA approaches its final half-year:

Americans Are Unwanted Worldwide (At Least By Banks)

http://www.bloomberg.com/news/2013-12-10/canada-withholding-law-stirs-disputes-with-u-s-companies-taxes.html

He said he believes pressure needs to come from the U.S. to get the Canadian government to respond.

“This has to be fixed at a very high level,” Fontaine said. “Right now, companies are effectively forced to deal with the bureaucrats to get treaty benefits to effectively apply. It slows everything to a crawl.”

Sinclair said her “best guess” as to why the CRA seems to have changed its waiver approval process is that it is considering a new test to determine whether employees are exempt under the treaty.

The CRA’s Brideau told Bloomberg BNA on Nov. 27 that the agency “is not currently working on developing such a test.”

Continue reading →

A well-researched article by Alex Newman today in The New American:

New U.S. Tax Regime is “Devastating,” Experts Say

Mr. Newman quotes from many familiar sources, including Andrew Quinlan, ACA, Rand Paul and James Jatras.  He also interviewed Roger Conklin, who again provides excellent historic context by linking today’s FATCA campaign with the Tax Reform Act of 1976. That earlier disastrous initiative forced thousands of US expats to return to the homeland, ceding fragile foreign markets to overseas competitors and ushering-in America’s monumental, decades-long trade deficit, which persists to this day.  To say that cause and effect is not well understood in Washington is a major understatement.

A crying shame that such a good article comes from a publication which includes The John Birch Society at the top of its list of Affiliates and Friends.  That is where we part ways.

What follows is a commentary on Virginia La Torre Jeker’s interview of ex-IRS Willard (Bill) Yates, recently retired from the Office of Associate Chief Counsel (International), If You Go, You Can’t Come Back. The Reed/Schumer Follies-Past And Proposed Anti-Expat Legislation: Interview With Bill Yates, Former IRS Attorney (International).  Yates explains why US has never enforced the exile provision of the Reed Amendment.

Continue reading →