is expensive only since they want to investigate you as a presumed criminal or tax dodger (the movie Brazil comes to mind)
is a result of their non-compliance with international norms
is the result of the US declaring you have a status that was never requested
As an expat I consider all US citizens to be indentured servants due to this requirement to buy independence from the US and whatever it chooses to enact next. Effectively, these changes are not noticed by the US' domestics, but those who think they "can flee to Canada" when they have ethical problems with the US are now deluding themselves. "If you don't like it, then leave" may have been sarcastic BS, but at least it was a real choice that many people made in the Vietnam era, etc. If you don't like us leave us money (which we will use in the ways you probably object to)" is something else.
I will find it both funny and sad that when the people who supported the two party system are pissed by someone like Trump implementing fascist policies they will finally realize that their own willingness to destroy our basic civil rights makes it impossible for them to avoid helping a system they find morally repugnent and criminal.
*Over time the US will enlist more and more help with these kinds of methods (for example many foreign employers would have obligations from paperwork they signed to accept US customer payments) so at some point you will probably have to come into compliance if you aren't somewhere totally at odds with the US.
So kiss vacations or business travel to the USA goodbye.
If you can live without that, I suspect you are fine.
I only have bank accounts in the US because of the complicated laws. That's not a big deal.
What REALLY pisses me off, is that banks in the US are declining service because you live abroad. For example, holding investment accounts back in the US. If they find out I'm living abroad they will promptly close my accounts. I can't have a retirement accounts because I live abroad!?
What do I do? Maintain a mailing address back in the US, in a state that collects no income tax. Use a VPN to login to retirement accounts. Insane.
Edit: I don't even mind paying taxes over 100k. Why? I can still go home whenever I want. I can go to one of the many embassies around the world and get a new passport. Ask for help, etc. I'll still get social security later. (Huge maybe)
http://thunfinancial.com/us-brokerage-accounts-american-expa... http://blogs.wsj.com/expat/2015/09/20/american-expats-scramb...
> I can still go home whenever I want. I can go to one of the many embassies around the world and get a new passport.
There's nothing special about the US in that regard. A citizen of Germany can do the same at any German embassy, even when not a resident in Germany and therefore not paying German income taxes, and also has the right to return to Germany.
1) we can get rid of all the BS $10,000 stuff in deposits in the US.
Americans gain huge benefits from the taxes paid by prior generations. The entire US system is the envy of much of the world--and how did it get that way? Americans paying their taxes. Whether or not you have kids--you must pay property taxes that fund your local schools. Unfair? Hardly. Those schools don't come out of thin air--taxpayers who came before you paid for them. Stop your whining. If you were born in the US, then you benefitted. If you are a US citizen and you get in trouble somewhere on earth, the US government will come to your aid. That's what you're paying for, in addition to paying for the next generation of Americans to have schools, roads, public utilities and the like.
Really, whining about having to pay your share--no matter where you have run off to--is ridiculous.
I don't know why Americans believe this fairy tale. It's simply not true. Case in point: Yemen, last year. American citizens were abandoned by State[1], only to be rescued by India[2]. What's the point of the taxes, again?
[1] http://www.mcclatchydc.com/news/nation-world/world/article24...
[2] https://www.washingtonpost.com/news/worldviews/wp/2015/04/08...
This always amuses me. Previous generations didn't pay for things with taxes. They paid with debt. All those (crumbling) things that are "the envy of much of the world"? I and people my age paid for, decades after they were built. Just like future generations will pay for the things being constructed now.
>Whether or not you have kids--you must pay property taxes that fund your local schools. Unfair? Hardly. Those schools don't come out of thin air--taxpayers who came before you paid for them. Stop your whining.
How is that not unfair? Why should I have to pay for your kids to be educated just because you live near me? Educate your own damn kids. And if not, well, the world needs ditch diggers too.
> If you are a US citizen and you get in trouble somewhere on earth, the US government will come to your aid. That's what you're paying for...
Anybody who's actually been in trouble can fill you in on the limits of this fantasy. Assuming by "get in trouble" you mean get arrested, the US government will do things like contact your family, verify that you are a US citizen, and try to find you a lawyer.
If you're mistreated they will file a formal complaint with the host government. And I'm sure that's incredibly helpful.
In short, the US government will do pretty much what every government everywhere does for its nationals that "get in trouble".
>That's what you're paying for, in addition to paying for the next generation of Americans to have schools, roads, public utilities and the like.
This is all state and local stuff, except for highways. What does it have to do with the federal government?
>Really, whining about having to pay your share--no matter where you have run off to--is ridiculous.
The problem with this attitude is a lot of us have paid our share and your share too. There's a limit to the amount of rapaciousness a person should be expected to tolerate. Particularly if I'm living in another country, driving on that country's roads, sending my kids (if I had any) to that country's schools, etc.
I think the biggest reasons other nations don't tax overseas income is because they don't have the power to force a special exception for their expatriate citizens (e.g. Greek citizens working in Canada). The US is using its position of power to require these overseas banks to modify all of their accounting and reporting systems to continue to do business in the U.S. This has large issues of fairness and generates animosity.
>Americans gain huge benefits from the taxes paid by prior generations.
So do the citizens of countries with residence based systems.
>If you are a US citizen and you get in trouble somewhere on earth, the US government will come to your aid.
This is patently not true. When has the US ever intervened on behalf of an ordinary passport holder, in a way that citizens of countries with ordinary tax systems do not?
Your government spends billions of dollars on wildly unsuccessful defense projects while at the same time arguing the there's no way to deal with poverty, access to education, homelessness, etc. By cutting back on defence spending, the US could still remain the most powerful military nation in the world and guarantee that every citizen gets a quality education and spends their lives healthy and well maintained. Instead, you insist on going trillions of dollars in debt and then complaining that the poor aren't paying their fair share while the people with so much wealth that it's literally impossible to comprehend use every loophole in the book to avoid paying anything at all. Warren Buffet himself has commented on how he pays less tax than his secretary does.
Meanwhile, your entire government is bought and run by corporations and lobby groups; because money runs the campaigns and the person with the most money wins, elected officials spend a huge portion of their time "in office" not serving their country, their electorate, or even their benefactors, in favour of travelling around, having meetings and dinners and fundraisers, so that they can ensure they get elected again. If you court the right interests then not only will they help pay for you to get re-elected over and over, when you're done with public life they'll offer you a consultancy position where you can make further millions for years convincing your old friends who are still in office to vote the way you want them to because you're old friends.
The entire US system, is, to much of the rest of the world, a farce made manifest. Many of us fail to understand how your populace even got into such ridiculous circumstances, let alone continues to tolerate them year after year.
To claim that someone overseas should pay thousands of euros to tell the US government that they owe no tax while millionaires are using fully legal loopholes that their rich congressional friends refuse to close to shirk millions of dollars of taxes is patently ridiculous.
Fix your system to stop exploiting the poor and giving rights, privileges, and power to the rich elite and you can claim that your system is the envy of the world.
And as for 'how it got that way'? Years and years of economic growth on the backs of slaves imported from Africa certainly helped. Being able to bootstrap your economy by cutting out the business owner's largest expense is certainly an effective way of getting ahead.
Majority of the Federal government expenditure goes into Military/Social Security/Medicare. All of which can be substantially reduced. These three components cover more than 70% of total Federal spending.
Out of this Medicare can be seen as taxing current generation to pay for the older generation. Almost all debt can be seen as taxation on future generation.
Also, I totally don't understand "public schools" arguments. Public schools in USA are the worst government institutions ever. Not only I paid taxes for this rubbish but now I have to send my kids to private schools paying full fees because the local public school is not differential from a mental hospital.
Agree this is worth something. I would propose a substantially decreased federal tax bracket (maybe 1-5%) for expats. Sort of like how you pay a decreased vehicle tax when it's not in use.
Yep, looks like that's true. Seems like US hospitals need lawyers and accountants on staff to explain the liabilities a new born will have later in life and you guys need to have a law that allows parents to officially reject citizenship on behalf of a new born.
I think some small country should negotiate a deal with all other nations and come up with a citizenship program that gives good value for their passport and then allow Americans (or any other highly taxed nationals) to settle there. For example Lala-Land does some background checks and issues passport to its citizens which can then be used to travel almost all the countries in the world. Lala-Land will give passports to anyone who applies if they pay enough money and show some evidence that they arent criminals etc.
https://www.henleyglobal.com/citizenship-saint-kitts-nevis-c...
Anyway, as an American abroad, I think about this periodically. Like the author, I never owe anything in taxes, but the stress and expense from making sure paperwork is correctly filed each year is really awful. If I mess something up on my FBARs, non-willfully, I would be fined enough to completely bankrupt me, the fines being way above the value of the accounts I might somehow misreport. How can you misreport an account? Well, you could use the wrong currency exchange rate, or you might not have access to information required on the form so you have o guess, or you could think that accounts with a balance of 0 all year do not need to be reported (turns out they do). Or maybe you think that an account with money for a loan does not need to be reported because it is not really your money (you do). And so on. Every mistake costs you 10k/account/year. It is true insanity.
Also, I currently have no tax deferred way to save for retirement because my employer funded pension account here (it is essentially a 401k, just based in Norway) is treated as a regular investment account by the IRS. So, I have to pay taxes on any gains each year on my pension. Luckily, this has always been below the standard deduction, but in some years, it will (hopefully) not be. I also cannot make any contributions myself to the account or else it turns into a PFIC (which is a Very Bad Thing).
That being said, I am hopeful that FATCA will be repealed, or at least revised so that it does not threaten to bankrupt middle class Americans with the ridiculous fee structure and recognizes foreign pension accounts. I do not want to give up my US citizenship, but will be forced to if something does not change in the next few years.
It is precisely rich expats who have themselves to blame for FATCA.
If you find the paperwork onerous--why not just renounce your citizenship? Must be that you get some advantages you're not disclosing by keeping your US citizenship.
Every American who does their taxes has to deal with this stress. So, you're special and should get your US citizenship advantages without paying for them? You looking for expat welfare?
FATCA will never be repealed. On the contrary, it's being copied by other governments all over the world. But you had to have known that the tax evasion party was going to eventually come to an end. If you consider yourself a victim of FATCA, then your anger should be directed at other rich expats who abused the system so badly that they inspired Congress to pass FATCA with both Democratic and Republican support.
If you are a US resident and mess up on your taxes, you do not get fined into bankruptcy. You just have to pay what you owed. The fee structure is the insane part of FATCA, not the taxes themselves.
As soon as I get Norwegian citizenship, if FATCA has not been repealed by that point, I will seriously consider renouncing. Because of the above reasons, not because I am some rich fat-cat wanting to evade taxes. If I wanted to evade taxes, I would move back to the US, which is a fantastic tax haven, instead of living my life here in Norway.
What the heck is "expat welfare"? The only relationship I have with the US government at this point is stress and expense from these forms every year, along with my inability to save for retirement. Literally no other developed country imposes this stress and compliance cost on their residents abroad. It is not welfare to expect to be treated like everyone else. And, if it was just filing regular taxes, and then getting it excluded with the FEIE, that would still be annoying, but fine. However, there is a whole extra set of insanely confusing forms to navigate, where you get fined into non-dischargeable bankruptcy if you mess them up, even non-willfully. People develop mental health issues and have even had their marriages destroyed from the stress of this prospect. It is not "just some extra forms" or "expat welfare" to want this onerous burden to be removed.
Sometimes I walk past the US embassy because it is in downtown Oslo (it looks like a prison and is a total blight on an otherwise charming neighborhood, btw), but I do not get any kind of "expat welfare" from it. I suppose I will visit there when my passport needs renewing in a few years, but that is it. If I wanted to contact them or voice my concerns about the pension issue (which could be resolved if they updated the tax treaty, like Germany has done), I have no way of doing so.
Why are you trolling this thread with support for FATCA when it is clearly a terrible thing for millions of people? You have no idea what you are talking about. Ugh!
Don't any deposits over a threshold get reported domestically as well? IIRC 10k is the limit.
> At the same time, the US has worked out Intergovernmental Agreements (IGA’s) with many countries, including the Netherlands
Worked out... bullied. As I recall the threat was to stop allowing business with the US.
> By the US definition, they are US citizens as well, and should have been filing US income tax forms every year. Many only discovered this recently and are now under threat of huge fines if they do not get compliant with the US taxation laws. The same goes for children of US citizens, like my son, who are born abroad but qualify as US citizens.
Don't you have to apply to get citizenship? I thought it was more of you are entitled to citizenship. I can't imagine why anyone wouldn't tell the US gov't to get fucked in this situation, unless you actually are taking advantage of being a citizen.
So glad Canada (and nowhere else but what, 1-2 countries?) have this global taxation BS.
>If US citizens living in the US had to report the balance of every account they had in their local bank — all their assets, in other words, not just their income — they would be up in arms, protesting the government’s intrusion in citizens’ private business.
If you are a not particularly wealthy individual and you don't owe any back taxes to the IRS, the consequences of not any filing taxes are likely to be nothing.
Good riddance. If you don't want to be a citizen of this great country, it would be better than you.
Although I agree with you that this does not seem like a good reason to renounce your US citizenship over, it is pointing out some issues with the US tax code that need fixing.
Your response doesn't address that and reads more like an ad hominem attack.
It seems like you live in the USA, so you don't have to put up with all of the unreasonable and invasive bureaucracy she writes about.
Guilty until you prove yourself innocent is not the USA way! But that's what the current systems require USA expats to do every year.
"If it's stupid, get away from it."
- dumb boss? job transfer or new job
- dumb family members causing you problems? Avoid them.
- dumb taxation? get away from the legal clutches of the taxing authority
Everything detrimental in life that can be avoided, should be avoided if possible.
There is enough unhappy other stuff that comes up in our lives that if you're not at least bailing on crappy situations, you're missing a chance at a happier less stressful life.
The rest of her post reads like whining about having to fill out forms.
You already have to disclose your income so I don't see bank account balances as a large step up from that. I'm pretty certain all US based banks already do this so the FBAR just covers foreign accounts.
I assume you asked https://news.ycombinator.com/item?id=11972642 5 hours ago for a friend?
Also, even greencard/non-citizens are subject to ATT.
2. Allows her to work in America with no visa issues. Access to top companies in the world including most of the ones we see on HN.
3. Allows her potential kids to have access same benefits and go to universities cheaper and again easily work in the US even if they didn't grow up there.
Should renunciation chargers be changed? Probably. Maybe if you don't earn very much you could pay less. Are there somethings that could be reformed? Yes. But she is complaining about forms and doesn't even pay taxes.
Her Dutch citizenship still gives her access to the EU, including many companies mentioned even on HN, a US-centric site.
LOL! 1) Her child has US citizenship - that doesn't go away after she renounced, 2) As an EU citizen, her children would have rights that US citizens don't have, and 3) Standard tuition fees in the Netherlands are about $2500, which is less than a community college tuition in the US.
The idea that the US government doesn't track US citizens bank accounts if they live in the US is laughable. Of course they do. Banks have to report all kinds of details of large transactions and balances. We don't have to fill out forms because the government can go directly to the banks to get the information.
The way voting works I think is entirely reasonable. How else should it work? Is she suggesting there be senators and representatives just for expats? I would honestly expect the states would not want expats voting in their local elections, so the expats have more rights than I would expect there. For the Presidential election, yeah our voting system is screwed up there, but it is screwed up for everyone.
So it sounds like she left to avoid paperwork that felt intrusive. Meh. Welcome to life.
... and FBAR, which is not a tax return, and figure out if a retirement savings in the local country is taxable or non-taxable under US law, and take the risk of a rather large fine for getting it wrong. One of the comments goes into details, at https://medium.com/@john_12842/tony-antonetti-de63e9971d02#.... .
I pay about $600/year for an accountant in the US to figure things out.
On a purely financial sense, if I were to plan to never return to the US, it's cost-effective to renounce citizenship. I don't like how my country encourages me to make a cost analysis for being an American.
How much more would you pay in taxes each year in order to stay an American?
> "We don't have to fill out forms because the government can go directly to the banks to get the information."
Sure. Ditto for the Dutch government to her Dutch bank.
But that's not the real issue. Imagine that you live in the US, married and with a joint account to an American citizen whose is also a citizen of Canada and the UK.
What do you think your bank would do if the Canadian and UK governments demanded that your US bank send them the details of your account? Change all their accounting systems to meet the reporting demands? Or kick you out as a client?
Took three years to resolve. I had to physically visit an IRS office while on a trip to confirm it, because email, mail, and phone communications all resulted in form replies.
In fact, the IRS office couldn't even confirm it. All they could confirm is that there no longer were asking for a return.
Wait times of over an hour by phone. And incredibly complicated forms to figure out.
There's a reason people are paying $3000 to avoiding it. Not even getting into the banking difficulties for Americans abroad.
It's really not. That part about banks not wanting to serve american's is true. (Almost) no other countries do this type of thing.
Earlier, banks were more than willing to support the tax evasions of Americans. But in case you were living in a cave, the last few years have seen those tax-evasion-enabling international banks fall one by one, admitting they enabled tax evasion and paying massive fines. So, the banks don't want Americans because they know so frequently those Americans are practicing tax evasion. They were burned and never again want to enable tax evasion. Rightly so.
