One Response to “Americans living abroad set record for giving up citizenship…”

1. Mike
   May 8th, 2015 @ 10:05 am

   And it isn’t because hey are unpatriotic. It is the overreaching hand of the IRS. The IRS gives absolutely NO HELP at all to overseas citizens in filing their taxes. Up until this year they had a little help. If you had any questions you could make an appoint at an embassy – except only 4 embassies have help. They are in London, Germany, France and China. So if a citizen is living in southern Africa, in order to get a tax question answered he has to fly to one of those countries. Alas, that is no longer a problem. This year they cancelled that “service”. When asked how are overseas citizens supposed to get answers, their reply was to go to their webpage like everyone else – ignoring the fact that the reason people have questions is because you’ll have one document that contradicts another and both have to be filled out.

   Of course regulations change every year, yet they don’t tell overseas citizens about it. The least they can do is tell them what forms need to be filled out. There is one form ,FBAR, that has to be filled out every year if you have over $10,000 in a foreign bank account. The IRS never tells expats that they have to fill this form out. You actually have to hunt , by keyword, on he IRS page to find out anything about it. This law ( and the $10,000 limit) was passed in 1970 in order to catch drug dealers hiding money overseas. Well, those living overseas are not drug dealers and to them their account is a local account, not an overseas account. The penalty for failure to file that form – $10,000 fine and 3 years in prison – for each year not filed. Plus it can only be filed via the Internet. Well, if you are living in a village in Africa or parts of China, you have no Internet access ( you are lucky if you have electricity ). Does the IRS care ? No.

   Then there is FACTA. The regulation are so burdensome for foreign banks to comply, they are just cancelling US citizens accounts. Ad to that the fact that the IRS prohibits overseas citizens from making simple investments that are open to US citizens living at home ( such as mutual funds ), overseas citizens can’t save for retirement.

   The IRS is treating overseas citizen as second class citizens by putting more tax constraints on them than if they were living in the US – a clear violation of the 14th Amendment – equal protection under the law.

   It is for these reasons – being treated as a criminal for not being able to keep up with the 70,000 odd pages of tax regulations each year, that they are giving up their citizenship. What was Congress’s answer when they were informed of the sharp increase of those renouncing their citizenship ? Did they say – why is this happening and what can we do about it ? No, their response was to raise the cost of renouncing one’s citizenship from $500 to $2500.

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