Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 05-02-2012, 01:47 PM   #101
Thinks s/he gets paid by the post
nun's Avatar
 
Join Date: Feb 2006
Posts: 4,836
Quote:
Originally Posted by rodi View Post
Interesting article going over the tax issues for folks living abroad.

Wealthy Americans Queue to Give Up Their Passports - Bloomberg
The attached video clip is annoying as it again assumes that US citizens or expats with foreign accounts are "tax dodgers". Unfortunately that's what the Congress and the IRS assume too. Until the US drops taxation based on citizenship the situation won't really improve. I'd love to see that as part of tax reform.
__________________

__________________
“So we beat on, boats against the current, borne back ceaselessly into the past.”

Current AA: 65% Equity Funds / 20% Bonds / 7% Stable Value /3% Cash / 5% TIAA Traditional
Retired Mar 2014 at age 52, target WR: 0.0%,
Income from pension and rent
nun is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 05-02-2012, 05:46 PM   #102
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,492
Quote:
Originally Posted by nun View Post
The attached video clip is annoying as it again assumes that US citizens or expats with foreign accounts are "tax dodgers". Unfortunately that's what the Congress and the IRS assume too. Until the US drops taxation based on citizenship the situation won't really improve. I'd love to see that as part of tax reform.
It may be more of a media assumption than an IRS belief. That said, it is indeed far to easy to presume the worst for most people when in fact they are in full compliance, and it makes for great slogans.

Regarding your suggestion of tax reform, my preference would be for an OECD agreement to produce auditable records for all financial accounts and transactions and share them among all the governments. This is because too much economic activity is now financial and can be transacted anywhere, and this can (and is) lead to wealthy individuals simply relocating their financial assets outside of tax jurisdiction. Our approach to taxation has not kept up with our economic evolution. By itself, however, FATCA is a clumsy approach.
__________________

__________________
MichaelB is offline   Reply With Quote
Old 02-09-2013, 01:32 PM   #103
Full time employment: Posting here.
 
Join Date: Dec 2010
Posts: 572
Quote:
Originally Posted by MichaelB View Post
By itself, however, FATCA is a clumsy approach.
At this time, only a handful of countries have agreed to the IGA. Now it looks like FATCA is actually very one-sided, and had created some hard feelings around the world. While the US government requires all financial institutions around the world to provide information on US clients, the present laws and practice in the US would not allow US banks to disclose information on customers from other countries to their governments. The irony!!

Full Reciprocity Under FATCA Is a Work in Progress, IRS Official Says - Bloomberg Law
__________________
bondi688 is offline   Reply With Quote
Old 02-09-2013, 06:15 PM   #104
Thinks s/he gets paid by the post
 
Join Date: Apr 2010
Posts: 1,694
A friend of mine recently gave up his US citizenship primarily because of the IRS issue. He had become a Canadian citizen and planned to remain in Canada.

He told me that there was an entire room full of people at the US consulate in Toronto where similar minded people were taken through The ramifications. Most of them were dual citizens who had no intention of returning to the US and who did not want to file with IRS, let alone pay any tax. He, and I assume everyone, had to obtain clearance from the IRS prior to being permitted to renounce US citizenship.
__________________
brett is offline   Reply With Quote
Old 02-09-2013, 07:31 PM   #105
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 13,294
Quote:
Originally Posted by brett View Post
A friend of mine recently gave up his US citizenship primarily because of the IRS issue. He had become a Canadian citizen and planned to remain in Canada.

He told me that there was an entire room full of people at the US consulate in Toronto where similar minded people were taken through The ramifications. Most of them were dual citizens who had no intention of returning to the US and who did not want to file with IRS, let alone pay any tax. He, and I assume everyone, had to obtain clearance from the IRS prior to being permitted to renounce US citizenship.

I wonder why these people got citizenship in the first place...
__________________
Texas Proud is offline   Reply With Quote
Old 02-09-2013, 08:01 PM   #106
Moderator
Alan's Avatar
 
Join Date: Jul 2005
Location: Eee Bah Gum
Posts: 21,152
Quote:
Originally Posted by Texas Proud View Post

I wonder why these people got citizenship in the first place...
Brett said that his friend was a Naturalized Canadian giving up his US citizenship, that I guess he had by right of birth. Many of the other folks in that room could have been in the same position.

Those of us that choose to become US Citizens I would suggest are less likely to want to give it up since it was hard earned and certainly can not be done on a whim.
__________________
Retired in Jan, 2010 at 55, moved to England in May 2016
Now it's adventure before dementia
Alan is online now   Reply With Quote
Old 02-10-2013, 08:30 AM   #107
Thinks s/he gets paid by the post
nun's Avatar
 
Join Date: Feb 2006
Posts: 4,836
Quote:
Originally Posted by Alan View Post
Brett said that his friend was a Naturalized Canadian giving up his US citizenship, that I guess he had by right of birth. Many of the other folks in that room could have been in the same position.

Those of us that choose to become US Citizens I would suggest are less likely to want to give it up since it was hard earned and certainly can not be done on a whim.
I don't agree. I can well understand that US citizens by birth see renunciation as a thing they'd never contemplate. Likewise I would never give up my UK citizenship.....or passport and I have actually turned down very good job offers that required security clearances because of that. However, I would consider giving up my US citizenship if there were practical benefits. I have little emotional connection to it and for me it was a step I took to make living in the US easier. If I move to the UK and the burden of tax filing becomes too high I might well give up the US citizenship.

I believe that the reason many US citizen expats contemplate giving up US citizenship is not to avoid US tax, but to avoid the complexity, fear and potential for IRS fines associated with their tax returns. If you want to have a pension or invest any money it's complicated as a US expat.
__________________
“So we beat on, boats against the current, borne back ceaselessly into the past.”

Current AA: 65% Equity Funds / 20% Bonds / 7% Stable Value /3% Cash / 5% TIAA Traditional
Retired Mar 2014 at age 52, target WR: 0.0%,
Income from pension and rent
nun is offline   Reply With Quote
Old 02-10-2013, 09:45 AM   #108
Thinks s/he gets paid by the post
 
Join Date: Mar 2010
Location: Kerrville,Tx
Posts: 2,726
Quote:
Originally Posted by Texas Proud View Post
I wonder why these people got citizenship in the first place...
There are a number of accidental citizens where their mother happend to be in the US when they were born, but feel no attachment to the US, in particular from Canada, if you are in that category renouncing ones us citizenship only makes sense. Of course I sometimes wonder if you never go to the US what could the US really do to you if you just ignored the IRS (and made sure you had no money in the US)
__________________
meierlde is offline   Reply With Quote
Old 02-10-2013, 10:02 AM   #109
Thinks s/he gets paid by the post
 
Join Date: Mar 2011
Posts: 3,711
Quote:
Originally Posted by meierlde View Post
There are a number of accidental citizens where their mother happend to be in the US when they were born, ...
Then again, a lot of moms do this deliberately....more to come likely.
__________________
Living well is the best revenge!
Retired @ 52 in 2005
marko is offline   Reply With Quote
Old 02-10-2013, 10:11 AM   #110
Thinks s/he gets paid by the post
nun's Avatar
 
Join Date: Feb 2006
Posts: 4,836
Quote:
Originally Posted by marko View Post
Then again, a lot of moms do this deliberately....more to come likely.
But those aren't "accidental US citizens". The problems arise when someone is unaware of their US citizenship and the unique taxation rules the US applies.
__________________
“So we beat on, boats against the current, borne back ceaselessly into the past.”

Current AA: 65% Equity Funds / 20% Bonds / 7% Stable Value /3% Cash / 5% TIAA Traditional
Retired Mar 2014 at age 52, target WR: 0.0%,
Income from pension and rent
nun is offline   Reply With Quote
Old 02-10-2013, 10:20 AM   #111
Moderator
Alan's Avatar
 
Join Date: Jul 2005
Location: Eee Bah Gum
Posts: 21,152
I can't see a breakdown of at-birth citizens against naturalized citizens who give up their citizenship. I think those that do are more likely to be wealthy.

Why give up U.S. citizenship? « Bankrate, Inc.

Quote:
Approximately 1,780 expatriates renounced their U.S. citizenship in 2011, up from 235 in 2008. Why? Money, honey. Bloomberg reports that rich Americans are giving up their nationality in higher numbers since the crackdown by the Internal Revenue Service on tax evaders who try to hide their money offshore.
__________________
Retired in Jan, 2010 at 55, moved to England in May 2016
Now it's adventure before dementia
Alan is online now   Reply With Quote
Old 02-10-2013, 11:16 AM   #112
Thinks s/he gets paid by the post
Major Tom's Avatar
 
Join Date: Nov 2009
Location: SF East Bay
Posts: 3,131
Quote:
Originally Posted by Alan View Post
Those of us that choose to become US Citizens I would suggest are less likely to want to give it up since it was hard earned and certainly can not be done on a whim.
That makes sense. If a person wanted to work and stay in the US mainly for financial reasons, they could do that as a resident alien - no need for citizenship. I applied for my citizenship because I realized that if push came to shove and I were ever forced to choose an alliance to just one country, I would have chosen the US. Even though British citizens are allowed dual citizenship, that realization prompted me to "make good" with the country that I had fallen in love with. It's a bit like a marriage really - if you've lived with a gal for a while and know that you would never want to be forcibly parted from her, why not do the decent thing and marry her?

I grew up and lived in the UK until I was 22. I am now 49 and still feel very English, but as much as I like visiting the UK, the US is my home. There are things about the culture here that I will never fully identify with but if I'm being honest, there are some facets to the British culture that aren't my cuppa tea either

I became a citizen for one reason - love of this country and although divorces do indeed happen, at this point it would take an awful lot to make me want to renounce my citizenship.
__________________
ER, for all intents and purposes. Part-time income <5% of annual expenditure.
Major Tom is online now   Reply With Quote
Old 02-10-2013, 11:30 AM   #113
Thinks s/he gets paid by the post
nun's Avatar
 
Join Date: Feb 2006
Posts: 4,836
Quote:
Originally Posted by Major Tom View Post
That makes sense. If a person wanted to work and stay in the US mainly for financial reasons, they could do that as a resident alien - no need for citizenship.
I took US citizenship after I'd been an H1-B and then a permanent resident for 10 years. I wanted to vote and at the time Sen. Simpson was making noises about restricting SS for non-citizens so I thought I would take US citizenship to protect that. Only after I started to investigate the possibility of retiring back to the UK did I fully understand the tax implications. Knowing what I do now, I would stay as a permanent resident and unless there are family and immigration considerations I usually advise people not to take US citizenship if there is a possibility that they might live outside the US again.

When I came to the US I had no understanding of US tax and made no plans for my UK assets.....luckily those were essentially zero as I left straight after college and brought my entire $3k net worth with me in travelers checks. Now that I understand more of the financial implications of being a US expat renouncing US citizenship is definitely an option.
__________________
“So we beat on, boats against the current, borne back ceaselessly into the past.”

Current AA: 65% Equity Funds / 20% Bonds / 7% Stable Value /3% Cash / 5% TIAA Traditional
Retired Mar 2014 at age 52, target WR: 0.0%,
Income from pension and rent
nun is offline   Reply With Quote
Old 02-10-2013, 11:35 AM   #114
Moderator
Alan's Avatar
 
Join Date: Jul 2005
Location: Eee Bah Gum
Posts: 21,152
Quote:
Originally Posted by Major Tom View Post
That makes sense. If a person wanted to work and stay in the US mainly for financial reasons, they could do that as a resident alien - no need for citizenship. I applied for my citizenship because I realized that if push came to shove and I were ever forced to choose an alliance to just one country, I would have chosen the US. Even though British citizens are allowed dual citizenship, that realization prompted me to "make good" with the country that I had fallen in love with. It's a bit like a marriage really - if you've lived with a gal for a while and know that you would never want to be forcibly parted from her, why not do the decent thing and marry her?

I grew up and lived in the UK until I was 22. I am now 49 and still feel very English, but as much as I like visiting the UK, the US is my home. There are things about the culture here that I will never fully identify with but if I'm being honest, there are some facets to the British culture that aren't my cuppa tea either

I became a citizen for one reason - love of this country and although divorces do indeed happen, at this point it would take an awful lot to make me want to renounce my citizenship.
Nice summary and sentiments. I was older when we left (32) and still have strong family ties and love of the old country as well the new. Since the UK and US have a tax treaty in place then it is essentially tax neutral, and it is only the aggravation of having to deal with the tax code that is a problem. (I don't have tax shelters to hide income from the IRS or HMRC).

TurboTax doesn't deal with Tax Treaties but the TT Community Forum has good info for the many of us living in the USA and receiving UK private and state pensions, and explain which forms to fill in for reporting of such.

We may decide to become resident of both countries in future so we can summer-bird (?) to the UK for 5 months each year, and that will involve some more complexity in filing in each country, but so be it. (That will actually mean 3 tax returns each year as Louisiana taxes me on my pension from my previous company there even though I don't live there).
__________________
Retired in Jan, 2010 at 55, moved to England in May 2016
Now it's adventure before dementia
Alan is online now   Reply With Quote
Old 02-10-2013, 11:37 AM   #115
Thinks s/he gets paid by the post
nun's Avatar
 
Join Date: Feb 2006
Posts: 4,836
Quote:
Originally Posted by Alan View Post
I can't see a breakdown of at-birth citizens against naturalized citizens who give up their citizenship. I think those that do are more likely to be wealthy.

Why give up U.S. citizenship? « Bankrate, Inc.
I have no understanding of the numbers either, and you'd think that the wealthy wouldn't want to advertise their reasons for renouncing, but on the expat forums I've encountered a growing frustration and fear from regular US expats about their tax returns. They want to be US tax compliant, but the rules make it almost impossible for them to do that without employing expensive tax professionals. The IRS has offered various programs for them to become compliant, but that does nothing to help them with the complexity of future returns. Those with no assets in the US often wonder why they are bothering and renunciation becomes an option.
__________________
“So we beat on, boats against the current, borne back ceaselessly into the past.”

Current AA: 65% Equity Funds / 20% Bonds / 7% Stable Value /3% Cash / 5% TIAA Traditional
Retired Mar 2014 at age 52, target WR: 0.0%,
Income from pension and rent
nun is offline   Reply With Quote
Old 02-10-2013, 11:48 AM   #116
Moderator
Alan's Avatar
 
Join Date: Jul 2005
Location: Eee Bah Gum
Posts: 21,152
Quote:
Originally Posted by nun View Post
I have no understanding of the numbers either, and you'd think that the wealthy wouldn't want to advertise their reasons for renouncing, but on the expat forums I've encountered a growing frustration and fear from regular US expats about their tax returns. They want to be US tax compliant, but the rules make it almost impossible for them to do that without employing expensive tax professionals. The IRS has offered various programs for them to become compliant, but that does nothing to help them with the complexity of future returns. Those with no assets in the US often wonder why they are bothering and renunciation becomes an option.
I can understand folks who have repatriated to another country, and believing that they will never go back to the US to live, who consider doing so, but I could never bring myself to burn that bridge just to avoid the IRS. That's why I was hoping to see some sort of breakdown of the numbers.

I was watching Millionaire while on a treadmill the other week and one of the questions was "What is longer than the combined works of William Shakespeare?". Of the choices given, the answer was the IRS tax code at over 5 million words long - and that is also 7 times longer than the Bible.

According to Wiki, Eritrea is the only country other than the USA that taxes its citizens even when they don't reside there, but they pay a lower tax rate than residents.
__________________
Retired in Jan, 2010 at 55, moved to England in May 2016
Now it's adventure before dementia
Alan is online now   Reply With Quote
Old 02-10-2013, 11:55 AM   #117
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 13,294
One point is that not all US citizens give up their citizenship even if they never have plans to return, nor do they file tax returns...

Not sure how to spell his name and do not want to look it up... but the terrorist Awlaki (who was recently killed with a drone) was a US citizen... but I do not think the IRS was getting his tax return...



But, seriously... if you do not have any financial ties to the US, what are they going to do if you do not file If you do have financial ties, then you might have more taxes withheld when payments are made to you than the taxes due... IIRC, there is a withholding requirement if you are not a citizen....
__________________
Texas Proud is offline   Reply With Quote
Old 02-10-2013, 11:57 AM   #118
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,387
Quote:
Originally Posted by meierlde View Post
Of course I sometimes wonder if you never go to the US what could the US really do to you if you just ignored the IRS (and made sure you had no money in the US)
Drone strike? Thallium coated pin stick on a crowded subway?

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 02-10-2013, 12:12 PM   #119
Thinks s/he gets paid by the post
 
Join Date: Mar 2010
Location: Kerrville,Tx
Posts: 2,726
Quote:
Originally Posted by marko View Post
Then again, a lot of moms do this deliberately....more to come likely.
I suspect there are far fewer of these from Canada than from the Latin America.
__________________
meierlde is offline   Reply With Quote
Old 02-10-2013, 01:28 PM   #120
Moderator
Alan's Avatar
 
Join Date: Jul 2005
Location: Eee Bah Gum
Posts: 21,152
Quote:
Originally Posted by Texas Proud View Post
One point is that not all US citizens give up their citizenship even if they never have plans to return, nor do they file tax returns...

Which is why I was disappointed not to find a breakdown of folks doing this. The Bloomsberg article above said the big increase was to do with Americans wanting to protect their offshore tax havens, but no hard data.
__________________

__________________
Retired in Jan, 2010 at 55, moved to England in May 2016
Now it's adventure before dementia
Alan is online now   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


 

 
All times are GMT -6. The time now is 12:39 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.