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from the breaking-up-is-hard-to-do dept.
The USA has been making life difficult for Americans residing abroad; FATCA causes plenty of problems; but so does citizenship-based taxation. The IRS and Treasury department have made the reporting and taxation more onerous, and stepped up their collection efforts.
The result should be a surprise to no one: more and more Americans are handing in their US citizenship. Total numbers are unavailable (the lists published by the government include only a portion of the total), but undisputed is the fact that the numbers are increasing rapidly.
Having lots of citizens want to leave is...embarrassing. One solution could be to review the policies leading to people to hand in their citizenship. Another would be to make the fee unaffordable, especially for people living on second- or third-world incomes. It's obvious, of course, which route the USA has chosen: It now costs $2350 to hand in your US passport; more than 20 times the international average.
(Score: 2, Interesting) by brocksampson on Thursday December 04 2014, @05:35AM
If you're a Canadian "for real" and an accidental American then you pretty much can't visit the USA anymore unless you file back taxes and massive punishment payments, and then spend a lot of time and money renouncing. Getting all freaked out about thousands of dollars is not a big deal, considering the IRS probably wants $500K or more for the income you earned as a lifelong Canadian citizen working in Canada, and you're going to have to take time off work and travel to Toronto, etc.
When US citizens living abroad move back to the US they have a five-year grace period during which they can settle their back taxes without penalties. This process is triggered when you change your residence. How then is it possible that Canadians who have never resided in the US are slapped with a tax bill the moment they cross the US border? I think this is a case of a friend told a friend told a friend because unless you actually try to move to the US on your American passport the IRS isn't even informed of your presence in the country. (You do, however, have to settle your taxes when you renounce your citizenship.)