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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: 0) by Anonymous Coward on Thursday December 04 2014, @08:12AM
The tax treaties don't help with regard to penalties... and if you have $10k or more in total foreign banks you have to file an FBAR every year.
The penalties for not filing an FBAR are up to $10k per account per year.
If wilful.. the penalty is up to the GREATER of $100,000 or 50% of the account per account, per year.
You don't even need to tack on years of interest to see how onerous this can be.
And remember.. that can even occur with $0 income and even if you filed the FBAR the previous year (which usually makes it a wilful violation the next year ).
So imagine someone who was born to American citizenship ( via parents ) but never travelled to the U.S. and has $10k in the bank in Canada/Uk etc...
http://www.irs.gov/uac/Newsroom/Offshore-Income-and-Filing-Information-for-Taxpayers-with-Offshore-Accounts [irs.gov]
(Score: 2) by caseih on Saturday December 06 2014, @07:09PM
Mod this up. This is very important information. I have been following the situation for some time now, and I knew about the banks reporting to the US, but I had not even heard about this form before. Wow. Crazy.