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Topic: U.S. Citizens Abroad And Fatca
Username: AirframeAS
Posted 2012-11-27 15:43:11 and read 6976 times.

Deriving this topic from a near similar thread, lets discuss this here....

Should The US End Birthright Citizenship? (by AA7295 Nov 27 2012 in Non Aviation)

It seems like FATCA was drawn up and designed to make ex-pats of the U.S. like criminals.

On that thread, Dreadnought responded to my post:

Quoting Dreadnought (Reply 50):
Quoting AirframeAS (Reply 49):

How is FATCA enforced in foreign countries that U.S. has no jurisdiction in?? I'm curious.

The US threatens the banks with retaliatory action, including confiscation and freezing of US assets. For major banks like UBS and HSBC, with assets all over the place, that is a real threat. It's blackmail, pure and simple.

For an American living overseas, it is now extremely difficult to find a bank who will take you as a customer - and in many countries, you simply can't live without a bank account. Your best bet is to go to a local private bank (IF they accept you - many simply don't want to do something illegal and at the same time don't want the bother of dealing with the IRS).

The Obama administration has turned all US expats into pariahs and treats them like criminals on the run.

Doesn't the European countries have a Credit Union type banks that are not covered by the FATCA rules? I still don't see how U.S. can strut it's stuff around, enforcing a law that has no jurisdiction in foreign countries abroad.

[Edited 2012-11-27 15:44:37]

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Dreadnought
Posted 2012-11-27 16:04:19 and read 6949 times.

Quoting AirframeAS (Thread starter):
Doesn't the European countries have a Credit Union type banks that are not covered by the FATCA rules?

All financial institutions (banks, investment managers, even insurance companies in certain) are covered by FATCA, regardless of local laws.

Until a few years ago, it would have been completely illegal under Swiss law for a Swiss bank to comply with FATCA. But under the deluded leadership of former President Micheline Calmy-Rey, the Swiss government caved in to US pressure and lifted those restrictions - essentially bank secrecy in Switzerland is a thing of the past thanks to this moron.

So while before Swiss banks could say, "We'd love to help but Swiss law does not allow us to divulge such information", now they no longer have that defense. And any bank or investment house has some assets in the US (even if it's only stocks or bonds), so they are exposed.

Remember - we are not talking about drug dealers and other criminals - Swiss law for many years allowed for their pursuit, and obligated banks to take reasonable steps to ensure their customers are not involved in illegal activity. We are talking about normal people.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Arrow
Posted 2012-11-27 16:46:12 and read 6922 times.

Quoting AirframeAS (Thread starter):
It seems like FATCA was drawn up and designed to make ex-pats of the U.S. like criminals.

You got that right. A lot of people think that expats are just getting inadvertently sideswiped by this, but I'm one of those who thinks they had this in their minds all along (the bill's sponsors -- not all the sheep who voted for it; they are totally clueless).

These folks think that anyone who has the temerity to move away from the US is a tax cheat and a traitor. It comes from a same mindset that years ago came up with things like "my country, right or wrong," and "America - - love it or leave it." It's a minority of people, but powerful beyond belief.

Dreadnought is right -- they are making global pariahs out of 7 million American expats, and turning a large bunch of potential ambassadors around the world into a mob of very angry malcontents -- and nobody wants to listen to them. The US media has virtually ignored this, with one or two exceptions at the NYT.

When Eduardo Saverin ditched his citizenship, he was called a tax cheat and a traitor by guys like Senator Carl Levin -- never mind that the guy paid millions to exit by the book. What Levin's attack completely covered up is the fact that Saverin ditched his US citizenship because of the pariah factor. He knows that as a US citizen, no other global entrepreneur will want him as a partner because it will expose them to a whole raft of IRS reporting requirements. That is intolerable. As a US citizen, Saverin would be on the outside looking in for the rest of his life. This should have been a wake-up call for Congress -- but it was completely ignored.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: PHX787
Posted 2012-11-27 17:54:48 and read 6889 times.

This is something Superfly is an expert on.

I think if a US citizen is doing business abroad and living abroad and already paying taxes abroad, he should be exempt from the same taxes in the US.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Dreadnought
Posted 2012-11-27 18:15:59 and read 6879 times.

Quoting PHX787 (Reply 3):
I think if a US citizen is doing business abroad and living abroad and already paying taxes abroad, he should be exempt from the same taxes in the US.

That's called Tax Territoriality, and it is something alien to the US government.

For example I am a Swiss American dual citizen. As long as I live in the US, I do not need to file or pay Swiss taxes. That's how all countries do it except the US. I think Libya under Qadafi had the same rule, but that is hardly a legitimizing factor.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: BMI727
Posted 2012-11-27 18:18:47 and read 6876 times.

Quoting Dreadnought (Reply 4):
That's how all countries do it except the US. I think Libya under Qadafi had the same rule, but that is hardly a legitimizing factor.

I think the other country that does that is Eritrea or something.

Quoting PHX787 (Reply 3):
I think if a US citizen is doing business abroad and living abroad and already paying taxes abroad, he should be exempt from the same taxes in the US.

I think there is some sort of exemption, but either way, US tax laws on expats are ridiculous.

It needs to be seriously simplified: as long as there is income tax, if you earn here you pay here. If you earn elsewhere, you don't.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: AirframeAS
Posted 2012-11-27 18:24:23 and read 6870 times.

Quoting PHX787 (Reply 3):
This is something Superfly is an expert on.

Where is S'Fly when we need the man?!

Quoting Dreadnought (Reply 4):
As long as I live in the US, I do not need to file or pay Swiss taxes.

It should be like that everywhere. Going around, as the IRS, wrecking lives in the process is not the way to go. People are allowed to have a life, in peace. I don't think Congress thought about the ramifications before passing this law.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: DocLightning
Posted 2012-11-27 18:47:01 and read 6854 times.

Quoting Arrow (Reply 2):
Dreadnought is right -- they are making global pariahs out of 7 million American expats, and turning a large bunch of potential ambassadors around the world into a mob of very angry malcontents -- and nobody wants to listen to them. The US media has virtually ignored this, with one or two exceptions at the NYT.

And the problem is that it's unlikely that there will ever be anything done about it unless somehow a court manages to overturn the law.

After all, 7 million Americans out of 350 million aren't that many. Those 7 million Americans are worth how many representatives in congress? What, maybe 8? And they are all from different constituencies. So there is absolutely no political will to reform the system.

It's a real pity. I think the only solution is going to be some serious foreign pressure from multiple sides at once.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Dreadnought
Posted 2012-11-27 18:49:42 and read 6853 times.

Quoting AirframeAS (Reply 6):
I don't think Congress thought about the ramifications before passing this law.

Oh, but they did. Chuck Schumer and Dick Durbin have had a hard-on to go after expats for many years, and the day Obama came to power, with filibuster-proof Democratic majorities in the House and Senate, they finally had a chance to ram it through. FATCA was passed in March of 2009, only weeks after Obama arrived in the White House, as part of the famous "Jobs Bill".

By the way, something that was not mentioned - FATCA was retroactive. Foreign financial institutions had to provide an annual report of the account balance, receipts and withdrawals of the U.S. customers all the way back to 2003,

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Mir
Posted 2012-11-27 19:37:23 and read 6831 times.

Quoting AirframeAS (Thread starter):
It seems like FATCA was drawn up and designed to make ex-pats of the U.S. like criminals.

No it wasn't, it was designed to prevent wealthy people from utilizing tax havens. But then it also caught a whole bunch of average people who were living abroad for non-tax reasons as well, and that's where the problems arose. It needs to be reworked at the very least.

Quoting PHX787 (Reply 3):
I think if a US citizen is doing business abroad and living abroad and already paying taxes abroad, he should be exempt from the same taxes in the US.

Certainly if he's already paid more taxes to wherever he's living than he would owe to the US.

-Mir

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Pyrex
Posted 2012-11-27 20:57:04 and read 6815 times.

Quoting Dreadnought (Reply 1):

All financial institutions (banks, investment managers, even insurance companies in certain) are covered by FATCA, regardless of local laws.

Even more despicable, they can get into trouble even if they don't know you are a U.S. citizen! If you are a double citizen of the U.S. and another country, and open a bank account under your other nationality (even if that happens to be the same nationality as the bank), years later the IRS can come after you with a vengeance. So now every financial institution with any dealings in the U.S. must guarantee that ALL their customers everywhere in the world are NOT U.S. citizens. And remember, AML (Anti-Money Laundering laws) are the only laws in the criminal book in which the burden of proof does not reside with the State, but with the accused.

Quoting Mir (Reply 9):

Certainly if he's already paid more taxes to wherever he's living than he would owe to the US.

Why only if he is paying more taxes? Should NYC retirees who move to Florida keep paying NYC state taxes too? And how do you account for different types of taxes paid (e.g., lower income taxes with higher consumption and property taxes)? What about contributions to foreign retirement accounts? Why do you feel such a need to go after the income of your own citizens who live abroad? How would you feel if Eritrea started confiscating assets of U.S. companies that do not assist it in tracking down Eritreans living in the U.S.?

Topic: RE: U.S. Citizens Abroad And Fatca
Username: mt99
Posted 2012-11-27 21:25:23 and read 6793 times.

Quoting AirframeAS (Thread starter):
The Obama administration has turned all US expats into pariahs and treats them like criminals on the run.

Does anyone know how American overseas votes in 2012?

If you live elsewhere - should you be allowed to vote?

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Dreadnought
Posted 2012-11-27 21:26:06 and read 6795 times.

Quoting Pyrex (Reply 10):
And remember, AML (Anti-Money Laundering laws) are the only laws in the criminal book in which the burden of proof does not reside with the State, but with the accused.

And even better - I understand that the standing policy at the IRS, once the self-reporting deadline is past, if they believe you might have any undeclared funds since 2003, is to issue an international arrest warrant through Interpol. So you might be going through an airport in Japan, get picked up and hauled off.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: AirframeAS
Posted 2012-11-27 21:40:08 and read 6782 times.

Quoting mt99 (Reply 11):

For the record, that was Dreadnought's quote from another thread as that's not my quote.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Arrow
Posted 2012-11-27 22:24:25 and read 6769 times.

Quoting Mir (Reply 9):
No it wasn't, it was designed to prevent wealthy people from utilizing tax havens.

And here's the joke, although no one is laughing. One of the world's biggest tax havens is the US (it's number 5 on the list). There's about $14 trillion of foreign money invested in US banks, the majority of them in Florida. The investors are attracted by the fact that the US does not tax interest earned on this money, and the US guarantees confidentiality -- just like Switzerland used to do!

Quoting DocLightning (Reply 7):
It's a real pity. I think the only solution is going to be some serious foreign pressure from multiple sides at once.

Sadly, they are caving in and signing agreements with the US so they can comply with FATCA and avoid the wrath of the Treasury Department and it's threat to withhold 30% of all US-source financial transfers to any bank that doesn't sign up. There is one bright ray of hope, however. Most of the countries signing these agreements are demanding reciprocity -- I'll rat on your tax evaders if you rat on ours -- and the Treasury Department is agreeing to that. What that ultimately means is that while foreign banks have to collect data on Americans, American banks will have to do the same for every country that signs one of these agreements. Treasury has committed to get 50 of these in place by the end of the year -- so far they've inked about half a dozen. This will be a costly administrative nightmare for American banks -- and all the foreign banks I suspect are laughing up their sleeves.

And guess who is now screaming about that -- Florida, of course, because all that foreign money will suddenly disappear if the depositors think the US is going to rat them out with their home country's tax collectors. I think this is what will ultimately sink FATCA -- not any pressure from outside. There will be a huge flight of foreign capital from US banks as a result of reciprocity, and some of the politicians who voted for FATCA are starting to wake up to that.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Superfly
Posted 2012-11-27 22:32:20 and read 6765 times.

Quoting AirframeAS (Reply 6):
Quoting PHX787 (Reply 3):
This is something Superfly is an expert on.

Where is S'Fly when we need the man?!

Thanks. I'm no expert but I've been following the issue closely. One week before this months election, the IRS kicked the can down the road to 2017 to enforce this law. Many countries have told Obama's IRS to f--k off.
This cumbersome some law is extremely difficult to enforce and many countries have not been able to get up to speed to comply with the foolish law by January 2013. In Thailand where I live, FATCA violates local Thai law as Thailand still respects banking privacy.
This FATCA issue will be an issue for the next administration to deal with.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: MD11Engineer
Posted 2012-11-27 23:30:03 and read 6739 times.

Quoting DocLightning (Reply 7):

After all, 7 million Americans out of 350 million aren't that many. Those 7 million Americans are worth how many representatives in congress? What, maybe 8? And they are all from different constituencies. So there is absolutely no political will to reform the system.

Most countries don´t like expats. In the Philippines they like the billions sent back every year by Filipino expats, but these people are not even allowed to vote in Filipino elections (unless they declare that they will return home permanently within the next three years) to decide how their money is being spent.
Often Filipinos staying at home look at the expats as cashcows and as traitors, who don´t stick it out at home.
For myself, when I returned to Germany after several years living and working in Ireland, my experience abroad was often not welcome. If I suggested some improvement at work to increase efficiency in a way I have seen abroad, I got told "We are not in Ireland, but in Germany and this is how we always did it.".
After the Berlin wall fell, many East Germans considered those who escaped earlier not as heroes, who risked their lives crossing the border, but as quitters, who went to the golden West to get rich instead of sticking it out at home.

Jan

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Superfly
Posted 2012-11-28 00:36:52 and read 6724 times.

Quoting mt99 (Reply 11):
Does anyone know how American overseas votes in 2012?

Expats are as diverse as those back at home. It depends on the expat. From my observation, the expats that are under the protection of the State Department and the United Nations lean left-wing. Those of us in the private sector working abroad lean right-wing.
The people I know working at the State Department and the United Nations often times don't know a damn thing about the country they reside in. Their bosses and co-workers are all Americans or other Westerners and their work environment is no different than working in the US.
Those of us in the private sector abroad have a better understanding of the country we live in. We don't have those protections and do not live in secluded gated communities abroad.
Most of the people I know that work at the State Department and the United Nations don't even like the countries they reside in. Therefore they have no interest in the local culture. For them it's just something to put on their resume, even though most of the work they do can be done back in the US.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: offloaded
Posted 2012-11-28 05:23:13 and read 6669 times.

Quoting mt99 (Reply 11):
If you live elsewhere - should you be allowed to vote?

Yes you should, because then at least you have a say in something that affects you.

Some time ago some bonehead floated a similar idea in the UK which would have potentially effected every expat Brit out there, like me. I live and work in Portugal, but after 15 yrs away my right to vote in UK elections is denied, despite being a relatively frequent visitor and still having plenty of family, friends, and business ties. If I had a house there that I rented out for example, I would be taxed on it. Most people I talk to are amazed that we actually lose our right to vote at all.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Aaron747
Posted 2012-11-28 07:26:56 and read 6644 times.

Quoting Superfly (Reply 15):
In Thailand where I live, FATCA violates local Thai law as Thailand still respects banking privacy.

FATCA violates Japanese privacy laws as well. There is a great deal of consternation about this law among people I know in the financial industry. American citizens who are married to Japanese nationals can simply transfer funds to their wife's account where they will be fully protected by the local family registration system. Under Japanese law, nobody can get access to this kind of information without the stamped personal seal of that individual.

Quoting Superfly (Reply 17):
Those of us in the private sector abroad have a better understanding of the country we live in. We don't have those protections and do not live in secluded gated communities abroad.

Sage words sir.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Dreadnought
Posted 2012-11-28 08:20:55 and read 6611 times.

Quoting Aaron747 (Reply 19):
FATCA violates Japanese privacy laws as well. There is a great deal of consternation about this law among people I know in the financial industry.

As far as I know, Japan is the only country that has given a firm middle finger to the IRS regarding FATCA.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: PHX787
Posted 2012-11-28 09:17:13 and read 6592 times.

Quoting Aaron747 (Reply 19):

FATCA violates Japanese privacy laws as well. There is a great deal of consternation about this law among people I know in the financial industry. American citizens who are married to Japanese nationals can simply transfer funds to their wife's account where they will be fully protected by the local family registration system. Under Japanese law, nobody can get access to this kind of information without the stamped personal seal of that individual.

Good to know for myself, but what about me, as a student, if I get a part-time job in Japan? What would I have to do there?

Quoting Dreadnought (Reply 20):
As far as I know, Japan is the only country that has given a firm middle finger to the IRS regarding FATCA.

Many many times have they told the US IRS to f*** off. Good for them indeed

Topic: RE: U.S. Citizens Abroad And Fatca
Username: StarAC17
Posted 2012-11-28 10:06:46 and read 6572 times.

Quoting PHX787 (Reply 3):
I think if a US citizen is doing business abroad and living abroad and already paying taxes abroad, he should be exempt from the same taxes in the US.

IIRC if you don't earn income in the US you don't have to pay on your foreign earnings but you have to essentially file a return saying you earned nothing. What is stinging a lot of ex-pats is that they don't file for several years and get hit with penalties for late filings that add up to a lot of money.

Quoting mt99 (Reply 11):
If you live elsewhere - should you be allowed to vote?

The difference is with voting is that you have earned that right through citizenship and many Americans living overseas do not have any intent to ditch their citizenship and perhaps they work for a multi-national who has requested they relocate to the country they now reside.

The difference with taxes is that they provide services that the ex-pat is unable to use overseas so why should they pay into a system that they aren't using. There is an argument that ex-pats should pay a small tax for services they use overseas such as consular services but those I would reckon are not very expensive and completely discretionary, furthermore it would be an absolute pain to enforce.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: HOMsAR
Posted 2012-11-28 10:36:24 and read 6556 times.

Quoting StarAC17 (Reply 22):
The difference with taxes is that they provide services that the ex-pat is unable to use overseas so why should they pay into a system that they aren't using. There is an argument that ex-pats should pay a small tax for services they use overseas such as consular services but those I would reckon are not very expensive and completely discretionary, furthermore it would be an absolute pain to enforce.

One of the facts/duties of citizenship, regardless of whether you're living within the national borders or abroad, is that you have to pay taxes to fund things you aren't using.

For example, I don't have kids, but I pay taxes to my local school district.

This isn't really any different in that sense.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Dreadnought
Posted 2012-11-28 10:42:07 and read 6553 times.

Quoting StarAC17 (Reply 22):
IIRC if you don't earn income in the US you don't have to pay on your foreign earnings but you have to essentially file a return saying you earned nothing.

No, you are exempt up to around $80K of income, but on anything more that you earn, you have to pay local taxes AND US taxes as well.

As many of you know, in many parts of the world $80K is not a whole lot of money.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: StarAC17
Posted 2012-11-28 11:06:31 and read 6625 times.

Quoting HOMsAR (Reply 23):
One of the facts/duties of citizenship, regardless of whether you're living within the national borders or abroad, is that you have to pay taxes to fund things you aren't using.

For example, I don't have kids, but I pay taxes to my local school district.

True but if you do have kids and send them to public school you are then taking advantage of that service, you are entitled to use it.

When outside of the country you cannot use any of those services so why should you pay taxes to fund it especially when you are paying taxes to fund services in the country you are not living in.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Arrow
Posted 2012-11-28 12:09:47 and read 6601 times.

I'm pretty sure the Earned income exclusion is $94K -- but it is in US funds always. if you have an annual salary of (just for argument) 94k Swiss francs, and the exchange rate is 1-1, you're OK. But if ten years down the road your 94K Swiss franc salary (you've had no salary increases) now translates to $150K US, the IRS will make you pay tax on the $55K appreciation in your salary. Remember, you still live in Switzerland. nice, eh?

There are dozens of these little tax nuances foisted on expats by the IRS -- all designed to make sure you pay much much more than home landers for essentially the same income and the same work circumstances. a couple of other examples:

1 . Americans can deduct mortgage interest from taxable income in the US, and declare capital gains on a house sale above a certain limit. Expats also have to pay capital gains (even if it is NOT taxable in their country of residence), and they can't claim the mortgage deduction.
2. The IRS makes no allowance whatsoever for countries that choose to generate revenue through consumption taxes rather than income taxes -- all they look at is income tax.
3. that foreign earned income exclusion of 94K? -- only applies to earned income. Dividends and, more importantly, pension income does not count.

The level of unfairness and downright vindictiveness contained in the US tax code as applied to expats is outrageous, and no other country in the world treats its offshore citizens like this. Watch for the numbers of renouncers to skyrocket once FATCA starts to bite.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Superfly
Posted 2012-11-28 12:16:59 and read 6638 times.

Quoting Dreadnought (Reply 20):
As far as I know, Japan is the only country that has given a firm middle finger to the IRS regarding FATCA.

  
More reasons why I LOVE Japan!   
I think Canada has put pressure on the IRS as well.

Quoting Dreadnought (Reply 24):
No, you are exempt up to around $80K of income, but on anything more that you earn, you have to pay local taxes AND US taxes as well.


It's been bumped up to about $95,000 per year but I hear what you'e saying.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: StarAC17
Posted 2012-11-28 13:34:12 and read 6589 times.

Quoting Arrow (Reply 26):
The level of unfairness and downright vindictiveness contained in the US tax code as applied to expats is outrageous, and no other country in the world treats its offshore citizens like this. Watch for the numbers of renouncers to skyrocket once FATCA starts to bite.

Will that be enough?? I have read some of your posts regarding your wife and even if you renounce your citizenship you still have to pay US taxes because the IRS still deems you a citizen.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: mt99
Posted 2012-11-28 13:41:50 and read 6582 times.

Quoting Arrow (Reply 26):
The level of unfairness and downright vindictiveness contained in the US tax code as applied to expats is outrageous, and no other country in the world treats its offshore citizens like this. Watch for the numbers of renouncers to skyrocket once FATCA starts to bite.

Cursed for being American. Man talk about having problems!

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Dreadnought
Posted 2012-11-28 14:07:18 and read 6580 times.

Quoting Arrow (Reply 26):
The level of unfairness and downright vindictiveness contained in the US tax code as applied to expats is outrageous, and no other country in the world treats its offshore citizens like this. Watch for the numbers of renouncers to skyrocket once FATCA starts to bite.

Already happening. There were 235 renunciants in 2008, 743 in 2009, about 1485 in 2010, 1781 in 2011. I expect 2012 will keep growing.

I know a couple of people who are going through the process, and it is not easy or fast. Basically the IRS wants to audit you and give you a great big tax bill before green-lighting your renunciation. So I expect that while 2012 might record 2000 renunciants, there are maybe 10,000 in the pipeline trying to get out.

It's starting to look like USSR in the 70s...

Quoting StarAC17 (Reply 28):
Will that be enough?? I have read some of your posts regarding your wife and even if you renounce your citizenship you still have to pay US taxes because the IRS still deems you a citizen.

Eventually you get out (as I said above), but it's like pulling teeth. Apparently, just the paperwork involved in removing yourself from Social Security and Medicare roles is particularly agonizing. They really don't make it easy.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: mt99
Posted 2012-11-28 14:13:28 and read 6570 times.

Quoting Dreadnought (Reply 30):
Eventually you get out (as I said above), but it's like pulling teeth. Apparently, just the paperwork involved in removing yourself from Social Security and Medicare roles is particularly agonizing. They really don't make it easy.

So when are you renouncing yours? Would love to hear the play by play.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Dreadnought
Posted 2012-11-28 14:22:51 and read 6569 times.

Quoting mt99 (Reply 31):
So when are you renouncing yours? Would love to hear the play by play.

I am quite close to people who are doing so, so I'm hearing quite a lot of the play-by-play myself. Personally, I have to admit I am thinking hard about it. I expect when my elderly grandmother (she's 102) finally passes away, I'll have nothing to hold me here.

One of the downsides is that even after the IRS audits you, and you spend up to a couple of years extracating yourself from Medicare etc, if the IRS remotely suspects that you renounced your citizenship due to financial considerations, you can be barred for life from ever returning to the US, even with a foreign passport on a tourist visa. No evidence is necessary, just an opinion. That's part of the Reed Amendment. As far as I know it's never been enforced, but it's scary that it's even on the books.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: lewis
Posted 2012-11-28 14:26:38 and read 6557 times.

Quoting Dreadnought (Reply 32):
One of the downsides is that even after the IRS audits you, and you spend up to a couple of years extracating yourself from Medicare etc, if the IRS remotely suspects that you renounced your citizenship due to financial considerations, you can be barred for life from ever returning to the US, even with a foreign passport on a tourist visa. No evidence is necessary, just an opinion. That's part of the Reed Amendment. As far as I know it's never been enforced, but it's scary that it's even on the books.
Quoting Dreadnought (Reply 30):
It's starting to look like USSR in the 70s...

How true!

Topic: RE: U.S. Citizens Abroad And Fatca
Username: AirframeAS
Posted 2012-11-28 14:51:49 and read 6539 times.

Quoting Dreadnought (Reply 24):
you are exempt up to around $80K of income

Just making sure I understand this correctly..... Lets say I move to England, working for UA or AA (for example) at LHR, making $14.50 an hour full time. That's roughly $45-50K a year. FATCA then would not apply to me, correct? But I still have to submit a 1040EZ tax return even though I would still be working for an American company, just overseas?

Do I have any of that right? Wrong?

Topic: RE: U.S. Citizens Abroad And Fatca
Username: bjorn14
Posted 2012-11-28 15:46:23 and read 6514 times.

Quoting BMI727 (Reply 5):
I think the other country that does that is Eritrea or something.

But they only charge their expats 2% tax for a infrastructure fund to help rebuild the country after their war with Ethiopia.

Quoting AirframeAS (Reply 6):
I don't think Congress thought about the ramifications before passing this law.

I remember good ol' Ted Kennedy say this was a fatcat bill...this was going to stop all those fatcats. Liar.

Quoting Dreadnought (Reply 30):
I know a couple of people who are going through the process,

I am thinking about it myself. I am eligible for another citizenship next year. I am thinking about transfering my account to a little dinky local bank.

Quoting AirframeAS (Reply 34):
Do I have any of that right? Wrong?

You are correct but good luck making it in London on $45K

Topic: RE: U.S. Citizens Abroad And Fatca
Username: AirframeAS
Posted 2012-11-28 15:52:09 and read 6507 times.

Quoting bjorn14 (Reply 35):
You are correct but good luck making it in London on $45K

I was only using London as an example......

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Dreadnought
Posted 2012-11-28 15:53:44 and read 6513 times.

Quoting AirframeAS (Reply 34):
Just making sure I understand this correctly..... Lets say I move to England, working for UA or AA (for example) at LHR, making $14.50 an hour full time. That's roughly $45-50K a year. FATCA then would not apply to me, correct? But I still have to submit a 1040EZ tax return even though I would still be working for an American company, just overseas?

Do I have any of that right? Wrong?


Not entirely.

First of all, FATCA applies to you no matter how much you make. If you open a bank account in the UK, or open any sort of financial account, that institution will be required to report to the IRS every year all movements in and out of that account.

You will of course file your taxes normally - although you won't be able to use the 1040EZ - You'll need the full 1040 form plus form 1116 for foreign earnings and also have to file FBARS, which is completely separate from your tax returns. If the FBAR is different from what your bank sent to the IRS under FATCA, then you open yourself up to problems. Of course, you will not be allowed to see what the bank sent the IRS, so cross your fingers.

If you make only $50K, you will be paying full UK taxes but won't have to pay US taxes, under the dual taxation treaty. However as has been previously noted Congressional democrats are working hard to eliminate that exemption. They will probably latch that little amendment to some vital piece of legislation under the radar, like whatever deal gets hammered out over this 'fiscal cliff' issue.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: bjorn14
Posted 2012-11-28 16:13:03 and read 6494 times.

Quoting AirframeAS (Reply 36):
I was only using London as an example......

Sorry I forgot my   

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Darksnowynight
Posted 2012-11-28 17:08:39 and read 6481 times.

Quoting AirframeAS (Reply 34):
Lets say I move to England, working for UA or AA (for example) at LHR, making $14.50 an hour full time. That's roughly $45-50K a year.

$14.50/hr is only $30,160/yr. $45 - 50 is between $21.63 & $24.03/hr. Roughly.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Superfly
Posted 2012-11-28 21:26:24 and read 6436 times.

Quoting Arrow (Reply 26):
Watch for the numbers of renouncers to skyrocket once FATCA starts to bite.
Quoting Dreadnought (Reply 30):
Already happening. There were 235 renunciants in 2008, 743 in 2009, about 1485 in 2010, 1781 in 2011. I expect 2012 will keep growing.

As of August of 2012, the numbers had already surpassed all of 2011.

Quoting AirframeAS (Reply 36):
Quoting bjorn14 (Reply 35):
You are correct but good luck making it in London on $45K

I was only using London as an example......

Has nothing to do with your income level. It's up to the banks to decide if they want to bother dealing with an American customer thanks to this new burden imposed by Obama and the IRS.
The U.K. may not be a problem because our governments are joined at the hip, both countries speak English and they're already a big, bloated, bureaucratic government with high unemployment. The problem is in developing nations where English is only spoken by the elite and they're not going to bother hiring an English speaking native just to deal with the small handful of American account holders.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Mir
Posted 2012-11-28 22:10:34 and read 6425 times.

Quoting Pyrex (Reply 10):
Why only if he is paying more taxes?

Because the point of the law is to stop people from going to tax havens. I have no problem with that, the problem I have with the law is that it's using a huge dragnet when it should be using a hook and line, and screwing over a lot of people who have moved overseas for various non-tax reasons.

If the law can be rewritten (and it would take a lot of rewriting) so that it hits who it's intended to hit and doesn't hit who it isn't intended to hit, then I'm all for it. And that is going to mean some mechanism to go after people who live overseas so that they can pay lower taxes. If the law can't be rewritten in such a way, then it needs to be scrapped entirely. That may well be the case, but I'm not entirely convinced of it yet.

-Mir

Topic: RE: U.S. Citizens Abroad And Fatca
Username: bjorn14
Posted 2012-11-29 07:26:07 and read 6360 times.

Quoting Mir (Reply 41):
If the law can't be rewritten in such a way, then it needs to be scrapped entirely. That may well be the case, but I'm not entirely convinced of it yet.

It will never be scrapped because those 7 million American expats don't vote in any kind of bloc (geographic, ideological or othewise.) They are just political whipping boys or kabuki theatre at its best.

I wonder what's going to happen when Obamacare kicks in and then Americans will have to prove they have some kind of medical insurance. IIRC your tax refund is tied to that stipulation.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: DocLightning
Posted 2012-11-29 08:29:11 and read 6354 times.

Quoting bjorn14 (Reply 42):
I wonder what's going to happen when Obamacare kicks in and then Americans will have to prove they have some kind of medical insurance. IIRC your tax refund is tied to that stipulation.

Shouldn't be a problem for most Americans abroad who live in countries with universal coverage.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Dreadnought
Posted 2012-11-29 09:27:15 and read 6333 times.

Quoting DocLightning (Reply 43):
Shouldn't be a problem for most Americans abroad who live in countries with universal coverage.

But those coverages might not satisfy all the requirements under Obamacare. Swiss universal coverage, for example, does not include psycho care, dental, or free annual checkups. Will Obamacare start demanding compliance internationally, like FATCA?

Topic: RE: U.S. Citizens Abroad And Fatca
Username: RobertNL070
Posted 2012-11-29 09:32:05 and read 6331 times.

Quoting offloaded (Reply 18):
I live and work in Portugal, but after 15 yrs away my right to vote in UK elections is denied, despite being a relatively frequent visitor and still having plenty of family, friends, and business ties. If I had a house there that I rented out for example, I would be taxed on it. Most people I talk to are amazed that we actually lose our right to vote at all.

I've been living and working in the Netherlands since 1987 and have dual British-Dutch nationality. I am also a frequent visitor to the UK and have family and a few friends there. However, I have no property or substantial capital in the UK.

I feel I have disqualified myself from voting in the UK. I play no active part in British society, have no business ties and I have no financial interests and therefore am not liable for UK taxes. I do, however play an active role in Dutch society and pay (hefty) Dutch taxes. As such I am well qualified to vote here. And there are about ten political parties to choose from ..... much more fun!

I have no qualms with that.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Mir
Posted 2012-11-29 09:39:47 and read 6327 times.

Quoting bjorn14 (Reply 42):
It will never be scrapped because those 7 million American expats don't vote in any kind of bloc

If it starts affecting international trade the way people on this thread have claimed it will, Congress will take notice.

-Mir

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Arrow
Posted 2012-11-29 11:13:58 and read 6305 times.

FATCA will affect international trade big time -- and one of the true ironies in this legislation is that it will be the US that is most negatively affected in the long run. Americans will now be shut out of all manner of business relationships because to invite an American to sit on your board of directors, or to appoint an American to any corporate position that has him/her holding signing authority, or to invite any American to invest in you venture at any level higher than 10% -- all will invite complicated tax compliance filings with the IRS. And that will hold true even if the business has no US interests or holdings whatsoever. Who in his right mind would submit to that. When it comes to global business and finance, Americans will be on the outside looking in.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: StarAC17
Posted 2012-11-29 13:14:39 and read 6250 times.

Quoting Dreadnought (Reply 44):
But those coverages might not satisfy all the requirements under Obamacare. Swiss universal coverage, for example, does not include psycho care, dental, or free annual checkups. Will Obamacare start demanding compliance internationally, like FATCA?

I would think not because if you are out of the US you are not likely utilizing health care in the US and thus and expat wouldn't have a need to carry US insurance and if they do its travel insurance which I would think is a separate policy. In reality if you are living in another country you have private or public coverage in that country.

I have heard nothing about Obamacare affecting expats.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Pyrex
Posted 2012-11-29 16:48:54 and read 6210 times.

Quoting Mir (Reply 41):
Because the point of the law is to stop people from going to tax havens. I have no problem with that,

Are you a fluent German speaker or have you just been practicing saying "Papieren, bitten" over and over again? The East Germans also thought a person who did not feel their "country" (i.e., politicians) was the best place for them to develop their opportunities personally should nonetheless not be allowed to leave (regardless of family ties, etc.) and keep producing for the good of the State. Of course they built walls and created smell databases to ensure that.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: AirframeAS
Posted 2012-11-29 17:30:56 and read 6201 times.

Quoting Superfly (Reply 40):
Has nothing to do with your income level.

Ah, gotcha. Thanks.

The one question is still now answered: How is this U.S. law enforced in other countries anyway? The U.S. has no jurisdiction in foreign countries.   

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Arrow
Posted 2012-11-29 17:57:58 and read 6198 times.

Quoting AirframeAS (Reply 50):
The one question is still now answered: How is this U.S. law enforced in other countries anyway? The U.S. has no jurisdiction in foreign countries.

If FFIs (foreign financial institutions) don't sign up (or their respective countries don't sign IGAs) the IRS will take a 30% charge on all US-source transactions conducted by the bank -- whether those charges are justified on an individual basis or not. All banks have dealings with the US in one fashion or another, and that is an immensely punitive club that the US holds over them.

What makes it doubly difficult for them is that the info the IRS is demanding will, in many instances, be a violations of the home country's privacy laws -- putting banks in the unenviable position of having to choose between getting whacked by the IRS with a 30% hit on all US transactions, or violating their home country laws.

It would be nice if the world could gang up on the US on this one - but that doesn't look like it will happen.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Darksnowynight
Posted 2012-11-29 20:49:27 and read 6186 times.

Quoting bjorn14 (Reply 42):
IIRC your tax refund is tied to that stipulation.

Only the first $250 of it. Considering the substantially larger refunds americans have been conditioned to expect, this really isn't a big deal.

Quoting Mir (Reply 41):
have no problem with that, the problem I have with the law is that it's using a huge dragnet when it should be using a hook and line, and screwing over a lot of people who have moved overseas for various non-tax reasons.

I agree with this. It is a matter of precision more than anything else that needs to be worked out.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: StarAC17
Posted 2012-11-29 21:29:12 and read 6175 times.

Quoting Darksnowynight (Reply 52):
Quoting Mir (Reply 41):
have no problem with that, the problem I have with the law is that it's using a huge dragnet when it should be using a hook and line, and screwing over a lot of people who have moved overseas for various non-tax reasons.

I agree with this. It is a matter of precision more than anything else that needs to be worked out.

From some of the posts I read regarding a law like this is that the US has lost a lot rationality of how they do things. How is somebody who leaves the US in the same boat as someone who moves their assets offshore and maintains residence in the US. This should be figured out quite easily and be taken care of. Get it clear America and all other countries some people will live outside the country they live in and often times it develops them as a person. Do not punish people for it!!

I lived in Australia for 16 months and was still a proud Canadian doing it.

Quoting Arrow (Reply 51):
It would be nice if the world could gang up on the US on this one - but that doesn't look like it will happen.

We can, we just have to get a lot of economic powers behind us and threaten trade agreements over this nonsense. The US needs to learn sooner than later it isn't as dominant as it used to be and a lot of countries would rather invest in the US than say China but this is a deterrent to it.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Superfly
Posted 2012-11-30 02:14:28 and read 6142 times.

Quoting Mir (Reply 41):
Because the point of the law is to stop people from going to tax havens. I have no problem with that, the problem I have with the law is that it's using a huge dragnet when it should be using a hook and line, and screwing over a lot of people who have moved overseas for various non-tax reasons.

If the law can be rewritten (and it would take a lot of rewriting) so that it hits who it's intended to hit and doesn't hit who it isn't intended to hit, then I'm all for it. And that is going to mean some mechanism to go after people who live overseas so that they can pay lower taxes. If the law can't be rewritten in such a way, then it needs to be scrapped entirely. That may well be the case, but I'm not entirely convinced of it yet.

Of the amount of money held by expats overseas, I wonder how much of a dent it would make in closing the budget gap.
I'd like to see a breakdown of how much of a difference it would make. There are only 7 million US expats out of over 300 million Americans. Most of us living abroad are NOT rich fat cats either.
Eventually the government may need to start cutting spending. Imagine that!  Wow!
Quoting StarAC17 (Reply 53):
a law like this is that the US has lost a lot rationality of how they do things.

Painting with a broad brush here pal. There were plenty of members of Congress than voted against this bill.

Quoting StarAC17 (Reply 53):
How is somebody who leaves the US in the same boat as someone who moves their assets offshore and maintains residence in the US.

We're not in the same boat but our government isn't that smart to determine the difference.

Quoting StarAC17 (Reply 53):
Get it clear America
Quoting StarAC17 (Reply 53):
The US needs to learn

  
You're missing the plot here. What is with this painting the US with a broad brush? As you can see in this thread, many Americans posting here are against this FATCA law. The reason why this law exist is because Obama passed this law. Obviously not everyone supports this and many of his supporters aren't even aware of this law. In fact, most Americans aren't aware of this law.

Quoting StarAC17 (Reply 48):
I have heard nothing about Obamacare affecting expats.

If we visit the US for more than 35 days it's an issue.

Quoting Arrow (Reply 51):
If FFIs (foreign financial institutions) don't sign up (or their respective countries don't sign IGAs) the IRS will take a 30% charge on all US-source transactions conducted by the bank -- whether those charges are justified on an individual basis or not. All banks have dealings with the US in one fashion or another, and that is an immensely punitive club that the US holds over them.

That is very true. For example, if I were to buy a product on ebay from Australia and shipped here to Thailand, yet paid thru Paypal which is set up with my Thai bank account, my bank here in Thailand would be levied with a penalty of 30% of the total transaction.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: bjorn14
Posted 2012-11-30 04:00:49 and read 6127 times.

Quoting Dreadnought (Reply 44):
might not satisfy all the requirements under Obamacare.

Like abortion?

Quoting Superfly (Reply 54):
If we visit the US for more than 35 days it's an issue.

Acutally IIRC it's 38 days and then IIRC you'll be taxed like you lived there the whole year.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Pyrex
Posted 2012-11-30 04:13:00 and read 6122 times.

Quoting Superfly (Reply 54):
There are only 7 million US expats out of over 300 million Americans. Most of us living abroad are NOT rich fat cats either.

7 million out of 300 million is around 2%... don't you know it is now acceptable to persecute whole segments of the population just as long as they amount to less than 2%? Hitler would have been fine if he was in the U.S. these days, after all most numbers put his body count among Jews at around 6 million.

Quoting bjorn14 (Reply 55):
Acutally IIRC it's 38 days and then IIRC you'll be taxed like you lived there the whole year.

Really? Now that is even more ridiculous... should be at least half the year, as that is how most countries do it. So if you spend a couple of months in the U.S. you get taxed in full both in the U.S. and the country you live in?

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Superfly
Posted 2012-11-30 05:35:13 and read 6110 times.

Quoting bjorn14 (Reply 55):
Acutally IIRC it's 38 days and then IIRC you'll be taxed like you lived there the whole year.

..,and see how a minor error of just being off by 3 days can cause you a world of hurt when dealing with the IRS.
This is just disgusting!
Perhaps this explains why the IRS hired 16,500 new IRS agents 72 hours after the Supreme Court ruled in favor of Obamacare and acknowledged it as simply a new tax.
I'm sure those 16,500 'new hires' were already waiting in the wings prior to the Supreme Court decision.

Quoting Pyrex (Reply 56):
7 million out of 300 million is around 2%... don't you know it is now acceptable to persecute whole segments of the population just as long as they amount to less than 2%?

Scary indeed.
Too many Americans think that us expats that work abroad are just on permanent vacation with tons of money to throw around or some fugitive running from the FBI.

Quoting StarAC17 (Reply 53):
some people will live outside the country they live in and often times it develops them as a person. Do not punish people for it!!

I forgot to reply to this in my last post but I wholeheartedly agree. I'm doing exactly the same thing here in Thailand and it's one of the best moves I've ever made for myself. It's developed me as a person and most importantly, the best move for my career. The sad thing is that if I had decided to move in to my mother's basement at age 37, play Dungeons & Dragons, surf porn and Airliners.net all day and collect a welfare check endlessly, that could have been an option given that Obama repealed Clinton's signature welfare reform. It's gone back to the Lyndon B. Johnson era welfare system where you can collect for as long as you want, have as many kids out of wedlock and no more work search requirement. Although, that is not in my nature to do such. Can't fly in 1st or business class on TG, SQ or CX with welfare. 
Yet those of us that find career opportunities abroad are now being punished by the current administration.
To add insult to injury, those living abroad protected by the State Department (Embassy) and the United Nations get to use their own bank/credit union and their international fees such as withdrawals from foreign banks are waived or reimbursed. Those of us working for private companies abroad do not get that privilege.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Aaron747
Posted 2012-11-30 07:18:51 and read 6098 times.

Quoting PHX787 (Reply 21):
Good to know for myself, but what about me, as a student, if I get a part-time job in Japan? What would I have to do there?

Not sure. Until the embassy sends me a letter, I'm kind of doing my own thing.

Be forewarned though that as a student, under Japanese law both your options for working part-time, and the income you are allowed to earn are limited. It is illegal to work part-time in any capacity unless you have obtained prior permission from the Immigration authorities before receiving your visa stamp upon entry.

Quoting Dreadnought (Reply 24):
As many of you know, in many parts of the world $80K is not a whole lot of money.

Thanks to the strong yen it has been quite a struggle to stay under but I've managed thus far.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Superfly
Posted 2012-11-30 07:35:20 and read 6096 times.

Quoting PHX787 (Reply 21):
if I get a part-time job in Japan? What would I have to do there?

Do they even have part-time jobs for foreigners in Japan?
It would be impossible for PHX787 to get a job as a coffeeshop barista or waitress in Japan.
Work permits are usually granted to managers with some sort of specialty. Otherwise it's just English teachers.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: SmittyOne
Posted 2012-11-30 07:41:31 and read 6089 times.

Quoting Superfly (Reply 54):
Eventually the government may need to start cutting spending. Imagine that!

The irony being how expensive (in terms of time and money) it is to draft, debate, pass, and then attempt to enforce a law like this.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: bjorn14
Posted 2012-11-30 07:45:05 and read 6089 times.

Quoting Aaron747 (Reply 58):
Thanks to the strong yen it has been quite a struggle to stay under but I've managed thus far.

Yep. The krone has hit historic highs against the $ in my time here. I've asked my employer for some non-income benefits in leiu of raises.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Superfly
Posted 2012-11-30 07:51:07 and read 6086 times.

Quoting SmittyOne (Reply 60):
The irony being how expensive (in terms of time and money) it is to draft, debate, pass, and then attempt to enforce a law like this.

The current government under Obama isn't interested in that and is willing to raise the debt ceiling AGAIN to just keep spending money. It may be difficult to fully enforce but many countries my comply anyway just to be seen in a good light by the US government. Most likely developing nations with growing economies do not want to upset the US government.
Regardless, it so unnecessary.

Quoting bjorn14 (Reply 61):
I've asked my employer for some non-income benefits in leiu of raises.

Business class tickets on SAS should do.
If not, get tickets to see A-ha.  

Topic: RE: U.S. Citizens Abroad And Fatca
Username: HOMsAR
Posted 2012-11-30 07:53:58 and read 6082 times.

Quoting Superfly (Reply 54):
The reason why this law exist is because Obama passed this law.

The president does not pass laws in the United States.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Superfly
Posted 2012-11-30 08:05:54 and read 6080 times.

Quoting HOMsAR (Reply 63):
The president does not pass laws in the United States.

Semantics, whatever.
The law passed because President Obama signed it in to law.
FATCA had previously been submitted to President Bush in 2007 but he vetoed the law. It was submitted again when Obama was President and HE signed it.
Therefore the blame is appropriate.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Arrow
Posted 2012-11-30 09:25:59 and read 6070 times.

Quoting Pyrex (Reply 56):
Really? Now that is even more ridiculous... should be at least half the year, as that is how most countries do it. So if you spend a couple of months in the U.S. you get taxed in full both in the U.S. and the country you live in?

It's worse than that. If you thought you relinquished your US citizenship, say in the 1970s, by taking out citizenship in another country -- but neglected to get that CLN (because at the time you didn't know it even existed) -- a stay of more than 38 days will get your US citizenship restored automatically (they won't tell you that of course), and going forward you will now be subject once again to taxation annually by the IRS -- until you formally renounce.

Part of the insanity of all this is that the US changed the rules around losing citizenship -- as of 1995, taking out citizenship in another country no longer means you did so with the intent of losing US citizenship. That in itself is not a big problem -- except the a**holes decided to apply the new rule retroactively and restore citizenship to hundreds of thousand of long-gone expatriates, without their consent, and without their knowledge -- and all for tax purposes. In fact, the US now has two types of citizenship; one that the State Department manages, the other that the IRS manages. So you can ditch the DOS citizenship by renouncing -- but the IRS will not let you go until you've filed several years of tax returns.

BTW -- did you know the US now has an exit tax? If you've got a net worth of $2 million or more (and some Congresscritters are trying to get the floor dropped to $1 million or less) you have to pay a 30% (I think its 30%) tax on your net worth before they'll let you out of the country. Since most people's net worth consists of assets they bought with after-tax dollars, it's effectively a double taxation on everything you possess. Two million sounds like a lot, but any family in their 50s - 60s -has probably accumulated close to that just through their houses and savings.

Quoting HOMsAR (Reply 63):

The president does not pass laws in the United States.

No -- but as Superfly said -- he signs off on it and until he signs off on it, it isn't law.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Dreadnought
Posted 2012-11-30 10:20:20 and read 6053 times.

Quoting StarAC17 (Reply 48):
I have heard nothing about Obamacare affecting expats.
Quoting Arrow (Reply 65):
BTW -- did you know the US now has an exit tax? If you've got a net worth of $2 million or more (and some Congresscritters are trying to get the floor dropped to $1 million or less) you have to pay a 30% (I think its 30%) tax on your net worth before they'll let you out of the country. Since most people's net worth consists of assets they bought with after-tax dollars, it's effectively a double taxation on everything you possess. Two million sounds like a lot, but any family in their 50s - 60s -has probably accumulated close to that just through their houses and savings.

That's right. The argument lawmakers give is that "You made your wealth because of the US government". The whole "You didn't build that" mentality (or should we call it a psychosis?). Never mind the fact that - for the people I know who have gone through the process, they made their money completely outside the US.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: StarAC17
Posted 2012-11-30 11:15:02 and read 6026 times.

Quoting Superfly (Reply 54):
You're missing the plot here. What is with this painting the US with a broad brush? As you can see in this thread, many Americans posting here are against this FATCA law. The reason why this law exist is because Obama passed this law. Obviously not everyone supports this and many of his supporters aren't even aware of this law. In fact, most Americans aren't aware of this law.

I think you missed the point I was trying to get at which was that the days are ending when the US can exert global pressure on the world to fulfill its agenda. More and more countries are going to tell the US to get lost if they require this kind of reporting that violates privacy laws in Canada for example.

We can invest our money and trade elsewhere, many countries would rather trade with the US but with a law like this as Arrow pointed out its going to go elsewhere.

Quoting Superfly (Reply 54):
Painting with a broad brush here pal. There were plenty of members of Congress than voted against this bill.

That may be so, but a majority of congress passed this law and like it or not those congressmen/women represent a majority of the American people. Government is the people at the end of the day and not just when you disagree with them.

Quoting bjorn14 (Reply 55):
Quoting Superfly (Reply 54):
If we visit the US for more than 35 days it's an issue.

Acutally IIRC it's 38 days and then IIRC you'll be taxed like you lived there the whole year.

Now say I visited the US for a longer period of time than that, would I be subject to it??

I would be carrying health insurance but not from an American Insurance company.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Arrow
Posted 2012-11-30 11:23:13 and read 6026 times.

Quoting Dreadnought (Reply 66):
Never mind the fact that - for the people I know who have gone through the process, they made their money completely outside the US.

Yeah -- that's the other part of it I forgot about. The net worth calculation is applied to all your global assets -- not just the US assets. So if a US citizen who has been out of the country for 40 years (and maybe even filing annual tax returns to the IRS to stay compliant) decides to renounce and breaks through that $2 million net worth threshold (and remember -- that's $2 million US -- don't forget the impact on your offshore assets of a falling US dollar) the IRS will apply the exit tax on assets that were a) generated entirely through 40 years of work in another country and b) are in fact 100% in another country. This is a direct raid on the treasury of another nation, because presumably this individual, in order to pay that exit tax, will end up pulling the money out of his/her "foreign" account.

When the USSR did this 30-40 years ago (and the exit tax was 5-10% I think) to keep people from leaving, the US congress approved stiff economic sanctions against the USSR (and believe it or not those sanctions are still in place -- Congress passes a waiver every year now to avoid embarrassment). This is a classic case of "do as I say, not as I do."

One more delicious irony: two countries tax based on citizenship rather than residence -- the US and Eritrea. A year ago, the UN passed a resolution condemning Eritrea for its "diaspora" tax (it tries to tax its offshore citizens). Co-sponsor of the resolution was the US.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Superfly
Posted 2012-11-30 12:07:45 and read 6011 times.

Quoting StarAC17 (Reply 67):
the point I was trying to get at which was that the days are ending when the US can exert global pressure on the world to fulfill its agenda.

They're very well of that and are doing everything they can to grab as much power as possible before it's days are over.

Quoting StarAC17 (Reply 67):
but a majority of congress passed this law and like it or not those congressmen/women represent a majority of the American people.

Not anymore.
FATCA passed when Obama had a Democratic House of Representatives. Many of those Congress people that voted in favor of this law has been tossed out in the 2010 mid-term elections.

Quoting StarAC17 (Reply 67):
Now say I visited the US for a longer period of time than that, would I be subject to it??

No you would not.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Aaron747
Posted 2012-11-30 15:33:36 and read 5980 times.

Quoting Superfly (Reply 59):
It would be impossible for PHX787 to get a job as a coffeeshop barista or waitress in Japan.

It's not impossible. A lot of Chinese and Korean university students here work part time in convenience stores and noodle shops. But that's only because they typically speak excellent Japanese and can read and write it as well.

And like in any country it's possible to work as a short-term contract construction laborer or something like that as well. If you don't mind shoddy employers that don't follow safety regulations and are backed by Yakuza...

Topic: RE: U.S. Citizens Abroad And Fatca
Username: PHX787
Posted 2012-11-30 21:33:50 and read 5944 times.

Quoting Superfly (Reply 59):
It would be impossible for PHX787 to get a job as a coffeeshop barista or waitress in Japan.

Because I am a man, not a woman   I won't be a "waitRESS" because I have a schlong, unlike most waitresses in Japan. I say "most."   

I am going to already have someone give me a job working at my friend's Eikaiwa Cafe and maybe work for the university tutoring. My friends have been helping me figure this out.

Quoting Aaron747 (Reply 58):
Be forewarned though that as a student, under Japanese law both your options for working part-time, and the income you are allowed to earn are limited. It is illegal to work part-time in any capacity unless you have obtained prior permission from the Immigration authorities before receiving your visa stamp upon entry.

I appreciate the info; do I declare I want to work part-time during my visa interview or what?

Topic: RE: U.S. Citizens Abroad And Fatca
Username: cws818
Posted 2012-11-30 21:46:40 and read 5936 times.

Quoting Pyrex (Reply 49):
Quoting Mir (Reply 41):
Because the point of the law is to stop people from going to tax havens. I have no problem with that,

Are you a fluent German speaker or have you just been practicing saying "Papieren, bitten" over and over again? The East Germans also thought a person who did not feel their "country" (i.e., politicians) was the best place for them to develop their opportunities personally should nonetheless not be allowed to leave (regardless of family ties, etc.) and keep producing for the good of the State. Of course they built walls and created smell databases to ensure that.

Do you have anything to contribute besides Cold War hyperbole?

Quoting Pyrex (Reply 56):
Hitler would have been fine if he was in the U.S. these days, after all most numbers put his body count among Jews at around 6 million.

Apparently not, since you have brought out the Hitler card - a sure way to eviscerate any credibility you might have had.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: BMI727
Posted 2012-11-30 21:50:14 and read 5936 times.

Quoting Mir (Reply 41):
Because the point of the law is to stop people from going to tax havens.

There's nothing wrong with tax havens. If politicians don't like seeing capital move overseas, they would be better off looking at the reasons why the money is leaving in the first place and making the US a more attractive place to keep it.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: PanHAM
Posted 2012-12-01 03:43:01 and read 5924 times.

What about double taxation, at least when the US has a double taxation agreement with the country a US citizen resides?

A US expat living in Germany, as a manager in a well paid job with a 6 digit € income, paying full German taxes which is about 45% on each € earned over a certain level (depends if married, number of kids etc) , wouldn't that be fully accountable on any potential US taxation?

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Dreadnought
Posted 2012-12-01 06:00:39 and read 5904 times.

Quoting BMI727 (Reply 73):
There's nothing wrong with tax havens. If politicians don't like seeing capital move overseas, they would be better off looking at the reasons why the money is leaving in the first place and making the US a more attractive place to keep it.

Exactly. Capital flight is a warning flag to a country that they are squelching wealth and job creation.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: PanHAM
Posted 2012-12-01 06:57:53 and read 5890 times.

Yes, but looking at the taxes Romney paid, the USA must be tax heaven. If I had that kind of money in the bank, I would gladly sell everything here and move to the US.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: MD11Engineer
Posted 2012-12-01 07:02:35 and read 5909 times.

Quoting PHX787 (Reply 71):
unlike most waitresses in Japan. I say "most."

Why? Do you have any "experience"?   

Jan

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Aaron747
Posted 2012-12-01 07:49:13 and read 5897 times.

Quoting PHX787 (Reply 71):
I appreciate the info; do I declare I want to work part-time during my visa interview or what?

You can ask them to clarify the procedure, but basically you will need to obtain the actual permission in Japan via application to immigration directly. They will require you to submit an "Application for Permission to Engage in Activity other than that Permitted under the Status of Residence Previously Granted" (資格外活動許可申請書)

Baseline explanation here:

http://www.immi-moj.go.jp/english/tetuduki/kanri/shyorui/09.html

Quoting MD11Engineer (Reply 77):
Why? Do you have any "experience"?

ニューハーフ (new half) is very "in" now in Japan. A handful of the most famous recent celebrities on TV variety shows here are either pre or post-op trannies. LOL

This one, Haruna Ai, is on so many shows, it's hard to find one she hasn't been on...

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Superfly
Posted 2012-12-01 08:03:58 and read 5895 times.

Quoting PanHAM (Reply 76):
Yes, but looking at the taxes Romney paid, the USA must be tax heaven.

Compared to Germany, yes the US is a tax haven but at least Germany does better job at providing services for it's citizens.




Quoting BMI727 (Reply 73):
There's nothing wrong with tax havens. If politicians don't like seeing capital move overseas, they would be better off looking at the reasons why the money is leaving in the first place and making the US a more attractive place to keep it.

  
Amen to that!

Quoting PanHAM (Reply 74):
What about double taxation, at least when the US has a double taxation agreement with the country a US citizen resides?

Those earning under $95,000 per year are exempt from paying taxes but we still have to file.

Quoting Aaron747 (Reply 70):
And like in any country it's possible to work as a short-term contract construction laborer or something like that as well. If you don't mind shoddy employers that don't follow safety regulations and are backed by Yakuza...

That's right. I forgot about those. Perhaps PHX787 can make friends with some Yakuzas that can get him in to their exclusive gentleman's clubs.  
Quoting PHX787 (Reply 71):
Because I am a man, not a woman   I won't be a "waitRESS" because I have a schlong, unlike most waitresses in Japan. I say "most."   

I know. There was a joke hidden in there.  
Quoting PHX787 (Reply 71):
I am going to already have someone give me a job working at my friend's Eikaiwa Cafe and maybe work for the university tutoring. My friends have been helping me figure this out.

Will he make you wear lingerie?

Topic: RE: U.S. Citizens Abroad And Fatca
Username: PHX787
Posted 2012-12-01 11:17:20 and read 5864 times.

Quoting MD11Engineer (Reply 77):
Why? Do you have any "experience"?
Quoting Aaron747 (Reply 78):
ニューハーフ (new half) is very "in" now in Japan. A handful of the most famous recent celebrities on TV variety shows here are either pre or post-op trannies. LOL

From seeing this...that's my excuse MD11Engineer   
Aaron747- I hope this doesn't become a new thing.....we don't need a huge wave of kathoey's in Japan confusing the crap out of me  
Quoting Aaron747 (Reply 78):
They will require you to submit an "Application for Permission to Engage in Activity other than that Permitted under the Status of Residence Previously Granted" (資格外活動許可申請書)

Baseline explanation here:

I appreciate the help. When I make money there, do I declare it upon a visit back to the states, or not?

Quoting Superfly (Reply 79):
Will he make you wear lingerie?

Why?   

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Superfly
Posted 2012-12-01 12:27:49 and read 5843 times.

Quoting PHX787 (Reply 80):
Quoting Superfly (Reply 79):
Will he make you wear lingerie?

Why?   

I was making a reference to the popular lingerie wearing baristas in Japan.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: BMI727
Posted 2012-12-01 13:27:14 and read 5830 times.

Quoting PanHAM (Reply 74):
A US expat living in Germany, as a manager in a well paid job with a 6 digit € income, paying full German taxes which is about 45% on each € earned over a certain level (depends if married, number of kids etc) , wouldn't that be fully accountable on any potential US taxation?

I forget exactly how it works, but I think there is some sort of deduction or exemption, either income to a certain level or taxes paid in another country.

Quoting Dreadnought (Reply 75):
Exactly. Capital flight is a warning flag to a country that they are squelching wealth and job creation.

Part of it can be chalked up to the billions of people poised to enter the middle class. But in general, the number of politicians who whine about outsourcing or capital flight is far greater than the number of politicians willing to do anything about it.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: bjorn14
Posted 2012-12-02 14:57:40 and read 5741 times.

Quoting PHX787 (Reply 80):
I appreciate the help. When I make money there, do I declare it upon a visit back to the states, or not?

You will file a tax return just as if you were in the US by April 15th.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Mir
Posted 2012-12-02 21:21:51 and read 5691 times.

Quoting PanHAM (Reply 74):
A US expat living in Germany, as a manager in a well paid job with a 6 digit € income, paying full German taxes which is about 45% on each € earned over a certain level (depends if married, number of kids etc) , wouldn't that be fully accountable on any potential US taxation?

They definitely should be.

Quoting Superfly (Reply 79):
Compared to Germany, yes the US is a tax haven but at least Germany does better job at providing services for it's citizens.

So in other words, the real problem is that the US government isn't as effective and efficient as the German government. That's not a tax issue or a services issue, that's a malfunctioning government issue.

-Mir

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Superfly
Posted 2012-12-02 22:57:30 and read 5678 times.

Quoting Mir (Reply 84):
So in other words, the real problem is that the US government isn't as effective and efficient as the German government. That's not a tax issue or a services issue, that's a malfunctioning government issue.

  
Exactly!
We're seeing eye to eye on this one.  

Topic: RE: U.S. Citizens Abroad And Fatca
Username: bjorn14
Posted 2012-12-04 05:07:34 and read 5542 times.

Quoting Mir (Reply 84):
That's not a tax issue or a services issue, that's a malfunctioning government issue.

Then again why should you pay for something that doesn't work?

Topic: RE: U.S. Citizens Abroad And Fatca
Username: SmokinL1011
Posted 2012-12-04 10:37:09 and read 5508 times.

There's a lot of conjecture and hysteria surrounding this whole issue. If you look up the facts it is pretty straight forward and not everyone living abroad is required to file 8938 (the FATCA form submitted as an attachment with your earned income filing).

Here's a link to the IRS website with info on FATCA:

See: Information for US taxpayers --> Do I need to file form 8938?

http://www.irs.gov/Businesses/Corpor...Account-Tax-Compliance-Act-(FATCA)

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Dreadnought
Posted 2012-12-04 10:48:38 and read 5503 times.

Quoting SmokinL1011 (Reply 87):
There's a lot of conjecture and hysteria surrounding this whole issue. If you look up the facts it is pretty straight forward and not everyone living abroad is required to file 8938 (the FATCA form submitted as an attachment with your earned income filing).

Form 8938 is not the issue here. In fact I was not even aware of it. By the way, the threshold is very easy to reach if you have some sort of pension account (like a 401K) in a foreign country.

The issue is

1) The concept of the extra-territorial taxation of foreign activity, that has nothing to do with the US apart from one party being a US person (not just citizens, but basically anyone who has ever been issued a social security number)

2) the concept of the US forcing foreign financial institutions to provide details of their customers' activities without due process, often in violation of other countries' laws.

3) the fact that the net effect of this Act being very minimal tax reciepts (estimated to be maybe a couple of billion per year, no more), but making US citizens and companies abroad pariahs, where they find it difficult to find financial institutions or business partners willing to deal with them, simply to avoid IRS paperwork.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: SmokinL1011
Posted 2012-12-04 10:57:32 and read 5500 times.

I agree with the stupidity of it all, but some above have asked questions about filing and others may see this thread who were never aware they have to file anything. The link spells out the info clearly for those that may need it while we're on the subject....

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Arrow
Posted 2012-12-04 11:35:28 and read 5489 times.

Quoting SmokinL1011 (Reply 87):
There's a lot of conjecture and hysteria surrounding this whole issue. If you look up the facts it is pretty straight forward and not everyone living abroad is required to file 8938 (the FATCA form submitted as an attachment with your earned income filing).

There is indeed a lot of hysteria -- the more you know about it, the more hysterical you get. It is by no means straightforward, and most US expats who want to retain their status as US citizens are paying $2-$3000 a year for legal/accounting fees involved with filing FBARs, 1040s, and the FATCA 8938. IRS penalties for any misstep in this process, however innocent, are draconian. All that is on top of filing tax returns and paying taxes in their residence country, of course.

Those expats who have decided to be the Minutemen of 2012 -- fighting taxation without representation -- are going through the increasingly torturous process of renouncing a citizenship that threatens to put them in the poorhouse. Any US expat who thinks it will get better someday is now dealing with the likely prospect that in fact it will get worse. There are Congresscritters, as we speak (write?) who will not rest until US expats are forced to pay full US income tax on their earnings -- in effect taxing them twice.

As Dreadnought has pointed out -- the issue here is citizenship-based taxation. If the US went to a territorial system (like everyone else in the world) none of this would matter and FATCA would be irrelevant. But there are none so blind as those who will not see.

If you want to see what level of hysteria is out there, check out this Canadian blog created specifically to help US expats -- those who want to remain US citizens and those who don't.

http://isaacbrocksociety.ca/

There are countless horror stories on this site of very ordinary people who have spent tens of thousands of dollars trying to comply with what you say is a "straightforward" process. It is highly complex, and there are expensive landmines everywhere, planted by an IRS that simply wants money, and has no qualms about how it generates it or where it comes from. The Mob has more compassion.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Dreadnought
Posted 2012-12-04 12:03:03 and read 5478 times.

Quoting SmokinL1011 (Reply 89):
I agree with the stupidity of it all, but some above have asked questions about filing and others may see this thread who were never aware they have to file anything. The link spells out the info clearly for those that may need it while we're on the subject....

And let's not forget the little issue of the 4th Amendment here.

Quote:
The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.

Unless the government can show probable cause to a judge, who authorizes a search warrant, I don't see how the IRS has any right to demand from a financial institution my records - even within the US. Outside of the US it should be completely out of the question.

One of these days I expect FATCA to end up in front of the Supreme Court and it will get thrown out. But in the meantime...

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Arrow
Posted 2012-12-04 13:27:06 and read 5467 times.

Quoting Dreadnought (Reply 91):

Unless the government can show probable cause to a judge, who authorizes a search warrant, I don't see how the IRS has any right to demand from a financial institution my records - even within the US. Outside of the US it should be completely out of the question.

It took a long time, but the Canadian Civil Liberties Association finally weighed in on this -- letter sent to Canadian Finance Minister today. I would have preferred stronger language, but ...

This is the CCLA website, link to full letter is on the bottom:

http://ccla.org/2012/12/04/ccla-regi...information-exchange-negotiations/

There is significant nervousness among US expats in Canada because they fear they'll be thrown under the bus in exchange for some unrelated bauble that Washington dangles in front of Ottawa's nose. It wouldn't be the first time that happened.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: bjorn14
Posted 2012-12-04 15:07:28 and read 5449 times.

Quoting Dreadnought (Reply 91):
One of these days I expect FATCA to end up in front of the Supreme Court and it will get thrown out

I hope you're right but I don't share your optimism.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Superfly
Posted 2012-12-04 22:08:01 and read 5413 times.

Quoting Arrow (Reply 90):

Thanks for the links Arrow.
Scary stuff indeed!

Quoting bjorn14 (Reply 93):
Quoting Dreadnought (Reply 91):
One of these days I expect FATCA to end up in front of the Supreme Court and it will get thrown out

I hope you're right but I don't share your optimism.

The Supreme Court has let us down before, they can easily do it again.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Mir
Posted 2012-12-05 02:23:00 and read 5394 times.

Quoting bjorn14 (Reply 86):
Then again why should you pay for something that doesn't work?

If you're of the mindset that the US government cannot be made more efficient, then you probably shouldn't. But that's a pretty pessimistic mindset.

-Mir

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Aesma
Posted 2012-12-15 17:02:37 and read 5067 times.

Quoting Dreadnought (Reply 1):
But under the deluded leadership of former President Micheline Calmy-Rey, the Swiss government caved in to US pressure and lifted those restrictions - essentially bank secrecy in Switzerland is a thing of the past thanks to this moron.

It wasn't just US pressure on Switzerland, and it wasn't mainly about that US law that is pretty unique. Switzerland is a real tax haven and that's why there was international pressure after the financial crisis to end the harboring of tax evaders. Not people living in Switzerland, people stashing money there.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Dreadnought
Posted 2012-12-15 18:47:20 and read 5055 times.

Quoting Aesma (Reply 96):
Switzerland is a real tax haven and that's why there was international pressure after the financial crisis to end the harboring of tax evaders. Not people living in Switzerland, people stashing money there.

Countries with a capital flight problem have a problem with excessive taxation. The problem is not Switzerland. If your government did not go apeshit on taxation, and if it were reasonable, you would not have such a problem with capital flight.

I understand that now, after losing the richest man in France, Bernard Arnault, you guys are losing Gerard Depardieu as well, not to mention hundreds of lower profile people. Belgium thanks you.

http://www.france24.com/en/20121216-...eu-says-hes-giving-french-passport

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Arrow
Posted 2012-12-15 21:49:53 and read 5019 times.

An early Christmas present. My wife got her CLN (Certificate of Lost Nationality) today, only 9 months after she first applied for it. Having left the US nearly 44 years ago, she finally has a piece of paper to prove she relinquished her US citizenship in 1974 when she became a Canadian citizen.

But in the envelope containing the CLN was also an IRS income tax form 8854. We haven't yet decided whether that should go in the circular file, or through the shredder. The CLN may not prevent her getting arrested by a US Customs/Border agent, but that's easy to control -- she doesn't want to visit the US any more anyway. But the real importance of that CLN -- and the main reason she got it -- is to prevent her Canadian bank from sending private financial info to the IRS in order to comply with FATCA.

Big party being planned.

[Edited 2012-12-15 21:50:49]

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Aesma
Posted 2012-12-15 21:54:20 and read 5014 times.

Well, most people do pay their taxes without trying to cheat. For some people there will always be excessive taxation, we won't enter a race to the bottom. If people enjoy living in Switzerland or Belgium because it's fiscally advantageous, good for them. We won't let people cheat, however. Look at what it caused in Greece.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: FlyDeltaJets
Posted 2012-12-15 21:55:00 and read 5014 times.

Quoting Dreadnought (Reply 44):
But those coverages might not satisfy all the requirements under Obamacare. Swiss universal coverage, for example, does not include psycho care, dental, or free annual checkups. Will Obamacare start demanding compliance internationally, like FATCA?

No

Quoting Superfly (Reply 54):
Of the amount of money held by expats overseas, I wonder how much of a dent it would make in closing the budget gap.
I'd like to see a breakdown of how much of a difference it would make. There are only 7 million US expats out of over 300 million Americans. Most of us living abroad are NOT rich fat cats either.
Eventually the government may need to start cutting spending. Imagine that!

The law wasn't designed for that. It may have been designed poorly but not as poorly as we may have been lead to believe. The only thing this law really adds to ex-pats is a requirement to submit an additional form only if your income is above 200,000 USD on Dec 31 or above 400,000 at anytime in the year. Im not seeing the need for such backlash.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Arrow
Posted 2012-12-15 22:27:50 and read 5014 times.

Quoting FlyDeltaJets (Reply 100):
Im not seeing the need for such backlash.

Then you haven't read enough. Cruise through the ACA (American Citizens Abroad) website and see if you can get a sense of why expats are so outraged. If you think the only issue is an additional form, you are badly misinformed.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Superfly
Posted 2012-12-15 22:59:36 and read 5012 times.

Quoting FlyDeltaJets (Reply 100):
The only thing this law really adds to ex-pats is a requirement to submit an additional form only if your income is above 200,0.....

You're missing the point. Expats have always been required to file regardless of income. The problem FATCA creates is it shifts the burden to the banks in foreign countries. Many banks will not comply at all and just turn down American customers. That creates a huge problem for us expats depending on which country we reside in. That is why some nations have already told Obama's IRS to f--k off.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Pyrex
Posted 2012-12-16 09:26:08 and read 4958 times.

Quoting Mir (Reply 84):
They definitely should be.

Not necessarily. In many countries, the employer contribution to Social Security (which is effectively a hidden tax on the employee itself) is very high. For instance, in Portugal that is 23.5% - in addition to the 11% paid by the employee itself, that means even if your effective income tax rate is 0% you already paid ~30% of your income to the government. If this doesn't get captured accurately (which it doesn't) you can easily be in a situation where someone is paying over 50% of their income to the local government but the IRS still thinking their effective tax rate is lower so requiring them to pay more.

Quoting Aesma (Reply 96):
Not people living in Switzerland, people stashing money there.

It affects everyone. My ex-girlfriend did high-school in Geneve and still had a checking account there at the Postbank, which she forgot she had, with around 500 francs. She got a strongly-worded letter from the IRS one day threatening to make her pay 10 years of back-taxes and generally make her life a living hell.

Quoting Aesma (Reply 96):
Switzerland is a real tax haven and that's why there was international pressure after the financial crisis to end the harboring of tax evaders

People don't put money in Switzerland to save on taxes, they put their money in Switzerland for the same reason Argentinians and Venezuelans buy condos in Miami - preservation of principal (i.e., an insurance policy). Because all they need to do is look back in history and realize that at some point, when taxing income is no longer enough to sustain a greedy government, they will start confiscating assets (i.e., taxing wealth) - and that is universal across all governments. I am sure the Jews in 1930s Germany who put their money in Switzerland and were able to escape alive are very happy they did so. BTW, Germany has been one of the countries more aggressively pursuing Switzerland on this topic - I wonder if it is just related to any hard feelings.

Quoting Dreadnought (Reply 97):
I understand that now, after losing the richest man in France, Bernard Arnault, you guys are losing Gerard Depardieu as well, not to mention hundreds of lower profile people. Belgium thanks you.

And the irony of it all is that Gerard Depardieu made his fortune starring in highly-subsidized (by France and the EU) French movies nobody watches but that get made anyway. Not even those that suck at the teat of the State want anything to do with it any more.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: AirOne
Posted 2012-12-20 03:30:36 and read 4778 times.

Hi All-

Interesting topic as I am now an expat in London after doing the past year or so in Ireland. As part of my contract (as sometimes standard for American expats) I have my tax preparation by a major accounting firm reimbursed by the company.

Here is my basic understanding of expat taxes, please correct me if I am wrong because I am not on the front lines preparing my own return.

1) There is a foreign earned income exclusion which reduces your taxable income by ~US$ 96,000 and this seems to increase with inflation

2) On top of this deduction, income tax paid in the foriegn jurisdiction can also be deducted from your US taxes - so if you are in a higher tax jurisdiction (think Western Europe) you probably will not have a US tax obligation and if you are in a lower tax environment (think Gulf States) you could have a significant obligation

3) I believe you are also able to deduct cost of housing paid each year, so your rental can be deducted

All of these factors mean I have a very marginal tax bill in the US, besides for my US based investments.

I think the biggest annoyance for me is the tax treatment and what the US recognizes overseas. For example, in the UK there is a think called ISA which lets you save up to ~GBP5,600 tax free in a savings account and another ~GBP5,600 in stocks and shares (or all 10k if no savings account) without paying tax on income or capital gains each year. The US does not recognize this structure and views the entire thing (esp stocks and shares) as a taxable trust which is a nightmare to claim.

I think the key thing if you can get the company to indemnify you from either the US side or foreign side. For example, most of the contracts I have seen in finance would reimburse the employee for additional taxes owed to the US for their foreign income. Alternatively, some companies will do the vice versa and reimburse you for any taxes over your domiciled country's obligations but I think it is pretty rare.

AirOne

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Superfly
Posted 2012-12-20 05:48:23 and read 4765 times.

Quoting AirOne (Reply 104):

Do you have a bank account in the UK? If not, you will not be effected by this. Even if you did, I'm pretty sure the UK would go along as they have done with other bad US foreign policy/wars.
Again, this is up to the banks in other countries. Has nothing to do with how much money you earn.

Topic: RE: U.S. Citizens Abroad And Fatca
Username: Arrow
Posted 2012-12-20 21:36:44 and read 4685 times.

Quoting AirOne (Reply 104):
I think the key thing if you can get the company to indemnify you from either the US side or foreign side. For example, most of the contracts I have seen in finance would reimburse the employee for additional taxes owed to the US for their foreign income. Alternatively, some companies will do the vice versa and reimburse you for any taxes over your domiciled country's obligations but I think it is pretty rare.

You've got most of it right, but there are dozens of little hidden land mines waiting to be stepped on and the IRS penalties for mistakes make the gas chamber look inviting.

Nice that your company helps with the accounting fees and will make you whole if there are US taxes owing. Must be an American company, right? But if you work for a local company, you're going to have trouble holding onto your job and your prospects for advancement will be very limited. As soon as that company puts you, a US citizen, in a position with signing authoriity it will trigger all kinds of IRS filings, as well as mandatory FBAR filings with the state department. That "local" company won't appreciate having the IRS inside the boardroom just because they've given you some financial responsibilities.

And watch out, because pretty soon the cost of employing an American offshore will be prohibitive, even for a US company. When FATCA starts to bite (takes effect Jan. 1, 2013), you'll see a lot of companies -- including the US ones -- figuring out that hiring locals is half the cost and presents no IRS hassles. Oh, and be prepared for your UK bank to decide it doesn't want you as a customer any more.

The good news is it looks like the FATCA compliance rules -- expected by the end of this year -- now won't be finalized until Q1 2013. Which hopefully means the foreign banks will get yet another deadline extension for getting their books in order. It also hopefully gives a few more governments an opportunity to tell the IRS to stick it where the sun don't shine.


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