AirframeAS
Topic Author
Posts: 9811
Joined: Thu Feb 05, 2004 3:56 pm

U.S. Citizens Abroad And Fatca

Tue Nov 27, 2012 11:43 pm

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]
A Safe Flight Begins With Quality Maintenance On The Ground.
 
User avatar
Dreadnought
Posts: 9821
Joined: Tue Feb 19, 2008 6:31 pm

RE: U.S. Citizens Abroad And Fatca

Wed Nov 28, 2012 12:04 am

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.
Forget dogs and cats - Spay and neuter your liberals.
 
Arrow
Posts: 2325
Joined: Wed Jun 19, 2002 7:44 am

RE: U.S. Citizens Abroad And Fatca

Wed Nov 28, 2012 12:46 am

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.
Never let the facts get in the way of a good story.
 
PHX787
Posts: 7877
Joined: Thu Mar 15, 2012 7:46 pm

RE: U.S. Citizens Abroad And Fatca

Wed Nov 28, 2012 1:54 am

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.
Follow me on twitter: www.twitter.com/phx787
 
User avatar
Dreadnought
Posts: 9821
Joined: Tue Feb 19, 2008 6:31 pm

RE: U.S. Citizens Abroad And Fatca

Wed Nov 28, 2012 2:15 am

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.
Forget dogs and cats - Spay and neuter your liberals.
 
BMI727
Posts: 11094
Joined: Mon Feb 02, 2009 9:29 pm

RE: U.S. Citizens Abroad And Fatca

Wed Nov 28, 2012 2:18 am

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.
Why do Aerospace Engineering students have to turn things in on time?
 
AirframeAS
Topic Author
Posts: 9811
Joined: Thu Feb 05, 2004 3:56 pm

RE: U.S. Citizens Abroad And Fatca

Wed Nov 28, 2012 2:24 am

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.
A Safe Flight Begins With Quality Maintenance On The Ground.
 
User avatar
DocLightning
Posts: 19628
Joined: Wed Nov 16, 2005 8:51 am

RE: U.S. Citizens Abroad And Fatca

Wed Nov 28, 2012 2:47 am

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.
-Doc Lightning-

"The sky calls to us. If we do not destroy ourselves, we will one day venture to the stars."
-Carl Sagan
 
User avatar
Dreadnought
Posts: 9821
Joined: Tue Feb 19, 2008 6:31 pm

RE: U.S. Citizens Abroad And Fatca

Wed Nov 28, 2012 2:49 am

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,
Forget dogs and cats - Spay and neuter your liberals.
 
Mir
Posts: 19092
Joined: Mon Jan 05, 2004 3:55 am

RE: U.S. Citizens Abroad And Fatca

Wed Nov 28, 2012 3:37 am

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
7 billion, one nation, imagination...it's a beautiful day
 
Pyrex
Posts: 4044
Joined: Thu Aug 25, 2005 7:24 am

RE: U.S. Citizens Abroad And Fatca

Wed Nov 28, 2012 4:57 am

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.?
Read this very carefully, I shall write this only once!
 
mt99
Posts: 6166
Joined: Wed May 26, 1999 5:41 am

RE: U.S. Citizens Abroad And Fatca

Wed Nov 28, 2012 5:25 am

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?
Step into my office, baby
 
User avatar
Dreadnought
Posts: 9821
Joined: Tue Feb 19, 2008 6:31 pm

RE: U.S. Citizens Abroad And Fatca

Wed Nov 28, 2012 5:26 am

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.
Forget dogs and cats - Spay and neuter your liberals.
 
AirframeAS
Topic Author
Posts: 9811
Joined: Thu Feb 05, 2004 3:56 pm

RE: U.S. Citizens Abroad And Fatca

Wed Nov 28, 2012 5:40 am

Quoting mt99 (Reply 11):

For the record, that was Dreadnought's quote from another thread as that's not my quote.
A Safe Flight Begins With Quality Maintenance On The Ground.
 
Arrow
Posts: 2325
Joined: Wed Jun 19, 2002 7:44 am

RE: U.S. Citizens Abroad And Fatca

Wed Nov 28, 2012 6:24 am

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.
Never let the facts get in the way of a good story.
 
Superfly
Posts: 37735
Joined: Thu May 11, 2000 8:01 am

RE: U.S. Citizens Abroad And Fatca

Wed Nov 28, 2012 6:32 am

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.
Bring back the Concorde
 
MD11Engineer
Posts: 13916
Joined: Sun Oct 26, 2003 5:25 am

RE: U.S. Citizens Abroad And Fatca

Wed Nov 28, 2012 7:30 am

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
Je Suis Charlie et je suis Ahmet aussi
 
Superfly
Posts: 37735
Joined: Thu May 11, 2000 8:01 am

RE: U.S. Citizens Abroad And Fatca

Wed Nov 28, 2012 8:36 am

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.
Bring back the Concorde
 
offloaded
Posts: 900
Joined: Fri Apr 17, 2009 1:56 pm

RE: U.S. Citizens Abroad And Fatca

Wed Nov 28, 2012 1:23 pm

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.
To no one will we sell, or deny, or delay, right or justice - Magna Carta, 1215
 
User avatar
Aaron747
Posts: 8529
Joined: Thu Aug 07, 2003 2:07 am

RE: U.S. Citizens Abroad And Fatca

Wed Nov 28, 2012 3:26 pm

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.
If you need someone to blame / throw a rock in the air / you'll hit someone guilty
 
User avatar
Dreadnought
Posts: 9821
Joined: Tue Feb 19, 2008 6:31 pm

RE: U.S. Citizens Abroad And Fatca

Wed Nov 28, 2012 4:20 pm

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.

Forget dogs and cats - Spay and neuter your liberals.
 
PHX787
Posts: 7877
Joined: Thu Mar 15, 2012 7:46 pm

RE: U.S. Citizens Abroad And Fatca

Wed Nov 28, 2012 5:17 pm

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
Follow me on twitter: www.twitter.com/phx787
 
StarAC17
Posts: 3400
Joined: Thu Aug 07, 2003 11:54 am

RE: U.S. Citizens Abroad And Fatca

Wed Nov 28, 2012 6:06 pm

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.
Engineers Rule The World!!!!!
 
User avatar
hOMSaR
Posts: 1343
Joined: Tue Jan 19, 2010 4:47 am

RE: U.S. Citizens Abroad And Fatca

Wed Nov 28, 2012 6:36 pm

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.
The plural of Airbus is Airbuses. Airbii is not a word, and doesn't even make sense.
 
User avatar
Dreadnought
Posts: 9821
Joined: Tue Feb 19, 2008 6:31 pm

RE: U.S. Citizens Abroad And Fatca

Wed Nov 28, 2012 6:42 pm

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.
Forget dogs and cats - Spay and neuter your liberals.
 
StarAC17
Posts: 3400
Joined: Thu Aug 07, 2003 11:54 am

RE: U.S. Citizens Abroad And Fatca

Wed Nov 28, 2012 7:06 pm

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.
Engineers Rule The World!!!!!
 
Arrow
Posts: 2325
Joined: Wed Jun 19, 2002 7:44 am

RE: U.S. Citizens Abroad And Fatca

Wed Nov 28, 2012 8:09 pm

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.
Never let the facts get in the way of a good story.
 
Superfly
Posts: 37735
Joined: Thu May 11, 2000 8:01 am

RE: U.S. Citizens Abroad And Fatca

Wed Nov 28, 2012 8:16 pm

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.
Bring back the Concorde
 
StarAC17
Posts: 3400
Joined: Thu Aug 07, 2003 11:54 am

RE: U.S. Citizens Abroad And Fatca

Wed Nov 28, 2012 9:34 pm

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.
Engineers Rule The World!!!!!
 
mt99
Posts: 6166
Joined: Wed May 26, 1999 5:41 am

RE: U.S. Citizens Abroad And Fatca

Wed Nov 28, 2012 9:41 pm

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!
Step into my office, baby
 
User avatar
Dreadnought
Posts: 9821
Joined: Tue Feb 19, 2008 6:31 pm

RE: U.S. Citizens Abroad And Fatca

Wed Nov 28, 2012 10:07 pm

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.
Forget dogs and cats - Spay and neuter your liberals.
 
mt99
Posts: 6166
Joined: Wed May 26, 1999 5:41 am

RE: U.S. Citizens Abroad And Fatca

Wed Nov 28, 2012 10:13 pm

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.
Step into my office, baby
 
User avatar
Dreadnought
Posts: 9821
Joined: Tue Feb 19, 2008 6:31 pm

RE: U.S. Citizens Abroad And Fatca

Wed Nov 28, 2012 10:22 pm

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.
Forget dogs and cats - Spay and neuter your liberals.
 
lewis
Posts: 3565
Joined: Thu Jul 08, 1999 5:41 am

RE: U.S. Citizens Abroad And Fatca

Wed Nov 28, 2012 10:26 pm

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!
 
AirframeAS
Topic Author
Posts: 9811
Joined: Thu Feb 05, 2004 3:56 pm

RE: U.S. Citizens Abroad And Fatca

Wed Nov 28, 2012 10:51 pm

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?
A Safe Flight Begins With Quality Maintenance On The Ground.
 
bjorn14
Posts: 3551
Joined: Sat Feb 27, 2010 2:11 pm

RE: U.S. Citizens Abroad And Fatca

Wed Nov 28, 2012 11:46 pm

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
"I want to know the voice of God the rest is just details" --A. Einstein
 
AirframeAS
Topic Author
Posts: 9811
Joined: Thu Feb 05, 2004 3:56 pm

RE: U.S. Citizens Abroad And Fatca

Wed Nov 28, 2012 11:52 pm

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

I was only using London as an example......
A Safe Flight Begins With Quality Maintenance On The Ground.
 
User avatar
Dreadnought
Posts: 9821
Joined: Tue Feb 19, 2008 6:31 pm

RE: U.S. Citizens Abroad And Fatca

Wed Nov 28, 2012 11:53 pm

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.
Forget dogs and cats - Spay and neuter your liberals.
 
bjorn14
Posts: 3551
Joined: Sat Feb 27, 2010 2:11 pm

RE: U.S. Citizens Abroad And Fatca

Thu Nov 29, 2012 12:13 am

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

Sorry I forgot my   
"I want to know the voice of God the rest is just details" --A. Einstein
 
User avatar
DarkSnowyNight
Posts: 1786
Joined: Sun Jan 01, 2012 7:59 pm

RE: U.S. Citizens Abroad And Fatca

Thu Nov 29, 2012 1:08 am

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.
You Sir, are a very funny lady.
 
Superfly
Posts: 37735
Joined: Thu May 11, 2000 8:01 am

RE: U.S. Citizens Abroad And Fatca

Thu Nov 29, 2012 5:26 am

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.
Bring back the Concorde
 
Mir
Posts: 19092
Joined: Mon Jan 05, 2004 3:55 am

RE: U.S. Citizens Abroad And Fatca

Thu Nov 29, 2012 6:10 am

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
7 billion, one nation, imagination...it's a beautiful day
 
bjorn14
Posts: 3551
Joined: Sat Feb 27, 2010 2:11 pm

RE: U.S. Citizens Abroad And Fatca

Thu Nov 29, 2012 3:26 pm

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.
"I want to know the voice of God the rest is just details" --A. Einstein
 
User avatar
DocLightning
Posts: 19628
Joined: Wed Nov 16, 2005 8:51 am

RE: U.S. Citizens Abroad And Fatca

Thu Nov 29, 2012 4:29 pm

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.
-Doc Lightning-

"The sky calls to us. If we do not destroy ourselves, we will one day venture to the stars."
-Carl Sagan
 
User avatar
Dreadnought
Posts: 9821
Joined: Tue Feb 19, 2008 6:31 pm

RE: U.S. Citizens Abroad And Fatca

Thu Nov 29, 2012 5:27 pm

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?
Forget dogs and cats - Spay and neuter your liberals.
 
RobertNL070
Posts: 4159
Joined: Mon Sep 22, 2003 4:29 am

RE: U.S. Citizens Abroad And Fatca

Thu Nov 29, 2012 5:32 pm

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.
Youth is a gift of nature. Age is a work of art.
 
Mir
Posts: 19092
Joined: Mon Jan 05, 2004 3:55 am

RE: U.S. Citizens Abroad And Fatca

Thu Nov 29, 2012 5:39 pm

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
7 billion, one nation, imagination...it's a beautiful day
 
Arrow
Posts: 2325
Joined: Wed Jun 19, 2002 7:44 am

RE: U.S. Citizens Abroad And Fatca

Thu Nov 29, 2012 7:13 pm

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.
Never let the facts get in the way of a good story.
 
StarAC17
Posts: 3400
Joined: Thu Aug 07, 2003 11:54 am

RE: U.S. Citizens Abroad And Fatca

Thu Nov 29, 2012 9:14 pm

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.
Engineers Rule The World!!!!!
 
Pyrex
Posts: 4044
Joined: Thu Aug 25, 2005 7:24 am

RE: U.S. Citizens Abroad And Fatca

Fri Nov 30, 2012 12:48 am

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.
Read this very carefully, I shall write this only once!

Who is online

Users browsing this forum: 910A, Baidu [Spider], PacificBeach88 and 30 guests