Tag Archives: U.S. person

Part 22: What God Hath Wrought – The #FATCA Inquisition (Review, Identify and Report on “U.S. Persons”) – Oh my God! #FATCA affects even a Paypal account!


 
 
 

Will a business trip to the United States of America trigger a "chance" encounter with Mr. #FBAR?

Prologue: Circa 1948 – George Orwell anticipates the arrival of Mr. FBAR

‘By the way, old boy,’ he said. ‘I hear that little beggar of mine let fly at you with his catapult yesterday. I gave him a good dressing-down for it. In fact I told him I’d take the catapult away if he does it again.
‘I think he was a little upset at not going to the execution,’ said Winston.
‘ Ah, well — what I mean to say, shows the right spirit, doesn’t it? Mischievous little beggars they are, both of them, but talk about keenness! All they think about is the Spies, and the war, of course. D’you know what that little girl of mine did last Saturday, when her troop was on a hike out Berkhamsted way? She got two other girls to go with her, slipped off from the hike, and spent the whole afternoon following a strange man. They kept on his tail for two hours, right through the woods, and then, when they got into Amersham, handed him over to the patrols.’
‘What did they do that for?’ said Winston, somewhat taken aback. Parsons went on triumphantly:
‘My kid made sure he was some kind of enemy agent — might have been dropped by parachute, for instance. But here’s the point, old boy. What do you think put her on to him in the first place? She spotted he was wearing a funny kind of shoes — said she’d never seen anyone wearing shoes like that before. So the chances were he was a foreigner. Pretty smart for a nipper of seven, eh?’
‘What happened to the man?’ said Winston.
‘Ah, that I couldn’t say, of course. But I wouldn’t be altogether surprised if-‘ Parsons made the motion of aiming a rifle, and clicked his tongue for the explosion.
Chapter 5 of George Orwell’s 1984

Writing in 1948, George Orwell (in his book 1984) identified the need to identify and punish all things “foreign” as being important for domestic security.
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The ownership and use of the "U.S. Person" (which includes a "citizen") as an instrument of foreign policy

Welcome and a bit of an introduction
This post turned out to be longer and cover more topics than I originally intended. The problem with discussing the problems experienced by Americans abroad is that there are many “moving parts”. I have broken SOME of the “moving parts” into, well six parts and a “prologue”.
In addition, as the title suggests, the original intention of the post was to discuss how the U.S. Government uses its citizens as “instruments of foreign policy”. The obvious question is: how can they possibly do this? Doesn’t U.S. law end at U.S. borders? How can the United States impose law on the rest of the world. The answer to that question raises other issues (which are discussed in the other parts of this post).
I guess I need a new title for the post.
I would also like to say that I am hopeful that there will be change. That said, change is possible ONLY (regardless of intention) if all of the issues are understood individually and how they interact.
Prologue – U.S. citizens are “subjects” to U.S. law wherever they may be in the world
Part I – The U.S. “Giveth” and the U.S. “Taketh” – How the U.S. uses “citizenship” as a weapon against individuals
Part II – U.S. Citizens living abroad – “Life in the penalty box”
Part III – I’m a “Toxic American”, but it’s not my fault – How U.S. regulation makes “U.S. citizens undesirables in other nations
Part IV – The use of U.S. citizens as instruments of foreign policy
Part V – Why Americans abroad are renouncing U.S. citizenship
Part VI – The injustice of the S. 877A “Exit Tax” as applied to Americans abroad
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Taxability Freedom Day: On what day does a "U.S. person" cease to be a "U.S. taxpayer"?

Update: October 9, 2015
This post focuses largely on the role of form 8854 in relinquishing U.S. citizenship for tax purposes. See also my more recent post which discusses the role of the Certificate of Loss of Nationality in relinquishing U.S. citizenship.


 
Introduction …
There is a difference between:

  1. What is your tax liability IF you are a “U.S. person” for tax purposes”;and
  2. Whether you are a U.S. person for tax purposes at all.

I find that many of the blog posts and articles confuse these two issues.
Remember that “U.S. person” for tax purposes INCLUDES (but is not limited to) U.S. citizens and Green Card Holders.
What this post is NOT …
This post is NOT to discuss your specific U.S. tax liability – the AMOUNT of U.S. taxes owing in general. It is NOT to discuss how U.S. taxes are calculated in general. It is NOT to discuss the “taxes that may be triggered” by expatriation. Only those who are “U.S. persons” are subject to U.S. taxation. Therefore, in order to end the “jurisdiction of the United States to impose taxes on you (your “taxability”):
You must terminate your status as a “U.S. person” for tax purposes. This means that you must either “relinquish your U.S. citizenship” under ALL applicable legislation or terminate your Green Card.
What this post IS …
This post is to explain the date that you cease to be a “U.S. person” for tax purposes. At what point, can you say with confidence:
“I’m free. The U.S. no longer has the right to treat me as a “U.S. person” for tax purposes. Nothing that I do from this point on will generate “U.S. tax liability”.
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