Category Archives: Renounce U.S. citizenship

Why tax compliant #Americansabroad are under great pressure to renounce US citizenship #citizide

Introduction …
Many individuals (Solomon Yue, Keith Redmond, and MANY others) have been working very hard on tax reform for Americans abroad. Many groups (ACA, AARO, DA, etc.) have also been working. The basic goal is to support Congressman Holding’s bill which would provide some tax relief. This has been a long and difficult process (which will eventually succeed), it is very hard for individual legislators to understand the issues. This motivated me to tweet the following:


A response to this tweet included: “So the only resolution is to renounce citizenship. Correct?”
My thoughts to this response …

Part 15 in series: The Emotional Toll of US Non-Resident Taxation and Banking Policies – “I Just Wanted to Punch, Kick, Scream”

Before moving to the post, if you believe that Americans abroad are being treated unjustly by the United States Government: Join me on May 17, 2019 for a discussion of U.S. “citizenship-based taxation” as follows:


You are invited to submit your questions in advance. In fact, PLEASE submit questions. This is an opportunity to engage with Homelanders in general and the U.S. tax compliance community in particular.
Thanks to Professor Zelinsky for his willingness to engage in this discussion. Thanks to Kat Jennings of Tax Connections for hosting this discussion. Thanks to Professor William Byrnes for his willingness to moderate this discussion.
Tax Connections has published a large number of posts that I have written over the years (yes, hard to believe it has been years). As you may know I oppose FATCA, U.S. citizenship-based taxation and the use of FATCA to impose U.S. taxation on tax residents of other countries.
Tax Connections has also published a number of posts written by Professor Zelinsky (who apparently takes a contrary view).
You will find Part 1 to Part 11 of this series of posts here.
Laura Snyder discusses the “emotional toll of U.S. non-resident taxation and banking policies
Laura Snyder has written (in addition to her original four posts) a series of five posts describing and exploring “The Emotional Toll of US Non-Resident Taxation and Banking Policies. Part 10 of this series (comments of Nando Breiter) was a prologue to Ms. Snyder’s five posts.
Now over to Laura …
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Part 12 in series: The Emotional Toll of US Non-Resident Taxation and Banking Policies – “I Love the US but Feel Betrayed”

Before moving to the post, if you believe that Americans abroad are being treated unjustly by the United States Government: Join me on May 17, 2019 for a discussion of U.S. “citizenship-based taxation” as follows:


You are invited to submit your questions in advance. In fact, PLEASE submit questions. This is an opportunity to engage with Homelanders in general and the U.S. tax compliance community in particular.
Thanks to Professor Zelinsky for his willingness to engage in this discussion. Thanks to Kat Jennings of Tax Connections for hosting this discussion. Thanks to Professor William Byrnes for his willingness to moderate this discussion.
Tax Connections has published a large number of posts that I have written over the years (yes, hard to believe it has been years). As you may know I oppose FATCA, U.S. citizenship-based taxation and the use of FATCA to impose U.S. taxation on tax residents of other countries.
Tax Connections has also published a number of posts written by Professor Zelinsky (who apparently takes a contrary view).
You will find Part 1 to Part 11 of this series of posts here.
Laura Snyder discusses the “emotional toll of U.S. non-resident taxation and banking policies
Laura Snyder has written (in addition to her original four posts) a series of five posts describing and exploring “The Emotional Toll of US Non-Resident Taxation and Banking Policies. Part 10 of this series (comments of Nando Breiter) was a prologue to Ms. Snyder’s five posts.
Now over to Laura …
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Part 9 of series: How do US Tax Rules Constrain the Investment Choices of US Taxpayers Living in Australia?

Before moving to the post, if you believe that Americans abroad are being treated unjustly by the United States Government: Join me on May 17, 2019 for a discussion of U.S. “citizenship-based taxation” as follows:


You are invited to submit your questions in advance. In fact, PLEASE submit questions. This is an opportunity to engage with Homelanders in general and the U.S. tax compliance community in particular.
Thanks to Professor Zelinsky for his willingness to engage in this discussion. Thanks to Kat Jennings of Tax Connections for hosting this discussion. Thanks to Professor William Byrnes for his willingness to moderate this discussion.
Tax Connections has published a large number of posts that I have written over the years (yes, hard to believe it has been years). As you may know I oppose FATCA, U.S. citizenship-based taxation and the use of FATCA to impose U.S. taxation on tax residents of other countries.
Tax Connections has also published a number of posts written by Professor Zelinsky (who apparently takes a contrary view).
This is post 9 in my series leading up to the May 17 Tax Connections discussion. The first eight posts have been for the purpose of demonstrating:
– in posts 1 to 4, Laura Snyder did a wonderful job in explaining how the U.S. tax system impacts the lives of Americans abroad. Her specific focus was on those individuals who identify as being U.S. citizens
– in post 5, I extended the discussion to reinforce that what the U.S. calls “citizenship-based taxation” is actually a system that impacts far more than those who identify as being U.S. citizens. In fact it burdens every individual on the planet who can’t demonstrate that he is a “nonresident” alien (people are renouncing U.S. citizenship because they can save themselves ONLY if they become a “nonresident alien”).
– in Post 6, I added the thoughts of Toronto Tax Professional Peter Megoudis who explained how those who are connected to “U.S. persons” (through family or business arrangements) can be impacted by the U.S. tax system
In Post 7, I extended the analysis to explain that:
1. Not only does the United States impose worldwide taxation on individuals who don’t live in the United States; but
2. The system of worldwide taxation imposed is in reality and separate and far more punitive collection of taxes than is imposed on Homeland Americans.
Think of it! With the exception of the United States, when a person moves away from the country and establishes tax residency in another country, they will no longer be taxed as a resident of the first country.
But in the case of the United States: If a U.S. citizen moves from the United States and establishes tax residency in a new country: (1) he will STILL be taxable as a tax resident of the United States (2) he will be subjected to a separate and more punitive system of taxation! (3) he will have to engage in financial planning according to the rules of the tax system where he resides. #YouCantMakeThisUp! I recently discussed this on Quora as follows …
Read John Richardson's answer to What would I, as an American citizen, need to do to manage my finances (such as an investment portfolio) if I decided to move to Canada? What pitfalls await? on Quora
We will now see how being subject to the U.S. tax system disables the individual, from being able to engage in the normal financial planning, that is optimal under the tax system where he resides. In effect, he will lose the tax benefits which are available to “non-U.S.” residents of his country of residence. The biggest cost of this is NOT the additional tax. The biggest cost is the opportunity cost of being disabled from normal financial planning. A discussion of “lost investing opportunity” in Canada is here.
Dr. Karen Alpert will now explain how the “loss of opportunity” works in an Australian context.


Australia – A Study
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Part 8 of series: Former ACA Tax Director Jackie Bugnion recalls the 2014 Kirsch Schneider debate on "citizenship-based taxation"

Before moving to the post, if you believe that Americans abroad are being treated unjustly by the United States Government: Join me on May 17, 2019 for a discussion of U.S. “citizenship-based taxation” as follows:


You are invited to submit your questions in advance. In fact, PLEASE submit questions. This is an opportunity to engage with Homelanders in general and the U.S. tax compliance community in particular.
Thanks to Professor Zelinsky for his willingness to engage in this discussion. Thanks to Kat Jennings of Tax Connections for hosting this discussion. Thanks to Professor William Byrnes for his willingness to moderate this discussion.
Tax Connections has published a large number of posts that I have written over the years (yes, hard to believe it has been years). As you may know I oppose FATCA, U.S. citizenship-based taxation and the use of FATCA to impose U.S. taxation on tax residents of other countries.
Tax Connections has also published a number of posts written by Professor Zelinsky (who apparently takes a contrary view).
This is the eigth of a series of post I have written as a run up to the May 17, 2019 Tax Connections discussion about U.S. citizenship-based taxation. You can read the previous posts here.
Introducing Jackie Bugnion …
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U.S. tax professionals discuss the principle that: The United States imposes a separate and more punitive taxation on #Americansabroad and @USAccidental

Here are some links to some of my videos discussion various of aspects of FATCA and U.S. “citizenship-based taxation”. In general there are two sources:
1. My personal YouTube channel.
2. Videos made at ThatChannel.com (a small Toronto internet based television station).
In March of 2019 I began a discussion at Tax Connections exploring the principle that:

“The United States is imposing a separate and more punitive tax system on people who are tax residents of other countries and do not live in the United States.”

As part of this discussion I had some discussion with Virginia La Torre Jeker, Peter Megoudis and Elena Hanson. Each of them is highly experienced and knowledgeable about how the U.S. tax system applies to Americans abroad and accidental Americans. The discussion took place in March of 2019. It turned out to be a very long discussion. Rather than include a video of the complete discussion, I have broken this into smaller videos that are based on themes.
This post is to separate and highlight the videos that resulted from this discussion.
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Part 5 of series: What does U.S. "citizenship-based taxation" actually mean and to whom does it actually apply?

Before moving to the post, if you believe that Americans abroad are being treated unjustly by the United States Government: Join me on May 17, 2019 for a discussion of U.S. “citizenship-based taxation” as follows:


You are invited to submit your questions in advance. In fact, PLEASE submit questions. This is an opportunity to engage with Homelanders in general and the U.S. tax compliance community in particular.
Thanks to Professor Zelinsky for his willingness to engage in this discussion. Thanks to Kat Jennings of Tax Connections for hosting this discussion. Thanks to Professor William Byrnes for his willingness to moderate this discussion.
Tax Connections has published a large number of posts that I have written over the years (yes, hard to believe it has been years). As you may know I oppose FATCA, U.S. citizenship-based taxation and the use of FATCA to impose U.S. taxation on tax residents of other countries.
Tax Connections has also published a number of posts written by Professor Zelinsky (who apparently takes a contrary view).
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This is the fifth of a series of posts that reflect views and experiences of Americans abroad who are experiencing the reality of actually living as an American abroad in an FBAR and FATCA world. (The first post is here.) The second post is here. The third post is here. The fourth post is here. I think it’s important to hear from people who are actually impacted by this and who have the courage to speak out. The “reality on the ground” is quite different from the theory.
I hope that this series of posts will give you ideas for questions and concerns that you would like to have addressed in the May 17, 2019 Tax Connections – Citizenship Taxation discussion.
Laura Snyder has graciously contributed the first four posts of this series. In her series of four posts, she has outlined the origins and requirements of U.S. citizenship-based taxation.


Ms. Snyder grew up in the United States and moved to Europe as an adult. The tone and pain reflected in her writing suggests that she truly identifies as being a citizen of the United States.
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Part 1 of 4: “How Do I Protect Myself?” A Case Study in the Marginalization of Americans Living Overseas

Before moving to the post, if you believe that Americans abroad are being treated unjustly by the United States Government: Join me on May 17, 2019 for a discussion of U.S. “citizenship-based taxation” as follows:


You are invited to submit your questions in advance. In fact, PLEASE submit questions. This is an opportunity to engage with Homelanders in general and the U.S. tax compliance community in particular.
Thanks to Professor Zelinsky for his willingness to engage in this discussion. Thanks to Kat Jennings of Tax Connections for hosting this discussion. Thanks to Professor William Byrnes for his willingness to moderate this discussion.
Tax Connections has published a large number of posts that I have written over the years (yes, hard to believe it has been years). As you may know I oppose FATCA, U.S. citizenship-based taxation and the use of FATCA to impose U.S. taxation on tax residents of other countries.
Tax Connections has also published a number of posts written by Professor Zelinsky (who apparently takes a contrary view).
____________________________________________________________________________
This is the first of a series of four posts that reflect views and experiences of Americans abroad who are experiencing the reality of actually living as an American abroad in an FBAR and FATCA world. I think it’s important to hear from people who are actually impacted by this and who have the courage to speak out. The “reality on the ground” is quite different from the theory.
I hope that this series of posts will give you ideas for questions and concerns that you would like to have addressed in the May 17, 2019 Tax Connections – Citizenship Taxation discussion.
I am grateful to Laura Snyder for contributing her thoughts, writing and research to the discussion.
Now over to Ms. Snyder …
________________________________________________________________________


“How Do I Protect Myself?”
A Case Study in the Marginalization of Americans Living Overseas

by Laura Snyder*
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Changes to the filing threshold for "Married Filing Separately" filing category likely to pressure more Americans abroad to renounce US citizenship


This post is a continuation of my post (referenced in the above tweet) which describes the reduction of the threshold for Married Filing Separately from $4050 to $5. In this post I describe why I believe that this change will result in further renunciations of U.S. citizenship. The primary incentive to renouncing citizenship is that: by requiring married low income Americans abroad to file U.S. tax returns, more financial information about their nonresident alien spouses will be reported to the IRS. On the most basic level, a Form 8938 is required only if a U.S. tax return is also required. The requirement to file a tax return increases the chances of a requirement to file Form 8938 (and others). Form 8938 does require the disclosure of some jointly owned assets. If you were a nonresident alien, would you want your financial information to be transferred to the IRS?
On December 19, 2018 Dr. Karen Alpert commenting on changes to the 2017 TCJA that would affect Americans abroad noted that:
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Under the Starry Flag by @SalyerLucy shows how the history of citizenship struggles repeat themselves: The USA of the 21st Century is like Britain in the 19th Century

Under the Starry Flag – exploring the historical context of the 1867 Expatriation Act


In 2018 Professor Lucy Salyer of the University of New Hampshire published “Under the Starry Flag” – a book largely about the 1868 Expatriation Act. The book describes a period in American history where Britain treated its “subjects” as having perpetual loyalty to the British Crown. To put it simply: One could NOT emigrate to America and expatriate. No matter what one did, those who were born British Subjects were destined to die British Subjects.
The above tweet links to an interview of Professor Lucy Salyer conducted on February 9, 2019. The interview is about Professor Salyer’s new book “Under the Starry Flag”. It is a fascinating (brilliantly researched) work. The publisher describes the book as:

The riveting story of forty Irish Americans who set off to fight for Irish independence, only to be arrested by Queen Victoria’s authorities and accused of treason: a tale of idealism and justice with profound implications for future conceptions of citizenship and immigration.
In 1867 forty Irish American freedom fighters, outfitted with guns and ammunition, sailed to Ireland to join the effort to end British rule. Yet they never got a chance to fight. British authorities arrested them for treason as soon as they landed, sparking an international conflict that dragged the United States and Britain to the brink of war. Under the Starry Flag recounts this gripping legal saga, a prelude to today’s immigration battles.
The Fenians, as the freedom fighters were called, claimed American citizenship. British authorities disagreed, insisting that naturalized Irish Americans remained British subjects. Following in the wake of the Civil War, the Fenian crisis dramatized anew the idea of citizenship as an inalienable right, as natural as freedom of speech and religion. The captivating trial of these men illustrated the stakes of extending those rights to arrivals from far-flung lands. The case of the Fenians, Lucy E. Salyer shows, led to landmark treaties and laws acknowledging the right of exit. The U.S. Congress passed the Expatriation Act of 1868, which guarantees the right to renounce one’s citizenship, in the same month it granted citizenship to former American slaves.
The small ruckus created by these impassioned Irish Americans provoked a human rights revolution that is not, even now, fully realized. Placing Reconstruction-era debates over citizenship within a global context, Under the Starry Flag raises important questions about citizenship and immigration.

In the 19th Century Britain regarded its subjects as subjects for life. Many Americans abroad will appreciate how the book applies to their lives in the 21st century. To put it simply: Americans abroad are treated as primarily Americans citizens – even though they are often citizens and residents of other countries. The FATCA IGAs are the most obvious example of this reality. (Shades of the British – History does have a way of repeating itself.) Renunciation is desirable, difficult, expensive (and for those who are in the U.S. tax system – inevitable). For many Americans abroad:

All Roads Lead To Renunciation.”

Furthermore, dual citizens (for example the accidental Americans in France) are beginning to request that their countries of citizenship/residence intervene and assist their citizens in breaking ties with the United States. History does repeat itself.
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