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(The Weekly Standard)   The new tax laws governing out of country US citizens are so draconian, that it's easier for people to renounce their citizenship than to try to figure out the regulations   (weeklystandard.com) divider line 97
    More: Asinine, tax laws, U.S., Americans, governments, Wall Street Journal  
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2145 clicks; posted to Business » on 17 Jul 2013 at 2:53 PM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-07-17 01:17:36 PM
4.bp.blogspot.com
 
2013-07-17 01:23:31 PM
You misspelled "cheaper".
 
2013-07-17 01:25:13 PM
The term "anti-American" is so misused in political discourse that you have to be very careful to use it, but I have no problem referring to an asshole that renounces American citizenship to save some cash as anti-American.
 
2013-07-17 01:28:28 PM

James!: You misspelled "cheaper".


Exactly.
 
2013-07-17 01:34:17 PM
My European country doesn't give a fark about taxes if I'm not living there. My North American country (the U.S.) thinks they're entitled to a cut of anything I do anywhere in the world because I have an American passport.

You do the math. I haven't burnt the nice blue passport yet, but seriously...lame...
 
2013-07-17 02:18:08 PM
Our tax laws regarding income earned outside of the legal jurisdiction are pretty messed up.
 
2013-07-17 02:25:34 PM

Facetious_Speciest: My European country doesn't give a fark about taxes if I'm not living there. My North American country (the U.S.) thinks they're entitled to a cut of anything I do anywhere in the world because I have an American passport.

You do the math. I haven't burnt the nice blue passport yet, but seriously...lame...


It's almost as if citizenship carries duties as we all as privileges.
 
2013-07-17 02:30:59 PM

minoridiot: Our tax laws regarding income earned outside of the legal jurisdiction are pretty messed up.


Yep, I agree. Though I did recently overhear a coworker liken it to the Berlin Wall as a way to prevent emigration. And that was my biggest facepalm in recent memory.
 
2013-07-17 02:35:20 PM
Aarontology

It's almost as if citizenship carries duties as we all as privileges.

It's almost as if it carries arbitrary duties in some places compared to others.

I served in the American military.I pay American taxes when I work in America.\ I really think that's enough. I still have to pay taxes to America anywhere I go and whatever I do. I'm just saying that this isn't the case in much of the world. Why should people pay taxes to somewhere they're not living or working?
 
2013-07-17 02:55:18 PM

Facetious_Speciest: I served in the American military.I pay American taxes when I work in America.\ I really think that's enough. I still have to pay taxes to America anywhere I go and whatever I do. I'm just saying that this isn't the case in much of the world. Why should people pay taxes to somewhere they're not living or working?


You don't.  You only have to do so if you wish to remain an American citizen.  Seems like a pretty straightforward choice.
 
2013-07-17 02:56:56 PM
Teiritzamna

You don't. You only have to do so if you wish to remain an American citizen. Seems like a pretty straightforward choice.

You're completely ignoring the point: why does one of the richest countries in the world need to tax people who don't live there, work there or shop there?

Most countries don't, fyi.
 
2013-07-17 02:59:01 PM

Facetious_Speciest: Aarontology

It's almost as if citizenship carries duties as we all as privileges.

It's almost as if it carries arbitrary duties in some places compared to others.

I served in the American military.I pay American taxes when I work in America.\ I really think that's enough. I still have to pay taxes to America anywhere I go and whatever I do. I'm just saying that this isn't the case in much of the world. Why should people pay taxes to somewhere they're not living or working?



If you are a U.S. citizen working abroad, you may be able to minimize what you owe in U.S. income tax if you qualify for the foreign income exclusion. If you qualify, you may exclude up to $97,600 in foreign income from U.S. income tax liability in 2013.
 
2013-07-17 03:00:16 PM
The love of big government by fark as a whole has always mystified me. What do you think will happen when the government is big enough to do what you think it should do? This and the NSA are only the beginning. What did you think would happen?
 
2013-07-17 03:02:49 PM
ongbok

If you are a U.S. citizen working abroad...

I don't qualify, which is my own fault, I guess. I like visiting people. I have lots of American friends and family.

This is just a pet peeve, not any kind of ideological hard-on.
 
2013-07-17 03:04:38 PM

walkingtall: The love of big government by fark as a whole has always mystified me. What do you think will happen when the government is big enough to do what you think it should do? This and the NSA are only the beginning. What did you think would happen?


There is a reason why the old time slave owners were Democrats and Democrats of today want total control.  They're still slavers at heart.
 
2013-07-17 03:08:00 PM

Facetious_Speciest: ongbok

If you are a U.S. citizen working abroad...

I don't qualify, which is my own fault, I guess. I like visiting people. I have lots of American friends and family.

This is just a pet peeve, not any kind of ideological hard-on.


If you want to remain a citizen and have the services provided for you by being a citizen, you are going to have to pay taxes. For example if what ever country you are living in goes to shiat and you need to get out in a hurry, you are going to need to get to the embassy and use there services to protect you and get you out. Or if you ever get in trouble in the country you are in you are going to need the services of the embassy and the State Department. Your taxes pay for these things. If you don't want to pay taxes denounce your citizenship and hope the country you are in will provide for you.
 
2013-07-17 03:13:20 PM
ongbok

If you want to remain a citizen and have the services provided for you by being a citizen, you are going to have to pay taxes. For example if what ever country you are living in goes to shiat and you need to get out in a hurry, you are going to need to get to the embassy and use there services to protect you and get you out. Or if you ever get in trouble in the country you are in you are going to need the services of the embassy and the State Department. Your taxes pay for these things. If you don't want to pay taxes denounce your citizenship and hope the country you are in will provide for you.

That's a very American view of things, which is entirely my point.

But to be fair, on the other hand, America is much more useful for getting out of places when things go to shiat, than, say, Belgium. I'll admit that.

I'm really not knocking America, I'm just saying it's a little unusual to demand money of people who aren't really doing anything in in or with your country. That's kinda the entire point of TFA.
 
2013-07-17 03:16:00 PM
You must also be required to pay a large "exit tax" when you renounce your citizenship if your assets are over $2-$3 million.
 
2013-07-17 03:16:06 PM
For the time being, you don't have to renounce your citizenship, just open up a corporation in a country with no capital gains tax and make your money through it.

As that get's more and more difficult, I think we will see more and more emigration.  Emigration has always been a problem with socialist states.  It forces a minority to carry a burden, and when they decide they don't want to, they move.

It's usually at this point in the discussion that people say "Where are they going to go? Somalia?!"  (which is sometimes ironic because the people who say that are the same ones who argue that American's have a superiority complex, as if there is nowhere else to go)  There are countries who are fine with having wealthy citizens spending money in their country, and are happy to welcome people with open arms.  they are all over Europe, the Caribbean, and elsewhere.
 
2013-07-17 03:19:34 PM

jake_lex: The term "anti-American" is so misused in political discourse that you have to be very careful to use it, but I have no problem referring to an asshole that renounces American citizenship to save some cash as anti-American.

 
2013-07-17 03:20:30 PM

Facetious_Speciest: ongbok

If you want to remain a citizen and have the services provided for you by being a citizen, you are going to have to pay taxes. For example if what ever country you are living in goes to shiat and you need to get out in a hurry, you are going to need to get to the embassy and use there services to protect you and get you out. Or if you ever get in trouble in the country you are in you are going to need the services of the embassy and the State Department. Your taxes pay for these things. If you don't want to pay taxes denounce your citizenship and hope the country you are in will provide for you.

That's a very American view of things, which is entirely my point.

But to be fair, on the other hand, America is much more useful for getting out of places when things go to shiat, than, say, Belgium. I'll admit that.

I'm really not knocking America, I'm just saying it's a little unusual to demand money of people who aren't really doing anything in in or with your country. That's kinda the entire point of TFA.


Tax dollars are used for a lot of things. Some in the country and some outside of the country. If you live outside of the country you claim citizenship of you may not be using any of the services that tax dollars pay for inside of the country, but tax dollars are sure as hell being spent to provide you with representation and protection when you are in foreign countries. So complaining that you shouldn't have to pay taxes if you are living outside of the country is a crock of shiat because tax money is being spent to provide you with services in the country you are in.
 
2013-07-17 03:23:05 PM

Facetious_Speciest: My European country doesn't give a fark about taxes if I'm not living there. My North American country (the U.S.) thinks they're entitled to a cut of anything I do anywhere in the world because I have an American passport.

You do the math. I haven't burnt the nice blue passport yet, but seriously...lame...


DO IT!
 
2013-07-17 03:24:17 PM

Facetious_Speciest: My European country doesn't give a fark about taxes if I'm not living there. My North American country (the U.S.) thinks they're entitled to a cut of anything I do anywhere in the world because I have an American passport.

You do the math. I haven't burnt the nice blue passport yet, but seriously...lame...


If the US didn't have world-wide taxation for individuals we would be in the same boat we are wrt corporations. The wealthy would earn their income for tax purposes in shelter countries, like Apple in Ireland and YouTube in Belgium, and pay no taxes at all. Then they'd biatch that the 47% don't pay any taxes...blah, blah.

Pay your taxes and enjoy life in Europe.
 
2013-07-17 03:25:58 PM
ongbok

Tax dollars are used for a lot of things. Some in the country and some outside of the country. If you live outside of the country you claim citizenship of you may not be using any of the services that tax dollars pay for inside of the country, but tax dollars are sure as hell being spent to provide you with representation and protection when you are in foreign countries. So complaining that you shouldn't have to pay taxes if you are living outside of the country is a crock of shiat because tax money is being spent to provide you with services in the country you are in.

You're still not getting it. What services am I getting from the United States if I spend ten months of the year in my other country? What representation and protection am I getting? Does a mail-in ballot cost so much?

Your only answer is "well, if it goes to shiat" and "stuff." All I'm saying is that most countries don't think like this. Can you understand that? I'm not attacking 'Murica, John Wayne. I'm just saying it's farking unusual and odd. The former is undeniable, the latter my opinion. Ffs.
 
2013-07-17 03:28:04 PM
propasaurus

DO IT!

Nevars!

Stone Meadow

If the US didn't have world-wide taxation for individuals we would be in the same boat we are wrt corporations. The wealthy would earn their income for tax purposes in shelter countries, like Apple in Ireland and YouTube in Belgium, and pay no taxes at all. Then they'd biatch that the 47% don't pay any taxes...blah, blah.

Sounds like a problem with the United States taxing people but not corporations (which, yes, I know, are people, my friend).
 
2013-07-17 03:30:43 PM

Smeggy Smurf: walkingtall: The love of big government by fark as a whole has always mystified me. What do you think will happen when the government is big enough to do what you think it should do? This and the NSA are only the beginning. What did you think would happen?

There is a reason why the old time slave owners were Democrats and Democrats of today want total control.  They're still slavers at heart.


Not a very good troll.  And I'm speaking as a conservative non-Democrat.
 
2013-07-17 03:31:09 PM

jake_lex: The term "anti-American" is so misused in political discourse that you have to be very careful to use it, but I have no problem referring to an asshole that renounces American citizenship to save some cash as anti-American.


Or we can have a serious discussion on why the US is the only country in the world that taxes its citizens who do not live here.  But I suspect that will never happen with you.
 
2013-07-17 03:31:34 PM

Facetious_Speciest: My European country doesn't give a fark about taxes if I'm not living there. My North American country (the U.S.) thinks they're entitled to a cut of anything I do anywhere in the world because I have an American passport.

You do the math. I haven't burnt the nice blue passport yet, but seriously...lame...


You won't be missed.
 
2013-07-17 03:32:39 PM

ongbok:
If you are a U.S. citizen working abroad, you may be able to minimize what you owe in U.S. income tax if you qualify for the foreign income exclusion. If you qualify, you may exclude up to $97,600 in foreign income from U.S. income tax liability in 2013.


But if you have any investments, like a bank account that returns interest, an investment account, or even if you have the temerity to purchase a home when you move abroad and sell it when you return home, you're screwed. You pay tax on those investments not only to whatever government you happen to be living under, but you must also count that income against your US taxes. Then, while filing your US taxes and claiming the foreign earned income exclusion, you also have to use Form 1116, for foreign tax credits, and if you're in AMT land, don't forget the AMT on FTC, etc. etc. etc.

ongbok:
If you want to remain a citizen and have the services provided for you by being a citizen, you are going to have to pay taxes. For example if what ever country you are living in goes to shiat and you need to get out in a hurry, you are going to need to get to the embassy and use there services to protect you and get you out. Or if you ever get in trouble in the country you are in you are going to need the services of the embassy and the State Department. Your taxes pay for these things. If you don't want to pay taxes denounce your citizenship and hope the country you are in will provide for you.


So do the embassies of every other nation on the planet, yet the overwhelming majority of these nations get by just fine with a territorial tax system, not a worldwide tax system. It's asinine to expect citizens working abroad to have to simultaneously track and comply with two sets of tax laws. For most taxpayers, the cost of compliance exceeds the tax collected: at the end of the day, your CPA or tax lawyer ends up making more money for helping you with the paperwork than Uncle Sam ever sees. What's the sense in that?
 
2013-07-17 03:32:59 PM

Stone Meadow: If the US didn't have world-wide taxation for individuals we would be in the same boat we are wrt corporations. The wealthy would earn their income for tax purposes in shelter countries, like Apple in Ireland and YouTube in Belgium, and pay no taxes at all. Then they'd biatch that the 47% don't pay any taxes...blah, blah.

Pay your taxes and enjoy life in Europe.


And yet every European country manages to pull it off.  Why can't we?
 
2013-07-17 03:34:02 PM

Facetious_Speciest: Sounds like a problem with the United States taxing people but not corporations (which, yes, I know, are people, my friend).


Corporations are taxed, and taxed again when what's left over is distributed to the shareholders as dividends.
 
2013-07-17 03:35:33 PM

gingerjet: And yet every European country manages to pull it off. Why can't we?


They also have a VAT to fall back on.

One area both parties can agree on is that the tax structure stinks and needs to be overhauled.  Which means that nothing will get done for quite a while.
 
2013-07-17 03:36:01 PM
hiker9999

You won't be missed.

That's simply not true, anonymous bigot. People love me.
 
2013-07-17 03:40:46 PM

gingerjet: Stone Meadow: If the US didn't have world-wide taxation for individuals we would be in the same boat we are wrt corporations. The wealthy would earn their income for tax purposes in shelter countries, like Apple in Ireland and YouTube in Belgium, and pay no taxes at all. Then they'd biatch that the 47% don't pay any taxes...blah, blah.

Pay your taxes and enjoy life in Europe.

And yet every European country manages to pull it off.  Why can't we?


Socialism.
 
2013-07-17 03:43:53 PM

Facetious_Speciest: ongbok

Tax dollars are used for a lot of things. Some in the country and some outside of the country. If you live outside of the country you claim citizenship of you may not be using any of the services that tax dollars pay for inside of the country, but tax dollars are sure as hell being spent to provide you with representation and protection when you are in foreign countries. So complaining that you shouldn't have to pay taxes if you are living outside of the country is a crock of shiat because tax money is being spent to provide you with services in the country you are in.

You're still not getting it. What services am I getting from the United States if I spend ten months of the year in my other country? What representation and protection am I getting? Does a mail-in ballot cost so much?

Your only answer is "well, if it goes to shiat" and "stuff." All I'm saying is that most countries don't think like this. Can you understand that? I'm not attacking 'Murica, John Wayne. I'm just saying it's farking unusual and odd. The former is undeniable, the latter my opinion. Ffs.


"If it goes to shiat" is a very American mindset. Almost all of our families came to the US because things went to shiat for them. Fear of things going to shiat, especially in Europe, is embroidered into Americans' unconscious. Personally I think that's why we support Israel so much. The original Israelis? Recipients of major shiat. And also theoretically a place to go, although I wouldn't run there myself.

Of course though we don't care about shiat in Africa, cuz it's not our shiat.
 
2013-07-17 03:47:44 PM
Janusdog

"If it goes to shiat" is a very American mindset. Almost all of our families came to the US because things went to shiat for them. Fear of things going to shiat, especially in Europe, is embroidered into Americans' unconscious. Personally I think that's why we support Israel so much. The original Israelis? Recipients of major shiat. And also theoretically a place to go, although I wouldn't run there myself.

I kinda get this. I encourage people in Israel to keep their foreign passports handy. I just don't think they should be taxed so much if that passport happens to be American.

/shrug
 
2013-07-17 03:47:47 PM

Twilight Farkle: ongbok:
If you are a U.S. citizen working abroad, you may be able to minimize what you owe in U.S. income tax if you qualify for the foreign income exclusion. If you qualify, you may exclude up to $97,600 in foreign income from U.S. income tax liability in 2013.

But if you have any investments, like a bank account that returns interest, an investment account, or even if you have the temerity to purchase a home when you move abroad and sell it when you return home, you're screwed. You pay tax on those investments not only to whatever government you happen to be living under, but you must also count that income against your US taxes. Then, while filing your US taxes and claiming the foreign earned income exclusion, you also have to use Form 1116, for foreign tax credits, and if you're in AMT land, don't forget the AMT on FTC, etc. etc. etc.

ongbok:
If you want to remain a citizen and have the services provided for you by being a citizen, you are going to have to pay taxes. For example if what ever country you are living in goes to shiat and you need to get out in a hurry, you are going to need to get to the embassy and use there services to protect you and get you out. Or if you ever get in trouble in the country you are in you are going to need the services of the embassy and the State Department. Your taxes pay for these things. If you don't want to pay taxes denounce your citizenship and hope the country you are in will provide for you.

So do the embassies of every other nation on the planet, yet the overwhelming majority of these nations get by just fine with a territorial tax system, not a worldwide tax system. It's asinine to expect citizens working abroad to have to simultaneously track and comply with two sets of tax laws. For most taxpayers, the cost of compliance exceeds the tax collected: at the end of the day, your CPA or tax lawyer ends up making more money for helping you with the paperwork than Uncle Sam ever sees. What's the sense in that?


Which countries are like this? England is similar to the U.S system where you are responsible for taxes if you work in another country, but if you had to pay taxes in the country you are working in, you can file for an exemption for that money.
 
2013-07-17 03:48:27 PM

Facetious_Speciest: hiker9999

You won't be missed.

That's simply not true, anonymous bigot. People love me.


The guy in the mirror is not "people".  And you'll be missed only by the poorer shots.
 
2013-07-17 03:51:50 PM
Galloping Galoshes

The guy in the mirror is not "people". And you'll be missed only by the poorer shots.

I'm unclear on which group I'm in that you're hating: people with dual-citizenships, people who work overseas at times, people who come here and serve in the military, people with multinational families, people who have objections to the American tax system...?
 
2013-07-17 03:52:23 PM
What the article intentionally fails to mention is that the article if full of crap. You either pay the taxes in the country where you are living and earning your income or you pay U.S. taxes. You can't game the system and pay neither.  This is what these rules are for.
 
2013-07-17 04:22:55 PM
You said Draconian, you meant Byzantine.
 
2013-07-17 04:37:57 PM
To be honest - if you don't live in the US, don't plan on returning to the US, and don't want to keep up with the laws of the US - you *shouldn't* be a US citizen.

As a US expat - I have to say, the laws have been 'pretty reasonable'....as much as any tax law ever is.  It used to be that you had to file US taxes....but unless you made over 98k USD - you wouldn't pay any actual US taxes.  You just have to file.  If you make over ~98k (filing single), you have may have to pay US taxes...but the income tax you pay in whatever country you are working is going to be deductible.

In addition to filing taxes - you need to report bank accounts that have more than 10k USD in them.  So, once a year, you fill out your taxes and you fill out your FBAR.  To be honest, my US taxes have gotten MUCH simpler since moving overseas....the 98k freebie or whatever makes it a breeze.  FBAR is quick and easy - done 100% online now.

This new FATCA isn't that extreme either.  If you are a single, US citizen, living in the US and have more than 50k USD in non-us investments, you need to declare it.  If you are living abroad, filing single, and have more than 200k in a non-us investment account - you need to report it.  If you are married - it's 400k.  And lots of normal stuff - like a 'retirement plan' is excluded.

Sure - if you were born in the US and left when you were three years old - this is all is a huge pain.  But you really shouldn't be a US citizen.  You don't want to be a US citizen, you just 'are'.  But if you are intending on returning to the US, you don't want a bunch of money inforeign accounts, and even if you do want to invest in foreign companies - you can do it, and avoid all these headaches, by using a US institution.  Go open an E-Trade account or drop into Wells Fargo or something.

Personally, I think taxes are B.S. and our tax system is flawed.  But it is what it is - and the only way we, as a people, pay our taxes is when we are forced.  The precedent is already established, we are already guilty until proven innocent with the IRS.  Everyone in the US has to file their taxes, and jump through hoops....if you want to be a US citizen - welcome to the club.  Uncle Sam is going to have his way with you.

Still, I'm cool with filling out my 1040 and FBAR.  I'm not loaded, but there is no reason for me to keep large sums of money outside of the US - the FATCA doesn't apply.
 
2013-07-17 04:40:40 PM
Okay, show of hands, how many of you that are complaining about people who live in Europe not paying taxes to America want us to be more like Europe?
 
2013-07-17 04:58:12 PM

ongbok: Twilight Farkle:
So do the embassies of every other nation on the planet, yet the overwhelming majority of these nations get by just fine with a territorial tax system, not a worldwide tax system. It's asinine to expect citizens working abroad to have to simultaneously track and comply with two sets of tax laws. For most taxpayers, the cost of compliance exceeds the tax collected: at the end of the day, your CPA or tax lawyer ends up making more money for helping you with the paperwork than Uncle Sam ever sees. What's the sense in that?

Which countries are like this? England is similar to the U.S system where you are responsible for taxes if you work in another country, but if you had to pay taxes in the country you are working in, you can file for an exemption for that money.


I'm hardly an international tax specialist, and I had to wade through an awful lot of partisan derp on the issue, but according to this this 2011 Ernst & Young powerpoint (PDF warning), the UK and Japan are moving and/or have moved from a worldwide system towards a territorial system of taxation.

Among the G7, the US is the only nation with a worldwide system. (This seemed pretty popular amongst the partisan sources.) I'm going with the more neutral claim from the E&Y reports that amongst the top 10 countries with Fortune 500 global headquarters, only the US, China, and South Korea also have worldwide taxation systems, which doesn't make for as catchy a soundbite as the "only one in the G7," but that's still 7 out of 10 for territorial taxation systems.

That 7/10 figure jibes reasonably with the fact that 28 of 34 OECD countries (PDF warning, plus a minor derpsclaimer that any think tank calling itself the "Tech CEO Council" can be safely assumed to have a pretty obvious agenda, even if they hired PricewaterhouseCoopers to do their homework.) The OECD countries that have worldwide tax systems are Chile, Greece, Ireland, Israel, Korea, Mexico, Poland... and, of course, the US.

The Wikipedia entry on international taxation suggests that only Eritrea (!) and the United States tax the income of nonresident citizens. This, I suspect, is a gross oversimplification given all the stuff I've outlined above, etc, but reinforces the point I was trying to make, namely that that taxation of individual nonresident citizens on their worldwide income really is an abnormality.

tl;dr: In most nations, when you move to study or work abroad, you no longer have to file taxes. You might very well have to pay a deemed disposition/expatriation tax to your home country when you leave, so as to square up your bill before you go, but as long as you remain abroad, there is no further paperwork. An American working abroad should not be required to file a 1040 every farking year, especially when in most cases, he ends up going through three hours and $500 worth of paperwork only to find they owe $150 in taxes on items not covered by FEIE, because they got $5000 in income that was taxed at, say, 25% ($1250) in Country X, but for which the US would have taxed at 28% ($1400).
 
2013-07-17 05:07:14 PM
Waaahhh! Youre making it harder to hide my income from the IRS and my ex-wives.
 
2013-07-17 05:08:05 PM
Twilight Farkle

....taxation of individual nonresident citizens on their worldwide income really is an abnormality.

Careful. You might be judged as an unloved faux-'Merican that deserves to be shot for talk like that.
 
2013-07-17 05:33:03 PM

Twilight Farkle: ongbok:
If you are a U.S. citizen working abroad, you may be able to minimize what you owe in U.S. income tax if you qualify for the foreign income exclusion. If you qualify, you may exclude up to $97,600 in foreign income from U.S. income tax liability in 2013.

But if you have any investments, like a bank account that returns interest, an investment account, or even if you have the temerity to purchase a home when you move abroad and sell it when you return home, you're screwed. You pay tax on those investments not only to whatever government you happen to be living under, but you must also count that income against your US taxes. Then, while filing your US taxes and claiming the foreign earned income exclusion, you also have to use Form 1116, for foreign tax credits, and if you're in AMT land, don't forget the AMT on FTC, etc. etc. etc.

ongbok:
If you want to remain a citizen and have the services provided for you by being a citizen, you are going to have to pay taxes. For example if what ever country you are living in goes to shiat and you need to get out in a hurry, you are going to need to get to the embassy and use there services to protect you and get you out. Or if you ever get in trouble in the country you are in you are going to need the services of the embassy and the State Department. Your taxes pay for these things. If you don't want to pay taxes denounce your citizenship and hope the country you are in will provide for you.

So do the embassies of every other nation on the planet, yet the overwhelming majority of these nations get by just fine with a territorial tax system, not a worldwide tax system. It's asinine to expect citizens working abroad to have to simultaneously track and comply with two sets of tax laws. For most taxpayers, the cost of compliance exceeds the tax collected: at the end of the day, your CPA or tax lawyer ends up making more money for helping you with the paperwork than Uncle Sam ever sees. What's the sense in that?


Does the $250K/$500K capital gain exception for main home sales not apply to overseas homes?
 
2013-07-17 05:34:33 PM

Fark_Guy_Rob:
Sure - if you were born in the US and left when you were three years old - this is all is a huge pain.  But you really shouldn't be a US citizen.  You don't want to be a US citizen, you just 'are'.  But if you are intending on returning to the US, you don't want a bunch of money inforeign accounts, and even if you do want to invest in foreign companies - you can do it, and avoid all these headaches, by using a US institution.  Go open an E-Trade account or drop into Wells Fargo or something.


By the very same logic you cite in favor of FATCA, your local tax authority has the same right to take a dim view of its residents (that's you!) trying to shelter their income by opening offshore accounts in tax havens like the United States. As a US citizen residing in, say, the magical land of Equestria, you owe the Princess tribute on investment income earned while you live in Equestria. Although She appreciates the aesthetics of the Wells Fargo logo, what's wrong with conducting your business at one of our fine Equestrian financial institutions, rather than some dodgy offshore tax haven like Unistat? :)

The information sought by FATCA and FBAR are pretty redundant. FATCA only exists so that some politician could get a few brownie points by railing against Eduardo Saverin, the Facebook billionaire who tried to avoid a few hundred million in taxes by making the questionable claim that his expatration wasn't primarily motivated by tax purposes. There was already a perfectly good law and tax form for that: section 877A of the Internal Revenue Code, and Form 8854.

FATCA and section 877A help ensure that you're squared up with Uncle Sam when you leave the US regardless of whether you actually expatriate per se or not. FBAR ensures that as long as you are subject to US taxation, you tell Uncle Sam how much you have stashed overseas, and to give Uncle Sam a way to get his cut of whatever foreign-sourced income you earn.

In a territorial taxation system, that would be just fine: Square up when you leave, do whatever you like when you're abroad, and start filing paperwork again when you return 5-10 years later. Do away with worldwide taxation and the onerous requirement to file a full 1040 every year you're out of the country, and I'll gladly accept the overlap between FATCA, 877A, and FBAR as a reasonable compromise.
 
2013-07-17 05:36:55 PM

gingerjet: And yet every European country manages to pull it off.  Why can't we?


You and Facetious should give it up.  These morons think that anything in the shadow of a US flag owes tribute to it.
No surprising they are the first ones to line up and support an exit tax, or a global tax.

Confiscation of the property of expats and rebels is straight out of the Communist Manifesto.
 
2013-07-17 05:40:57 PM

Twilight Farkle: By the very same logic you cite in favor of FATCA, your local tax authority has the same right to take a dim view of its residents (that's you!) trying to shelter their income by opening offshore accounts in tax havens like the United States. As a US citizen residing in, say, the magical land of Equestria, you owe the Princess tribute on investment income earned while you live in Equestria. Although She appreciates the aesthetics of the Wells Fargo logo, what's wrong with conducting your business at one of our fine Equestrian financial institutions, rather than some dodgy offshore tax haven like Unistat? :)



encrypted-tbn1.gstatic.com
You're not Filthy Rich if you don't have a Caymane Islands bank account.
 
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