Tax Evaders Renounce U.S. Citizenship

[The Straight Story]

Tax Evaders Renounce U.S. Citizenship

Rather than deal with the complexities of U.S. tax law, Americans living overseas are increasingly renouncing their citizenship in order to avoid paying their income taxes.

According to National Taxpayer Advocate Nina E. Olson, approximately 4,000 people gave up their citizenship from fiscal year 2005 to FY 2010. Renunciations increased sharply within the past three years, from 146 in FY 2008 to 1,534 in FY 2010. And during the first two quarters of FY 2011 alone, 1,024 Americans ditched their citizenship.

The advocate’s report cites two reasons for the renunciations. First, many taxpayers abroad say they are confused “by the complex legal and reporting requirements they face and are overwhelmed by the prospect of having to comply with them.”

Second, others have accused the Internal Revenue Service (IRS) of “bait and switch” tactics, telling Americans they can resolve their unpaid taxes under an “older voluntary disclosure programs with the promise of reduced penalties, only to find themselves subjected to steeper penalties.”

http://www.allgov.com/US_and_the_World/ViewNews/Tax_Evaders_Renounce_US_Citizenship_120124

[Vogon_Glory]

1. Steve Forbes' Magazine Brought Up This Tactic A While Back

Steve Forbes, a noted supporter of Republicans and right-wingers, published an article about Americans renouncing their citizenship in order to dodge federal income taxes. However, Steverino's magazine generally portrayed renouncing one's US citizenship as something done by the top one to five percent.

Hmmm. Renouncing one's US citizenship in order to dodge paying income taxes. Wasn't one of the Republicans' traditional boasts that they were more patriotic than Democrats?

What's so patriotic about renouncing one's US citizenship?

Progressives ought to use this topic sometime when the GOPsters are bloviating about "class warfare."

[gratuitous]

3. Is this a question that should be posed to Mr. Romney?

After all, his father wasn't born in this country, and so you have to suspect he doesn't have any great affinity for being a citizen of the United States. What he does have affinity for, his money, largely resides outside the country. I read once that where your treasure is, there will your heart be also. Will Mitt commit to remaining a U.S. citizen, or does he have any plans to renounce his citizenship so he can shelter even more of his money from having to pay his fair share of the upkeep on a society that has so greatly enriched him?

[Vogon_Glory]

12. I Think It Would Be A Good Question

I think it would be a very good question to pose to Mitt-sie. Moreover, I think it would be the sort of question that ought to be directed at the one percenters bankrolling the Republican Party and the reactionary so-called "Conservative Movement."

I can certainly think of a major cog in the Republican/"conservative" noise machine that changed his nationality for business reasons:

Rupert Murdoch.

[CanonRay]

2. Goodbye and don't let the door hit you in the ass

Good riddance. Bet you 10K how they all voted.

[Initech]

5. They shouldn't be allowed to access their money once they leave.

[karynnj]

4. These numbers actually seem quite small

It would help if they compared this to the total number of Americans living abroad. I would say that their citizenship means very little to them if they drop it because they have to fill out a form for every foreign bank account.

I would think that that as the reason they are dropping their citizenship is to avoid reporting their foreign bank accounts because they then could not longer hide income that they previously were required to pay taxes on, but which they avoided due to not having them reported. The paperwork does not look all that bad. I saw it because one of my daughters is doing a masters in London. In her case, she does not have to file as at no time will she have more than $10,000 in her one and only foreign bank.

This article - as many on this new requirement, ignore the revenue brought in to the government - concentrating on how it "hurts" wealthy people. Note that when they are complaining of "bait and switch", what they are speaking of are people who cheated - intentionally for years - having to pay what they own and penalties because they cheated.

What all these articles suggest is that the provision genuinely has teeth. It passed as part of the 2010 fall jobs bill that gained Voinivich and LeMieux to break the filibuster - and one reason they agreed was it was paid for - and this is the provision that payed for it. The provision was written by Baucus and Kerry.

[joeglow3]

7. Ex-pat returns are VERY confusing and can cost thousands to prepare

I am not surprised by the numbers. However, they probably decided to stay where they were and this is an afterthought.

[closeupready]

6. Fine with me. Bunch of freeloaders.

[Enrique]

8. don't give Mitt any ideas

he may make a run for the border.

[ProgressiveProfessor]

9. There are two kinds of expats caught up in this

The first group are the filthy rich who are tax dodging.

The second are long time expats, normally not rich, married to a local in whatever country they are in. They get blasted by the IRS in a very confusing maze of rules that makes conformance almost a matter of luck. This group is being caught in the snares being set for the former and its really not fair.

People should keep this in mind while they post their rants.

[redqueen]

10. Would the super rich kind ever become citizens somewhere else?

Are there any countries which taxes their filthy rich citizens less than the US does?

[ProgressiveProfessor]

11. There are several nations that were accumulating millionaires at one point

Ireland comes to mind. There are others.

[Zalatix]

20. LOL how's that going for Ireland?

[ErikJ]

13. If they do give up citizenship, they should not be allowed US income

They shouldnt be allowed to continue making a salary or profits from their companies here in the US.

[cthulu2016]

14. Might want to think that through

[ErikJ]

16. Rich Repubs always say thy will leave the country

if they have to pay higher taxes. I say let them. But make it illegal to draw a salary from their company that is using the US market place to make their money.

[Spider Jerusalem]

17. That's just it, most of these people have no US income.

All their income is earned abroad in whatever country they're resident. The US government however taxes Americans on the basis of citizenship and not residence. Which not infrequently leads to double taxation for anyone who earns over the foreign income exemption amount. Now, you know...if you happened to be working in, say, London...had lived in the UK for 10, 20 years, had dual citizenship, were married to a British citizen, and were already paying a higher rate of tax (top rate in the UK is 50%), would *you* be all that keen on paying US taxes as well?

[MicaelS]

19. The question I would have for these long-time expats is

"Why are you still maintaining US Citizenship?"

If I were

working in, say, London...had lived in the UK for 10, 20 years, had dual citizenship, were married to a British citizen,

I would probably have decided I'm not every going back to the US and applied for British citizenship.

[Spider Jerusalem]

21. You don't lose US citizenship by gaining another.

Hence "dual citizen". It's actually quite hard to lose American citizenship.

[MicaelS]

22. Yes, I realize that..what I don't understand is the mindset

Of these long time expats.

To live in another country for a decade or longer, marry a citizen of that country, maybe have children in that country, buy a home there, that speaks to me of someone who is "home" in that country, not the US.

[L0oniX]

15. Hmmm ...I thought you had to go through a US court to be granted a removal of citizenship.

[Spider Jerusalem]

18. Nope.

you have to make a declaration of intent to expatriate to a US consular official. And you have to discharge any remaining tax liability under current laws relating to expatriation.