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The number of Americans who renounced their citizenship in 2013 just shattered 2011's record
Hotair ^ | 02/10/2014 | Erika Johnsen

Posted on 02/10/2014 7:21:01 PM PST by SeekAndFind

There are any number of reasons a person might consider giving up their U.S. citizenship, ranging from the familial to the professional to the financial, but for me at least, it would take a heck of a lot for me to even think about it. And by “a heck of a lot,” I mean that I have difficulty fathoming a situation in which I would actually want to give up my citizenship and/or live anywhere permanently other than the United States, because from where I’m sitting, the mere suggestion sounds pretty ghastly — which is precisely why our spiking expatriation rates of the past few years are so troubling. Via Andrew Mitchell at his International Tax Blog:

Expats_1998_2013

Today the Treasury Department published the names of individuals who renounced their U.S. citizenship or terminated their long-term U.S. residency (“expatriated”) during the fourth quarter of 2013.

The number of published expatriates for the quarter was 630, bringing the total number of published expatriates in 2013 to 2,999. The total for the year shatters the previous record high of 1,781 set in 2011 and is a 221% increase over the 2012 total of 932.

We do not believe that the primary reason for the increase in expatriations is for political purposes or for individuals to reduce taxes. Instead, we believe that there are likely three principal reasons for the recent increases in the number of expatriations:

1. Increased awareness of the obligation to file U.S. tax returns by U.S. citizens and U.S. tax residents living outside the U.S.;

2. The ever-increasing burden of complying with U.S. tax laws; and

3. The fear generated by the potentially bankrupting penalties for failure to file U.S. tax returns when an individual holds substantial non-U.S. assets.

Sure, the total expatriation numbers are a relatively miniscule phenomenon, but the pace at which they are increasing probably says a lot about the direction in which the federal government is taking our tax code. Hint: They aren’t making it easier or more attractive for people working out in the global market to maintain their citizenship, as Robert Wood at Forbes explains:

No group is more severely impacted than U.S. persons living abroad. For those living and working in foreign countries, it is almost a given that they must report and pay tax where they live. But they must also continue to file taxes in the U.S. What’s more, U.S. reporting is based on their worldwide income, even though they are paying taxes in the country where they live.

Many can claim a foreign tax credit on their U.S. returns, but it generally does not eliminate all double taxes. These rules have long been in effect, but enforcement was historically less of a concern with expats. Today, enforcement fears are palpable.

Moreover, the annual foreign bank account reports known as FBAR forms carry civil and criminal penalties all out of proportion to tax violations. The penalties for failure to file these forms, civil and criminal, are severe. Even civil penalties can quickly consume the balance of an account.

The coup de grace is FATCA, which is ramping up now worldwide. It requires an annual Form 8938 to be filed with income tax returns for foreign assets meeting a threshold. And foreign banks are sufficiently worried about keeping the IRS happy that many simply do not want American account holders. Americans abroad can be pariahs shunned by banks for daily banking activities.

In other words, foreign financial institutions are required to certify that U.S. taxpayers aren’t “hiding” money with them as a condition for being allowed to do business with the U.S. I seriously doubt that many of these newfound expatriates were really gunning to give up their citizenship, but the federal government incorrigibly continues to make it more and more worth people’s while to investigate the option.


TOPICS: Business/Economy; Culture/Society; Government; News/Current Events
KEYWORDS: citizenship; expats; rich
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To: SeekAndFind

“So, living in the Philippines for 10 years, do you have income there?”
________________________________________________
Well, I have been here only five years, and no, I have no income other then my social security. I have no contact with the IRS. I receive only the notices from SS as to what they paid me and my child.
I know of no reason to apply for Philippine citizenship, and I do not know any expats that have.
My child, however, is an American and Philippine citizen, as he was born here.

I see that some Americans are renouncing their citizenship.
(not in the Philippines) I do not know the point, unless they are sitting on a gazillion dollars. My US citizenship, as well as my child’s is sacred.


21 posted on 02/11/2014 5:58:33 AM PST by AlexW
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