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A Landscape PAINting Of The Effects Of U.S. Citizenship-Taxation On U.S. Citizens Living Outside The U.S.



A Landscape PAINting Of The Effects Of U.S. Citizenship-Taxation On U.S. Citizens Living Outside The U.S.

Introduction:

On September 21, 2021 Tax Connections published my post describing how the recent 10th Circuit Meahr decision means that US citizens can be prevented from leaving the United States. Generally that post focused on the reality that the passport revocation law means that US citizens do NOT have an unfettered right to leave the country. But, what about those who already reside outside the United States? Those without dual citizenship may (to meet local immigration laws) be required to have a US passport to have permission to live in the countries where they live. Even for those who have moved from THE UNITED STATES to other countries, US tax laws interfere with the ability of individuals to live outside the United States in many other ways.

It is believed that there are currently approximately nine million US citizens living outside the United States. This post is for the purpose of (1) reminding that US citizens living outside the United States are still subject to US taxation (2) The US tax rules that apply to Americans abroad are more punitive than the rules that apply to US residents and (3) introducing you to a wonderful post by journalist Rick Mitchell that paints a picture of a US diaspora that is collapsing under the weight of the US tax and regulatory regime. In other words:

Even if US citizens are free to move from the United States they are increasingly finding it difficult to survive outside the United States.

Rick Mitchell describes himself as a journalist, writer and cyclist living in France. His recent blog post “FATCA to Expats: You’ll Never Have Paris or Anywhere Else” reminds me more of a painting than a blog post. They say “a picture is worth a thousand words”. In this case, Rick’s post is actually worth a museum of paintings.

At first blush it could be seen as just one more post about FATCA. But, it’s actually much more. Mr. Mitchell has written a post that describes how US citizenship taxation has created tremendous problems for Americans abroad and is contrary to the values that American is supposed to stand for. Without directly saying so, his post also explains the burdens that come holding a US passport.

If the US were to cease its policy of citizenship taxation, all of the FATCA related problems would go away.

I highly recommend this post and suggest that you pass it on to others.

The post starts with:

A long time ago I met some French tourists on a boat on Lake Titicaca, fellow trekkers headed from the Peruvian town of Puno for an overnight visit to the island of Taquile. They said their trip was about to end. Capital controls set by their Socialist president had limited how much money they could take out of their country.

I remember thinking, as I hiked the paths of that rocky island, looking across that lake toward Bolivia, that I was lucky to be from a country where the government doesn’t tell you what to do with your money, as long as you follow the law.

You can read the complete post here.

Have a question? Contact John Richardson, Citizenship Solutions.

The Reality of U.S. Citizenship Abroad

My name is John Richardson. I am a Toronto based lawyer – member of the Bar of Ontario. This means that, any counselling session you have with me will be governed by the rules of “lawyer client” privilege. This means that:

“What’s said in my office, stays in my office.”

The U.S. imposes complex rules and life restrictions on its citizens wherever they live. These restrictions are becoming more and more difficult for those U.S. citizens who choose to live outside the United States.

FATCA is the mechanism to enforce those “complex rules and life restrictions” on Americans abroad. As a result, many U.S. citizens abroad are renouncing their U.S. citizenship. Although this is very sad. It is also the reality.

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