Archive for Accidental Americans

Biden 2024 Green Book: Message To Accidental Americans – Either Comply Or Renounce!

Biden 2024 Green Book: Message To Accidental Americans - Either Comply Or Renounce!

Part I – Summary of post:

The proposals for Americans abroad include:

1. A provision to (and presumption of) heighten enforcement of the 877A exit tax through changes in the Internal Revenue Code

2. A possible “carve out” from the 877A exit tax for certain Americans abroad with limited ties to the United States (under rules prescribed by the Treasury Secretary)

3. NO RELIEF whatsoever from U.S. citizenship taxation and the way that the rules apply to Americans abroad. This assumes a continuation of U.S. citizenship taxation with no evidence of change.

In other words: Either comply or renounce!

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Written by | Posted in Accidental Americans • Biden 2024 Green Book

Being An Accidental American: A Tax Perspective

Being An Accidental American: A Tax Perspective

While being an American citizen comes with many privileges, it also comes with a host of tax obligations. This is where things get tricky for accidental Americans – people unaware of their U.S. citizenship. In recent years, the issue of accidental Americans has garnered attention due to the increasing global mobility and their potential to face significant financial consequences in the United States.

In this article, we will explore the challenges they are facing and discuss strategies for avoiding the tax implications of accidental citizenship.

Who Is an Accidental American?

An accidental American is a term used to describe someone who holds dual citizenship in the United States and another country, but is unaware of their U.S. citizenship status. They may have acquired U.S. citizenship even if they have never lived in the States or have only spent a limited amount of time in the country. For many accidental Americans, the discovery of their citizenship comes as an unpleasant surprise – often through a realization of the tax filing obligations to the United States.

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IRS Amnesty Programs For Accidental Americans And Other Late Filers

IRS Amnesty Programs for Accidental Americans and other late filers

The post was written by Kasia Strzelczyk of the 1040 Abroad Team.

It doesn’t come as a surprise that the IRS will be filling the budget hole in 2023 by cracking down on non-compliant U.S. citizens living abroad. Even expats that didn’t know about their debt may face some serious penalties and fines. To address your tax issues and take control of the situation – start learning about Tax Amnesty Programs the IRS offers. These procedures can help you come clean about your U.S. taxes while escaping all undesirable consequences.

What is a tax amnesty program?

The IRS is aware that many American Expats don’t know about their filing obligation to the U.S. The tax amnesty programs can be seen as a way to “clean the slate” and start fresh with regard to tax compliance. It allows delinquent taxpayers to pay their debt in exchange for avoiding severe tax penalties, and interest too.

Most expats who find themselves in the position of not having satisfied their U.S. tax obligations may feel as if fixing the situation is daunting. Contrary to popular belief, the financial consequences of your failure to file before may not be as severe as one might expect.

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Written by | Posted in Accidental Americans • U.S. Citizens Living Abroad And Taxes

Expatriated From US? Intend To Expatriate? New IRS Procedure

Darlene Hart

On September 6, 2019, the Internal Revenue Service (IRS) announced a new procedure which allows certain non-compliant US citizens who relinquished their US citizenship to become US tax compliant.

This procedure is geared towards ‘Accidental Americans’ who were unaware of their US tax obligations. As well, under this procedure, no US social security number is required.

The main eligibility points include:

1.       Prior compliance failures were non-willful.

2.       Past tax liability is not in excess of $25,000 for the six years of returns to be filed.

3.       Less than $2 million in net assets as of expatriation date.

4.       Expatriated after March 18, 2010.  Must expatriate prior to filing under this procedure.

5.       It is limited to individuals only.

6.       The taxpayer has no tax filing history as a US citizen or resident.

7.       Must include a copy of approved form DS-403, Certificate of Loss of Nationality with the filing.

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Accidental Americans Get Relief! New Announcement From The IRS

Manasa Nadig

Stop the presses, hold the phones, drop everything you are doing! The Internal Revenue Service announced “Relief Procedures for Certain Former Citizens” on September 6th, 2019. If you are an “Accidental American” and planning on renouncing your U.S. Citizenship, you should be reading this.

Let’s dig back a bit and refresh our memories: The United States Constitution provides through the 14th Amendment that “all persons born or naturalized in the United States” are citizens of the USA. A person born abroad to a U.S. citizen parent or parents acquires U.S. citizenship at birth if the parent or parents meet conditions as specified in § 301 and following sections of the U.S. Immigration and Nationality Act.

Those who have acquired U.S. citizenship in such a manner may not be aware of the obligations and consequences of this status. As you my dear readers already know from my blog, that by law, U.S. citizens regardless of where they live have to report and possibly pay tax on their world-wide income to the Internal Revenue Service.

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Written by | Posted in Accidental Americans • FATCA

UK MP Vows To Continue Speaking Out On Behalf Of Accidental Americans Living In Britain

Helen Burggraf

Preet Kaur Gill, a British Labour Party member of Parliament from the greater Birmingham area,  has said she plans to continue asking questions of the UK government on behalf of U.S.-born British citizens – like at least one of her constituents, who are facing unprecedented “negative financial implications” as a result of the way such individuals are pursued for tax by the U.S. authorities.

Gill’s vow to continue speaking out on behalf of such dual U.S./British citizens comes as resistance is reported to be growing on the part of European governments to continuing to accommodate the American government’s extra-territorial tax enforcement efforts, which is currently done in part through intergovernmental agreements signed in the wake of the 2010 passage of the Foreign Account Tax Compliance Act.

Under FATCA, non-U.S. financial institutions around the world are required to report to the U.S. on those accounts they hold on behalf of American citizens. They do this by reporting the information to the authorities in the country in which the financial institution in question is located – which in turn, under the terms of the IGA, forwards the information to the U.S. Internal Revenue Service.

As reported here last month, a growing number of the more than 100 countries that have signed up to participate in a new, global automatic banking information exchange program modelled on FATCA, and organized over the last few years by the Brussels-based Organization for Economic Cooperation and Development, have begun to question the fact that the U.S. has opted not to participate – and is understood to be giving as its excuse the fact that it has FATCA, and therefore has no need to.

Such countries are said to be frustrated in particular because the U.S. has failed to “reciprocate” with respect to the information it receives from them through their FATCA agreements with the same kind of information on accounts held by their taxpayers in U.S. financial institutions.

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Accidental Americans Latest: French Banks Warn Of Potential Need To Close 40,000 Accounts

France And US

The head of the French Banking Federation has formally warned France’s finance minister that he country’s banks may be forced to close as many as 40,000 bank accounts by the end of the year, owing to problems these banks have in complying with the U.S. tax information reporting law known as FATCA.

The 40,000 bank accounts in question are understood to be those of individuals who are either Americans or dual American and French citizens. The fact of their American citizenship obliges banks in France and elsewhere around the world to provide data on these clients to a French agency that subsequently supplies it to the U.S., as the Foreign Account Tax Compliance Act requires.

In his letter to French foreign minister Bruno Le Maire, dated July 17, French Banking Federation chairman Laurent Mignon noted that France’s banks say they face significant financial penalties from the U.S. if they fail to provide it with such information as the so-called Tax Information Numbers (TINs) of all of its American clients, and yet, he explained, they are unable to do this because many of these “French-speaking [French] citizens born on American soil” lack “lack any concrete link with the United States, where they no longer reside,” and therefore don’t have TINs or other documentation the U.S. is seeking.

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Accidentel Americans Reel But Vow To Fight On As France’s Conseil d’Etat Rules In Support Of Current FATCA Regime

French And US Flag

So-called “Accidental Americans” in France and elsewhere in Europe expressed disappointment, and in some cases dismay, after France’s top administrative court ruled that the current regime under which France provides information to the U.S. under its controversial Foreign Account Tax Compliance Act could stand, and didn’t need changing or to be scrapped.

In its decision, published yesterday, the Conseil d’Etat said it saw no legal basis to support claims by the Paris-based Accidental Americans Association that the way France currently implements FATCA violated the privacy of dual French/American citizens.

It also rejected arguments that the reporting regime is one-sided – that is, that it doesn’t oblige the U.S. to provide the same amount of information about French citizens living in the U.S., and thus the information flow is one-sided – according to French news reports.

“The [Conseil d’Etat] ruled that the claims by the accidental Americans, that the regulations under which FATCA is enforced in France, lack legal legitimacy, are unfounded,” the French news agency, AFP reported.

It added that the decision was in line with statements made at a hearing on the matter earlier this month by the public rapporteur that the problems having to do with FATCA at most had to do with “technical difficulties of implementation.”

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