TaxConnections

 
 

Access Leading Tax Experts And Technology
In Our Global Digital Marketplace

Please enter your input in search


Exposé On The Cost For An Accidental American Under FATCA



William Byrnes

An interesting read by the Telegraph that walks an Accidental American through the process of renunciation of American citizenship to avoid paying a life time of US taxes, penalties, interest, and potentially criminal offences for non-filing. Read it here. Excerpts below:

Renouncing citizenship was particularly onerous as she had no social security number, which is a requirement for any US tax filing. To obtain one, she had to provide documentary evidence for every year she had not been in the US – almost 50 years. She had to present a record of her life’s movements in person to US tax representatives, via microphone through a glass panel, in a room with other people waiting. Going through a “streamlined” process, she then had to provide five years of US tax returns, and six years of a “foreign bank and financial account” reports, providing specific details of all financial assets. Any mistakes can elicit potential fines of $10,000 (£8,200) per error. The specialist advice she required to go through this process cost $6,000 (£4,900), on top of the $2,350 (£1,900) renunciation fee, plus further costs involved in obtaining documentation. There is also the potential of an “exit tax” for wealthier individuals who pass certain thresholds, and inheritance tax implications. The exit tax applies to their total wealth, as measured at the point of citizenship renunciation.

Updated U.S. Treasury data shows 55,800 taxpayers have come into the Offshore Voluntary Disclosure Program (OVDP) to resolve their tax and financial reporting anti-money laundering obligations, paying more than $9.9 billion primarily in FBAR financial reporting money laundering penalties which are 50% confiscation of foreign assets per year of non-compliance, for up to six years. In addition to the financial reporting asset seizures imposed on US taxpayers, the IRS has also collected tax, interest and tax penalties since 2009. In addition, another 48,000 taxpayers have made use of separate streamlined procedures to correct prior non-willful omissions, such as Accidental Americans, paying approximately $450 million in taxes, interest and penalties in addition to their foreign taxes paid.

Avatar

William H. Byrnes has achieved authoritative prominence with more than 20 books, treatise chapters and book supplements, 1,000 media articles, and the monthly subscriber Tax Facts Intelligence. Titles include: Lexis® Guide to FATCA Compliance, Foreign Tax and Trade Briefs, Practical Guide to U.S. Transfer Pricing, and Money Laundering, Asset Forfeiture; Recovery, and Compliance (a Global Guide). He is a principal author of the Tax Facts series. He was a Senior Manager, then Associate Director of international tax for Coopers and Lybrand, and practiced in Southern Africa, Western Europe, South East Asia, the Indian sub-continent, and the Caribbean. He has been commissioned by a number of governments on tax policy. Obtained the title of tenured law professor in 2005 at St. Thomas in Miami, and in 2008 the level of Associate Dean at Thomas Jefferson. William Byrnes pioneered online legal education in 1995, thereafter creating the first online LL.M. offered by an ABA accredited law school (International Taxation and Financial Services graduate program).

Subscribe to TaxConnections Blog

Enter your email address to subscribe to this blog and receive notifications of new posts by email.