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Survey Dispels Myth Of Wealthy Americans Abroad And Why Middle Class Americans Abroad Are Forced To Renounce U.S. Citizenship



John Richardson On FATCA

Introduction

This blog post features the research of Laura Snyder. It is (I believe) the single and most comprehensive study of (1) the U.S. legislation that is understood to apply to Americans abroad and (2) the disastrous impact this legislation has on them. To put it simply, Congress is forcing Americans Abroad to renounce their U.S. citizenship.

The bottom line is that for Americans Abroad:
“All Roads Lead To Renunciation!”

And now over to Laura Snyder with thanks.

“I Feel Threatened by My Very Identity:”

US Taxation and FATCA Survey

Introduction

In autumn 2018 I worked with a France-based association of Americans living overseas to organize an online survey addressing the topics of FATCA and US taxation. The survey was open for participation for a period of about six weeks, from late September to early November. The survey was conducted using the open source software LimeSurvey.

Approach and Methodology

The survey was open to all US citizens and green card holders living overseas. It was also open to former US citizens living overseas, a category that is often overlooked. The survey was publicized via social media (principally Facebook and Twitter) and email.

The survey began with questions verifying both that the participant was a current or former US citizen or green card holder and that he/she currently resided outside the United States. Participants that did not confirm both were immediately taken to the end of the survey. Neither their limited participation nor their responses are reflected in this report.

After establishing that the participant met the necessary criteria as to citizenship (or green card) status and current residency, the survey then asked a serious of questions regarding the participant’s country of birth, current country of residence, the principal reason the participant left the United States to live overseas, the length of time the participant had lived overseas, the participant’s intentions to return to live in the United States, and the participant’s status (student, employed, unemployed, retired, etc.). The survey also requested certain additional demographic information, notably the participant’s gender, individual and household incomes, and membership in organizations that defend the rights of US citizens living overseas.

The core of the survey was in two parts. The first part was a series of questions intended to expose the extent to which participants are aware of and understand their obligations with respect to US non-resident taxation and FATCA and to obtain an understanding of the additional information and other types of help they would like to have with respect to both.

The second core part of the survey was a series of questions intended to expose the extent to which participants have experienced problems as a result of US banking and non-resident taxations policies and precisely what kinds of problems they have experienced. These questions had a more general and outwardly-focused purpose of helping the wider public to better understand the serious challenges US citizens living overseas face as a result of US banking and taxation policies.

The survey contained a total of 30 questions. Conditional logic was applied such that certain questions were shown or hidden depending upon the participant’s responses to prior questions. In that manner, no participant was asked more than 21 questions in total. Most of the questions were closed-ended, asking the participant to respond in the affirmative or negative or to select responses from a fixed list of options. In the event that none of the pre-determined options were appropriate, in most cases participants could select “other” and then describe their alternative response. A very small number of open-ended questions were asked; those questions allowed participants to express themselves in any manner they chose. Notably, the last question invited participants to make any comment they saw fit to make with respect to US banking and taxation policies. Another open question was reserved for those who had renounced US citizenship: this question invited those participants to describe the circumstances under which they renounced and how they felt going through the process.

Only the preliminary questions verifying citizenship status and residence were required; all other questions were optional and some participants did skip or otherwise fail to answer certain questions.

There are questions that could have been included in the survey but were not. For example, the survey could have included questions about participant age or US-citizen children. In most cases, these questions were excluded because they did not seem essential and a lengthy survey might have discouraged participation. However, there is one line of questioning that was avoided for a different reason: the survey did not inquire as to whether or not participants actually are or at least try to be in compliance with US banking and tax obligations. For example, participants were not asked if they meet the filing thresholds and, if so, whether they actually do file US tax returns. Nor did were participants with dual nationality asked if they had attempted to hide their US citizenship from foreign banks and, if so, whether they had been successful in doing so. Such questions were potentially too sensitive and their inclusion could have discouraged participation, or, at least, honest participation, in the survey. Nevertheless, as can be seen in Part 2 a number of participants volunteered this kind of information.

The survey was conducted on an entirely anonymous basis. No records identifying those who completed the survey were kept. Participants had the option but not the obligation to provide an email address for possible follow up and to receive updates about the survey.

Survey Results

The survey results complement and corroborate the results of other surveys demonstrating that US citizens and green card holders living outside the United States experience a wide range of hardships as a result of US non-resident taxation and banking policies. The results also confirm that these hardships are experienced by persons of all backgrounds and walks of life. While not all are affected in the same manner and some are affected more severely than others, no one kind of person (man or woman, employed or unemployed, high income or low) is spared. Finally, the results show that many Americans living overseas experience acute emotions in connection with US taxation and banking policies.

Part 1 presents the survey data. It begins with demographic information about the participants and then dissects participant responses in order to expose what percentages of what kinds of citizens and green card holders report having which kinds of experiences. Notably Part 1 shows the extent to which participant experiences differ (or not) based upon gender, citizenship (singular or dual), country of residence, length of time living outside the United States, intent to return to the United States, employment status, and income. Part 1 finishes with demographic information about former US citizens together with their reasons for taking the irreversible step of renouncing US citizenship.

Click here for Part 1.

Part 1 – Data

Part 2 contains the words of the survey participants, explaining firsthand their experiences with US non-resident taxation and banking policies. With these words we can better understand in a personal manner the wide variety and range of experiences and the effects the policies have had on the participants and their families.

Click here for Part 2.

Part 2 – Comments

Part 3 contains a case study examining in detail one participant’s extended comment explaining the multitude of issues that she faces as a military spouse and new mother.

Click here for Part 3.

Part 3 – Case Study

Part 4 contains a focused examination of the emotions that the survey participants report as a result of their experiences with US taxation and banking policies: (1) fear, worry and anxiety, (2) stress, frustration and confusion, (3) vulnerability, (4) anger and sadness, (5) feeling like a criminal, (6) marital problems, (7) concern for US citizen children, (8) feeling like a second-class citizen, (9) persecution and betrayal by the United States, and (10) having changed their opinion of the United States.

Click here for Part 4.

Part 4 – Emotional Toll

For background information explaining US non-resident taxation and banking policies and the political and legislative context in which the policies were adopted, see these links:

It Hurts My Heart: The Case for Fairer Taxation of Non-Resident US Citizens, Part 1

It Hurts My Heart: The Case for Fairer Taxation of Non-Resident US Citizens, Part 2

It Hurts My Heart: The Case for Fairer Taxation of Non-Resident US Citizens, Part 3

It Hurts My Heart: The Case for Fairer Taxation of Non-Resident US Citizens, Part 4

It Hurts My Heart: The Case for Fairer Taxation of Non-Resident US Citizens, Part 5

It Hurts My Heart: The Case for Fairer Taxation of Non-Resident US Citizens, Part 6

 

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The Reality of U.S. Citizenship Abroad

My name is John Richardson. I am a dual citizen. I am a 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.”

I am also a member of the American Citizens Abroad Professional Tax Advisory Council (PTAC). This is an advisory panel focused on assisting American Citizens Abroad in an FBAR and FATCA world.

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.

23 thoughts on “Survey Dispels Myth Of Wealthy Americans Abroad And Why Middle Class Americans Abroad Are Forced To Renounce U.S. Citizenship

  1. Avatar ZH says:

    Wealth should not be part of the equation. If you’re non-resident, you should have zero tax obligation other than on US source income. Why should a billionaire pay anything in return for nothing? They’re paying where they live. Every other country manages just fine with this scenario. But the “greatest country” cannot? Pure freed, and because they can.

  2. Avatar Kathy says:

    Of the estimated 9 million or so deemed ‘US persons’ living outside USA, only a small minority actually file US tax returns – IRS receives submissions from this group in the 100’s of thousands, NOT millions. Before you get disgusted at the low numbers of compliance remember two things:

    1. Most US persons are citizens of the countries that they live in and already file tax returns and pay taxes. As such they are not so much ‘US citizens living abroad’ but rather are tax paying citizens of the countries they live in. Their so-called ‘foreign’ accounts that are required to be reported to the Financial Crimes Enforcement Network every year (on FBAR), are not foreign to the people they belong to; they are legal, already taxed, local banking and retirement accounts that normal people have as part of life.
    2. USA is the ONLY country in the world that requires taxation and bank account reporting based solely on place of birth. All other countries tax based on residency, not citizenship where citizenship can mean something as meaningless as being born in USA while your mom was on a cross-border shopping trip. Even Eritrea, the only other country with a form of citizenship based taxation requires more than birth on its soil to be considered a taxpayer.

    Based on such ridiculousness, it is easy to understand why millions of ‘US persons’ who do not live in the USA, do not bother to file US tax returns or Foreign Bank Account Reports(on their local accounts). Not only is it counter-intuitive to do so (no other countries do), it is practically impossible for USA to enforce such laws on people who do not reside in the USA and are tax paying citizens of the countries that they actually do reside in.

    In summary, citizenship based taxation has been and continues to be safely ignored by the vast majority of so-called ‘US persons’ living in their countries of citizenship, most of whom are average Joe types, as Laura Snyder points out. As far as John Richardson’s comment that ‘all roads lead to renunciation’, that is only the case for some of those who attempt compliance with USA’s citizenship based taxation and ‘foreign’ (aka local) bank account reporting, or for those who must renounce in order to maintain a bank account in their country of residence; otherwise all roads lead to the very simple act of ignoring the laws of a country one does not live in.

    • Avatar Laura Snyder says:

      Kathy

      Thank you for your comment.

      Non-compliance with US non-resident taxation laws is certainly an option for some people, some of the time. Indeed, for US citizens who were born outside the US (and so are able to hide the fact of their US citizenship from the banks in the countries where they live and in doing so are able to keep their local bank accounts) and who have minimal to no financial or family ties to the US (and so both their assets and their person are likely out of reach of US authorities), it is a viable if not the best course of action. For now. There is no way to know how current laws may evolve such that that may no longer be a viable option, leaving them with even bigger problems because of their history of non-compliance. And either way, they will always live under a cloud of uncertainty. Some have no problem with that; others understandably find it difficult to choose to live in violation of laws, however unjust and difficult to comply with those laws may be.

      Non-compliance is not an option for many others. This is for a variety of reasons, often particular to the person in question. Perhaps they have entered the US tax system for perfectly normal reasons, such as because they previously lived and worked in the United States. Perhaps they have assets in the United States. Perhaps they have family members in the United States, such as parents, from whom they expect to inherit. Perhaps they hold professional licenses that would be in jeopardy were it discovered they were not in compliance with applicable tax laws, again however unjust and difficult to comply with those laws may be. Perhaps they envision the eventual need to return to the United States at some indefinite point in time, such as to care for elderly parents. Perhaps perhaps perhaps – there are perhaps as many reasons why non-compliance is not an option as there are people who do attempt to comply.

      In the face of a situation that is so overwhelming and outside of one’s control, non-compliance is an entirely understandable and defensible coping mechanism. But make no mistake – it is nothing more than a coping mechanism. Like all other coping mechanisms, it works for some but not for others. And for those it works for, it may only work sometimes and not at other times.

      Fundamentally, coping mechanisms do not address the underlying problems that created the need for the coping mechanisms in the first place. That is, non-compliance does not solve the underlying problems of non-resident taxation and FATCA. They are very serious problems that need to be addressed regardless of how many people do or not do comply with the laws at any given point in time.

      • Avatar Bjorn Slijpers says:

        Oh I’d say non-compliance is more than a coping mechanism. First off, it’s extremely popular, with at least 85 percent of US persons abroad failing to file anything. I imagine the vast majority of those people are simply unaware of their purported filing obligations, while others have made the sensible decision not to enter or re-enter the US tax system. (Estimated number of US persons abroad: 6 to 9 million. Number of returns filed: well under 1 million, as the last published data shows 450,000 in 2011.)

        For all the grief that FATCA has caused, the IRS is not actively looking for non-resident US persons. Nor does the IRS have any ability to assess income and collect penalties or taxes owed from such persons, with a very few exceptions. (There are tax-treaty provisions for collection assistance between the US and Canada, Denmark, France, Netherlands and Sweden, but excluding routine collection against anyone who is a citizen of their country of residence; to date these provisions have been invoked precisely twice.) Overall, CBT is both unenforceable and unenforced.

        Note also the general unpopularity of US compliance programs. The OVDI/OVDP scam snared a few thousand victims. At last count the Streamlined Program had seen 64,000 filings – a whopping 1 percent or less of the US diaspora.

        There are indeed a small number of people for whom non-compliance would be difficult if not impossible, and for whom the idiocies of the US tax system as it applies to non-residents can be an expensive headache. They are generally expats without a second citizenship, or with strong financial and family ties to the US. Most everyone else who’s filing would probably be better off if they stopped, or at least if they had not begun. Certainly duals and accidentals – with or without US birthplace – who’ve never worked in the US should not consider filing.

        One point that does not get made enough is the role the tax compliance industry plays in this situation. They do not give honest advice about the pros and cons of compliance and non-compliance. (There are more than a few articles in this blog explaining how to follow the rules, without ever asking whether the rules should be followed. An honourable exception being Gary Carter, who now admits that telling clients to file 3520 forms has been a huge mistake.)

        Things could indeed change for the worse. Or it will be status quo for a very long time: FATCA and banking problems for some people in some countries, but CBT a widely ignored zombie law. In which case, US persons need protection less from the toothless IRS than from the tax compliance industry.

      • Avatar Kathy says:

        Thanks for your reply to my comment Laura.

        Is refusing to comply with the laws of a foreign country really a “coping mechanism”, as you refer to it, or more like a form of civil disobedience – a well thought out, decisive action of standing up for one’s rights?

        Non-compliance with counter-intuitive, abusive, foreign laws, can feel natural, liberating and empowering, not at all like merely coping.

        Also there is power in numbers, such that if the vast majority of ‘US persons’ living in their countries of primary citizenship continue to be non-compliant with US tax and reporting laws, those foreign laws become essentially meaningless. The USA cannot make criminals out of the majority of US persons who neither live in the USA, nor earn their living there. As such, to ignore foreign laws in one’s own country of residence and citizenship, is not simply a coping mechanism, rather it is sticking together with the majority, and refusing to be bullied into submission.

        Just say ‘no’! It really can be that easy for most of us. Certain exceptions apply.

        • Avatar Laura Snyder says:

          Bjorn,

          You are entirely correct that the tax compliance industry plays an important role in all this. They are the most important overseas enforcement tool for the IRS. And as if to rub salt into the wounds, it is the overseas US taxpayer (who really shouldn’t be a US taxpayer) who pays for their enforcement services, rather than the IRS. I would like to invite you to study this situation in greater depth and expose it in greater detail, including your recommendations as to how to combat this problem. Given that non-compliance is not an option for everyone, your recommendations should include options beyond simple non-compliance. Given how complex an overseas US tax return typically is, your recommendations also need to go beyond suggesting that overseas US taxpayers complete their own return – this is simply not possible for many of them, especially but by no means not only the elderly.

          Kathy,

          Again thank you for your comment.

          Rosa Parks engaged in an act of civil disobedience, as did so many others during the civil rights movement. To my knowledge, at no time was it contemplated that acts of civil disobedience were sufficient to address the problems faced by the African-American population of the United States. To the contrary, a primary objective was to obtain changes to laws. In the absence of changes to laws, acts of civil disobedience would remain little more than crimes.

          You have a very strong and unbending conviction that it is sufficient for nearly most people to simply chose to not comply and that in doing so all will be well. You don’t seem especially concerned with the remaining few who you concede might actually need to comply (or at least try to).

          Given your confidence and the strength of your convictions, I would like to invite you to contact Mr. Roger Kaiser, Senior Policy Adviser – Tax & Compliance of the European Banking Federation.

          At this link he explains the concerns that the EBF has with FATCA (his discussion starts at 11:05:27):

          https://www.europarl.europa.eu/streaming/?event=20191112-1000-COMMITTEE-PETI&fbclid=IwAR17jztydMPHxPLuEDSweaxPBiN_89I7pwQi4BAkPOOO3OHlmizw-W7J2gs

          Beginning at 11:08:40 he states: “European banks must abide by the law and strictly comply with tax regulations. In particular, a European bank which has operations in the US or even simply markets US financial products cannot afford facing the risk of being considered non-compliant with FATCA since it could be penalized with the 30% withholding tax on all income streams from the US.”

          I am sure that he will be more than relieved to hear from you and the thereby understand that European banks are simply wrong in believing they need to comply with FATCA.

          I would also invite you to contact the European MPs who participated in yesterday’s hearing before the Petitions Committee of the European Union (https://www.socialistsanddemocrats.eu/newsroom/european-citizens-lives-severely-disrupted-and-rights-under-threat-result-us-tax-law). I suspect that they would be delighted to learn from you that this can all be solved with non-compliance as this would enable them to turn their attention to what I imagine you would consider to be far more important matters.

          Finally, please also contact Fabien Lehagre, the founder of the Association of Accidental Americans. I am sure he will be delighted and relieved to learn from you that his fight to improve the situation for Accidental Americans is a waste of time – that all he and the other members of his association – indeed all accidental Americans around the world – need to do is simply not comply.

          I’m looking forward to your discussions because I’m sure that afterwards all threats of bank account closures will become a bad and distant memory and FATCA and its accompanying tax obligations will simply loose their teeth.

          Good luck. We’re counting on you. Thanks so much.

          • Avatar Kathy says:

            Hi Laura,

            In no way do I mean to dismiss the challenges that some people in the world face with regard to FATCA and CBT. However from my own personal experience I have seen too many people have a stress meltdown over it – myself included – and waste years fretting and looking over their shoulders for the big bad wolf who never comes. As such my perspective is from someone who has been there done that, only to regret it.

            I encourage fearful CANADIANS – my focus is on my fellow countrymen, no apologies for that – to keep their US personhood to themselves and carry on with their lives. They are Canadian; they live in Canada; who cares what USA says?

            Donate to legal battles, correspond with political representatives, become involved in protests if you like(I’ve done them all), but keep it in perspective. Life is challenging enough. There are bigger problems than FATCA in the world today. Don’t let it become all consuming, as so many have.

            Canadians don’t have much to fear from FATCA currently and likely never will. Should that change in future, I promise you, so will my attitude.

          • Avatar Bjorn Slijpers says:

            Laura,

            A small number of people are in fact trying to hold the tax compliance industry to account. They post frequently to whatever online forums they can find, wade into the stupidity of news comments, and sometimes they will even turn up in person at Moodys and other “seminars” and ask a lot of questions to hopefully combat disinformation and save the innocent from being sucked into unnecessary compliance. Tax Connections is itself a frequent source of thou-must-obey bad advice from tax professionals who really should know better. I’m surprised we’re even being allowed to have this conversation, given the pro-blind-compliance editorial direction. (A funny thing is, when you contact an accountant who’s written an “advertorial” for a major newspaper, and grumpily point out all the things they conveniently failed to mention, such as renouncing not requiring tax compliance, sometimes they will privately agree that Canadians without money in the US have no business filing US taxes.)

            Anyway, I contend that only a relatively small percentage of US persons truly cannot avoid compliance. And for many of those, a “partial compliance” approach would greatly reduce the pain. Report only that which the IRS knows about – volunteer nothing they can’t discover. Canadians paying taxes or being hit with 3520 fines for reporting TFSAs – a silly self-inflicted injury. Britons paying capital gains to the US after selling their homes – a dreadful own goal. People need to stop listening to the “professionals” and start taking responsibility for their own financial security.

            FATCA problems are serious in some countries, not in others. That is a separate issue, deserving of its own novella. Canadians are fortunate in two respects: one, banks do not require ID showing place of birth and do not challenge customers’ answers to citizenship questions, so one can very easily avoid all this silliness by simply answering that one is not a US person; two, for those identified whose accounts are unfortunately subject to reporting, there are no restrictions on the services offered, nor risk of closure.

            CBT is absurd, but thankfully it is widely ignored, willfully or unwillfully as the case may be. Global compliance rates are perhaps 10 to 15 percent at best, and they are not rising significantly, despite FATCA. The US government has extremely limited powers of enforcement. Among those who do comply, a healthy portion should not be, and could stop tomorrow if they learned not to fear the IRS or listen to what the “professionals” tell them to do. That is the message that needs to be spread far and wide.

            PS Regarding your reply to Kathy:

            “all threats of bank account closures will become a bad and distant memory and FATCA and its accompanying tax obligations will simply loose their teeth.”

            FATCA has no accompanying tax obligations. FATCA is completely independent of CBT.

            FATCA has triggered account closures and other restrictions in a few countries because banks have been utterly spineless – the IRS hasn’t actually threatened anyone with penalties (quite the reverse, it just extended the deadline for the SSN requirement and basically said “don’t blame us, we aren’t telling the banks to close accounts”). Some of these banks need to be sued up one side and down the other by their Accidental American customers.

            As for those US tax obligations, they can’t lose their teeth because they don’t have any teeth to lose. When a person has no US assets or income in play, the IRS is quite literally toothless.

      • Avatar Alma Lou Annab says:

        Thank you for your your remarks. As a dual citizen, I have investment in the US as well as Jordan, my adopted country. I am retired. I am forced to comply because of FATCA. I cannot have a bank account without annually signing the document.
        I feel it is unfair for the US to demand payment from me, and to threaten the banks for their noncompliance. I get no benefit from my taxes, and they often used against my interests politically. Taxation without representation.
        In the light of he corrupt policies in the US I do not foresee any changes.

  3. Avatar Paul Malkovich says:

    This is a well put together study.

    The issue I see at this point is Congress understands there are hardships, but are in no hurry to do anything about it. Then there are some who see the government as the important entity rather than its citizens getting a fair shake. They feel exerting total control is paramount.

    Perhaps the most reprehensible aspect are the ones who view the federal ledger as a weapon. Expats are being used to fund the revenue side disproportionately with heavy fines and penalties — which the bean counters have no problem leaving intact. Raising taxes on the wealthy has political risk while draining the coffers of Americans abroad carries zero pushback.

    Congress is a very undemocratic institution which means Americans abroad must build organizations to get attention.

  4. Avatar Heidi Hasz says:

    Good work Laura. We are the off shored citizens. Some of us health care refugees. Living check to check. We are the forgotten were it not for the #FACTA enforcers and compliance vultures. Most of live check to check, like most Americans, just in another country. We pay our taxes where we live, and it’s a stress and financial burden to comply to two tax systems. That’s why no other country does this. It literally makes no sense.

  5. Avatar Greg Swanson says:

    Thank you for this survey. People who are not impacted by this will buzz over it. They will simply think, “oh, they are just trying to get out of paying taxes”. This survey shows much more. It shows a system that is restricting the lives of normal people. It is forcing normal people to live in two countries’ systems, with a complex tax treaty in between. No decision made by these people, large or small can be made without trying to understand the potential devastating impact. But it goes much further. It is a sign of abuse. Nobody can effectively even deal with a US citizen abroad without the worry that someone, in the US, may someday pass a law that will impact them too. Could there be sanctions for dealing with an American citizen? Possibly. For other people, an American citizen abroad is a walking time bomb. Already, we see parents of young people telling their children not to marry an American. We see divorce. We see renunciations. We see separation of family assets in ways that can put the American in poverty if there is a death. This is not a topic of fair share. Americans abroad pay their fair share where they live. This is a topic of human rights. When you place a citizen under US jurisdiction, force them to be a tax resident somewhere that has nothing to do with them, or pass new laws without any consideration of the impact on them, it is violating everything that the US says it stands for. It is shameful.

  6. Avatar David Johnstone says:

    John and Laura,

    Thank you for sharing this important and comprehensive survey.

    The five key takeaways that stand out to me from the replies given by the survey participants are as follows:

    1. The personal and household income distribution and income levels of the overseas respondents appear to be very similar to the income distribution and income levels of stateside American residents. This powerfully counters the stereotype that all American expats are wealthy. It turns out that they are likely to be no richer and may be a little poorer on average than stateside Americans.

    2. The income distribution of the subset of respondents who indicated that they had renounced their United States citizenship was even lower than the general income distribution of all survey respondents. This indicates that persons who renounce are likely to be poorer than either stateside Americans or other Americans overseas. This is a strong indication that the often-heard view that Americans who renounce their citizenship are all wealthy and do so to escape United States taxation is nothing more than a myth. The fact that this probable myth, as well as the above-mentioned incorrect stereotype have been used as reasons to impose wide-reaching and intrusive legislation on Americans overseas, which would be viewed by most stateside legal scholars to be unconstitutional if implemented inside the United States, is therefore all the more troubling.

    3. Americans in Europe constitute a much higher percentage of survey respondents than they do of the American overseas population overall. If one were to factor in the large numbers of Americans resident in Mexico and elsewhere in Latin America, for instance, the above-mentioned average income of Americans overseas would, in all probability, fall further below the average income of stateside Americans.

    4. Combining the above results and population distribution of overseas Americans throughout the world with the evidence of a study posted by the Isaac Brock Society on March 8, 2016, based on UN and country-by-country census data of American residents, that 92.5% of Americans resident overseas live in higher tax jurisdictions than the United States, Americans overseas appear to be no wealthier on average than stateside Americans and pay more in taxes than they would if they lived in the United States.

    5. Given all the above points, it appears likely that a truly systematic, Census-type survey of Americans resident overseas would fully dispel the myths that all Americans abroad are wealthy tax evaders and that Americans who renounce their citizenship are wealthy individuals seeking to escape taxation.

    Absent a truly comprehensive Census survey of Americans living outside the United States, Laura Snyder’s survey results should be prerequisite reading for all candidates and elected officials of the United States prior to the proposal of any legislation pertaining to the taxation and financial access of Americans resident overseas.

    Finally, I believe that Laura Snyder’s survey clearly shows the injustice of United States tax and financial legislation that affects all Americans resident overseas, but most particularly the poor, the middle class, and women. Our elected officials should be ashamed of the fruits of their labor.

    Citizenship-based taxation, FATCA and all other legislation aimed at Americans overseas whose only fault is to live overseas are clearly based on incorrect stereotypes and the myth of the wealthy, tax evading expat. Americans overseas already must comply fully with all the laws of the countries in which they reside, and almost all of them pay more taxes where they live than they would if they lived in the United States. Additional, unjust, extraterritorial legislation imposed on them by the United States is simply an unnecessary burden, serving no justifiable purpose for the United States.

    The United States should join the rest of the world by moving to residence-based taxation, it should repeal FATCA, and it should study and apply the best practices from other countries to combat tax evasion. Starting over from scratch, based on evidence, not myth, is the best way for the United States to achieve its legitimate aims of justice and equity and to rejoin the civilized world.

  7. Avatar Esther Jenke says:

    We are just normal people who have chosen to live outside of the US for various reasons. We have done nothing wrong but are treated as tax evaders even though we pay full taxes in the country in which we live and work.

    It is impossible to be fulfill the tax laws of two different countries which often contradict each other. In many ways we are double taxed and discriminated against because of the US citizens outside the US are toxic for banks and employers.

  8. Avatar troutbum says:

    I am so thankful for this informational survey that finally puts a bit of fact to the expat story & the tragic impact of citizen based taxation & the USA’s implementation of the draconian FATCA & related legislation. The estimated 9 million of us expats are not even treated like 2nd class citizens but more like scum – we, effectively, have no rights. Our private financial information which would require a warrant or subpoena in the States is handed over freely by our banks, brokerage & insurance firms. In almost all of the cases we have done nothing wrong or illegal – just living ‘normal’ lives but in another country. And after we have been scaremongers into the hand of the compliance industry we have to fork over thousands of dollars in fees to find out we owe nothing which as long as we remain US citizens will have to do every year until we make the decision to renounce. And to add insult to injury, the cost to renounce (highest in the world by far) can be financial crippling. And what a sad travesty it is to hear our so called US representatives spout off utter nonsense about us fat cats hiding overseas and almost none of our representatives has even a clue about the true impact on us expats…nor do they really care. The concept of residency based taxation is not so hard to grasp – the US gets it internally. If I move from New York to California, I do not continue to pay New York taxes – I pay California taxes because I am a RESIDENT OF CALIFORNIA and I use their services which I should pay for. It is exactly the same when you move to a different country…what a moronic idea CBT is – the rest of the world gets it but the US exceptionalism (exceptionally stupid) prevents them from seeing the simple logic. Or maybe it is all just a simple revenue grab….

  9. Avatar Carol Negiar says:

    So far, everyone we know who is renouncing are young people starting on their work career. The tax accountants are asking them to pay too much to do their tax returns, & it’s too complicated for them to do it on their own. They are going to other countries for jobs and vacation. They have a bad feeling about the US. It’s diplomacy at its worst. These are good kids.

  10. Avatar Lina Kunstler says:

    I am 10th generation American who married a non-US citizen & moved to his country.
    I earn less than the threshold to pay taxes in both countries, but it is so expensive, time-consuming and stressful to have to fill out the many tax forms required, that I will end up by renouncing & advise children to do likewise. If thé US starts fining those who don’t declare, there will be more of a shortage of tax accountants in my city. Many are lost in the complexity of it. It’s sad to give up one’s citizenship for administrative headaches.

  11. Avatar Mario Martin says:

    I am a dual citizen US and Spanish. I am 45 years old and I have born in the USA. One of my parents is a US citizen, the other is Spanish and I have family living in both sides of the Atlantic. I came to Spain as a toddler when I was 2 years old and I have been in the US only for short visits.

    I have never taken care much about my US citizenship. It was just a passport in a drawer that I always forget to renew. After the 2001 attacks, some terrorist were actually identity thief. So, I went to the US to visit a family member and while I was there, I make a driven license, so they have some bio metric data of me, just to be safe and that’s the only relation I had with the US administration.

    I only get knowledge that I had to comply with tax obligations when I starting to have troubles with banks in Spain, because of FATCA. I have brothers and sisters who they have born in Spain, but they are also US citizens, because one of our parents was a US citizen. But I am the only one with problems, because my identity documentation says “born the USA”.

    I have written to the Spanish and European authorities about this FATCA issue, but it is difficult to explain, because how anyone can own anything to a country where we have no assets, no incomes and we’ve never lived there? Certainly, you must be mistaken.

    The US government is in violation of the Non-Discrimination article of the tax treaty between the USA and the Kingdom of Spain.

    ARTICLE 25
    Non-Discrimination
    Nationals of a Contracting State shall not be subjected in the other Contracting State to any
    taxation or any requirement connected therewith which is other or more burdensome than the taxation
    and connected requirements to which nationals of that other State in the same circumstances are or maybe subjected.

    US citizens cannot be discriminated as residents in Spain. But actually it is the US government discriminating its own citizens, which is mind blowing.

    I don’t mind to renounce my US citizen. I am not qualified to give the US citizenship to my children, I don’t plan to live there in any foreseen future and I am very happy living in Spain. But in Spain, salaries are much lower than in the USA and the renunciation expenses aren’t afordable for many.

    I don’t have any remorse with the US. Even if I renounce, I will still be their ambassador, feed of its history and the ideas of the founding fathers.

    I don’t understand what benefit they have for all this troubles. But, somehow I feel this FATCA issue is a cleanser of some radical factions in the USA, who consider us “not true American”. I use to live in a country where the “yankies go home” is embedded in the political speech. Believe me that this will have knock out long term consequences on what any benign understanding of the US will have in the world, for no benefit.

  12. Avatar Rebecca Dean says:

    Thanks so much for this survey. I am a dual US-German citizen who is far from being rich. Not only am I angry about FATCA and CBT and the unjust burden it puts on my family, I’m also angry about the total disregard our woes (being shut out of banking systems, spending hundreds of euros a years on accountant fees to file when we know we won’t have to pay any taxes, etc.) receive from homelanders and US politicians–if they even bother to think of us at all. The myth that we are all fat cats who don’t want to pay our “fair share” to Uncle Sam is beyond insulting. The fact is that we all do pay taxes where we live and the only other country who treats its citizens in such an atrocious way is a small West African dictatorship. An in-depth survey like this is the perfect example to send around so that people become aware of how things really are for us.

  13. Avatar USA-free says:

    Great work! Residency-based taxation is the only sane, moral and just alternative to the idiotic FATCA ‘global government’ power grab that ruins lives of US citizens who’ve finally said goodbye to the USSA.

  14. Avatar Aussie says:

    I am Australian but was born in the USA while my father was a graduate student. All my family are Australians and none of us had any idea that I had become an American citizenship by birth until we applied for a visitor visa and mine was rejected (no problems at all for my Aussie siblings). Likewise, CBT came as a complete suprise, kindly brought to my attention by my LOCAL bank due to FATCA. We came back home when I was a few months old, so I have grown up here, been educated here, worked here, and raised my family here in Australia. Being an “American” was career-limiting for me due to bank signatory issues so I have renounced.

    But, really, the issues are bigger than that. Our income tax rates are higher in Australia than America. We have a national health scheme in Australia called Medicare that automatically comes out of our salary like income tax. Further, the two tax systems are not compatible, which means that anyone caught up in the mess is double taxed and does not get the benefits designed into either country’s tax system to encourage nationally-desired behaviours (eg. saving for retirement).

    People should pay tax in the country that they live to contribute to the infrastructure and services from which they benefit. I cannot think of any justification for me contributing to the tax base of a foreign country – the U.S.A. I firmly believe that CBT is immoral and reflects poorly on the values of the American people who let this situation persist.

    Residents of other countries should be outraged that American is siphoning off dual citizen’s income – into American compliance costs, tax paid due to the incompatibility of the tax systems, and excessive fines issued by the IRS – which would be better off being spent in their own country, especially with the current economic situation in many countries.

    I have empathy for those expat Americans who need to retain their American citizenship for family reasons.

  15. Nice work! Residency-based taxation like all other countries in the world practice is what we need. CBT ruins lives of US citizens and their families. As many have said, my family cannot continue to live under two tax systems. Add on FATCA and banks restricting what products I can have, or even flat out rejecting some people as ludicrous!

  16. Avatar Marsha Thalin says:

    I came across FATCA when one of my banks back in 2013 started asking if I was a US person. When I finally got an answer I also discovered that after living abroad since 1975 that I had to declare. After a call to an IRS rep in the London Embassy I entered, unfortunately, the Streamline declaring and became compliant. But as time went by I was nearing retirement age. I found that declaring in the US extremely complicated but managed to do it myself. Was worried that the FATCA requirements would get more stringent and not to mention the US taxing my pensions. Not having anything in my name and putting almost all fond accounts in my husbands name was not really a good idea. So in the end I bit the bullet and renounced 2 years ago. Just as well all the bank in my country are asking deeper questions and want you to submit your TIN or SSN to verify where you have your tax home/homes.

    I am angry that I had to give up my citizenship to keep my meagre pension savings from being taxed twice. The other worry would’ve been if I became a widow and had to sell our house and be taxed in the US as well.

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