I suspect that history will show that that the growth in renunciations of U.S. citizenship (and abandonment of Green Cards) continued in 2016. Absent a change in the way that the United States treats its “U.S. Persons Abroad”, I suspect that the growth in renunciations of U.S. citizenship will continue.
The purpose of this post and a short summary:
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:
Since the time the IRS announced the revised Offshore Voluntary Disclosure Program, there has been a consistent restlessness among American expats. At the forefront of this change is the inclusion of the Streamlined Compliance Procedure Program, which is available to U.S. individual taxpayers residing in the United States as well as those who live abroad.
The Streamlined Foreign procedures cater to those U.S. citizens or lawful permanent residents – i.e., expats – who satisfy the non-residency requirement. The non-residency requirement has two strands. First, the taxpayer must not have a U.S. abode. And second, the taxpayer must have lived outside of the U.S. for at least 330 full days in at least one (or more) of the most recent three years for which the U.S. tax return due date (or properly Read More
Heitor David Pinto wants to “make it easy” for Congress to move from citizenship-based taxation (CBT) to residence-based taxation (RBT).
Pinto thinks CBT is “absurd.” And he aims to help Congress change it.
Because of CBT’s complexity and because it’s a low priority for Congress, Pinto was concerned Congress might take a long time or might not do tax reform at all for Americans abroad. But, Pinto hopes “if it’s mostly done already, they might do it faster.”
When the naturalized American citizen immigrated to the United States from Brazil a Read More
Over the last two years, the number of U.S. expatriations has skyrocketed. For 2013 alone, the number of Americans renouncing their citizenship has increased to 221%. As shocking as this statistic might appear, according to those in the “know,” it is grossly understated. This has inspired many to call the trend, “Ellis Island in reverse.”
What has caused so many to resort to something as extreme as renouncing their U.S. citizenship? None other than the usual suspects, or what I like to refer to as the “dynamic duo” (for all you “Batman” fans): the United States’ system of worldwide taxation, on the one hand and FATCA, on the other. While I could go on endlessly about the harmful effects of global tax reporting and FATCA, the purpose of this blog is to discuss the steps that must be taken in order to expatriate. Read More
Call me naive but the immigration “problem” in the USA is rooted in the fact that the country offers the absolute best Social Security and Medicare systems on the planet. Surely detractors painfully draw out and depending on perspective fabricate flaws. It is remarkable that millions of people, mostly good people in all other regards are so willing to commit the crime of residing in the USA without proper documentation in pursuit of a ‘better life’ for themselves and their progeny.
On the one hand thinking about and planning for multiple generations at a time is what seems to lead to measurable advancements in humanity. But on the other hand one must ask whether being in the USA without proper documentation is worth it at any cost. Evidently the answer is a resounding and problematic yes. That is why expatriating from Read More
The taxation of Americans and long term green card holders (permanent residents) who expatriate from the United States has gone through many changes over the years. The latest version of these changes with tax expatriating Americans on their accumulated un-taxed wealth prior to their leaving the United States, along with their earned income that has not been paid and will be paid in the future.
In addition, the United States tax laws will tax expatriating Americans at draconian rates, for Americans that die owning United States wealth (the “Estate Tax”) and that make significant gifts (the “Gift Tax”) after they have given up their United States citizenship.
Thinking about renouncing your citizenship? After reading this blog, you may want to think twice.
Over the last two years, the number of U.S. expatriations has risen dramatically. While it might not be Ellis Island in reverse, it’s damn near close. What has caused people to resort to an option as drastic as renouncing their U.S. citizenship? None other than global tax reporting and FATCA.
For 2013, there was a 221% increase, with record numbers of Americans renouncing. This statistic is based on a quarterly list published by the Treasury Department. As high as that might sound, it might fall woefully short of the actual number. Why? According to Read More
Often, U.S. citizens who move to Canada are shareholders of U.S. S Corporations. This can potentially create double tax problems.
Under Canadian tax law, the S Corporation is just like any other foreign corporation. Dividends received are generally fully taxable. In addition, if the S Corporation is a “controlled foreign affiliate”, the shareholder can be taxable on his or her share of underlying investment income and capital gains under Canada’s “foreign accrual property income” (“FAPI”) rules.
Double taxation can arise because of the fact that Canada will generally only grant limited foreign tax credit relief for the U.S. taxes paid by the shareholder on the S Corporation Read More
When it comes to considering gross income for tax purposes, Section 121 of the US Internal Revenue Code allows for the exclusion of up to $250,000 in gains arising from the sale of a “principal residence.” The exclusion should apply whether the property is in the US or a foreign country. In the case of married couples filing a joint return, up to $500,000 may be excluded. The tax law is very specific in how it defines a “principal residence”, and in the “ownership” and “use” requirements that form part of the definition for utilizing this exclusion.
In order for a property to qualify as a principal residence, the residence must have been owned and occupied by the taxpayer for a minimum of 2 years (specifically, 730 days) Read More
As will be recalled from the previous blog posting that discussed so-called “Controlled Foreign Corporations” (CFC), a United States shareholder of a CFC can possibly be treated as having received “dividend” income at various times. These are when the US shareholder (i) has current income inclusions from the CFC under the anti-deferral regime (Subpart F income); (ii) has amounts actually distributed to him that had not been previously taxed as Subpart F income (these are ‘actual’ dividends); (iii) has amounts actually distributed to him that had been previously taxed as Subpart F income and (iv) recognizes gain on the sale of his CFC stock and the CFC has undistributed earnings and profits.
The question arises whether any of these amounts (i)-(iv), can be treated as “qualified dividend income”? Full details about the tax beneficial treatment of “qualified dividend Read More
The IRS reminds United States citizens and resident aliens, including those with dual citizenship who have lived or worked abroad during all or part of 2013, that they may have a U.S. tax liability and a filing requirement in 2014.
The filing deadline is Monday, June 16, 2014, for U.S. citizens and resident aliens living overseas, or serving in the military outside the U.S. on the regular due date of their tax return. Eligible taxpayers get one additional day because the normal June 15 extended due date falls on Sunday this year. To use this automatic two-month extension, taxpayers must attach a statement to their return explaining which of these two situations applies. See U.S. Citizens and Resident Aliens Abroad for details. Read More
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