Tag Archive for U.S. Citizenship

Part 13 – Understanding “Exit Taxes”

“I relinquished U.S. citizenship many years ago. Could I still have U.S. tax citizenship?”

Attn: Former U.S. Citizens: Are you STILL or have you EVER BEEN a U.S. “Tax Citizen”?

Synopsis:

This is a long post. In fact, it is too long for the average reader. Therefore, I wish to summarize the purpose and possible (but not certain conclusion) of the post in a few simple sentences.

Here goes:

If you were born in the United States (and became a U.S. citizen at birth) who moved to Canada and naturalized as a Canadian Citizen prior to June 3, 2004:

1. Without informing the U.S. State Department or applying for a Certificate of Loss of Nationality; and Read More

Written by | Posted in Exit Tax • Expatriate • FATCA

Part 12 – Understanding “Exit Taxes”

“The two kinds of U.S. citizenship: Citizenship for “immigration and nationality” and citizenship for “taxation” – Are we taxed because we are citizens or are we citizens because we are taxed?”

The United States of America – One country two citizenships – Introducing the “Tax Citizen”.  Dual Citizenship – American style – All Americans are both “Citizens” and “Tax Citizens”. One Country – Two Citizenships.

First Citizenship – Citizenship for Nationality Purposes

Americans have always been proud of their U.S. citizenship. Most U.S. citizens regard their U.S. citizenship as the most valuable thing they have. Most Americans will fight for their citizenship. They will die for their citizenship. They Read More

Written by | Posted in Exit Tax • Expatriate • FATCA

Part 6 – Understanding “Exit Taxes”

Part 6 – “Surely, expatriation is NOT worse than death! The two million asset test should be raised to the Estate Tax limitation – approximately five million dollars – It’s Time”

Introduction

Many Americans abroad have had their lives turned upside down by the combination of FATCA and the enforcement of U.S. “place of birth” taxation. Those who are “long term” residents abroad find themselves caught between a “rock and a hard place”.

On the one hand they can’t afford the costs and complexity of filing U.S. tax returns.

On the other hand, many “middle class” Americans abroad cannot relinquish their U.S. citizenship (freeing themselves from the complexity of U.S. tax laws and the IRS) without Read More

Written by | Posted in Canada • FATCA

Part 5 – Understanding “Exit Taxes”

“The “Exit Tax” in action – Five actual scenarios with 5 actual completed U.S. tax returns.”

In order to see the graphic and brutal confiscatory effects of the U.S. Exit Tax in action I asked a licensed U.S. CPA who specializes in International Tax to consider the following scenario:

Relinquishment date: A person who renounced U.S. citizenship on November 1, 2014.

Profile: He was a “middle class” person who was completely tax compliant in his country of residence. He was a saver and investor. He had worked hard for this money. Read More

Written by | Posted in Exit Tax

Part 1 – “Facts Are Stubborn Things” – The Possible Effect of The US “Exit Tax” On Canadian Residents

Although this series originally began on “April Fools Day”, I assure that this is NOT a joke.

This post will demonstrate how the U.S. “Exit Tax” affects “middle class Canadians who  have U.S. citizenship and wish to relinquish it. You will see how the “Exit Tax” imposes punitive taxes on Canadian assets and on income earned in Canada. You will also see how some U.S. assets are (in effect) exempted from the “Exit Tax”. We will learn from the example of a “Middle Class Canadian” with an average house in Toronto, a pension plan from the University of Toronto and a low value RRSP who decides that he no longer wishes to be a U.S. citizen.

This person has lived in Canada most (or perhaps all) of his adult life. You will see that he has NO U.S. assets and Read More

Written by | Posted in Exit Tax • FATCA • FBAR

Thoughts On: Major Updates To Foreign Affairs Manual On U.S. Citizenship Renunciation Procedures

In a well researched post, “Eric” at the Isaac Brock Society writes about updates to the U.S. FAM “Foreign Affairs Manual” on RENUNCIATION (not relinquishment) procedures. The revised procedures are here:

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It appears that  “two interviews” will be required, but that only the second interview (actual renunciation”) must be in person.

On balance, it’s clear that the State Department is directing it’s attention to the question of whether the would be “renunciant” really does intend to relinquish U.S. citizenship (after going through all the work of tax compliance, paying the fees, etc.). Read More

Written by | Posted in Expatriate • Individual • International