This article was passed along to us and was originally printed in French for the French magazine L’obs. Due to its dealings with FATCA, we decided to post it for you.

A recent US tax law requires all nationals to report their income. Those who were born by chance in the United States like Fabien live a nightmare.

In the 21st century, the Joseph K of the “Trial” of Kafka is called Fabien Lehagre. He lived until then a peaceful life in Paris. But because he was born by accident in the United States, he finds himself in a terrible legal mess, collateral victim of a new US law, FATCA , to fight against tax evasion. The United States wants to know everything about taxpayers of American nationality based abroad. Taken in a bureaucratic nightmare, Fabien Lehagre ended up creating a collective of “accidental Americans” to bring together the citizens who live the same torments.

If you are not American, prove it!

Fabien Lehagre is not a fraudster. He is so little an American. A commercial executive in a company that distributes bottles of gas, he does not even speak English. Tenant, lacking any heritage, it has nothing to interest the IRS (Internal Revenue Service, the US tax). But he is “born in America”, and as such, according to the law of that country, he has American nationality.

Until then, it was no problem for him. It was for him a mere testimony of the exotic circumstances of his birth. In the early 1980s, his father, a French waiter in a restaurant near San Francisco, met his mother, an American from Singapore. In 1984, they had a son, Fabien, but the couple separated. The man went back to France with his 18-month-old baby in his arms, and made a new life. Fabien will not have news of his mother before adolescence, and will visit him for the first time (with his French passport, his only passport) only at the age of 27 years. He will then discover that he has another half-sister, but that’s another story, do not mislead us.

In August 2014, Fabien received a letter from his bank, BNP-Paribas. He is reported to have been reported as having an “Americanism” because of his place of birth and that he is in the target of the Fatca law. Does he confirm that he is American? If so, what is its “Social Security Number” (which is used for tax identification)? If not, can he file the certificate of loss of nationality and complete a W8-BEN form?

 

 

“I was in the 36th below”

Fabien Lehagre falls from the clouds, he has no Social Security number, which was made mandatory for all Americans only in 1986, nor a certificate of non-nationality. He does not even know what this law is. And plunges on the internet to understand.

The young executive discovers that the United States is the only country in the world to base taxpayer status on nationality rather than residence, under the principle of citizenship-based taxation, and by not declaring his Income in the USA, it is illegal.

In 2010, the United States has the idea, certainly good, to twist the arm of the leaders of tax havens, such as Switzerland, to end tax fraud. On March 18, 2010, Congress passed a law, the Fatca, which provides for automatic exchange of information with other countries on the financial behavior of all American expatriates. Paris agreed in 2013 to participate in the system: Bercy transmits to the IRS the information gleaned from the Americans living on French soil. The idea is to allow the US administration to verify that all its citizens pay their taxes well. Lehagre says:

“I discovered the problem that many Canadians were experiencing, some of them being ruined because of retroactive penalties,” federal crime. “I was really scared, I was in the 36th.

He decides to regularize his situation, but the nightmare begins. Fabien realizes that the steps to abandon the nationality are monstrous: he must for example demonstrate, by gathering evidence on each year of his life, that he never resided in the United States …

He knocks at various doors, secretariat at the Budget, Quai d’Orsay, parliamentarians, consulate in New York … Without great result. We invite him to “get by”, he decides to make the dead. But this case turlupine him.

“It’s not nice to have a sword of Damocles over his head.”

The situation is not without consequence for his personal life. What will happen if he goes to the United States ? If he marries, what will be the consequences for his wife and daughter? More anecdotally, he discovered that some online banks like INGDirect or Boursorama, simply refuse US customers, not to have problems.

The lobbying challenge

In September 2015, he chooses to confront the monster and creates the collective “accidental Americans” to make their situation known and count.

Aware of the problem, which affects hundreds of thousands of people in many countries, the IRS has put in place a “simplified” procedure to get rid of US citizenship and get a tax receipt, but you have to file bank accounts Of the last six years, to pay legal fees to be assisted (7,000 to 8,000 euros) and administrative expenses (so to say a fee) of 2,350 dollars … and waste a lot of time.

So, Fabien Lehagre prefers to fight politically and media. His collective writing to elected officials (in France and abroad), alert the media, launched a petition … A real work of lobbying. First success, the parliamentary report on the extraterritoriality of US law , signed by Pierre Lellouche and Karine Berger and made in October, mentions the fate of accidental Americans and ordered the Foreign Ministry to act as Washington finally solve the problem (with A simple procedure for renunciation of nationality).

But the road may still be long … Fabien Lehagre estimates the number of accidental Americans to 10,000 people in France. His collective has hitherto attracted only fifty. The others are not yet aware of their situation or prefer to stay under the radar. To live happy, live hidden…