Mister Taxman: Why Some Americans Working Abroad Are Ditching Their Citizenships

Tina Turner says she’s turning Swiss because she’s lived in Switzerland for years now. But there are tax benefits for giving up an American passport

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Why is Tina Turner switching from American to Swiss citizenship? The legendary singer, a longtime Zurich resident, told the Blick newspaper that she has been very happy in Switzerland and “can’t imagine a better place to live.” But some observers believe she may be one of thousands of American expatriates who have taken the drastic and irrevocable step of giving up their citizenship because of what they consider to be the unjust and discriminatory taxation practices of their government.

While Turner has indicated nothing other than a practical decision behind the switch, it comes at a time when American expats all over the world are turning in their passports in record numbers to avoid double taxation and other financial burdens imposed on them by Uncle Sam. According to government figures, nearly 1,800 Americans relinquished their passports in 2011, a process that requires a special application and a $450 exit fee. True, that number is just a drop in the bucket, considering that an estimated 6 million U.S. citizens live abroad. But the numbers are growing dramatically — a sevenfold increase since 2008, and that is not counting thousands of applications waiting to be processed in U.S. consulates and embassies around the world.

(MORE: Renouncing Your U.S. Citizenship to Stick It to the Tax Man? Not as Easy as It Looks)

The U.S. is the world’s only industrialized nation that taxes citizens who live overseas, even if their income is generated in a foreign country and they never return to America. And while high-profile cases like that of Turner or that of Facebook co-founder Eduardo Saverin (who renounced his American citizenship last year to become a resident of Singapore) catch public attention, the vast majority of expatriates affected by double taxation and increasingly draconian filing rules are middle-class or retired, or those who have never lived or worked in the U.S. at all but were born to American parents overseas.

Even though expatriates can claim a $97,000 exclusion on their U.S. taxes, most Americans who work in high-cost nations earn salaries far exceeding this amount, for which they already pay hefty income taxes in their countries of residence.

“I became increasingly frustrated by the necessity to file in two countries,” says Peter Dunn, an Anchorage native who now lives in Toronto and renounced his U.S. citizenship in 2011. Dunn became even more outraged when the IRS insisted on taxing his Canadian Tax-Free Savings Accounts, which are similar to the tax-free Roth IRAs in the U.S. “I could not live with the abuse of America taxing me even though I could not receive any services or benefits of living in the U.S.,” he adds.

In addition to the burden of double taxation, expats must deal with a myriad of increasingly complex and confusing IRS rules, like the Report of Foreign Bank and Financial Accounts, which requires expatriates to report all foreign accounts exceeding $10,000, including those held jointly with their non-American spouses. Stiff financial penalties are imposed for noncompliance.

(MORE: Switzerland: Are Its Days as a Tax Haven for Foreigners Over?)

While filling out this form, Genette Eysselinck, a North Carolina native who lives in France, included the details of her accounts held jointly with her Belgian husband, as required by the IRS. “When I realized how distressed he was over my breach of confidence, I decided the only recourse left was to renounce my nationality,” she says. Eysselinck gave up her American citizenship last year.

Another law that affects expatriates is the Foreign Account Tax Compliance Act (FATCA), which will go into effect in July and require all foreign banks to report to the IRS information about accounts held by Americans. While this new regulation aims to prevent tax evasion, it also makes life difficult for millions of law-abiding expats.

“FATCA is the straw that broke the camel’s back,” says Jackie Bugnon, director of American Citizens Abroad (ACA), a Geneva-based expatriate advocacy group. Because this legislation forces local banks to invest in expensive new infrastructure in order to comply with the IRS rules, “access to foreign financial institutions is being shut off and Americans abroad are treated like criminals,” she adds.

Switzerland-based Amy Webster experienced the bias firsthand when she and her Swiss husband encountered difficulties getting a mortgage because of her U.S. citizenship. “This was infuriating and humiliating,” she says. “These unfair regulations imposed by the U.S. government are having adverse effects on the lives and well-being of U.S. citizens living in this country.”

(MORE: Why the Swiss Aren’t Neutral: Chocolate and the CIA)

Webster notes that while she understands “the political motivation of the current Administration to chase tax evaders and punish banks that contributed to such transactions, I am outraged that these regulations have impacted honest and hardworking citizens.”

One way to stave off the surge in renunciations, ACA’s Bugnon points out, is to tax expatriates on the same basis as nonresident aliens, who maintain a tax home in a foreign country and benefit from the same tax laws as American citizens within U.S. territory. That’s the proposal the ACA will push during the Overseas Americans Week, to be held in Washington, D.C., the week of Feb. 11.

Unless this change happens soon, disgruntled expats will continue to turn their backs on America, perhaps singing Tina Turner’s old hit, aptly titled, “Goodbye, So Long.”

MORE: Why More U.S. Expatriates Are Turning in Their Passports

163 comments
MrNobody
MrNobody

I am not living abroad, and do not intend to. I am interested in this issue, however.


My question: Exactly what means does the IRS have to collect taxes on a US expat if they refuse to pay and have no intention of returning to the US?  Can they seize their accounts in foreign, non-US banks?

American-Abroad
American-Abroad

Yesterday the London international IRS office closed to to budget constraints.  It is no wonder considering the waste of IRS resources being dumped on absurdly redundant tax filing that is not profitable to review.  

AmericanAbroad
AmericanAbroad

You have probably heard of FBAR and FATCA, and yes they are incredibly complicated and scary for private individuals.  It seems ordinary middle-class citizens residing abroad are being made to do the tax-work of a multinational corporation.  I am a relatively bright, college educated guy, with an income around 45,000 usd.  With this income I support my wife who is studying at the university and our baby boy.  As it stands we are about to go into debt for the first time in my life because we had to hire an international tax attorney help to fill out the plethora of IRS forms pertaining to citizens abroad.  The process has already taken weeks, and thousands of dollars, and we still have so many uncertain questions.  This process will need to be repeated year after year, at tremendous cost to me and all the 7 million other ordinary American citizens residing and working abroad.  The kicker is that all of this effort is done to prove that we already paid our taxes in the countries we reside in.  


The USA is the only modern country to imply double taxation on its citizens and the burden is literally unbearable.  With the ease of information sharing today, there is no reason to jump IRS hoops blindfolded when foreign government tax offices can provide notice of good-standing with the click of an email.  Americans and their families shouldn't be punished for living in another country.


The Senate Finance Committee is suggesting rethinking tax rules for nonresident US citizens and I hope that you will all contact your representatives and consider supporting them!  




SeattleSheila
SeattleSheila

I look at my two passports and well, gee...as I get closer to retirement it seems that I may need to make a decision... I know my father wanted me to be an American like him...but it looks like keeping it might be detrimental to my bottom line, especially if I retire abroad as I plan.

kmcj22
kmcj22

No taxation without representation, eh yanks?

MarkAreReynolds
MarkAreReynolds

Taxes on labor are slavery. And taxes in many countries are a joke because the all operate on fiat currency and can create all they want out of thin air. HELLO?

wanshousi
wanshousi

Already balking at applying for a US citizenship now. Even in French or Sweden they pay double tax to IRS, how much it would be for a Chinese to be double-taxed, Chinese tax rate is way lower than European industrial countries.  As RMB appreciating, $97,000 is an easy sum to break thru. Ah, the good news is Chinese government/banks don't give a darn to this FATCA thing.

cpid
cpid

@wanshousi Stay away from the US it sucks here go to Australia.

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brownsmithfinancialhelp

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kimmels
kimmels

I followed Mr Dunn's decision and took the same route in Toronto for the same reasons. Maybe we were both at the same Democrats Abroad tax update presentation. The foreign bank rules was the last straw. Of course I became Canadian twenty years prior.. It was no problem renouncing at the US Consul in Toronto (Fort USA). It took 1.5 years to get confirmation from the US gov after submitting my last tax return.

JSN
JSN

The USA is the most corrupt country in the planet - the big difference is it is a legalized corruption.  Extorsion of taxes by non-residents. Looting 401k money of non-citizen workers in the USA and not returning the money when they leave the country.  It may happen that the day would come that even US companies start leaving and moving their head offices to other countries.

N2TroubleAgain
N2TroubleAgain

@JSN Many US companies have left and many have already moved their head offices to other countries.  This is one of the reasons that nothing is made in the USA anymore.  So is the USA is the most corrupt country on the planet? They are corrupt; not just to non-residents but to residents as well!  The IRS itself is corrupt, just like many other agencies in the US.  The government plays favorites.  They tax to death their citizens.  They are taking away the peoples basic freedoms.  They are making people dependent upon government, not self reliant.  Does anybody really blame those for leaving the country?  I don't!

The government  borrows enormous amounts of money and wastes it.  This is not a responsible government, and when the bottom falls out, everyone is going to pay all around the world for the massive corruption in America's government.  So I guess if you say that the USA is the most corrupt country on the planet, I would have to agree with you!

cgelder2002
cgelder2002

@N2TroubleAgain @JSN So why isn't there a revolution? A rebellion? Why do people accept it all? I think it will take a few generations to develop tax freedom fighters.

cspcyfen
cspcyfen

I'm an American living and working abroad, and can empathize with the sentiment behind the decision many have taken to surrender their US citizenship. While I treasure my US citizenship and don't plan to give it up, it has been difficult to reconcile the bizarre and complex extraterritorial tax laws that the US forces upon it's citizens living abroad with our supposed veneration of liberty. Embarrassingly and hypocritically, the US is one of only two countries in the world (along with Eritrea) that attempts to collect income taxes based on citizenship, not residence. Yet despite being the world's most aggressive taxer of citizens abroad, the US had the gall to censure Eritrea in Security Council Resolution SC/10471 for it's implementation of a global tax built on the same principle. Hopefully, Congress sees sense one day...but given that Americans abroad have no unified means of exerting influence in Congress, it's hard to feel hopeful. The Tyranny of the Majority lives on for now...

N2TroubleAgain
N2TroubleAgain

@cspcyfen The effects of the US taxation is being felt on businesses.  They are leaving the country to more safe havens.  So it does affect those citizens that still live in the US!  There isn't much left that isn't corrupt in government any more. 

MarkAreReynolds
MarkAreReynolds

@cspcyfenMaybe everyone on the planet should turn in their citizenship's to their respective "countries" and all become citizens of Earth. We could be called "Earthlings". How novel!

jyamana
jyamana

@cspcyfen americans AA have unified means its called (ACA) americansabroad.org donate money and support them,  they are campaigning  on your behalf 

brooke.e.nichols
brooke.e.nichols

A petition has recently been started to address this issue. Please sign and share! We petition the Obama administration to: not require American expats residing permanently abroad to file U.S. tax returns and pay U.S. taxes. You can sign the petition here: http://wh.gov/lcccP

oldschoolggsex
oldschoolggsex

@CharlzInchargeConnor Us citizens has to pay taxes,or end up homeless,care to find out how many United States end up homeless for losing their jobs, not able to pay for mortage or rent ,which means taxes,and ends up on the street? Tina Turner got out while the getting was still good..clich'e here is when rats knows something is wrong on a ship, the rat jumps ship: basic survival at its best

mkc0124
mkc0124

Truth be told, given the choice that comes with financial means, the attraction to places outside of the U.S. has everything to do with a better quality of life, first and foremost.  For many, it is simply a matter of what you want the world around you to look, sound and feel like every day when you awake and for many people that are able to seek life abroad, the choices are just so much more rewarding...present company included.

NoahClaypole
NoahClaypole

The converse is true too. For example, non-citizens who live in the USA and paid Social Security and Medicare don't ever get to see that money back. Other developed countries, keep a tab and when the non-citizen decides to leave the country for good, he/she gets whatever he/she is entitled too. Its not written off like in USA!

ShawnNoneya
ShawnNoneya

you can go into any usa consulate and renounce your citizenship its easy and not hard-

they want the full protection of the usa -but without paying for it

just like the teaparty and libertarians they can claim absolute tax excempt status-

but they would have to work for themselves and trade amongst themselves

"the amish do it and its quite legal"


Apurath
Apurath

Hello.

i came accross this article while researching the subject of having to pay US self-employment tax eventhough the individual is permanently living and working overseas. In case you were wondering, i am a tax preparer that specializes in preparing US tax returns for expats overseas, or foreigners coming to the US on assignment. I am a foreigner myself (German) who has been living in the US for 10+ years now.

I would like to state the following: 1. Yes, I agree that it seems unfair that the US government (IRS) keeps all the filing and more so reporting requirements for their citizens overseas. I am not aware of any other country that makes you file a tax return unless you are actually living or working within this country's boundries. Some people seem to be so happy when they receive a green card or citizinship, my comment to them always is that "good for you, now get ready to file a US tax return for the rest of your life no matter where you go. sorry getting of topic. 2. The article above seems to miss the fact that besides the mentioned Foreign Earned Income Exclusion (FEIE) there is also the possibility to use Foreign Tax Credits (FTC) instead or in addition (in parts). So if you are a high earning individual that is already paying high income taxes in a foreign country, chances are there will be no US tax lilability. However the burden of filing and reporting still remains and can be very frustrating.

AtticusinCanada
AtticusinCanada

My Canadian spouse told his company to take any investments he had in his RRSP in the U.S. out of there. He no longer wishes to invest through his company in the U.S. because of FATCA and FBAR fines upon our family due to his being married to an American. I will renounce to protect his bank accounts and our children's too. It's the ONLY choice left under this ridiculous witch hunt. Foreign citizens should not be subjected to this just because they are married to an American. I can renounce or divorce him and I'm not divorcing a man who has supported me for over thirty years. Here I'd like to insert some choice words about Obama passing this with zero regard to what it's doing to honest Americans abroad who have always represented the U.S. in a positive light outside the country. And the U.S. press who has refused to tell the story of what this is doing to lower and middle income ex pats who have lived abroad for decades due to family reasons. I will always remember Obama as the president who drove those who would never, ever have considered renouncing to have to make that choice to protect their families abroad. The "Hire" legislation, FATCA and FBAR fines are draconian horrendous legislation trumped up to dig fines out of ex pats no matter if they are poor or not. The U.S. knew no one in the homeland would care what is happening to us and they need $$$. God knows they can't get it from the REAL "tax cheats" like Timmy Geither and Wall St. fraudsters. This is one of the most despicable things I've seen the U.S. do against it's own citizens. 

BeenThereSawIt
BeenThereSawIt

@arielle_maia Hi Arielle, thanks for the follow, By the way, I had Australia friends, they told me they get taxed overseas even more.

moniquevalcour
moniquevalcour

@andymolinsky I know this only too well from personal experience :(

LynneBlaze
LynneBlaze

@FATCA_Fallout @TIME @planetmoney @MarketplaceAPM Mr. Taxman: It's not about taxes. It's about being able to have a normal life outside US.

bubblebustin
bubblebustin

"Jackie Bugnion, ACA’s Tax Team Director. “Our tax code makes Americans too expensive to hire, so US and foreign firms understandably replace them with qualified professionals from other countries without income tax, FBAR or FATCA filing requirements and the immense legal and financial jeopardy they entail. How can you work effectively when FATCA prevents you from opening a bank account?”

http://genevalunch.com/tag/fatca/

bubblebustin
bubblebustin

i don't think I'd be going out on a limb to predict that in within the next generation we will witness the extinction of the United States Person permanently living abroad .

JeffersonTomas
JeffersonTomas

It is hard to say that Tina would actually renounce for tax reasons. In fact it is more likely that middle class people with high rents and high expenses who might be squeezed by a few percent of extra tax would renounce for tax reasons. Not to mention the heavy burden of filling out all of the US tax forms correctly, which can by itself cost thousands of francs. Tina Turner is so rich that an extra few percent of tax will not take food off of her table. But people with lesser means, especially those with so called "unearned income" such as pension benefits, unemployment benefits, welfare, disability benefits can get squeezed out of their ability to meet their basic expenses by the US double tax burden, and as such would tend to renounce to avoid the additional tax, though the reason would not just be for tax reasons, but for survival reasons. 

Another reason to renounce is for privacy reasons. FATCA and FBAR regulations violate privacy, amount to a general warrant in violation of the 4th amendment, and put people at the risk of identity fraud. Spouses, other family members and business partners may also object to the disclosure of their information to the US, and even sue or press criminal charges against the US person who is compliant with US reporting requirements.

PatrickTaw
PatrickTaw

I agree it is best for expats to accept their new country and relinquish their US citizenship. They made a choice to immigrate, they should go all the way. If they complain their money doesn't belong to the US, then they should also give up the protections and benefits of US power and expertise. My parents immigrated to the US and happily gave up their original citizenship to become US citizens. You cannot have two loyalties and immigration is a statement of switching loyalties. Expats that live temporarily out of the US don't worry about the tax laws since they don't deal with it for the rest of their lives and only for a few years.

uneven
uneven

Who gives a damn what some pissy spoiled people living overseas are doing?

YO TIME, WE HAVE REAL PROBLEMS - TRY ADDRESSING THOSE.

allafiorentina
allafiorentina

@RobertaK @nocrowds Its not right that we have to report & pay taxes on income made taxed & spent abroad Wouldnt renounce citizenship though

DavidSLesperance
DavidSLesperance

DID YOU HEAR THE ONE ABOUT THE SINGER, THE GOLFER, THE ACTOR, THE FACEBOOK FOUNDER AND THE LUXURY KING?
What do Tina Turner, Phil Mickelson, Gerard  Depardieu, Eduardo Saverin and Bernard Arnault all have in common and why are they generating such press? The answer is they are all "Golden Geese" who have dared to either threaten or have actually flown their current high tax coop. The real question is whether they are anomalies or high profile examples of a growing and dangerous trend?


Lost in the media frenzy is the basic truth that the US, France, and any other countries with a progressive tax system have an inherently fragile revenue model. This fragility exists whether you think such a system is "fair" or "unfair" and is caused by the simple fact that a very small number of people provide a very large portion of the total personal taxes collected. Generally, the top 1% contribute approximately a third of the total, while the top 0.1% contribute over 10% but is composed of a minuscule number of individuals. Contrary to Occupy Wallstreet dogma, the 1% or even the 0.1% are hardly homogeneous regarding their value system or attitude toward taxation. Just remember that both Michael Moore and these Golden Geese are all in the 0.1% group. About the only common attribute (aside from their wealth) is that as a result of globalizing "flattening effects", they are no longer bound to the tax home of their birth in order to make or maintain their wealth. In short, they are no longer "sticky" and can leave easily and quickly. 


The danger for France, the US or any other country with a progressive tax system is that they only need a tiny number of the 1% or 0.1% to leave their tax regime to cause a catastrophic effect on their future tax revenue. Individuals such as Depardieu, Mickelson, Saverin or even Arnault will not, by themselves, bring France or the US to its fiscal knees. However, such high profile opinion leaders may inspire other "Golden Geese" to leave. With such a fragile revenue model, an exodus of even a small number of Golden Geese could spell disaster. Most Golden Geese are not as high profile as Arnault or Saverin (who were "outed") or as eager to grab a microphone as Depardieu or Mickelson. So what is actually going through the minds of many Golden Geese today?


Like every immigrant in history, a Golden Goose first decides that they want to seek to change their current tax home. Each individual tends to have their own "straw that breaks the camels back". "On the push side, is a combination of increased fiscal requirements when aging populations meet existing entitlement programs; the inevitability that they will be called upon to pay the lion's share of this increase; decreased satisfaction with government's effective efficient use of tax dollars; and the failure of their fellow citizens to acknowledge that much of their wealth stems from their own efforts and risk-taking rather than the "government building that. The fiscal cliff problem was solved for 98% of Americans by the Golden Geese being tossed into the abyss. 

Overcoming "life inertia" is the major barrier between thought and action, but the fiscal crisis acted like a 'near death experience' which prompted many Golden Geese to look beyond their daily struggles and realize that the world had fundamentally changed. They were astounded to discover that many highly developed countries such as the UK, Switzerland, Canada, Singapore, New Zealand and Australia are actively competing for them. Increasingly Golden Geese are recognizing that they can reproduce their current business and personal lifestyle while legally and securely significantly reducing their global tax burden. 

The age when the only options for wealthy people are Monaco, Jersey or the Cayman Islands is long over. With homes and businesses in several countries, it is quite common for my clients not to spend enough time in ANY potential taxing jurisdiction to attract tax residency status based on day count alone. Therefore, we chose the new tax home where they will have a minimal global tax burden. The other places where they have homes and businesses, which often includes their former tax home will simply be places that they visit rather than be 'tax resident.


High profile Golden Geese who have followed this path include: 
Boris Abramovich (Russia to UK)

David Bowie (UK to Switzerland) 

Eduardo Saverin (US to Singapore)

Kim DotCom (Germany to New Zealand)

Alan Gibbs (New Zealand to UK)

Mark Mobius (US to HK)

Properly chosing and acquiring the best new tax home, is not a do it yourself project. With the stakes so high, proper advice and implementation is essential. The Golden Goose has to ensure that the chosen destination is a jurisdiction where they will have a proper home and acquire a long list of "indicia of residence". They must also spend enough time in that jurisdiction in order to make a strong argument that this is their new tax home. "Both Boris Becker and Luciano Pavoritti did not do this well in Monaco and suffered the consequences. After a long and difficult trial Pavoritti won the criminal case. Boris Becker was not so lucky". 

With such high stakes and to avoid emotional stress, many Golden Geese are chosing new tax homes that have an extensive tax treaty network (including one with their departed tax home) AND where they will be able to 'live the plan'. This allows them to add more certainty to their departure from their last tax home and establishment in their new tax home. If ever challenged they can use the tie-breaker rules of the tax treaty as a shield against a potential audit from their departed tax home. This is why, although some Golden Geese such as Richard Branson (Necker Island) and David Gilmor (Wakaya Island) own remote islands that they love, these are generally not their "tax homes" because they are located in jurisdictions (BVI and Fiji respectively) that do not have extensive tax treaty jurisdictions.

Lost in the politically partisan debate over increasing the tax burden on the Golden Geese, is the simple fact that the Golden Geese are not likely to sit idly by and accept what others implies on them. The danger is that more Golden Geese will follow in the footsteps of these recent high profile examples and the flood of departures will become a tsunami

SwissKay
SwissKay

OK, let's get this straight: Turner relinquished her U.S. passport for tax reasons, only she is not going to say so because otherwise she would get in deep ____ with the IRS. She didn't make this decision lightly. She didn't do it because she is greedy, and she didn't do it because she hates America, or that she likes living in Switzerland. She also did not do it because she refuses to pay any taxes to the U.S. She did it because (most likely) she would like to have the simple pleasure of having a joint bank account with her husband, who is German I believe, but as a U.S. citizen she would be obliged to disclose, and pay taxes on, her husband's fortune (FBAR nonsense). She also did it because, as a U.S. citizen, no Swiss bank is willing to do her investments for her anymore ( FATCA nonsense). She found it humiliating to be resigned to having a bank account with no more than $10,000 in it and signing everything else over to her husband in order to escape the unpredictable claws of the IRS. She also found it unreasonable that her family would have to turn over about 50% (this may have changed in the meantime, as so many IRS regulations do) of the sale value her estate to the IRS upon her death, even though she hasn't lived in the U.S. since 1995.  50% here because I assume her fortune combined with her husband's (should he die before her and she inherits) will be over $5 million.

bubblebustin
bubblebustin

All other countries of the world allow their citizens to go to far off lands and take up residence elsewhere, no longer encumbered by taxation by the homeland. Not the US. The US punishes its citizens abroad by requiring them to fill out form after form to prove they aren't trying to hide anything, and send money to the homeland should they do well, both acquiring the help of cross-border tax specialists to help them though the mire of paperwork at a cost of at least $2-3K per year. Other countries let their citizens go, and welcome them back if they choose to return and again contribute to their home country's tax base. A citizen of the US who renounces citizenship will not likely ever contribute to the US tax base again. In fact, with the betrayal most ex-Americans feel, the US would be lucky to receive even a tourist dollar from them. Isn't that a kick in the teeth for everyone?

MarkMercer
MarkMercer

It's even worse than the article mentions and the self-employment problem that eadejong mentioned. That $97,000 exemption also does not apply if you go back to the USA even one day in 330 days. So no visiting family, even if all your income is from your new country. No even connecting via the USA into a flight to another country, because the US stupidly does not have airside international transit areas so to connect from South America to Europe in Miami, for example, you are legally entering the US. And in many countries now if you are a US citizen, banks will refuse to do business with you or any American, and are closing all the accounts of US citizens. Even if those citizens are also legal residents of that country with a right under law to have a bank account. Here in Uruguay, for example, only the government-owned Banco Republica still allows accounts for US citizens. Every other bank has fired their existing customers. The reporting requirements for them are draconian - every account, no matter how small, and every transaction, even a small ATM withdrawal or a store purchase on the debit card, is a reportable item. Countries don't want to deal with this Roman Empire-style enforced tributes. Can't blame them. But it makes life very tough for law-abiding US citizens abroad, even us "little guys".

eadejong
eadejong

It's even worse if you are self employed. Then the $97,000 doesn't apply. I'm a tour guide and I have to file (not necessarily pay) if I make $400 or more!! That's less then it costs to pay for the accounts! I made about $4000 last year and paid more than $500 to the account, and $150 to IRS. This is only the last few years, for years I didn't work and although I called IRS in europe to ask about filing, NO ONE told me about the Foreign Bank account filings until I finally decided I had earned over the $400 and had better file. Thank God it was a pardon year or I would have been fined! I was so glad to discover the kids funds were in my husbands name and not mine.

bryanfred1
bryanfred1

People with means (not just expats) can go anywhere in the world they like in today's global economy and connected world. Even within the U.S. there is tremendous migration from high-tax to low- (or no-) tax states among people of very average income. That's why tax schemes like this never raise anywhere near the amount their authors claim they will, while also damaging their own economies. Nevada has been saved from its horrible real estate bust by businesses moving across the border from California, which just hiked its top state income tax rate from 10.3% to 13.3% (just ask Phil Mickelson about that).

TootlessWonderS
TootlessWonderS

@TIME @TIMEWorld WorldWide Embarrassment !!! #NoRespect Another 85Billion Currency Manipulation of Global Stock Markets to HALT @BlackBerry