From a correspondent today via email (and with permission):
I’ve just returned to [Country where I live now] from [New Country I am moving to].
I am amazed however, at the number of normal Americans with normal jobs abroad who have never heard of the FBAR witch hunt and have no intention of participating. In addition, the fairly consistent message by Americans who have spent more than a few years abroad is that the benefits of holding the little blue book are hard to quantify and pale in comparison to the nightmare of compliance with the oppressive American tax regime. Over 12 days in [New Country], I heard the words “renouncing my citizenship” over 20 times.
I am aghast that our government would continue to force intelligent Americans, who otherwise fully intend to move back to the US for their retirement – if not before – to this conclusion. Clearly, the benefits of repatriating a group of internationally adept, high net worth citizens is preferable to losing them to “competing” economies. [New Country welcomes people like that] whilst our government seems to be focused on forcing them away.
I appreciate you drawing to my attention the lengthy letter of objection from the Geneva-based American Citizens Abroad regarding the new legislation and penalties. I plan to get involved with a similar interest group as soon as I settle in [New Country]. However, I’m beginning to think there really is little reason to fight the multi-headed IRS hydra when there are many other safe, beautiful, and tax-benign, places to live in the world than the US.
I too, may be having a blue book burning party soon.
best regards
[Name]
Clickable link: American Citizens Abroad
Reader comments (1)
-
As stupid, expensive and counterproductive to US interests as US income tax and financial reporting requirements on US citizens abroad may be, dumping your US citizenship to avoid them strikes me as pretty silly.
This is especially true in light of the all too obvious fact that the IRS does not waste its limited resources chasing after US expatriates to get them to pay whatever chump change they usually owe (or – increasingly – to pay them the refundable credits compliance would entitle them to) or enforce constitutionally dubious FBAR penalties.
It is worth noting in this regard that the “secret protocol” between the IRS and UBS concerning the parameters that UBS would observe in selecting foreign accounts for disclosure to the IRS excluded foreign accounts OF ANY VALUE that were held by a US citizen with a foreign address.
Moreover, the recent introduction of the new, “Son of FBAR” under Title 26 will allow the IRS to simply “grip and grin” to collect its penalties rather have to go through a tendious and expensive suit in Federal Court that it must currently use to enforce penalties under Title 31′s “Ol’ Man FuBAR” if the victim squawks. I predict that the IRS/Treasury will probably act soon to a) eliminate the old FuBAR altogether or b) dump enforcement responsibility back on FINCEN. FINCEN, of course, could not care less whether you file the idiotic thing or not.
So remember, the IRS is on your side against the manifold imbecilities of the US Congress accumulated over the years. It has no budget or inclination to go chasing after all the US citizens overseas that the democratically elected representatives of yourself and your fellow citizens say it is supposed to chase.
The Defense Finance and Accounting Service and the US Social Security Administration continue to electronically transfer millions of US dollars in retirement and survivors benefits to foreign bank accounts located in dozens of “qualfiying countries” every month. The average annual total of those benefits per recipient is probably well in excess of the $10,000 FBAR reporting threshold. You think anyone at IRS has asked for the DFAS and SSA database to go looking for retirees and survivors who maybe haven’t filed a FBAR?
Well, of course not.
And by the way: You want to watch Sen. Carl Levin of Michigan bust a blood vessel? Tell him that DFAS and SSA include Switzerland and the Cayman Islands as qualifying countries. Really.
So, despite all the loose talk about abandoning US citizenship that I hear, I don’t see anything like a statistically significant surge of expatriation applications.
Nor – so far, anyway – have I seen anything like a surge in foreign banks dumping their US expatriate clientele in anticipation of the new “Son of QI” regulations introduced by the FATCAT provisions of the HIRE Act.
And remember this: Neither the IRS nor any other branch of the US government gives a rat’s patootie about US citizens abroad.
For better or for worse, your government has you on IGNORE.
Govern yourself accordingly.
John Nolan
Frankfurt am Main