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  1. Phil,
    Could you follow up with your always insightful and informative comments – this time on the related situation of those living (and many born) entirely abroad – who are prevented (lifelong) by US law from expatriating or being expatriated (by a parent or guardian) because they are deemed legally incompetent to understand citizenship and thus to voluntarily renounce or relinquish it? They therefore are bound forever as US taxable citizen persons abroad – with all the pain and burdens that entails.

    This is very important – in order for families to arrange for ALL family members to renounce and have the same non-US status for simplicity sake, and to protect their legal, local, non-US disability grants, benefits and savings (ex. Canadian Registered Disability Savings Plans RDSPs) from punitive and unjust US extraterritorial taxes, FBAR, and 3520/A burdens imposed on the funds provided by non-US taxpayers, parents and governments in order to provide for the wellbeing and support of those who cannot provide for themselves – due to chronic or congenital physical, neurological, psychological or intellectual impairments which make them unable to care for and support themselves.

    This is a travesty – wherein the most vulnerable abroad are claimed and taxed (and potentially penalized on their savings and income in their legal local ‘foreign accounts’ and ‘taxable foreign trusts’) by the US on the local benefits and savings that non-US governments and families provide for the support of those deemed too disabled to care for themselves. Thus, those deemed legally incompetent due to a disability (many from birth) are to have a portion of their scarce savings and income (many would otherwise live far under the poverty line) confiscated by the US government in order to pay off the US national debt – and at the same time, the US provides these vulnerable individuals with absolutely NO supports or benefits though they are dependents residing entirely abroad – ALL supports (education, healthcare, disability benefits, etc.) are actually being provided by the taxpayers in the country where they actually live.

    This has now evolved from grave injustice into blatant hypocrisy because the US has just trumpeted its own version of the RDSP – but only for US RESIDENTS. Similar to the US IRS urging taxpayers resident inside the US to use available tax preferred savings and exemptions (ex. 529 plans) to save for US resident children’s post-secondary education, yet at the same time while it is taxing and penalizing and burdening the RESPs and other education savings/grants/benefits of those children living outside the US.

    These vulnerable people are kept prisoners of US extraterritorial tax, penalties, FBAR, FATCA, and related punishment regimes for the rest of their lives – because they and their legal guardians are prevented by the US from ever renouncing their US taxable citizen/birthplace/parentage status. They are deemed legally incompetent enough to be prevented from ever renouncing, but not from filing their own FBARs and returns, and being taxed extraterritorially by the US.

    This issue deserves attention and wider airing, yet gets little to none.

  2. “..Why is a kid showing up an Embassy and asking to renounce his U.S. citizenship? It is unlikely that this is a deliberate, knowing, voluntary, intentional choice by the child…” “The Foreign Affairs Manual flatly says that it is impossible for a child younger than age 16 to make a renunciation decision with the necessary “voluntary” deliberation and intent.”

    Yet, the US government asserts extraterritorially that non-resident minors, “kids”, should file and submit their own FBARs themselves, as the US Financial Crimes Network site clearly and flatly demands. Thus their Canadian RESP Registered Education Savings Plan accounts are subject to potential confiscatory penalization under the BSA as ‘foreign accounts’ (even as non-willful) – but yet, hypocritically the US government insists that they are not capable enough to voluntarily renounce US citizenship? And in the instance of significant disability and legal incompetency (many from birth) how can someone the US deems too legally incapable to understand US citizenship sufficient to renounce themselves be held legally capable enough to report, file, owe and pay US taxes on their Canadian Registered Disability Savings Plans as ‘foreign accounts’ and ‘foreign trusts’ – (tax on any interest accrued and distributions, as well as reporting as a ‘foreign trust’ on the 3520/A or be liable for severe consequences with the IRS?

    A non-US citizen (or US) parent or guardian is not allowed by the US to renounce their minor or legally incompetent dependent’s US citizenship. Yet, the US government, the IRS, and FINCEN state that if the child cannot file their own FBAR, the parent/guardian must do it for them.

    Interesting. The minor and those deemed legally incompetent cannot renounce or be renounced by a parent or guardian. Yet, they can be assessed extraterritorially for US taxes, penalties, and FBAR punishment. They are also forced by US law to travel only on a US passport – though they themselves would not be able to successfully apply or obtain one without the substantial assistance of an adult parent or guardian.

    Those deemed legally incompetent will NEVER be able to renounce, and therefore will be liable for FBARs, 3520/As, US taxes and any relevant penalties for the rest of their lifetime – and beyond, via their estate. Their legal local disability benefits provided by Canadian taxpayers, and their Canadian registered savings – created, managed and funded by their Canadian parents, will be taxed by the US as non-earned income, and as ‘foreign trusts’ – for their whole lifetime. Despite the US contributing zero to their care or security. or health or education or their shelter or their sustenance. AND this despite the US creating an equivalent Disability savings plan for US residents – given tax favoured treatment as a highly desirable social good: – now in addition to the tax favoured US education savings plans the IRS urges US resident taxpayers to take advantage of.

    In both the cases of the minor and those deemed incompetent, the US is happy to assert their status as taxable and penalizable US citizens – but provides no benefits, no supports, no services or anything else towards their security and wellbeing – yet demands the absolute right to extraterritorially tax and penalize their benefits and savings – provided by the country where they actually live – based solely on the accident of their birthplace or their parent’s national origin.

    For shame.

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