I received an email from a reader over the weekend. He raises an interesting question facing people who hold citizenship in both the USA and an EU country.
The current U.S. tax enforcement programs has made many non-U.S. banks leery of doing business with U.S. citizens. I know this second hand — many of my clients and business contacts have experienced this. In a few cases I have heard dual citizens (US/EU or US/Switzerland) having trouble opening bank accounts. This seems odd to me but I have no reason to doubt that this has happened.
My reader raises an interesting question having to do with the European Court of Human Rights. My initial response is cynical. The European governments are hungry for tax revenues and willing to bend the law to get at them. **cough** Germany **cough**
Here is the email text, posted with permission. I would be interested in any feedback from U.S. people who are having trouble with getting a bank account opened in Europe.
Has anyone raised the issue of joint US / EU citizenship? There has been stories in the press that US citizens being turned away opening EU bank accounts because the local EU bank doesn’t want to get into the world of QI reporting.
There are two points where this approach may be problematic and to the best of my knowledge not yet pursued.
- As an EU citizen I am being discriminated against and not being treated that same as other EU citizens.
- The QI regulations do not deal with the issue of hundreds of thousands of EU citizens (without American accents and born in Europe) who are joint US and EU citizens or hold green cards and can walk into an EU financial institution and be above suspicion. Again that’s discrimination. Either everyone needs to be vetted or accept the person is an EU citizen and it ends there. (Of course vetting everyone in the EU would not be politically acceptable for the purposes of satisfying IRS tax regulations).
This position may be a good test case for the European Court of Human Rights and a successful case may limit the scope the IRS can gather information on EU citizens who are genuine “residents” for particular tax years. Should not all EU citizens deserve not being harassed by a foreign tax authority from outside the EU when they are genuine residents and meet the 183/184 day rule which is the standard for Europe??
Of course it won’t stop the Feds hassling you at a US airport someday, but it may reduce their scope on dual US / EU citizens who don’t travel to the US.
The intention is not to hide assets, but to limit the scope of having two tax masters.
Has anyone commented at that approach?