Americans Abandoning Citizenship In Record Numbers Due To Government Tax/Fine Harrassment

[Lancelot]

Around 1,800 people renounced their US citizenship- out of +300 million US population...

[Jingthing]

Around 1,800 people renounced their US citizenship- out of +300 million US population...

Right. The point was there was a RECORD high number of people renouncing. That IS news.

[flying]

Justify it anyway you want, the law says American taxpayers are required to report their foreign financial institution accounts each year. Failure to do that might go unnoticed, but if at some time in the future you might get caught then you'll definitely have some explaining to do.

Yes I did not mean to justify anything as I am not in illegal status. I file yearly & report what I have.

All I meant is regardless of what tactics are used to force other countries into compliance....extra work...costs to them (foreign banks)

I do not think all banks will be turning away US passport holders anytime soon.

Also as an aside I do believe this is a storm in a tea cup. While yes the IRS is looking under every stone I do think they are looking for

the big fish...bigger than those posting here on TV.

At the end of the day even if they went as strong after Thai banks as they did Swiss banks ( where big money was always known to hide )

Their power would be once they identify a large account over XXXXXX in deposit sizes & XXXXX amount of interest earned they would then

do the same as they did with the Swiss holders... Offer an amnesty period to come forward & then put a 30% hold on any further deposits via the US banking system. After that they still have the non-renewal of your US passport option.

So yes I guess the BIG fish that do not report may have to worry about those things. I do think that is where a lot of the abandoning of US citizenship is coming from. As always the BIG fish have options.

Edited April 22, 2012 by flying

[Jimjim]

I thought I had read before that if you give up your citizenship and the USA feels it is purely for tax reasons, they will still come after you for taxes even if you have already renounced. As in, "you offered to renounce, but we don't accept it. Now pay your taxes, American!"

Not sure if they really resort to that or not...

[flying]

I thought I had read before that if you give up your citizenship and the USA feels it is purely for tax reasons, they will still come after you for taxes even if you have already renounced. As in, "you offered to renounce, but we don't accept it. Now pay your taxes, American!"

Not sure if they really resort to that or not...

No but there is an exit tax you must pay when renouncing.

If you have over 2 million in assets I believe was the figure/threshold.

[Naam]

until a spineless banker turns over their client account details to Uncle Sam like what UBS did a couple of years ago. Naam, whatever you want to believe is fine but when Swiss bankers decide to give up their prime selling point - secrecy - after a bit of arm twisting, then I'm pretty sure the IRS could find out details about the financial accounts of Americans anywhere. That is unless you want to kept your offshore financial assets with the Bank of North Korea.

Yes but that was because the US had a arm to twist with the Swiss

The threat being if they do not divulge the info they cannot have a branch in the US.

Perhaps even disallow transfers from the US to their banks?

To that end & in regards to Thailand the only bank the US would have that kind of persuasive powers with

would probably be Bangkok Bank because they wish to keep their New York Branch open.

I am not so sure smaller banks like Ayudhya would have any reason to comply as it is more work for them &

they have nothing to lose by saying no thanks

Perhaps, but then what happens when Citibank or Bank of America decide they want to buy half of a local Thai bank. Do you think they are going to just ignore the fact they have x number of American account holders? In fact, aren't GE capital a major shareholder in Bank of Ayudhya? Justify it anyway you want, the law says American taxpayers are required to report their foreign financial institution accounts each year. Failure to do that might go unnoticed, but if at some time in the future you might get caught then you'll definitely have some explaining to do.

i'm dàmn sure that Thai banks will be the next financial institutions which the IRS will target. it is a well known fact that not only a huge number of American retirees and Americans working as teachers but also high net worth American individuals keep trillions of Dollars in secret Thai bank accounts which they don't report to the IRS.

main reasons are the fantastic possibilies concerning global investing, non-bureaucratic procedures and last not least tax free double digit yields and capital gains which Thai banks provide for wealthy investors.

[Naam]

Yesterday, I met with an officer from a Thai bank and she mentioned to me that the US government is pressuring Thai banks to sign an agreement to identify US citizens and green card holder accounts in Thailand. She said that it would all be in place after about 2 years. FATCA is expected to deduct taxes directly from accounts. It is an administrative nightmare, but will be a reality soon.

Not too worried as I deal with my taxes, but some will certainly have problems.

Thanks, ilyushin, this is what I was looking for: actual first-hand knowledge of what Thai banks are doing re. FATCA.

"FATCA" deducting taxes = rubbish² !

This is what the bank officer that is dealing with FATCA arrangements has informed me. I think the banks will be responsible for reporting and collecting the taxes on the US citizens. She mentioned they are establishing a sysetm to identify the citizens and green card holders. Why go to all the trouble to identify the accounts if they will not take some kind of action? Thai taxes are automatically deducted on interest so the system could follow that template and then funnel the funds to the FATCA accounts. I don't put anything past the US government at this point.

Wage a bet on rubbish?

for the record: FATCA (Foreign Account Tax Compliance Act) accounts do not exist. should Thai banks eventually comply with FATCA provisions they will report and submit detailed information to the IRS. the latter is done since years by banks on a global scale.

the only new procedure FATCA introduced end of 2011 as draft is "Form 8938" on which a U.S. citizen, green card holder or U.S. Person has to report his/her foreign assets in a very detailed manner.

notwithstanding the above-mentioned information there are more IRS "acts" in the pipeline which are presently only proposals and which concern foreign financial institutions and their treatment of persons/corporations which are liable to pay U.S. taxes. to list them would not only be premature but also cause our American friends sleepless nights. we wouldn't want that, would we?

[SVS]

I hear a lot of paranoia in many of these posts, so I dug out my May 2011 copy of a mouthly Investment letter to which I subscribe. This one titled "The Four Investment Assets You Do NOT Have to Report to the U.S. Goverment" , highly recomemded for all Americans not just expatriates! 1. Bank accounts out of the U.S. totalling less than $10.000 for each family member's account. Caution, if interest or anything raises balence to $10.000 it must be reported. 2. Buy LAND, Real Estate, one of the best way of keeping assets out of the U.S.. 3. A Trust, can hold secutities, assets, and life insurance. It can even build wealth and the income that is not reported until you take it out of trust. Lawyers required. 4. The letter writer's favorite, GOLD & SILVER in a private and secure place out of the U.S. A safety deposit box in a Singapore bank I thank would be secure. Does any of you trust a safety deposit box in a Thai bank? Which one in Chaing Mai?

[Naam]

The letter writer's favorite, GOLD & SILVER in a private and secure place out of the U.S. A safety deposit box in a Singapore bank I thank would be secure.

not as long as Singapore levies a 7% tax on goods and services which might be scrapped end of this year.

[Singlebarrel]

Good article, thanks JingThing. Read about his a couple years ago as I considered it. Element of emotional "voting with our feet" in protest, but the article laid out a few scenarios I hadn't considered, the common unpinning being money, taxes and overbearing govt interferece in our lives. Started out fair enough, virtuous War on Terror and all that, then leeched into broader powers to other agencies. We've been warned, so we need another McCarthy-like commission to haul up American expats with foreign bank accounts and accuse them of being tax dodging unpatriotic souls. That sort of public "name and shame" will never happen.

I do resent paying taxes (even with the FE Income Exclusion) to assist in operating the infrastructure of a country I don't live in, probably never will again, but do visit for a few weeks every few years or so. Mind less paying Social Security and Medicare monthlies, rationalizing that I might actually avail those accrual type services (chuckle) at some point in the future, and try to keep my head in the sand on the argument they may not be around by the time I get to eligibility age and further, my current contributions support a percentage "on the dole" who are defrauding the system. On the other hand, Mom/Dad are still around and collect monthly SS benefits, so I rationalize I'm helping them. A lovely, warm feeling, sorta like pissing down one's leg in winter, in the snow.

Oh, and to the lads who droned on above with the predictable "shoulda remained a colony" pokes, I actually agree, only as far as favorable expat taxes status goes. Yes, it would be grand.

However for the rest of it, and setting aside that you drive on the wrong side of the road, I am shocked and confused why you didn't relay the colonist comment to me in either Urdu, Farsi or Hindi, which makes complete sense to me as Z BBC told me all good English sur-names these days end in I or "Zed". Further, at least for now, where I'm located, can still go to "my" Embassy for a quick, new passport, not Germany, as I've heard a few of my UK allies and best mates lament about recently.

I do, however, say this descending into a barely audible, embarrassed murmur (as should you) as, where I'm at, the American Service Timing is 2 days weekly on the comical order of like 0900-0905. I arrive in the car park at 0830, compensating for the fact it requires 10 minutes to explain why I'm there to a host national (jobs programme), empty my pockets to get frisked by an Asian security guard paid slightly better than slave wages (jobs programme), then eventually I'm escorted by another Asian security guard into the Consular office where I am interviewed in front of a bullet proof window by a non-American (jobs programme). Shell out the required fees, reverse to check out with the Asian security guard and host national, who crosses me off the visitor's list.

I can visit my Embassy and save for other unfotunate souls like me, never see another American.

In'Shallah, to be fair again, you should actually relay your colonist break away barbs to us Americans on this forum in Spanish which, after all, is our official, national language.

Allah Akbhar, Humdullah, peace be upon you, best mate. Happy taxes to the rest of us.

J

and amen....

[4evermaat]

Yesterday, I met with an officer from a Thai bank and she mentioned to me that the US government is pressuring Thai banks to sign an agreement to identify US citizens and green card holder accounts in Thailand. She said that it would all be in place after about 2 years. FATCA is expected to deduct taxes directly from accounts. It is an administrative nightmare, but will be a reality soon.

Not too worried as I deal with my taxes, but some will certainly have problems.

Thanks, ilyushin, this is what I was looking for: actual first-hand knowledge of what Thai banks are doing re. FATCA.

"FATCA" deducting taxes = rubbish² !

the IRS is trying to scare American taxpayers into report. Why? I think the main reason is that the IRS can only take jurisdiction if you give it to them. When you open a bank account in the USA, for a usa-resident the documents that you use to open the account can be fairly easily traced back to the account opener. This is simply not the case for bank accounts at banks outside the USA. Especially when that bank is NOT holding USD. A thai bank account will be in Thai Baht. And the bank is more than happy to charge you for exchanging into THB and then again into USD or other currency when making foreign purchases. And the fees at the ATM, etc. You lose all those wonderful consumer protections/priviledges that would have been afforded to you in the USA and other western countries that might join in on this quasi-witchhunt (mainly the USA, because they have the most interest as a de-facto world currency) But for this is a small price to pay to have more control over your finances.

Banking in the USA is excellent for non-usa residents. However there are very few USA banks, if any that will open an account to non-usa residents unless in-person post 9-11 era.

Something similar happened in forex recently, where USA was "protecting" its residents by dis-allowing foreign forex brokers from allowing USA residents. This was shortly after they significantly reduced leverage on forex products and imposed other regulations on retail forex brokerages in the USA. Most of the foreign brokers scoffed at this initially [uS law doesn't apply here, et al], but then the majority of them decided to distance themselves from USA retail clients, because it wasn't worth the negative press or other headaches. Once the money is outside the USA, the US govt alphabet team do not have any control over it anymore (at least directly).

I mention this because the IRS or other alphabet entities are attempting to indirectly get financial information if they cannot convince taxpayers to volunteer information. They will do this by encouraging the foreign banks (or foreign gov't) to either discourage US Citizens from opening accounts, or encourage them to snitch. And there will be no deductions that go to IRS or other entities. The Thai banks, if they make any deductions at all, will keep it themselves.

oh, and i was interested in that cambodian passport. Is it a grey or black passport?

[Naam]

Bank accounts out of the U.S. totalling less than $10.000 for each family member's account.

perfect! a dozen children and one can "hide" the princely sum of 139,986 US-Dollars. pity is that any interest has to be reported and will be taxed.

[Naam]

oh, and i was interested in that cambodian passport. Is it a grey or black passport?

the colour depends on what grade of passport is issued. shitty brown for common citizens, crimson for diplomats and purple for holders of noble descent.

[flying]

oh, and i was interested in that cambodian passport. Is it a grey or black passport?

Interesting article

I always forget about that possibility.....

Acquiring a 2^nd passport through ancestral or cultural methods

That if your grandparents were born in another country you may sometimes qualify for a passport

from that country.

[Naam]

oh, and i was interested in that cambodian passport. Is it a grey or black passport?

Interesting article

I always forget about that possibility.....

Acquiring a 2^nd passport through ancestral or cultural methods

That if your grandparents were born in another country you may sometimes qualify for a passport

from that country.

just a handful of countries and even those with restrictions, e.g. eligible for a U.K. passport if mother was British, father a Brit does not count

rather easy for a Kazakhstan citizen who's grandparents kept a German Shepherd or Dachshund to get German citizenship (i only exaggerate a wee bit!). after the break-up of the Soviet Union tens of thousands moved from former Soviet Republics to Germany and got citizenship by providing utmost flimsy proof of German ancestry.

[samran]

oh, and i was interested in that cambodian passport. Is it a grey or black passport?

Interesting article

I always forget about that possibility.....

Acquiring a 2^nd passport through ancestral or cultural methods

That if your grandparents were born in another country you may sometimes qualify for a passport

from that country.

just a handful of countries and even those with restrictions, e.g. eligible for a U.K. passport if mother was British, father a Brit does not count

rather easy for a Kazakhstan citizen who's grandparents kept a German Shepherd or Dachshund to get German citizenship (i only exaggerate a wee bit!). after the break-up of the Soviet Union tens of thousands moved from former Soviet Republics to Germany and got citizenship by providing utmost flimsy proof of German ancestry.

I've passed through Frankfurt Airport a couple of times...does that help me qualify?

[meand]

...

If you were to search "Miraflores" it will be worlds different. This is like (one of) Lima's safe and beautiful oasis.

...

Miraflores? Yes, cool place and that's where I stayed. Agree the food is amazing. Like I said, I recommend a visit. I just don't think it will become an expat magnet. That might be a feature to some. BTW, Miraflores isn't that safe. The American friend I was traveling with got mugged in Miraflores. In Miraflores cafes the custom is attach any bags you have with you to ... the furniture. The infamous Dutchman Van Sloot murdered a Peruvian girl in, you guessed it ... Miraflores. But compared to most neighborhoods in Lima, yes "very" safe.

Right, I love Peru more than anybody, and even I wouldn't be all that keen on settling in Lima for various reasons. I'd be more apt to head up to Trujillo, but that is a bit too small for most expats. For me though, I spent a year in Peru and never had a single problem except getting turned down by women, haha. Smiling and speaking a lot of their Peru slang was the my way of trying to keep safe.... my one rule in taxis was make the guy like you in the first 30 seconds and he'd feel too bad to take you off and rob you. Ha. Crude but it was effective. As you say though, right before I left a friend of a friend (a peruvian girl) got robbed in a cab -- it happens quite a bit.

I spent a good amount of time considering living in Peru. It really is a viable option.... set up a small business, help the kids in the neighborhood with English or sports..... the parents then like you and want you to stay... you get all the necessary permits and local approval etc after that. That was in smaller cities though, but definitely doable.

I have spent time in Quito as well -- same deal.... nice people, good food, gorgeous women .... but I don't wanna live there.

I was actually in Peru when Vandersloot got scooped up. All my Peruvian buddies said the same thing -- "aint no lawyers gonna help him in our jails" haha.

Edited April 23, 2012 by meand

[Naam]

oh, and i was interested in that cambodian passport. Is it a grey or black passport?

Interesting article

I always forget about that possibility.....

Acquiring a 2^nd passport through ancestral or cultural methods

That if your grandparents were born in another country you may sometimes qualify for a passport

from that country.

just a handful of countries and even those with restrictions, e.g. eligible for a U.K. passport if mother was British, father a Brit does not count

rather easy for a Kazakhstan citizen who's grandparents kept a German Shepherd or Dachshund to get German citizenship (i only exaggerate a wee bit!). after the break-up of the Soviet Union tens of thousands moved from former Soviet Republics to Germany and got citizenship by providing utmost flimsy proof of German ancestry.

I've passed through Frankfurt Airport a couple of times... does that help me qualify?

only if you submit a sworn statement that you like German beer and Bavarian Weisswurst. but your specific case also requires the correct pronunciation of the German Umlaute "ü" (very difficult) and "ö" (not too difficult).

[samran]

only if you submit a sworn statement that you like German beer and Bavarian Weisswurst. but your specific case also requires the correct pronunciation of the German Umlaute "ü" (very difficult) and "ö" (not too difficult).

Is that the "ü" as in "Deutschland, Deutschland über alles"?

[Naam]

only if you submit a sworn statement that you like German beer and Bavarian Weisswurst. but your specific case also requires the correct pronunciation of the German Umlaute "ü" (very difficult) and "ö" (not too difficult).

Is that the "ü" as in "Deutschland, Deutschland über alles"?

your question qualifies you.

[farang000999]

As I mentioned in an earlier thread about the new taxation laws, this is the part that most concerns me:

The tax compliance act — the newer law — asks foreign financial institutions such as banks, hedge funds, and private equity funds to provide the IRS with information on U.S. clients.

I just wonder if the Thai banks, in order to avoid the excessive paperwork and cost this would entail, simply close all accounts held by Americans, as apparently other banks around the world are doing. This would be a big problem for both the retired guys and those of us who have our salaries deposited directly in the local bank.

I'm not ready to renounce my citizenship but geez, there's got to be an easier way to stop tax evasion and money laundering.

(I think this part of the law won't come into affect until 2013 or later, so hopefully a more reasonable approach will prevail.)

I think you will find parts of this are already in place....As an American go and try an open an offshore account with a major bank in Singapore...first question...are you a US citizen ?...you reply yes and some banks will politely decline your business...they dont want the hassle of dealing with your beloved IRS

Mission Accomplished.

[farang000999]

I dont see why this is such a big deal, unless you are a tax evader. If you have a non-tourist visa, you can open a current account easily. if you have a real reason to be in a country, you can open an account easily.

No, you can't open a brokerage account and buy GOOGLE and try to circumvent paying taxes.

These rules, like everything the IRS does, is mainly to keep the big fish in line. Take a look at audit rates by income level. They are not trying to get JingThing.

Very few truly wealthy individuals are renouncing citizenship. the US passport is still super valuable and guess what there are many people the world over who would gladly purchase one if possible. most renouncing are probably khao sarn road pacifists.

[farang000999]

i recieved my 2nd passport through ancestory recently. was NOT an easy process.

[farang000999]

actually Naam it is quite easy to prove for Americans because their ancestor came to the USA and would eventually file for a certificate of citizenship. now, very easy to show when Great Grandpa applied/recieved the certificate and when grandma was born.

[Naam]

I dont see why this is such a big deal, unless you are a tax evader. If you have a non-tourist visa, you can open a current account easily. if you have a real reason to be in a country, you can open an account easily.

No, you can't open a brokerage account and buy GOOGLE and try to circumvent paying taxes.

These rules, like everything the IRS does, is mainly to keep the big fish in line. Take a look at audit rates by income level. They are not trying to get JingThing.

Very few truly wealthy individuals are renouncing citizenship. the US passport is still super valuable and guess what there are many people the world over who would gladly purchase one if possible. most renouncing are probably khao sarn road pacifists.

there was a time (i was 16 or 17) when i was willing to sacrifice one of my balls for a US passport. ten years later i could have gotten one with a snap of my fingers but i politely declined. and ten years ago a U.S. passport would have come in handy when foreigners (like me and my wife) were harassed at the port of entry inspite of having long term visas, paying income tax and fancy property taxes whenever we wanted to spend some months in our US home. end of 2003 my wife, arriving from London was told in Atlanta "having a home in Florida is not a valid reason to enter the United States. you are paying taxes, so what? we are the INS not the IRS!"

please enlighten us why a US passport has super value for those who opt not to live in the Greatest Nation on Earth™. do you see some value that a US passport holder is not allowed to travel to Cuba? is it valuable that a US citizen, living with his family in Nakhon Nowhere, is required to pay income tax?

[flying]

I dont see why this is such a big deal, unless you are a tax evader.

I don't think that is true of all US citizens that want a 2nd passport.

Some may feel various laws are just too much of an infringement on their personal freedoms.

I think perhaps your correct when you say it might be a small percentage of rich that renounce but....

I will bet that there is a very large segment of rich that have dual citizenship. Whether that be for a

"just in case scenario" or other reasons ...who knows?

After all it is law that if your worth over two million dollars you will be hit with a hefty exit tax should you

want to renounce your US citizenship. So yes I agree the rich probably would not.

But looking at it from the freedom perspective.... It is a nice option for someone who holds two passports

to freely open an account elsewhere without the liability of either being refused ( possible in the future )

or even just the fact they can & not be breaking any laws technically.

If say my wife is a dual Thai/US citizen & of course she opened her accounts as a Thai before she was a US citizen....

why should she be compelled to disclose that or even report it? It was not required as part of her citizenship.

Technicality?.... Maybe......Letter of the law? ....Maybe

But these are some of the reasons some may want another passport. Perhaps even just the security/option

of being able to return to the country of their choice should TSHTF in either of the countries.

After all this so called worldwide financial crisis is not over by a long shot. I would go so far as to say it

has not only not been addressed but on paper has gotten worse.

[CaptHaddock]

please enlighten us why a US passport has super value for those who opt not to live in the Greatest Nation on Earth™. do you see some value that a US passport holder is not allowed to travel to Cuba? is it valuable that a US citizen, living with his family in Nakhon Nowhere, is required to pay income tax?

US passport/citizenship provides these benefits:

can return to the US if situation in Thailand becomes untenable (just saying it's possible, not likely)

easy entry into first-world countries for travel

access to US highly-developed securities market for investment, e.g. low-cost mutual funds

preferential rules of inheritance for spouse who is a US citizen

One does have to consider that the benefits outweigh the very considerable disadvantage of taxation on worldwide income. However, you have to earn a lot in Thailand to become liable for US income tax over and above Thai income tax. I wouldn't think a US passport would offer much over a German passport, for example, but it does compared to a Thai pp.

[CaptHaddock]

If say my wife is a dual Thai/US citizen & of course she opened her accounts as a Thai before she was a US citizen....

why should she be compelled to disclose that or even report it? It was not required as part of her citizenship.

Technicality?.... Maybe......Letter of the law? ....Maybe

Your statement implies that a dual Thai/US citizen may not be legally required to report accounts held in Thailand in all cases. As I understand it, this is not correct. No matter when she opened the account or what her citizenship status was on the day she opened it, as a US citizen she does indeed have to report it or else be liable for civil and criminal penalties. The instructions for filling out form TD 90.22 do provide exceptions, but none that would apply in this case.

[Javabear]

You only have to report the account or combination of accounts if the total value exceeds $10k US in at anytime during the year. So an account with THB 300k would not need to be reported.

[BEENTHEREDONETHAT]

I agree with flying, there are reasons to have a second passport other than taxes. If you don't like the way the country is going or if they should in the future make new laws that are discriminating to expats or their spouses they have the option to renounce and get out of dodge. You don't have that option is you don't have a second passport. So I for one am all for it.