TribLIVE

| USWorld


 
Larger text Larger text Smaller text Smaller text | Order Photo Reprints

Expats renounce citizenship over U.S. tax hassles

Daily Photo Galleries

By USA Today
Saturday, March 8, 2014, 8:18 p.m.
 

LONDON — Some Americans, frustrated at what they see as onerous tax filing obligations for Americans living overseas, are giving up their United States citizenship.

“I felt like I had gotten a divorce,” said Donna-Lane Nelson, a 71-year-old Geneva-based editor who renounced her citizenship in 2011 in part because of what she felt were the increasingly arduous tax reporting requirements.

“The cost of having a professional go through the complicated U.S. tax forms, living under the threat if this or that wasn't properly filed there would be huge fines — U.S. nationality just became a complete burden because of banks not wanting my business, and as an expat not being allowed to have a U.S. account,” Nelson said.

There are about 6 million Americans living and working abroad, and the Internal Revenue Service estimates that international taxpayers owe $40 billion to $123 billion in unpaid taxes.

This summer, in an attempt to start redressing this sizable hole in the nation's coffers, the first stage of the Foreign Compliance Tax Act, or FACTA, will formally come into effect.

It is designed — using a controversial dragnet-like method — to catch those Americans thought to be evading taxes by hiding their wealth in foreign bank accounts. The way FACTA does this is by requiring that all non-American financial institutions pass along detailed information about American account holders, or potentially face steep penalties.

The Report of Foreign Bank and Financial Accounts, which has been operational, requires Americans — whether they live in Boise or Bangkok — with foreign accounts that have $10,000 or more held in them to notify the IRS annually of that year's highest balance.

“I have always filed my U.S. taxes just as I am supposed to,” said Brian Dublin, 47, an American businessman who has lived overseas for many years.

“However, as a result of FACTA, in the past year I have been kicked out of a Swiss bank that said, ‘Hey, we love you, but we won't work with Americans.' I have also been kicked out of a Swiss pension fund. They told me they don't want any Americans in the fund. They don't want to work on behalf of the IRS,” he said.

Dublin, a New Yorker, will be eligible for Swiss nationality in the next few years and said that if the situation has not dramatically changed, he will give serious consideration to renouncing his citizenship.

About 3,000 Americans decided to call it quits on their citizenship in 2013 — according to data posted online at the Federal Register. While that is not a large number itself, it's a 221 percent rise from the 993 people who relinquished passports in 2012.

Subscribe today! Click here for our subscription offers.

 

 
 


Show commenting policy

Most-Read Nation

  1. Mo. gunman kills 7, self, in rampage
  2. Senate approves 1-week funding bill for Homeland Security
  3. Israeli Prime Minister Netanyahu rejects Jewish House Democrats’ invitation
  4. Why would GOP candidate for Missouri governor Schweich kill himself?
  5. Attorney General Holder backs change in civil rights law
  6. Gene making human brains bigger found
  7. Rep. Schock of Illinois shoulders $40K cost of office renovation
  8. Obama pitches privacy bill, Democrats say
  9. 8 shot to death, including gunman, in Missouri rampage
  10. Hackers won’t take break if DHS shuts down, officials warn
  11. 2 arrested in U.S. tried to join ISIS, feds say