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.

 

 
 


Show commenting policy

Most-Read Nation

  1. Hurricane shattered Charleston, S.C., tested mayor 25 years ago
  2. Ticks reduce moose population in northern states
  3. 121 tourists stranded on schooner near Statue of Liberty
  4. Scope of Chrysler’s latest SUV recall questioned
  5. New DNA testing in twins welcomed by prosecutors
  6. Pope picks moderate to be Chicago archbishop
  7. Egyptian Bary admits links to 1998 U.S. Embassy bombings in Africa
  8. DHS headquarters’ planning goes awry
  9. Threats from Mexican cartels lead protesters to scrap immigration rallies, organizer says
  10. Door left ajar to boots on ground to combat the Islamic State of Iraq and Syria
  11. Yellowstone bison could be culled by 900
Subscribe today! Click here for our subscription offers.