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Americans Renouncing Citizenship up 221%

July 13, 2014

Interesting article that should be some fuel for thought.

http://www.forbes.com/sites/robertwood/2014/02/06/americans-renouncing-citizenship-up-221-all-aboard-the-fatca-express/

That brings the total number to 2,999 for all of 2013. The previous record high for a year was 1,781 set in 2011. It’s a 221% increase over the 932 who left in 2012.

 

That number of people is not really that big, but I wonder who they are? American’s tired of jumping through the hoops to remain an American? It was interesting to me that these people’s names get published by the Treasury Department.

Moreover, the annual foreign bank account reports known as FBAR forms carry civil and criminal penalties all out of proportion to tax violations. The penalties for failure to file these forms, civil and criminal, are severe. Even civil penalties can quickly consume the balance of an account.

The coup de grace is FATCA, which is ramping up now worldwide. It requires an annual Form 8938 to be filed with income tax returns for foreign assets meeting a threshold. And foreign banks are sufficiently worried about keeping the IRS happy that many simply do not want American account holders. Americans abroad can be pariahs shunned by banks for daily banking activities.

Even Canada has now agreed to turn over data to the U.S., though many in Canada are hopping mad about it. See Canada Signs U.S. FATCA Deal, IRS To Get Data. Still, leaving America can have a special tax cost. To exit, you generally must prove 5 years of tax compliance in the U.S. Plus, if you have a net worth greater than $2 million or have average annual net income tax for the 5 previous years of $155,000 or more (that’s tax, not income), you pay an exit tax.

It should serve as a warning to us that the Federal Government has these kinds of reporting requirements and enforce them on the rest of the world.  I’ll have more on that shortly.  It seems that our Federal Government is working to piss off as many entities, foriegn and domestic as they possibly can.   This is the kind of bully mentality that will get even our friends in line to kick our ass.  Frankly, I’d have to say that the government deserves it. Worse, the rest of us deserve it to for having failed to keep our own government in line and limited to its Constitutional boundaries.

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