Moving?

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72Hardtop
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Moving?

Post by 72Hardtop » Wed May 13, 2015 3:03 am

http://www.bloomberg.com/news/articles/ ... itizenship




More Americans living outside the U.S. gave up their citizenship in the first quarter of 2015 than ever before, according to data released Thursday by the IRS.

The 1,335 expatriations topped the previous record by 18 percent, according to data compiled by Bloomberg. Those Americans are driven to turn in their passports in part because of laws that have expanded bank reporting and tax compliance requirements for expatriates.

The increase in early 2015 follows an annual record in 2014, when 3,415 Americans gave up their citizenship.

An estimated 6 million U.S. citizens are living abroad, and the U.S. is the only country within the Organization for Economic Cooperation and Development that taxes citizens wherever they reside.

In many cases, those choosing to give up their citizenship have limited connections to the U.S. and have lived outside of the country for most of their lives. Anyone born in the U.S. automatically receives citizenship, and people born abroad to U.S. parents are typically citizens as well.

For some the decision is easy, because they perceive little benefit from holding U.S. citizenship. For others, the choice is more complicated.
‘Highly Distressing’

“The cost of compliance with the complex tax treatment of non-resident U.S. citizens and the potential penalties I face for incorrect filings and for holding non-U.S. securities forces me to consider whether it would be more advantageous to give up my U.S. citizenship,” Stephanos Orestis, a U.S. citizen living in Oslo, wrote in a March 23 letter to the Senate Finance Committee. “The thought of doing so is highly distressing for me since I am a born and bred American with a love for my country.”

London Mayor Boris Johnson, who had a tax dispute with the IRS, said earlier this year that he would give up the U.S. citizenship he received because he was born in New York. His name isn’t on the IRS list. Eduardo Saverin, a Brazilian-born co-founder of Facebook Inc., gave up his U.S. citizenship in 2012.

U.S. citizens who live abroad can exclude as much as $100,800 in earned income and in many cases can receive tax credits for payments to foreign governments.
Tax Cheats

The U.S. has increased efforts to catch tax cheats after the Swiss bank UBS AG paid a $780 million penalty in 2009 and handed over data on about 4,700 accounts. That has led some banks to forgo doing business with people who have ties to the U.S.

One of the primary U.S. moves took effect last year as asset-disclosure rules under the Foreign Account Tax Compliance Act kicked in. The measure, known as Fatca, requires U.S. financial institutions to impose a 30 percent withholding tax on payments made to foreign banks that don’t agree to identify and provide information on U.S. account holders.

It allows the U.S. to scoop up data from more than 77,000 institutions and 80 governments about its citizens’ overseas financial activities.

The new laws, combined with past rules, can make tax filing difficult for U.S. citizens living overseas who are trying to start businesses or set up trusts, said Andrew Mitchel. He’s an international tax lawyer in Centerbrook, Connecticut, who has been tracking expatriations.

“These are complicated rules, and these are laypeople who don’t really understand the rules,” he said. “It can be tens of thousands of dollars to file tax returns.”

In establishing the 2010 law, Congress and President Barack Obama in effect threatened to cut off banks and other companies from easy access to the U.S. market if they didn’t pass along such information. It was projected to generate $8.7 billion over 10 years, according to the congressional Joint Committee on Taxation.
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Amskeptic
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Re: Moving?

Post by Amskeptic » Wed Jun 03, 2015 6:38 pm

72Hardtop wrote: Andrew Mitchel an international tax lawyer in Centerbrook, Connecticut,
“These are complicated rules, and these are laypeople who don’t really understand the rules,” he said. “It can be tens of thousands of dollars to file tax returns.”
Horsepucky, Andrew, horsepucky. If you are charging "tens of thousands of dollars" to file returns, you are clearly on the take.
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72Hardtop
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Re: Moving?

Post by 72Hardtop » Wed Jun 03, 2015 6:41 pm

Amskeptic wrote:
72Hardtop wrote: Andrew Mitchel an international tax lawyer in Centerbrook, Connecticut,
“These are complicated rules, and these are laypeople who don’t really understand the rules,” he said. “It can be tens of thousands of dollars to file tax returns.”
Horsepucky, Andrew, horsepucky. If you are charging "tens of thousands of dollars" to file returns, you are clearly on the take.
Colin
They are likely being charged that due to the amount of their return...a percentage. For a Millionaire or Billionaire...a drop in the bucket or pocket change.
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Bleyseng
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Re: Moving?

Post by Bleyseng » Thu Jun 04, 2015 7:52 am

"It was projected to generate $8.7 billion over 10 years, according to the congressional Joint Committee on Taxation."

Yep, maybe this will help to catch the tax dodgers living outside the US. When I lived in Suriname I filed taxes in both countries, big deal.
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yondermtn
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Re: Moving?

Post by yondermtn » Thu Jun 04, 2015 11:55 am

72Hardtop wrote: They are likely being charged that due to the amount of their return...a percentage. For a Millionaire or Billionaire...a drop in the bucket or pocket change.

CPAs and tax attorneys aren't allowed to prepare returns based on contingent fees.

The laws are very confusing and it is difficult to find professionals qualified to interpret them. I don't have much experience with US citizens living abroad, but I do have experience with US citizens who have foreign accounts. I'd advise against any foreign accounts unless absolutely necessary. The reporting requirements and the changing laws aren't worth the hassle or expense.
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hippiewannabe
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Re: Moving?

Post by hippiewannabe » Thu Jun 04, 2015 8:26 pm

Bleyseng wrote:"It was projected to generate $8.7 billion over 10 years, according to the congressional Joint Committee on Taxation."

Yep, maybe this will help to catch the tax dodgers living outside the US. When I lived in Suriname I filed taxes in both countries, big deal.
Classic case of static analysis. In the real world, people and the economy are dynamic. When you go after a higher percentage of people's income, they don't just stand there and take it; the income, or in this case the citizenship, moves. This is why tax revenue increased when Reagan cut marginal rates; less game playing to hide the income, and more honest investment and reported wages exposed to a fair rate.
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Bleyseng
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Re: Moving?

Post by Bleyseng » Fri Jun 05, 2015 6:43 am

hippiewannabe wrote:
Bleyseng wrote:"It was projected to generate $8.7 billion over 10 years, according to the congressional Joint Committee on Taxation."

Yep, maybe this will help to catch the tax dodgers living outside the US. When I lived in Suriname I filed taxes in both countries, big deal.
Classic case of static analysis. In the real world, people and the economy are dynamic. When you go after a higher percentage of people's income, they don't just stand there and take it; the income, or in this case the citizenship, moves. This is why tax revenue increased when Reagan cut marginal rates; less game playing to hide the income, and more honest investment and reported wages exposed to a fair rate.
Huh? Then why did he run such huge deficits. I thought it was just like GW Bush that they cut the taxes and spent more expecting the economy to boom but it didn't happen. (Trickle Down Economics) Same BS the GOP is mouthing now.
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hippiewannabe
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Re: Moving?

Post by hippiewannabe » Sat Jun 06, 2015 6:56 am

Bleyseng wrote:
hippiewannabe wrote:
Bleyseng wrote:"It was projected to generate $8.7 billion over 10 years, according to the congressional Joint Committee on Taxation."

Yep, maybe this will help to catch the tax dodgers living outside the US. When I lived in Suriname I filed taxes in both countries, big deal.
Classic case of static analysis. In the real world, people and the economy are dynamic. When you go after a higher percentage of people's income, they don't just stand there and take it; the income, or in this case the citizenship, moves. This is why tax revenue increased when Reagan cut marginal rates; less game playing to hide the income, and more honest investment and reported wages exposed to a fair rate.
Huh? Then why did he run such huge deficits. I thought it was just like GW Bush that they cut the taxes and spent more expecting the economy to boom but it didn't happen. (Trickle Down Economics) Same BS the GOP is mouthing now.
Yes. When Reagan cut tax rates, revenue went up. The Laffer Curve is an empirically proven fact.

The deficits were caused by excess spending. He rebuilt the military while also letting entitlements grow. Hey, nobody's perfect.

The fact that revenue went down when Bush2 cut rates further says we are near the peak of the Laffer Curve. If you change rates either up or down from here, revenue will likely go down.


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When thousands of people believe a made-up story for a month, we call it fake news. When a billion people believe a made-up story for a thousand years, we call it a religion.

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