[Guns N' Coffee]

https://www.nbcnews.com/news/us-news...hip-rcna118770

Many "accidental Americans" filed a lawsuit after the State Department announced it would lower the fee to renounce citizenship.

The U.S. started imposing a fee for Americans to renounce their citizenship in 2010, and in 2014 it increased it to $2,350, from $450.

The price of being an American who lives abroad is often an accent that sticks out, jokes about culinary inferiority and sometimes even issues opening a bank account or buying a home.

But for some former citizens, the price to renounce that status has long been steep. Now many of them want refunds, filing a class-action lawsuit Wednesday to try to get their money back.

It marks a new stage in a yearslong battle by “accidental Americans” — U.S. citizens who neither live in the country nor have any real ties to it but must still pay taxes to Uncle Sam — to reduce the costs they face.

The $2,350 that Rachel Heller paid to renounce her citizenship years ago was almost equivalent to her monthly salary.

The State Department announced Monday it would be dropping the fee back down to $450, the amount it used to charge until 2014. Heller, a Netherlands resident and one of the lead plaintiffs in the lawsuit, wants a refund of the difference.

'Like a divorce'
Heller is one of 30,000 former U.S. citizens, according to the Accidental American Association, which is organizing the lawsuit and calling for a change in the tax system.

Unlike most countries, the United States imposes a citizenship-based taxation system, irrespective of where a person lives or works.

“It was far more complicated for people living overseas. And the threatened fees if you did it wrong or left something off by mistake were so high that I got really paranoid about trying to do it myself,” Heller, 61, told NBC News in a telephone interview.

So in 2015, the former teacher turned travel writer decided she couldn’t keep spending the $1,100 every year on her accountant to file her U.S. taxes and declare her entire personal life to a country she had left in 1997.

She went to her nearest embassy in Amsterdam, near the city she had emigrated to, for a brief but final visit that left her in tears as she gave away her U.S. passport.

“It felt like a divorce, but it was by somebody you love but someone who’s not good for you,” said Heller, who grew up in Connecticut and moved to the town of Groningen, Netherlands.

"Accidental" Americans began coming to the attention of U.S. tax authorities some decades ago.

In 2010, Congress enacted the Foreign Account Tax Compliance Act, or FATCA, to crack down on tax evasion by Americans with financial assets abroad after a Swiss bank scandal showed U.S. taxpayers hid millions of dollars overseas. The law requires foreign banks to report on financial accounts held by U.S. citizens to the IRS.

As a result, many of these Americans learn they may owe taxes in the U.S. for services they’ve never received, after getting contacted by banks in countries where they live and are tax-compliant.

The State Department started imposing a fee for Americans to renounce their citizenship in 2010, and in 2014 increased it from $450 to $2,350 — one of the highest in the world — citing a “dramatic increase” in applications that required more resources.

The proposed reversal to $450 was in line with the cost of other services provided abroad, it said in a Federal Register notice Monday.

The State Department did not immediately comment on the lawsuit.

“Rather than resolving the causes of what leads individuals to renounce American nationality (FATCA law & Citizenship-Based Taxation), the State Department has preferred to put up barriers to limit the constant increase in renunciation requests,” said Fabien Lehagre, president of the Accidental Americans Association.

But it’s not just the taxes that have forced an increasing number of Americans to quit their citizenship, including Heller’s 25-year-old son, Robert.

A financial burden
“It was becoming clear that the banks were going to make things more and more difficult for us,” Heller said.

Some banks around the world would refuse services such as opening accounts, home loans would become tougher, and the paperwork the diaspora had to endure skyrocketed. Experts say that was because the cost of complying with FATCA ultimately fell on the banks, which became increasingly reluctant to serve Americans.

Any mistake while filing the required forms could come with fines amounting to thousands of dollars, meaning that having dedicated accountants just for American taxes was more and more necessary.

“For a lot of Americans, the hassle of being an American from a day-to-day financial being, it’s just not worth it. You’ve got interest penalties and even criminal penalties,” said David Lesperance, a managing partner at the Gibraltar-based law firm Lesperance & Associates.

“You’ve got full U.S. tax liability. Income, gift, estate, everything,” he said.

Amid these hurdles a record number of U.S. citizens have chosen to become expatriates.

IRS data showed that more than 1,300 people renounced their U.S. citizenship between January and June.

Lesperance said he has seen an unprecedented increase in the number of his clients wishing to give up their citizenship, and sometimes even the process fee is not the biggest hurdle.

The actual costs could balloon up to thousands, he said, as many struggle to even get an appointment with an embassy in the country they live in and are forced to travel to other countries.

Many who finally go through this process do so reluctantly.

Esther Jenke was completing her master’s degree in Nebraska when she met her German husband in 1994. Together they decided to move to Hamburg, Germany, the same year.

But it wasn’t until 2017 that she became fully aware of her tax obligations. She had already started thinking about retirement plans but her nationality got in the way.

“It was extremely difficult because the banks didn’t want me as an American client. Many of them refused to take me. So we put our investments in my husband’s name,” Jenke said.

The house they bought after saving up for years could be taxed too if they sold it, she said.

“I felt so angry that my own country was forcing me to give up my citizenship just to have a financially sound retirement,” Jenke said. She ultimately renounced her citizenship in 2018 at the Frankfurt Embassy.

“I feel much more free now. I can focus on my life in Germany without the U.S. hanging over my head,” she added.

[GODREKR]

So as usual the rest of us have to suffer for the wrong doings of the rich. How is it we're making it so easy for people to emigrate to this country while making it so hard for Americans to emigrate to other countries? WTF?

[megadeth11]

the story I read on this was very confusing and talked about how these fees and constant tax issues also applied to US Citizens born in foreign countries who had no intention of ever moving to the USA. (I assume an American parent hade whoopie with some foreign person in a foreign land and made a dual-citizen baby with an over sized baby head). I'm not sure what the hell is going on with this issue. Need. More. Data.

[Guns N' Coffee]

Originally Posted by megadeth11 ↗

the story I read on this was very confusing and talked about how these fees and constant tax issues also applied to US Citizens born in foreign countries who had no intention of ever moving to the USA. (I assume an American parent hade whoopie with some foreign person in a foreign land and made a dual-citizen baby with an over sized baby head). I'm not sure what the hell is going on with this issue. Need. More. Data.

https://www.theguardian.com/politics...eign-secretary

Boris Johnson among record number to renounce American citizenship in 2016

Foreign secretary had previously protested against ‘absolutely outrageous’ US tax obligations after sale of his north London home

Boris Johnson has renounced his US citizenship, ending years of ambiguous loyalties and probably ridding himself of a hefty tax bill.

A list released by the US Treasury department showed the UK foreign secretary was one of 5,411 individuals to renounce his American citizenship in 2016.

Johnson was born in New York when his parents worked there, but has not lived there since he was five years old. His decision does not appear to be an attempt to distance himself from the politics of Donald Trump, but may instead be a move to ensure he is out of reach of America’s Internal Revenue Service (IRS).

In 2014 he publicly said that the US was trying to hit him for tax on the sale of his home in Islington, north London, something he said he regarded as “absolutely outrageous”, although he later reportedly paid the demand. The US tax authorities have been mounting a campaign to crack down on the earnings of dual nationals.

A record number of dual nationals renounced US citizenship in 2016, 26% higher than the next highest annual total that followed the enacting of a disclosure law in the 1990s.

Andrew Mitchel, an international tax lawyer, tallies the names on the lists, and identified Alexander Boris Johnson renouncing his citizenship. The foreign secretary’s full name is Alexander Boris de Pfeffel Johnson.

It was revealed in 2014 that Johnson might owe more than $50,000 in US tax on the income from the sale of his home.

On a visit to New York in 2014 in an interview with National Public Radio – partly promoting his biography of Winston Churchill – Johnson, then mayor of London, said he was being chased to pay the capital gains tax by the American tax authorities. A dual citizen can be liable for tax in both countries.

Johnson told NPR it would be hard to renounce his citizenship. He said: “I have to confess to you, that you’re right ... it is very hard, but I will say this, the great United States of America does have some pretty tough rules, you know. You may not believe this but if you’re an American citizen, America exercises this incredible doctrine of global taxation, so that even though tax rates in the UK are far higher and I’m mayor of London, I pay all my tax in the UK and so I pay a much higher proportion of my income in tax than I would if I lived in America.

“The United States comes after me, would you believe it ... for capital gains tax on the sale of your first residence which is not taxable in Britain, but they’re trying to hit me with some bill, can you believe it?”

Pressed to say if he would pay the tax he said: “Why should I? I haven’t lived in the United States for, you know, well, since I was five years old”.

Unlike most nations, the US taxes non-resident citizens on their worldwide income. A strong tax-enforcement campaign by US authorities and lawmakers has been mounted in the wake of admissions by banks in Switzerland and elsewhere that they encouraged US taxpayers to hide assets abroad.

To prompt compliance, a 2010 US law, the Foreign Account Tax Compliance Act, requires foreign financial institutions that operate in the US to report information about holdings by all US taxpayers to the IRS.

[megadeth11]

My point exactly. People who were never really citizens being taxed? What am I missing here.....

[megadeth11]

Originally Posted by GODREKR ↗

So as usual the rest of us have to suffer for the wrong doings of the rich. How is it we're making it so easy for people to emigrate to this country while making it so hard for Americans to emigrate to other countries? WTF?

I'm confused. Why is this an issue about rich vs poor?
Also, emigrate is to leave one's country. You are confusing and should explain if you actually know about any of this.

[GODREKR]

Originally Posted by megadeth11 ↗

I'm confused. Why is this an issue about rich vs poor?
Also, emigrate is to leave one's country. You are confusing and should explain if you actually know about any of this.

Did you even read the article?

In 2010, Congress enacted the Foreign Account Tax Compliance Act, or FATCA, to crack down on tax evasion by Americans with financial assets abroad after a Swiss bank scandal showed U.S. taxpayers hid millions of dollars overseas. The law requires foreign banks to report on financial accounts held by U.S. citizens to the IRS.

emigrate - leave one's own country in order to settle permanently in another.

People emigrated their country to come live in ours. Like wise Americans have emigrated to live somewhere else.

[fattubbashit]

Originally Posted by GODREKR ↗

So as usual the rest of us have to suffer for the wrong doings of the rich. How is it we're making it so easy for people to emigrate to this country while making it so hard for Americans to emigrate to other countries? WTF?

I'm not even allowed to visit

[Coolingwhiteboy]

What's the government gunna do if they don't pay it? Fly to where ever they are and abduct a foreign citizen?

[megadeth11]

this whole thing is a big tub of government shit and taxes. same ol same ol. And the same ol' liberal whiners support it, while the same anti-government (and correct) people do not support it.