Renounce US Citizenship?

I just looked up a bit of this on http://www.usembassy.org.uk/irs/irsfaq.htm.

Given the following quote from their FAQs, it seems as if I can continue being lazy for some years to come:

"I am a U.S. citizen who moved to the U.K. several (or many) years ago and thought I did nothave to file U.S. tax returns any longer. Now I have learned that information was incorrect. What do I do?

This is a common misunderstanding among Americans abroad, and should not create anxiety for those who find themselves in this situation. Generally, you should file returns for the past three years, taking the foreign earned income exclusion, the foreign tax credit, or both. It would be extremely unlikely that there would be any late penalties assessed, since penalties are computed as a percentage of tax owed, and only the rare taxpayer would actually owe tax in this situation. "

Just found this as well:

"If I am able to exclude all my income, why do I have to file?

A U.S. citizen or lawful resident alien is required to report worldwide income if you exceed the minimum filing requirements.

If your tax liability is zero there is no penalty for not filing, but you may risk eligibility for future exclusions or deductions by not filing a timely and accurate return."

So, why would we bother?

For some of us we'll be getting back a HUGE chunk of change - I do!  So I'll be filing every year...

Onetiger, i dont want to be too nosy/personal... but just wondering how you are getting money back if your income is all UK income and (im assuming) you make less than £80k?

I haven't owed taxes in the US for years, but I always call the IRS hotline, and they give me their agent number, so I can report to the IRS that I owe nothing, if they come back to me about it

I always spend too much time each year in the US on business trips or courses or something and end up having to write the IRS a check for several thousand.

M.

Now this statement just scared the carp out of me.

I am putting my foot down if my company makes me go to the US for too long on business trips!  YIKES!

Hi, Aimiloo - yes, I have to pay full US federal taxes on any work days I spend in the US. That means basically everytime I go to the US on business (or to take a course), my salary for those days is fully taxable in the US (at least at the federal level). This is fully a function of being a US citizen - foreigners in the same situation would not have to pay taxes to Uncle Sam... If I am there for a number of weeks, it is easy for that to mount up. A couple of hundred here and a couple of hundred there and pretty soon you are talking about real money.

The good thing (I suppose) is that I get to claim back taxes withheld and paid to the UK on the same income. Because of the tax treaty, there shouldn't really be any situation with dual taxation on the same income (at least as to earned income!).

  

You might find it interesting that in the U.K. income tax was intended to be a temporary tax when it was introduced. 

Here we are two centuries later and it's still with us, but officially it is still temporary, since parliament has to pass a resolution to renew  it each year.

http://www.hmrc.gov.uk/history/

Paul, did you know that the US had no income tax until the mid-19th century?

Income tax in the US was also intended to be a temporary measure when first introduced (to pay for the Civil War).

After an 1895 Supreme Court case, most forms of income tax were unconstitutional, which necessitated the 16th Amendment to the US constitution.

Yep, it's amazing just how many things which were supposed to be temporary measures end up becoming permanent.  There's a brief outline of U.S. Income tax here:

History of U.S. Income Tax

After an 1895 Supreme Court case, most forms of income tax were unconstitutional, which necessitated the 16th Amendment to the US constitution.

I can't help feeling a little uneasy with the idea that if something is considered unconstitutional you just change the constituion.   Imagine applying that principle to something as basic as the 1st or 5th Amendments.

The words "just change the constitution" are the key ones here - it is very difficult to change the constitution. You have to get a majority in both houses of Congress AND 2/3 of the state legislatures to pass it. The Equal Rights Amendment (gender equality) has never passed for that very reason.

To get 2/3 of the state legislatures to pass something in the US, in practical terms you will need support from both political parties. Neither party has a lockhold on a majority of the states.

If a legislator decided to suggest getting rid of the 1st Amendment or the 5th Amendment, I expect a) he wouldn't get far with the proposal and b) he may find himself looking for a new job after the election. 

Only as a side-note, a big chunk of the 5th floor, heretofore vacant, at the US Embassy in Mayfair, has just been occupied by a team of criminal investigators from the IRS. 

Their mandate?  To locate tax-errant expats.  Or possibly just another guvvie boondoggle?  I reckon not.  I reckon they are dead serious about it.

They have busted three in December, but they were all on the continent, so apparently it's a base of operations for all of Europe.

Crikey, Garry that doesn't sound too pleasant for expats! I'm glad I don't owe any money to the IRS! Phew!

Only as a side-note, a big chunk of the 5th floor, heretofore vacant, at the US Embassy in Mayfair, has just been occupied by a team of criminal investigators from the IRS. 

Their mandate?  To locate tax-errant expats.  Or possibly just another guvvie boondoggle?  I reckon not.  I reckon they are dead serious about it.

They have busted three in December, but they were all on the continent, so apparently it's a base of operations for all of Europe.

by that I think a lot of people here are now shi*ing themselves 

by that I think a lot of people here are now shi*ing themselves   

You can say that again! lol

by that I think a lot of people here are now shi*ing themselves 

I'm not even there, am current on my taxes, and I'm sh**ing myself!