Expats giving up passports because they no longer want to pay taxes

If you’re just a regular old employee but you have more than $10k in savings, where would that put you?  Also, how does it work with joint accounts?

If you are named on any account that has more than 10K in at anytime (so not consistently, even just once during the year) you need to fill out the form.  It's easily found on the IRS website and DOESN'T get mailed in with your taxes, but to a different address entirely.

It takes about 5 minutes to fill out.

The highest balance of any joint accounts have to be declared, as well. Any account for which you are a signatory, basically.

Regular employee = 1040 + 2555 EZ which gives you up to $92k foreign income exclusion, i.e. tax free which covers most people, including me.

> $10k finances  = TD 20 whatever (FBAR) and there's a box on your 1040 you have to tick to say you've filled one out, but the FBAR goes to the Treasury, not the IRS.

But, you only have to do the FBAR if the aggregate of ALL your accounts > $10k at any given time. I have a bank account with a £135k or so overdraft so I don't complete an FBAR.

Also note, the $10k limit includes $5000 transferred from one account in your name to another, if the transaction goes through on the same day.

It's archaic and insulting and to defend it by saying it only takes 5 minutes to fill out is just insane.

And...there is a very long wait of many months to get an appointment to renounce - and for some folks there would be a US tax charge on renouncing.

It was a lot easier in The man without a country's day. All you had to do was shout "Damn the United States. I wish I may never hear of the United States again!" And then you got a lovely cruise for the rest of your life

Much as I loathe the way the US taxes US citizens abroad I don't think I'll give up US citizenship because I have a lot of accounts in the US and also expect to get social security. So I'll take the hassle. However once out of the US I'll be domiciled in the UK so that I don't have to worry about state tax returns.

...However once out of the US I'll be domiciled in the UK so that I don't have to worry about state tax returns.

Not necessarily. Some states still require you to file a return even if you're gone (and haven't moved to another US state). Also, if you own property, that can cause some state tax hassles, depending on the state.

I believe nun is from the UK originally, so it's more straightforward for domicile to revert to the UK.

Much as I loathe the way the US taxes US citizens abroad I don't think I'll give up US citizenship because I have a lot of accounts in the US and also expect to get social security. So I'll take the hassle. However once out of the US I'll be domiciled in the UK so that I don't have to worry about state tax returns.

Yeah, I can completely agree with that. I don't have any of that, however, and don't want it. I don't think I should get s/s because I've never had to pay any taxes in the US nor do I ever want to live there again.

I think I really resent all the time I have to waste on this crap (not to mention the occasional US tax expert consultancy fees) just to prove I don't owe anybody any money. Because of the US policy of taxing non residents, and the fact that I run a British company on British soil, I have to spend lots of money to prove I don't owe any money.

It's utterly ridiculous.

I believe nun is from the UK originally, so it's more straightforward for domicile to revert to the UK.

That's right, sorry I left out that bit of information. I currently live in a domicile state when it comes to taxes.

I have to spend lots of money to prove I don't owe any money.

It's utterly ridiculous.

Exactly, the IRS is really messed up and US citizens abroad have ridiculous tax obligations and are discriminated against in investment and money matters too. Compare that to the UK citizen abroad. Once they become non-resident the UK doesn't tax them on income arising outside the UK and there are no nasty rules to stop them from investing in local mutual funds or having to report non-UK assets.

In 25 years in the US I haven't filled out any UK tax forms or paid any tax to the UK. I do make voluntary payments to the UK's equivalent of social security though.... US citizens don't have that coice, they can't pay into SS when they are abroad and if they have a foreign pension contributions that are tax deferred in the foreign nation have to be declared as income to the IRS...a tax treaty or foreign tax credits/income exclusion often get around this, but it's like you said, you have to spend money, time and a lot of worry to prove you owe nothing. There's none of that for the UK expat.

I think I'm going to go see a lawyer before I have a nervous breakdown over all this -- assuming he has some understanding of international taxation. 

Tell me about it. The more I read, the more freaked out I get, particularly about things like the FBAR. The penalties draconian and the whole thing has me in a panic about how to get on with my life AND stay on top of US tax/disclosure law just to stop myself landing in jail.

Nice.

Seems that this has been going on for some time. Here is an NY Times article from 1914 about UK-Yankees with the same problem:
http://query.nytimes.com/mem/archive-free/pdf?_r=1&res=9A0CEFDE163AE633A25754C0A9659C946596D6CF

Doesn't seem like there's any hope of things getting better!

Seems that this has been going on for some time. Here is an NY Times article from 1914 about UK-Yankees with the same problem:

Great post!

Should we speculate on a similar post (wherever it may be) in 2114? Like the clever Mr. Bliss, no one today intends to renounce due specifically to the US tax situation either! 

Thanks for posting that Weller!  I guess some things never change!

It takes about 5 minutes to fill out.

So, we can safely assume that you have more than 25 accounts. Spare a thought for us poor folks.