Renounce US citizenship?

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Up2u
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Renounce US citizenship?

Post by Up2u »

Not me, but it ticks me off that I will have to do FBAR reporting as discussed in this article because I am bringing in USD to buy a car.

https://www.cnbc.com/2022/06/17/1-in-4- ... nship.html

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Gaybutton
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Re: Renounce US citizenship?

Post by Gaybutton »

The article says many who want to renounce their US citizenship want to do so because they don't want to pay US taxes. I don't like paying taxes either, especially when I see what the money is being spent on.

However, many also don't realize that even renouncing citizenship in no way relieves you of having to pay US taxes. As far as IRS is concerned, you would still be liable for paying taxes and subject to all the penalties, including seizure of any money you have in bank accounts in the USA and all assets you have in the USA and whatever else they can get their hands on.

The only way a USA citizen can get out of paying taxes is by dying - and I'm not so sure even then . . .

Besides, suppose you really do renounce your US citizenship. Ok, now you become a citizen of where? How? That will be really interesting when you have to show a valid passport for certain transactions, such as banking and immigration. And if for whatever reason you are ever arrested and deported, guess where you'll be deported to - and IRS will be delighted to welcome you back.

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2lz2p
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Re: Renounce US citizenship?

Post by 2lz2p »

Up2u wrote:
Sat Jun 18, 2022 8:44 am
Not me, but it ticks me off that I will have to do FBAR reporting as discussed in this article because I am bringing in USD to buy a car.

https://www.cnbc.com/2022/06/17/1-in-4- ... nship.html
FBAR reporting can be done easily (it is required to be filed online). It takes me only a few minutes to complete and file the form using the option for reporting by "individuals".

The report has nothing to do with US taxes - it is received and put in a database maintained by the Financial Crimes Enforcement Network (FINCEN) and is required by US money laundering laws. This same agency also receives US Customs declarations made by people entering or leaving the US with over US$10,000 to enter into the database. But, as mentioned there are some severe penalties for non-filing if you are required to do so.

Although Up2u is exceeding the threshold because of transferring funds in to buy a car, a USA expat that has 800,000 baht in a Thai bank to meet Thai Immigration requirements for extensions of stay would also be required to file the form. The Pattaya City Expats Club has information for US Expats about the FBAR as well as the requirements of the Foreign Account Tax Compliance Act (FATCA). FATCA is a report filed with one's US Income Tax return if they meet the thresholds which depend on filing status and the number of months in a year that one is living outside of the USA - https://pcec.club/BANK-ACCOUNT

https://www.fincen.gov/how-do-i-file-fbar
The Report of Foreign Bank and Financial Accounts (114) must be filed electronically using the BSA E-Filing System. Individuals can satisfy their filing obligation by using the no registration option within the E-Filing System. Institutions (including attorneys, CPAs, and enrolled agents), must register with the BSA E-Filing System and obtain a User ID and password in order to file FBARs.
Here is the link for "individual" filing of the form: https://bsaefiling.fincen.treas.gov/NoRegFBARFiler.html

If you need to file the form, be careful to ensure you are using the above link. A friend of mine not too long ago mentioned he fell for a scam -- he googled for the FBAR report and the link that came up appeared official and he completed his personal information - when he clicked to file it, he got a message wanting payment of about US$300 - He stopped at that point, but by then they already had his personal information. There is no fee to file the FBAR and it can be done as I mentioned quite easily.

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Jun
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Re: Renounce US citizenship?

Post by Jun »

From what I've read, from a distance, people ARE renouncing their US citizenship to avoid US taxes.
For someone who has cut all ties with the US, what legal basis would they have for taxing you ?

The bigger difficulty is, as far as I know, one can't renounce citizenship and be stateless. So you need another passport before renouncing citizenship. I don't think countries like Thailand give away passports particularly easily & gather that <topic banned> has to sign every application himself.
Maybe Up2u has more passports than Jason Bourne ?

Fortunately, for almost all countries, including the UK, emigrating is enough to escape the tax system. Although, I believe it takes a few years before they let you off the hook for capital gains tax.

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Gaybutton
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Re: Renounce US citizenship?

Post by Gaybutton »

Jun wrote:
Sat Jun 18, 2022 3:54 pm
From what I've read, from a distance, people ARE renouncing their US citizenship to avoid US taxes.
For someone who has cut all ties with the US, what legal basis would they have for taxing you ?
I don't know what you've read, but that is absolutely wrong. The only way a person could get away with it would be if they have nothing in the USA, or anywhere else for that matter, that IRS can somehow get their hands on. Someone like me, for example, whose pension originates in the USA - good luck collecting. But IRS has that covered anyway. They take out the taxes from the gross before you get your net pension benefit. By law, if a person owes taxes, the only entity that can touch a person's pension is IRS, no matter who else a person owes money to, or how much. Even if you lose a lawsuit, nobody else can touch your pension, but IRS can - and will.

As a matter of fact, I have a tax refund coming. I filed my income tax in early February and I'm still waiting for my refund. We are not amused.

I don't know the legal basis, but obviously they have what they need. And if they have to go after it, then along with losing money and assets, there are hefty penalties and interest to pay too. And if they think income tax evasion is involved, now you can be criminally charged as well. And income tax evasion is a felony.

If you somehow manage to obtain a passport from another country, I have no idea what happens if IRS tries to get it revoked. And I don't want to find out the hard way what does happen.

As for the people renouncing their citizenship to avoid US taxes, I'm wondering how many of them actually succeed. It would be incredibly stupid and naive to think IRS doesn't know every trick people try.

We have a saying in the USA: "The only two absolutes are death and taxes." I know of no exceptions . . .

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Jun
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Re: Renounce US citizenship?

Post by Jun »

One can only assume that the 5000 or so HNWIs who renounce their US citizenship each year are kicking themselves for not firstly coming here for free and exhaustive tax advice.

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2lz2p
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Re: Renounce US citizenship?

Post by 2lz2p »

GB wrote:
As a matter of fact, I have a tax refund coming. I filed my income tax in early February and I'm still waiting for my refund. We are not amused.
Did you do a paper 1040 or did you eFile?

I use TurboTax each year. For 2021 year, I filed in late January 2022. I received my refund by direct deposit in mid February which is about the same wait time I've experienced each year.

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Gaybutton
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Re: Renounce US citizenship?

Post by Gaybutton »

2lz2p wrote:
Sun Jun 19, 2022 9:57 am
Did you do a paper 1040 or did you eFile?
I eFiled and I also use TurboTax, but mine has a complicated story that goes with it. I'm not going to bore everybody with that story, but that is most likely the reason why it is taking so long. If I don't receive it soon, I'll try to call IRS.

The frustrating part is if I had done a paper tax return, I would have received the refund long ago.

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windwalker
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Re: Renounce US citizenship?

Post by windwalker »

Gaybutton wrote:
Sat Jun 18, 2022 4:16 pm

We have a saying in the USA: "The only two absolutes are death and taxes." I know of no exceptions . . .
There are many in the USA who pay little to no taxes, usually the very poor and the very rich. But they all do die!

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Gaybutton
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Re: Renounce US citizenship?

Post by Gaybutton »

windwalker wrote:
Sun Jun 19, 2022 6:07 pm
There are many in the USA who pay little to no taxes
You're right. I forgot Donald Trump. How careless of me . . .

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