Tags: Americans | FATCA | citizenship | taxes

Americans Relinquish Citizenship in Growing Numbers Over Taxes

By    |   Friday, 06 September 2013 08:43 AM

The number of Americans opting to renounce their citizenship is growing sharply, as the government implements a new law to deter tax evasion on foreign assets.

More than 1,800 Americans ceded their citizenship or green cards in the first half of this year, almost doubling the total for all of last year — 932, CNNMoney reports.

That increase likely stems from the onset of the Foreign Account Tax Compliance Act (FATCA), which forces foreign financial institutions to report all assets owned by Americans to the IRS. The law also means Americans with overseas assets must file more forms.

Editor’s Note:
New Video Exposes a ‘Great Retirement Heist’

The U.S. government wants to gain the windfall of taxes that go unpaid each year, according to CNNMoney.

In contrast to most other countries, the United States requires citizens to pay taxes on all income, regardless of where it's derived. So Americans living overseas must file tax returns in two countries.

"With the looming deadline for FATCA, more and more U.S. citizens are becoming aware that they have U.S. tax reporting obligations," Matthew Ledvina, a U.S. tax lawyer at Anaford AG in Zurich, tells Bloomberg. "Once aware, they decide to renounce their U.S. citizenship."

The bulk of those Americans giving up their citizenship are "hardly the fat cat tax exiles," Eugene Chow of Hong Kong immigration firm Chow King & Associates, tells CNNMoney. Rather they're frequently "very ordinary people" who are vexed by shifting tax rules.

U.S. taxpayers filed only 825,000 foreign-account reports in 2012, which indicates that millions of Americans are breaking the law, according to The Wall Street Journal, as the State Department estimates 7.2 million U.S. citizens live abroad.

"It's clear that compliance is dismal, and also why the IRS is being aggressive in its enforcement efforts," Jeffrey Neiman, a former federal prosecutor, tells the paper.

Editor’s Note: New Video Exposes a ‘Great Retirement Heist’

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The number of Americans opting to renounce their citizenship is growing sharply, as the government implements a new law to deter tax evasion on foreign assets.
Americans,FATCA,citizenship,taxes
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2013-43-06
Friday, 06 September 2013 08:43 AM
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