Tags: Mitchel | taxes | US | citizens

Tax Attorney Mitchel: Higher Taxes Aren't Driving US Citizens Out of the Country

By    |   Wednesday, 12 February 2014 01:57 PM

A record 2,999 Americans renounced their citizenship or terminated their long-term U.S. residency last year, up more than 200 percent from 932 in 2012, the Treasury Department announced last week.

The common explanation for this trend is that the tax increases implemented last year for the wealthy drove people away.

But international tax attorney Andrew Mitchel doesn't see it that way. "We do not believe that the primary reason for the increase in expatriations is for political purposes or for individuals to reduce taxes," he writes on his blog.

Editor’s Note:
18.79% Annual Returns . . . for Life?

Mitchel believes three other principal reasons are at work:

1. More knowledge of tax filing laws. Many Americans living overseas have been unaware until recently that all U.S. citizens must file tax returns no matter where they live.

2. Heightened compliance standards. Foreign banks may soon have to report accounts held by Americans to the Internal Revenue Service. Some banks are just closing Americans' accounts to avoid that.

3. Major penalties. Someone who has retired abroad with a $1 million foreign bank account and has intentionally failed to file taxes for four years could face a $2 million penalty, Mitchel says.

Robert Wood, a tax lawyer based in San Francisco, largely agrees with Mitchel.

"Complex or costly taxes can help sway a decision but are often only one factor," Wood writes in an article for Forbes.

"Although statistics are not available for why people say a final good-bye, many now find America's global income tax compliance and disclosure laws inconvenient and nettlesome. Some go so far as to say that the U.S. tax and disclosure laws are downright oppressive."

Editor’s Note: 18.79% Annual Returns . . . for Life?

Related Stories:

© 2019 Newsmax Finance. All rights reserved.

   
1Like our page
2Share
Personal-Finance
A record 2,999 Americans renounced their citizenship or terminated their long-term U.S. residency last year, up more than 200 percent from 932 in 2012, the Treasury Department announced last week.
Mitchel,taxes,US,citizens
310
2014-57-12
Wednesday, 12 February 2014 01:57 PM
Newsmax Media, Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved