How much is your US citizenship worth?
Posted on August 14th, 2013 in General Interest
Expatriates giving up their US citizenship have increased dramatically in 2013. In the first half of 2013, 1,810 expatriates have relinquished their US citizenship as compared to 235 relinquishment in 2008. Most experts are pointing to the Foreign Account Tax Compliance Act, (FACTA) as the main reason for this increase.
The U.S. is the only country in the Organization for Economic Cooperation and Development, (OECD) that taxes its citizens irrespective of the country they reside. The FACTA requires reporting of all foreign held assets totaling more than $50,000 to the IRS and contains stiff penalties of $10,000 and 40% of the value of the unreported asset.
On the bank side, the IRS has started requiring banks to provide information on foreign accounts held by US citizens and issuing fines to the banks that do not relinquish such data. So with the increasing tax reporting requirements, possible fines and penalties, and difficulty finding banks abroad that will allow US citizens to open an account, it has become difficult to rationalize continuing to be a US citizen if permanently residing abroad.
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