This is a good article on NPR – Why More Americans Are Renouncing U.S. Citizenship
This is put both in the Media section and elevated to a specific post – as it is a thoughtful article.
This radio article notes that Americans who live overseas are renouncing their U.S. citizenship in record numbers. The renunciation has been a sudden spike from a domino affect from the following:
1. UBS aided tax evasion scheme that broke in 2009;
2. Congressmen believed that tens of billions could be collected;
3. FATCA was adopted in 2010 – to identify all American account holders throughout the world;
4. Foreign banks cancelled accounts throughout Europe; and
5. The U.S. is unusual in that it taxes its U.S. citizens wherever they are in the world.
February 23, 2014 at 6:45 pm
There are a number of thoughtful comments that have been posted on the NPR website regarding this article about U.s. citizenship renunciation –
http://www.npr.org/blogs/parallels/2014/02/20/275937138/why-more-americans-are-renouncing-u-s-citizenship
For instance –
This new law that is driving US citizens to give up their citizenship, FATCA, is not about tax collection – that is the biggest misunderstanding about FATCA.
FATCA is about data collection. Foreign banks and financial institutions around the world are required to collect and transmit bank account details on any US person on their books. The information that will be collected is name, account number, joint account holders, account balances, transfers in and out, etc Banks who do not comply with FATCA will have a 30% punishment fee attached to every single transaction that goes through the US (i.e. most transactions).
A US person is anyone who was born in the US, anyone who was born to a US parent but never lived in the US, non-US spouses of US persons, non US joint account holders of US person, and the list goes on and on.
At the moment, the IRS has created a huge database where every financial institution in the world has to sign up and get a registration number (called a GIIN) to prove that they will compile and forward all US data to the IRS. The portal is open for business and can be found by googling FATCA portal registration IRS. Any financial institution that does not have a GIIN by 1 July 2014 will have the 30% punishment fee applied to all US payments.
And this applies to ALL countries – friendly or not. So every country in the world will be compiling databases of US persons and their financial information to send to the IRS … and possibly anyone else who is willing to pay for the information.
For what it’s worth, 95% of overseas US tax filers owe no taxes anyway. So this is not about tax collection. This is a massive data collection exercise on an Edward Snowden level.