Month: August 2014

Qtr 2 Numbers (2014) and Names of Former U.S. Citizens are Announced – 576 Who Renounced

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There were 576 names listed for the second quarter of 2014.  This is compared to 567 for the entire year 2003.  To date, a total of 1,576 have renounced for the first half of 2013.  The complete list of names of former U.S. citizens can be access here at  Quarterly Publication of Individuals, Who Have Chosen to Expatriate.Former US Citizens Bar Chart - Including Qtrs 1 and 2 - 2014

There were far more individuals who renounced citizenship, 1,130 in the second quarter of 2013, compared to 576 in the second quarter of 2014.

Nevertheless, it looks like the year 2014 is on track to be a record year of U.S. citizens who have renounced.  The following graph reflects historical renunciations including the first and second quarters of 2014, with two more quarters to go.

Lawful permanent residents do not appear on this list that is required only for U.S. citizens pursuant to the requirements of IRC Section 6039G, which provides in relevant part as follows:

  • Notwithstanding any other provision of law, not later than 30 days after the close of each calendar quarter, the Secretary shall publish in the Federal Register the name of each individual losing United States citizenship (within the meaning of section 877 (a) or 877A) with respect to whom the Secretary receives information under the preceding sentence during such quarter.

Samples of International Tax Frauds that are Flourishing Now with More Taxpayer Financial Information Required Under the Law

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This post is a follow-on to the post of yesterday explaining the explosion of tax frauds that are flourishing requesting bank and financial account information.  The law indeed requires U.S. citizens living abroad (and some LPRs living outside the U.S.) to report and file various detailed personal and bank information as follows:Fake FBAR Notice p1

  • passport numbers,
  • bank account names
  • bank account addresses,
  • bank and financial account information,
  • highest balance in these bank accounts,
  • full name of individual,
  • taxpayer identification numbers of the individuals,
  • along with extensive personal and financial information.

See, International Tax Frauds are Flourishing Now with More Taxpayer Financial Information Required Under the Law

Accordingly, the type of frauds demand immediate reporting of the bank account information, purportedly to the U.S. Treasury Department.  Here are examples of some of these fraudulent demands (this one in Spanish) that warns of stiff penalties, including criminal penalties for failure to provide the information within 14 days.Fake FBAR Notice p2

These requests are typically accompanied by an actual Treasury Department Form TD F 90-22.1 (Report of Foreign Bank and Financial Accounts) which are being requested to be completed with the detailed information required under the law and to be returned and sent via facsimile immediately to the U.S. Treasury Department (with an area code that is indeed in the Washington D.C. area).   These are false requests.

As FATCA is implemented further throughout this year and the upcoming years, there will indeed be a range of fraudulent schemes designed to capture financial and personal information of individuals around the world.  See, FATCA Driven – New IRS Forms W-8BEN versus W-8BEN-E versus W-9 (etc. etc.) for USCs and LPRs Overseas – It’s All About Information and More Information

International Tax Frauds are Flourishing Now with More Taxpayer Financial Information Required Under the Law

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The U.S. federal law requires “U.S. persons” as that technical term is defined through complex Title 31 regulations, to provide and report extensive financial account information about the U.S. person.  The report is referred to as the “FBAR” –FBAR 114 electronic foreign bank account report.  An explanation of how it works is set out here, in an earlier post, *Nuances of FBAR – Foreign Bank Account Report Filings – for USCs and LPRs living outside the U.S.

The current electronic form is referenced here:

The FBAR information includes not only the taxpayer name and bank, but also the account number and the highest account balance.  Plus, failing to comply with the law of the FBAR can have devastating affects to individuals, as was the case to Mr. Zwerner.   See, Why the Zwerner FBAR Case is Probably a Pyrrhic Victory for the Government – for USCs and LPRs Living Outside the U.S. (Part II).

The combination of (1) extensive financial information required under the law to be provided, and (2) aggressive enforcement by the government with potentially financially devastating penalties to the individuals,  has provided a toxic mix for criminals who are alarming individuals in thinking they will be prosecuted by he U.S. federal government unless the financial information is provided immediately.

The information provided is a “crook’s dream”!  Imagine if organized crime groups can access the information of an TD F P1individual’s account, account number (possibly with multiple banks and multiple accounts throughout the world), their address, their identifying numbers, etc.

The old paper form was replaced last year by an electronic form (114).  Specifically, filing of the FBAR form is not with the IRS, but rather with FinCEN. This form includes passport numbers, bank account addresses, account information, taxpayer identification numbers, along with extensive personal and financial information.  See old form and some highlights here:

It must now be filed electronically on Form 114, Report of Foreign Bank and Financial Accounts  through the BSA E-Filing System website.  The electronic form supersedes TD F 90-22.1 (the FBAR form that was used in prior years).

This treasure trove of information in the wrong hands, can wreak havoc on individuals and their personal finances.  Plus, there is not a legal remedy against the U.S. federal for an individual who has their financial information stolen under the guise of tax and bank finance legal compliance.TD F P2

A follow-up post will show examples of recent scams received around the world., which appear very legitimate on their face.  I have recently been asked by multiple persons residing overseas if the FBAR request for information is legitimate.  Details to follow in a follow-on post.

Individuals need to be cautious in many ways when handling their financial and tax affairs.  For instance, see, Take Caution when Completing a “Tax Organizer” Provided by Your Tax Return Preparer.

Will Qtr 2 Exceed Qtr 1 – 2014, Record of USC Renunciations?

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The Qtr 2, 2014 numbers will soon be out as the second quarter has come to an end.US Ciitzens Renounced Chart

Will the second quarter be a record again, or will the number of U.S. citizens renouncing start to subside?

See, an earlier post, Will the IRS simply select the list of published former citizens for tax audits?

The complete set of lists going back to the mid-1990s can be reviewed here.  Quarterly Publications.

It is important to remember that these lists do not publish the “long-term” lawful permanent residents who have abandoned their immigration status.

For further reading on LPRs, see, Countries with U.S. Income Tax Treaties & Lawful Permanent Residents (“Oops – Did I Expatriate”?)