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The 2014 Third Quarter Renunciations Is probably the New Norm –

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The Treasury Department announced 776 renunciations, which brings the 2014 total to 2,353, on track to match last year’s record breaking 2,999 citizens who renounced.

US Citizen Renunciations USC Renunciation Q1 thru 3 - Citizens who Renounced 2014Q1 thru Q3 – 2014

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

As has been mentioned previously, this list does not include lawful permanent residents who have terminated their LPR status for purposes of these tax law provisions. For further reading on LPRs, see, Oops…Did I “Expatriate” and Never Know It: Lawful Permanent Residents Beware! International Tax Journal, CCH Wolters Kluwer, Jan.-Feb. 2014, Vol. 40 Issue 1, p9

Maybe the LPR list represents several hundred thousands of individuals? The current total estimated number of LPRs is 13.3 million for the year 2012 as reported by the Office of Statistics of the DHS. See, Estimates of the Legal Permanent Resident Population in 2012

There are two distinct ways that LPRs can terminate their tax residency status. First, through the formal immigration law process typically involving filing Form I-407.  See, Who is a “long-term” lawful permanent resident (“LPR”) and why does it matter?

Second, they can terminate their LPR status, for tax purposes, by merely meeting the statutory I-407 Abandonment Formrequirements of IRC Section 7701(b)(6). This simply requires the individual to move from the U.S. and live in a country with a U.S. income tax treaty and meet the other two statutory requirements.

This statutory language has three tests for when the individual is no longer a LPR for federal tax purposes:

  1. The individual is treated as a resident of a foreign country under the provisions of a tax treaty;
  2. The individual does not waive the benefits of the treaty, and
  3. Notifies the Secretary of the commencement of such treatment.

See, LPR status can be abandoned for tax purposes (since 2008 tax law changes) by merely leaving and moving outside the U.S. [and filing a U.S. tax return]  in some cases?

Global Entry, SENTRI and NEXUS after Renouncing – the “Trusted Traveler Programs” – SAFE TRAVELS!

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The U.S. federal government has made the life of world travelers much simpler over the last few years, for those who have signed up and participate in one of the “trusted traveler programs.Global Entry Website - Kiosk

Entry into the U.S. through customs and immigration checkpoints is fast tracked and explained in more detail below.

Also, a related program that provides much convenience to travelers is the Pre-TSA.  This is a program described on the government website as –

What does TSA Pre✓™ mean for travelers?

TSA Pre✓™ Experience:

  • Quicker transit through airport security screening
  • Faster moving lines
  • Improved travel experience
No Removal of:

  • Belt
  • Shoes
  • Light outerwear/jacket
  • 3-1-1 compliant bag and laptop from carry-on

Obtaining approval for Pre-TSA.  is facilitated if an individual has already been approved for one of the “trusted traveler programs.

You can typically avoid long lines of travelers who do not have such clearances and it provides a more convenient way of traveling in and out of the U.S.

However, once a USC renounces, they can no longer travel on their previous status as a USC under a “trusted traveler program”  where they previously applied and represented they are a USC.

Once a person ceases to be a USC, they can no longer represent themselves to be a citizen.  Indeed, there is a specific statutory provision that holds that any person falsely claiming citizenship can be found to be inadmissible for entry into the U.S.  8 U.S. Code § 1182 – Inadmissible aliens

Accordingly, you should not continue to travel on your existing/old “trusted traveler program”  documents.  You will need to re-apply as a non-USC.  More details on the Global Entry program are provided below from the government’s own website –

Global Entry

 

What is Global Entry?

Global Entry is a U.S. Customs and Border Protection (CBP) program that allows expedited clearance for pre-approved, low-risk travelers upon arrival in the United States.

How Does the Global Entry Program Work?

Global Entry is a U.S. Customs and Border Protection (CBP) program that allows expedited clearance for pre-approved, low-risk travelers upon arrival in the United States. Though intended for frequent international travelers, there is no minimum number of trips necessary to qualify for the program. Participants may enter the United States by using automated kiosks located at select airports.

At airports, program participants proceed to Global Entry kiosks, present their machine-readable passport or U.S. permanent resident card, place their fingertips on the scanner for fingerprint verification, and make a customs declaration. The kiosk issues the traveler a transaction receipt and directs the traveler to baggage claim and the exit.

Travelers must be pre-approved for the Global Entry program. All applicants undergo a rigorous background check and interview before enrollment.

 

SAFE TRAVELS!

How does the basic premiss that there are ‘Unpaid Taxes on Billions in Hidden Offshore Accounts'” hurt the average U.S. citizen taxpayer living overseas?

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The hearings of the Senate on “Offshore Tax Evasion” of the “Billions in Hidden Offshore Accounts” make for good headlines, but no one seems to ask the critical questions of the basic premiss.
**
Will the hearings scheduled for February 26th, 2014, shed any light on this issue? 
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Here is what the government says:

Offshore Tax Evasion: The Effort to Collect Unpaid Taxes on Billions in Hidden Offshore Accounts

Permanent Subcommittee on Investigations

February 26, 2014 09:30AM

Location: Dirksen Senate Office Building

Agenda

The Permanent Subcommittee on Investigations will hold a hearing, “Offshore Tax Evasion: The Effort to Collect Unpaid Taxes on Billions in Hidden Offshore Accounts,” on Wednesday, February 26, 2014, at 9:30 a.m., in Room G-50 of the Dirksen Senate Office Building.

The hearing will continue the Subcommittee’s examination of tax haven bank facilitation of U.S. tax evasion, focusing on the status of efforts to hold Swiss banks and their U.S. clients accountable for unpaid taxes on billions of dollars in hidden assets. Witnesses will include representatives from a Swiss bank and the U.S. Department of Justice. A witness list will be available Monday, February 24, 2014.

Do some former U.S. citizens now consider this a “badge of honor” to have renounced their U.S. citizenship?

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A record number of U.S. citizenship renunciations in 2013, some 3,000, begs the question:  “Why are so many U.S. citizens renouncing?”

 

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Wow, the number of 2,999 U.S. citizens who renounced in the year 2013 shattered the prior record set in 2011 of 1,782 renunciations. Why so many renunciations?

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The U.S. Treasury Department released the number of U.S. citizens who renounced for 2013.  The Federal Registry reported some 631 U.S. citizens who renounced for the quarter; for a total of 2,999 former citizens for the entire year of 2013.

Click here for complete details of the registry

See also more information in this blog under the  “Government Resources” section for more details.

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Is the Senate Finance “Punting” on reforming international tax rules for U.S. citizens living overseas?

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Summary of Staff Discussion Draft: International Business Tax Reform

Chairman Max Baucus

U.S. Senate Committee on Finance

11/19/13

http://www.finance.senate.gov/imo/media/doc/Chairman’s%20Staff%20International%20Discussion%20Draft%20Summary.pdf

“The staff discussion draft does not address the international tax rules addressing individuals, whether for U.S. citizens living overseas or foreign nationals moving to the United States. The Chairman’s staff is considering reforms to simplify the rules in this area while appropriately taxing such individuals. Comments are requested regarding the scope and mechanics of reforms in this area.”

 

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Why should the names of former U.S. citizens be published – especially if they have lived all of their lives in the U.S.?

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Why should the names of former U.S. citizens be published – especially if they have lived all of their lives outside the U.S.?  The law provides for publication (Section 6039G) and apparently there is no method by which they can be suppressed.  Should Congress change this law?

 

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