According to Robert W. Wood, tax lawyer based in San Francisco (www.WoodLLP.com), and Forbes.com contributor, there is another spike in the quarterly name and shame list of those who renounced their U.S. citizenship or terminated long-term U.S. residency.
This means that the 2015 third quarter published expatriates is at a record high. The tally for three months was 1,426, and although that may seem a trickle, it is the highest number ever. It surpasses the previous record of 1,335 for the first three months of 2015. Many are noticing that Americans renouncing citizenship is at an all-time high. Why?
It can be over family, tax and legal complications. Dual citizenship isn’t always possible, as this infographic from MoveHub shows. Some countries make citizens pay a fee to hand in their passport. Some countries have no fee, but America’s $2,350 fee is more than twenty times the average level in other high-income countries. Indeed, Movehub reveals that America has the highest fees in the world. Many now find America’s global income tax compliance and disclosure laws to be a burden, some say downright oppressive.
No group is more severely impacted than U.S. persons living abroad. Americans abroad can be pariahs shunned by banks for daily banking activities. For those living and working in foreign countries, it is almost a given that they must report and pay tax where they live. But they must also continue to file taxes in the U.S. What’s more, U.S. reporting is based on their worldwide income, even though they are paying taxes in the country where they live.
Many can claim a foreign tax credit on their U.S. returns, but it generally does not eliminate all double taxes. These rules have long been in effect, but enforcement was historically less of a concern with expats. Today, enforcement fears are palpable. Moreover, the annual foreign bank account reports known as FBARs carry civil and criminal penalties all out of proportion to tax violations. Even civil penalties can quickly consume the balance of an account.
FATCA has ramped up worldwide and requires an annual Form 8938 filing if foreign assets meet a threshold. Foreign banks are sufficiently worried about keeping the IRS happy that many simply do not want American account holders. Still, leaving America can be costly. To exit, you generally must prove 5 years of IRS tax compliance. Plus, if you have a net worth greater than $2 million or have average annual net income tax for the 5 previous years of $160,000 or more, you can pay an exit tax.
more recommended stories
A study by Universidad del Caribe reveals exponential increase of Airbnb rooms in Cancun
Cancun, Q.R. — A new reports.
Mexico’s next government starts oil contract reviews with Talos Energy
MEXICO CITY (Reuters) – Mexico’s incoming.
Mexico marks anniversaries of two deadly earthquakes
Memorials were held in Mexico Wednesday.
Ship sails out of Progreso, Yucatán to explore Central American seas
The Government of Mexico, through the.
Ticul Yucatán will stop using plastic
After a session of the City.
Young Yucatecan talent at Olimpo’s piano recital
Prior to the sixth edition of.
Businessmen ask for more trees on Tulum’s main Avenue
“Now that Avenida Tulum Norte will.
Odebrecht in Mexico… What is AMLO’s administration going to do about it?
MEXICO CITY, Sept 18 (Reuters) –.
Yucatecan engineer from Valladolid wins the Proser Prize
The School of Engineering of the.
Cozumel returns to lead the cruise industry in Mexico and South America
The general director of the Port.