Tuesday, May 5, 2015

The U.S. tax war on expats

The United States Internal Revenue Service is pursuing a damaging war on its citizens living abroad by demanding tax returns from American citizens worldwide irrespective of where they are resident, leading growing numbers of expat Americans to formally renounce their citizenship. Almost 4,000 Americans did exactly this in 2014, the latest being the mayor of London, Boris Johnson, a dual British and American national.
According to Brett Arends in the Wall Street Journal's Marketwatch, U.S. financial laws that make it nearly impossible for expats to keep two passports (not that the U.S. has ever encouraged dual citizenship!). According to Arends, the federal government is "ramping up a wide set of bizarre and impossible regulations on all Americans living abroad — and threatening them with the financial equivalent of the death penalty if they don’t comply...they can be arrested, thrown in jail and bankrupted by Uncle Sam for failing to disclose a $15,000 checking account on which (they) have paid all the taxes owed". In addition, such expats are liable to double taxation, required to spend thousands of dollars a year on professional advice simply to survive, are effectively barred from investing in either U.S. or non-U.S. based mutual funds and stripped of a number of constitutional rights.
At the same time, the Obama administration is allowing millions of illegal, or so-called 'undocumented' immigrants, mostly from Mexico, to acquire legal status and to get work permits and benefits normally associated with holders of green cards.