American Expats Renounce Citizenship Over Taxes (accountant, tax, money, cost)

[Member1]

American Expatriates Renounce Citizenship Over Taxes

[texdav]

I red that its increased soenwhere ele. In fact i really think its to avoid double taxation some do this. Otehr wsie ;I think perhaps it because of wanting to live in lower cost countries. Really no different than what we see ipopualtio shifts within the US of people seeking better life thru lower cost of living areas.

[City Guy997S]

Originally Posted by Member1

American Expatriates Renounce Citizenship Over Taxes

There have been a few cases of this. The jam is that the US Govt wants their money even if you leave and you can't leave knowing you are doing it to beat Uncle Sam out of money. They now have an exit tax....

Michael Dingman did it years ago along with the founder of Carnival Cruise Lines Ted Arison. Google them

[shaker281]

Originally Posted by City Guy997S

There have been a few cases of this. The jam is that the US Govt wants their money even if you leave and you can't leave knowing you are doing it to beat Uncle Sam out of money. They now have an exit tax....

That is what I have read. In most cases, you still owe the US tax on money earned/acquired while a US citizen. And most foreign countries have reciprocal agreements to this effect.

[bale002]

Originally Posted by shaker281

That is what I have read. In most cases, you still owe the US tax on money earned/acquired while a US citizen. And most foreign countries have reciprocal agreements to this effect.

By now this is old news.

As usual, the effective tax rate is not nearly so bad as all the paperwork that one has to do the figure out the actual tax, by far the main problem with the US tax system: low effective tax rates, which are fine, but utterly insidious and cynical compliance costs, including legal risk, such that the losers are the taxpayers and the winners are accountants, lawyers and IRS burocrats - the very people who make the rules -, another colossal waste in the US economy, and a damn shame too.

As for the exit tax, around $600,000 is exempt and then a somewhat reasonable tax rate is applied to unrealized capital gains on assets, but a guaranteed headache to figure out what that final amount will be.

In many cases, the people who do this have not been US residents for many years and they have strong ties to another country, so the burden of filling out US paperwork for compliance purposes is a needless expense, headache, and, again, legal risk. A too high effective tax rate by itself is usually not the main reason.