To Be, Or Not To Be: That Is The Question: – Whether tis nobler in the mind to suffer The slings and arrows of outrageous fortune …
The above quotation from Hamlet describes the dilemma of U.S. citizens living outside the United States. For many, the renunciation of U.S. citizenship is the only patriotic option. Others feel they need to renounce their U.S. citizenship as an act of self defense. Either way, they want out! Yes, things have gotten to this point. This is illustrated in a recent Fox News video detailing the renunciation of U.S. citizenship. Pay special attention to the comments. The renunciation of U.S. citizenship is big news! The renunciation of U.S. citizenship is growing! The renunciation of U.S. citizenship may be necessary! Why would U.S. citizens choose to renounce their citizenship for the privilege of paying higher taxes in almost every other part of the world? To be forewarned is to be forearmed. Hint: it’s because they would rather “Be” than “Not to be”.
Let’s begin with an account of a U.S. citizen living outside the United States – The Life Of A U.S. Citizen Living in Canada
I appreciate the help and I am on my way to start my letters tonight, coffee is brewing. I really hope we can open some eyes and the Canadian Government will help us with this issue as its really a huge concern for our innocent children, they need to be left out of it and our government needs to protect them and tell the US to back off with seeking them out. If people want to be US Citizens and assert their claim, the US will be the first to know with a passport application and SSN application on their desk, then our children will of course file and be subject to report to the IRS (like the rest of us who are registered and confirmed citizens now we know!). (Till I get my CLN this year!!!).
I wish I didnt have to go to that extreme with renounciation, its sad to come to this. I don’t make a large income or have dazzling assets, I live in a fixer-upper home and drive a rusted old beater truck….rather hard trying to make ends meet in our family…so I have nothing to hide from the US and I am not renouncing to evade taxes, I am just your average working mom trying to support two kids. But, the cost of just being compliant has made it impossible to do yearly, H&R block charged me 2500 to file back 6 years (as many of you), I dont have that kind of cash and with Christmas that was fast approaching after learning of this, sure made it tight for our family. I am not a tax evader or criminal as we are all being portrayed. I am a law abiding canadian citizen as our my children and husband who do not deserve to be dragged into this.
This has consumed my life and soul since the day I became aware of this, Sept 3, 2011 is a day I will never forget and that terrible knot as been in my stomach since. The endless hours spent searching frantically on the interent for learning how to become compliant with the IRS, calling them to find out answers (although, never getting any answers) searching through US website after website to determine the fate of my children and on top of that …trying to live my life and focus at my job/home and maintain some level of a normal life has been impossible. This has greatly affected my health and family life. I am not sure if the government cares, but do they realize how much this affects people…how its destroying families…hope..dreams..freedom. People like us, just trying to legally do the right thing, be honest people…and in turn…its killing us, physically and mentally. I will continue to do the right thing, being honest to the US government, IRS etc as I have been to this point. I will hopefully be able to regain the joy I had in my life once this is all said and done and try and find the peace I had before…I am not sure if I will ever step foot again across that US border now….not because I am a criminal, but because they have made us to feel like we are less of people, all because we have chosen to give our loyalty and allegiance to our great country of Canada and hold one citizenship. I am sure the CLN will cause huge issues for us crossing that border…and with my kids by my side, I can only imagine what questions may arise. I think we will stay far and clear from there….thank goodness we have done the Disney trip!
Yes, this is for real! This is the experience of a real person. This is one of many comments describing how the IRS has destroyed the lives of U.S. citizens living outside the United States.
The obvious is finally being reported. The renunciation of U.S. citizenship is a growth industry. In 2011 1781 were reported to have renounced U.S. citizenship. (This article generated a number of comments that made it clear that far more that 1781 actually renounced.) The number of renunciations is poised to explode. Furthermore a recent article describing now many U.S. citizens naturalise in European Countries noted that:
Similarly, the post-2008 explosion in renunciations of U.S. citizenship is not matched by a rise in naturalisations in single-citizenship EU countries (Austria, Germany, and Malta showed slight falls in 2009; Denmark did not provide data at all). This suggests that the two issues are unconnected; Americans are renouncing U.S. citizenship for reasons other than their desire to naturalise in countries which refuse to let them continue to be Americans. They are renouncing because the U.S. government refuses to let them continue being Americans and passes laws to make it impossible to continue living a normal life overseas.
Is The Renunciation of U.S. Citizenship Patriotic or Unpatriotic? – Two Perspectives: Inside Looking Out or Outside Looking In
People inside the United States see renunciation as unpatriotic. Of courses they don’t know what it’s like to live outside the United States as a U.S. citizen. Many U.S. citizens living outside the United States view the renunciation of U.S. citizenship as the only patriotic option. It has become almost impossible for a U.S. citizen to live outside the United States and comply with the obligations of U.S. citizenship. U.S. citizens are renouncing their citizenship to protect themselves from the U.S. government. Here is why.
Outside Looking In – U.S. Citizens Living Outside The United States
Renunciation is an “act of self defense” for U.S. citizens living outside the United States. A recent renunciant wrote an interesting account of her experience of renouncing U.S. citizenship in Toronto. To put it simply U.S. citizens living outside the United States are under attack by their own government. Check out the following threads on the Isaac Brock Society blog. Pay special attention to the comments. They will reveal the extent of the IRS assault on hard working honest people. What was their mistake? Being ignorant of the FBAR and income tax filing requirements. For the most part the recent IRS assault is affecting older people near retirement. Why? The answer is simple: They have accumulated assets that can be taken by the IRS by imposing fines. Although the law applies to all, it can only effect those who have accumulated assets – making them victims of Obama Class Warfare. Furthermore, U.S. citizens living outside the U.S. have already paid tax on this money to the countries in which they reside!
“The law in its majesty prohibits both the rich and the poor from sleeping on the park bench.”
This issue is starting to appear in the media. What follows is an excerpt from the NewAmerican.Com:
One of the reasons given for considering renunciation is the increasingly onerous rules invading privacy and personal finances. The Patriot Act has made it more difficult for Americans living abroad to keep accounts with international banks. If those banks cannot verify an American address, the accounts are closed. Daniel Flynn, an American citizen who lives in Belgium, wrote a letter to the ACA:
It seems the new anti-terrorist rules are having unintended effects. I was born in San Francisco in 1939, served my country as an army officer from 1961 to 1963, have been paying U.S. income taxes for 57 years, since 1952, have continually maintained [my] federal voting residence, and hold a valid American passport. [And yet my bank] said that the new anti-terrorism rules required them to close our account because of our address outside the U.S.
Another American living in Canada had the same problem. Kathleen Rittenhouse said, “I did not know that the Patriot Act placed me in the same category as terrorists, arms dealers and money launderers.”
The United States is the only industrialized country that requires citizens to pay income taxes on earnings abroad that are also being taxed by the country where they live. Some are calling this, properly, double taxation and are sick of it. And the IRS began investigations into foreign accounts, calling it a “voluntary offshore disclosure program,” that threatens the privacy and financial security of those with legitimate offshore accounts. Joe Field, a partner in a law firm in Hong Kong that caters to American citizens seeking to renounce their U.S. citizenship, says his firm is experiencing an “exponential increase” in the number of American citizens wanting to get out. He said:
Many people who looked to America as the protector now see America is bent on coming after them. We’re getting a whole new class of client who is someone who says, “I want to go into the [IRS] disclosure program and as soon as I complete it, expatriate.”
Their numbers are likely to increase as a loophole allowing wealthy Americans to move their monies and wealth offshore closes at the end of the year. Americans with a net worth of at least $2 million will have to buy their way out of the country by paying hefty exit fees and taxes, even on assets that have unrealized gains. The loophole allows them until the end of the year to give away up to $5 million without the fee being applied, saving enough in taxes to pay the fee that is levied.
Renouncing U.S. Citizenship Will Be The Number One Story of 2012
Mr. FBAR was the number one news story of 2011. U.S. citizenship renunciations will be the number one story of 2012. U.S. citizens living outside the United States must choose one of the two choices:
First Choice: Have a life – Which includes the opportunity to:
- do normal retirement planning (many investments are prohibited to U.S. citizens)
- have a non-U.S. spouse (marriage and American citizenship)
- afford the financial cost of tax compliance for U.S. citizens
- maintain a normal bank account in your country of residence (U.S. citizens are unable to get normal banking services)
Second Choice: Be a U.S. citizen
What exactly are the benefits of U.S. citizenship in general? What exactly do you get? Why would anybody choose to not have a life in order to be a U.S. citizen? Given recent IRS conduct, U.S. citizens living outside the United States are beginning to consider these questions. The rising pace of renunciations suggests that many U.S. citizens feel that U.S. citizenship is far more trouble than it is worth. There are others who believe that U.S. citizenship is a danger to their health and wealth. Others are hoping that they have not transmitted U.S. citizenship to their children.
Who are the people most likely to remain U.S. citizens?
Only the very rich or the very poor are able to remain U.S. citizens. The poor have nothing for the U.S. to take. The rich have the money to defend themselves. It’s Obama’s “Middle Class” that is being destroyed – the direct result of Obama “class warfare”. This week the American Thinker published an article which noted that U.S. citizenship renunciations are soaring under Obama. U.S. citizenship has been priced out of the market – it is too expensive both financially and emotionally.
The author comments that:
“Increasingly” is an understatement. In Fiscal Year 2008, George W. Bush’s last year, 146 Americans renounced their citizenship to avoid paying U.S. taxes. In FY 2010, that number soared to 1,534, an increase of 950% – and no, that is not a misprint. 950%.”
Andrew Mitchell notes that:
According to the I.R.S., an estimated five to seven million U.S. citizens reside abroad. Many of these individuals have never lived in the U.S. and never expect to live in the U.S. However, these U.S. citizens must annually file U.S. tax returns.
For example, I spoke with a Canadian the other day who was born to two U.S. citizen parents in Canada. This individual therefore is a U.S. citizen. However, he has never lived in the U.S. and never expects to live in the U.S. Despite that he has never lived in the U.S., he will have to file U.S. tax returns for his entire working life. In addition, his U.S. tax returns are quite complicated because he pays income taxes in Canada and because he has financial assets located in Canada.
Failing to disclose offshore assets to the I.R.S. can create huge potential penalties. The potential penalties can be so large that they can bankrupt even the wealthiest of taxpayers. Further, the cost of preparing a U.S. tax return for a U.S. citizen living abroad can be significant.
The I.R.S. has recently been doing a lot of “saber rattling” with respect to the potential penalties for failing to disclose offshore assets. The National Taxpayer Advocate, in her recent annual report to Congress, criticized the I.R.S. with respect to how it has handled recent offshore voluntary disclosure programs.
Lastly, with the recent enactment of the FATCA provisions, many U.S. citizens living outside the U.S. are unable to even open regular bank accounts. Foreign banks simply don’t want to deal with what they perceive as U.S. complicated and overreaching tax rules.
Speaking of tax – the IRS is hunting U.S. citizens living outside the United States while many U.S. residents pay no income tax. Yet a recent article on Allgov.com suggests that those who renounce U.S. citizenship are tax cheats. Go figure.
Ronald Reagan commented that he had never left the Democrats. Rather the Democrats had left him. In the case of many of those renouncing U.S. citizenship, there position is:
I never left the United States, the United States left me. As a result, I am forced to renounce U.S. citizenship.
For your further reading pleasure:
A. Check out the following posts and articles – which in way or another are examples of how difficult it is to be a United States citizen living outside the United States:
Americans renouncing citizenship over onerous tax code – includes a great video!
B. Hamlet – William Shakespeare
William Shakespeare – To be, or not to be (from Hamlet 3/1)
To be, or not to be: that is the question: Whether 'tis nobler in the mind to suffer The slings and arrows of outrageous fortune, Or to take arms against a sea of troubles, And by opposing end them? To die: to sleep; No more; and by a sleep to say we end The heart-ache and the thousand natural shocks That flesh is heir to, 'tis a consummation Devoutly to be wish'd. To die, to sleep; To sleep: perchance to dream: ay, there's the rub; For in that sleep of death what dreams may come When we have shuffled off this mortal coil, Must give us pause: there's the respect That makes calamity of so long life; For who would bear the whips and scorns of time, The oppressor's wrong, the proud man's contumely, The pangs of despised love, the law's delay, The insolence of office and the spurns That patient merit of the unworthy takes, When he himself might his quietus make With a bare bodkin? who would fardels bear, To grunt and sweat under a weary life, But that the dread of something after death, The undiscover'd country from whose bourn No traveller returns, puzzles the will And makes us rather bear those ills we have Than fly to others that we know not of? Thus conscience does make cowards of us all; And thus the native hue of resolution Is sicklied o'er with the pale cast of thought, And enterprises of great pith and moment With this regard their currents turn awry, And lose the name of action. - Soft you now! The fair Ophelia! Nymph, in thy orisons Be all my sins remember'd.