The title of this post was a Google search term that led to a number of hits. A search on Bing led to an equally impressive number of hits. (Note that each search revealed results for “why we are so cruel to us citizen living abroad“.) Fascinating question. How can this be? Why is this so?
The following comment appeared on a blog post this week – note the part where she says: “I cannot stand to be an American for one second more.”
Anonymous said…
I am an accidental US person – and have lived outside the US since I was a baby.
I owe no US taxes, but because of the nightmarish US laws about ‘foreign’ bank accounts and ‘foreign trusts’, I’ve had to pay extortionate legal and accounting fees out of my non-US family’s non-US savings in order to
become ‘compliant’ – because I felt strongly that I could not live with US citizenship – and be subjected to arrogant US might-makes-right any longer than forced to. The fees I paid far exceeded my annual earnings. I work multiple jobs, poorly paid, irregular hours, no benefits, no security. At my current rate, it will take me more than 3 years to earn what I paid to prove that I owed the US nothing and be able to renounce. For my last simple return, the local chain of preparers quoted up to 1000. for a 1040 and 3520 plus 3520A. Another wants a signed letter of engagement – but will provide no estimate of cost and the agreement has no limits.I cannot stand to be an American for one second more. Through the torment of the last two years, I have come to loathe the US, the US tax lawyer and the accounting firm who made major errors that even I could see – but who charged me incredible fees regardless. I came very close several times to concluding that suicide was my only option in order to be free. Or that maybe I should leave my family in order to wall them off from the US threat. I could not eat or sleep. I did not know before about FBARs and the US threat, but inadvertently, I was the cause of our financial loss, and I will have to live with that for the rest of our lives together. My spouse does not rebuke me, but sometimes questions whether we really had to spend the money. I told him that it was a ransom we had to pay so that the US could not hold me hostage forever. I will never forgive or forget what is happening, and neither will my non-US family. There is no way I could remain a US citizen and live with myself. I could not justify to myself or anyone else why I would remain in any relationship to a government and country who would treat us this way, and who continues to, regardless of our stories, our lobbying and the evidence reported by the Taxpayer Advocate.
It is only because of others like me on the web, plus the Taxpayer Advocate, that I had any hope at all and survived this.
Polite deputations do not do my and other’s torment justice. The US will not readily let us renounce or stop asserting its claims and power over our lives and the live of our family – even though they are not US persons.
If Democrats Abroad have not been successful in getting their very own personal President and party in power to see that what is being done is very wrong, then any polite lobbying is doomed to failure. I don’t believe that the US will willingly strike any commission in order even to pretend to hear us, much less do anything to redress the wrongs we are suffering. Some Democrats Abroad have even echoed the words of the IRS and Treasury that this is the price we must pay for the ‘privilege’ or ‘choice’ of living outside the US.
I looked for an answer to this question on Twitter. Tweeting a link to the letter of a Canadian Businessman to his Dual Citizen Son prompted the following exchange:
https://twitter.com/peterdahlen/status/307876203480633344
https://twitter.com/peterdahlen/status/307955985341874176
Is this really Congressional ignorance? Is it, as Roger Conklin suggests a “sin tax” for making the mistake of living abroad?
What do you think?
Related articles
- #FATCA is sure to create and exacerbate tensions between Homelanders and #Americansabroad (renounceuscitizenship.wordpress.com)
- Required reading for countries considering a #FATCA IGA with the US (renounceuscitizenship.wordpress.com)
- France: October 10, 1789 – Ancestor of #OVDP and #FBAR (renounceuscitizenship.wordpress.com)
- Citizenship and the freedom of travel from and travel to other countries (renounceuscitizenship.wordpress.com)
- A Letter to America from the Son of an American – by AJ (renounceuscitizenship.wordpress.com)
U.S. Persons Abroad - Members of a Unique Tax, Form and Penalty Club 
Well, that comment says it. Loathing of the United States is now exactly how many expats feel. We can thank Barack Obama and Congress; we can thank Tim Geithner and Douglas Schulman. We can thank the compliance industry: foxes guarding the hen house. Do they know what they are doing? Damn right. If nothing else, Nina Olsen has told them. But if they don’t read their memos from the tax advocate, then are we supposed to obey every stupid law that they pass: or does Geithner’s tax cheating mean that we shouldn’t be “honest” either and just simply ignore their stupid laws? I say the latter. Ignore their “laws”. To disobey an immoral law is to take the high ground.
Can a directive without moral authority really be a law? Of course, the U.S. has so many directives written into law that everybody is in violation of something. “Show me the man and I will show you the crime”.
In the final analysis the U.S. will be most damaged by all the hostility it is generating. But, the question remains:
Why?
I wept to read this. I have faced the same situation for my UK family. without the Isaac Brock society and resources available on the web I would not have made it through the last year since learning about FATCA, FBAR true obligations, OVDI, OVDP, 3520s, 3520As, PFICs, 8938s.
Because they can;
..”Yes, as through this world I’ve wandered
I’ve seen lots of funny men;
Some will rob you with a six-gun,
And some with a fountain pen. “..
from ‘Pretty Boy Floyd’
Words and Music by Woody Guthrie
http://www.woodyguthrie.org/Lyrics/Pretty_Boy_Floyd.htm
Because we dared to shatter the myth of American exceptionalism, and leave the tax chattel plantation in search of a better life elsewhere. That is what pisses them off the most.
Crystal London
Thanks so much for your comment. Would you be willing to describe both what you have done to respond to the reality of being a U.S. citizen abroad and how it has affected your relationship with your UK family. It is important that these stories be told.
Thanks,
Here is another search term:
“cruelty to US citizens abroad”
Amazing, in another era this would have suggested the damage to done to US citizens abroad by citizens and governments of other countries. This was and continues to be the result of anti-Americanism. Now the entity that is most cruel to US citizens abroad is the Obama administration.
@renounce,
re; “…..is it, as Roger Conklin suggests a “sin tax” for making the mistake of living abroad?”..
I believe that FinCEN thinks that living abroad is a “choice” that justifies whatever burdens the US places on those who do.
There is a 2011 document (from the Federal Register) where commentary on revisions to the FBAR – form, coverage, applicability, burden, etc. was reported. The US Treasury FinCEN response to the objections lodged by commenters ‘living abroad’ – (a status which they specifically noted), included a direct reference to FinCEN’s opinion that the burden of the FBAR filing was a price that those ‘abroad’ must pay as a result of CHOOSING to live outside the US:
…”With respect to the comments raised
by United States persons living abroad,
FinCEN does not believe that an
exemption is appropriate simply
because a United States person chooses
to live outside of the United States. “…
From: DEPARTMENT OF THE TREASURY
Financial Crimes Enforcement Network
31 CFR Part 1010
RIN 1506–AB08
Amendment to the Bank Secrecy Act
Regulations—Reports of Foreign
Financial Accounts
AGENCY
:
Financial Crimes Enforcement
Network (FinCEN), Treasury.
ACTION
:
Final rule.
http://www.google.ca/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CDEQFjAA&url=http%3A%2F%2Fwww.gpo.gov%2Ffdsys%2Fpkg%2FFR-2011-02-24%2Fpdf%2F2011-4048.pdf&ei=FYRIUf_zIbTA4AOW6ICYBg&usg=AFQjCNFPXf9pv-Hgif5hm7IDiNjDdH4WSA&bvm=bv.43828540,d.dmg&cad=rja
The choice of words and exact tone of the Department of the Treasury/FinCEN response is extremely telling in my opinion. They will not contemplate or acknowledge any circumstances in which people so burdened were actually BORN with another citizenship and live permanently outside the US, or were born in the US to non-US citizens and returned to their country of origin, etc. They describe being/living outside the US as “simply” a ‘choice’ with FBAR consequences. They don’t acknowledge that by logic and by default, someone with a life outside the US has utterly compelling and entirely pedestrian reasons to have non-US bank accounts.
As to the commenters objections to FBAR reporting on joint accounts held with non-US spouses or with other non-US persons who have no obligation to share that information with the US, FinCEN notes that commenters raised the issue, but decline to address it entirely or give any rationale for why it is acceptable to force US will on a non-US person’s rights. They also do not address the utility or logic of forcing those abroad to report the non-personal accounts belonging to their employer or voluntary community associations.
Treasury and FinCEN consider ‘choosing’ to live outside the US as an exceptional and questionable act.
They are three issues:
1. U.S. citizens are “property of the state”;
2. They should be punished for their choices;
3. To live abroad is to live in a “foreign place” with “aliens” and anything foreign is at best “questionable” and at worst “criminal” with a presumption of the worst.
But the fact remains that for U.S. citizens abroad bank accounts in their country of residence are NOT foreign. The U.S. is “history” and those in the “blogosphere” are documenting its end “As it happens!”
Do you realize that U.S. citizens are among the least free people on earth? Too bad the Homelanders can’t see it.
Part of why they can’t see it is because they actually believe they have a free press.
I keep thinking there is some hope: Rep. Carolyn Maloney’s H.R. 597, the “Commission on Americans Living Abroad Act”, the new presence of a representative of Americans Living Abroad in Nina Olson´s Tax Payers Panel and of course all of us with our voices.
MarkPinetree, do you have any update on most recent years?
Regrettably and tragically MarkPinetree passed away. See:
There is no doubt that his death was hastened by FBAR and CBT.
People here will already know from my earlier posts that I shared similar fears and dreadful costs as the anonymous poster above. I feared I would lose everything I’d worked so hard for and that my marriage would be destroyed. It drove a wedge between us and I will have had to pay almost two years’ net pay after it’s all been hopefully resolved. But it sounds as though this individual’s situation was even worse than mine, especially as it sounds as though he had to use up ALL his savings just to pay off the professionals. And unlike my accountant, though she is very expensive, at least she was fair.
It sounds to me as though his attorney and tax preparer really screwed him, especially given that he is obviously poor. I wish there could be a little more compassion in this game. At least the guy is trying to do the right and honest thing by dutifully complying with U.S. tax law, even though he’s spent all his live abroad and is merely an accidental U.S. Person.
I get very upset when I read about how unfair this is all is…I’ve taken a substantial hit but will still hopefully survive relatively intact…but it sounds as though this individual with NEVER fully recover from such a blow. Not just in terms of money lost but also loss of goodwill.
I have the same question. I lived abroad from 1974 to 1957 and again I am abroad since 2001. Something changed drastically. Today my life is a nightmare. I am looking to spend almost the whole yers spending a lot of money and doing a lot of paper work. I fail to understand why this is being done to us. Anger because we are not living in the USA? And I am not speaking of the fear for my mistakes with draconian fees that Americans in the mainland don´t have. And we have no representation. Isn´t that a case of discrimination?
@MarkPinetree
Yes, this whole thing has been and continues to be a nightmare. For the first two years, many (including me) thought this must be a mistake, that surely the U.S. didn’t know what it was doing, etc.
After two years I have realized how wrong I was. The U.S. treatment of it’s citizens abroad can now be understood to be deliberate. I have been reading your comments for a long time and I feel your pain.
My advice to you:
Renounce as quickly as you can. The U.S. has been given ample opportunity to correct its ways. Rather than work with U.S. citizens abroad and acknowledge their value, the Obama administration has turned U.S. citizenship abroad into a living hell.
There is only one way out – renounce in the quickest manner that is consistent with your financial circumstances.
A final point: You don’t live in the U.S. On a day-to-day basis there is not much they can do to you anyway. My question: Why give them them permission to inflict such psychological pain on you? The pain is now habitual. Remember that:
“Habit is the prison of the mind”.
You can deal with the world as it is or as you wish it were.
Thank you. I have considered this. But I am 80 years old with a failing health. I have two married daughters in the USA and one son who is getting married there. I now have a granddaughter born in the USA. Even thought I may not be able to travel to the USA, my main family is there. After working 30 years in the USA, I have investments there, tax sheltered retirement plan, social security income. I never invested one cent of what I earned in the USA in my country of origin. My investments in my country of origin are from money that I earned working here and to the contrary I frequently send money to my family in the USA. But the IRS intrudes on me. For instance I have a small pension income from my work here. I this country I don´t pay taxes on it. Yet I have to pay to the USA even knowing that Americans in France do not pay taxes on their pensions; Up to a few years ago I trusted the fairness of the US government to its citizens. As you I could not believe in what was happening and my life becoming hell. I know spend months trying to cope with my IRS Return (not to speak of the cost). But against all odds I still believe that the USA eventually will do the right thing to Americans Abroad.
@Markpinetree
What you describe is so so horrible. The biggest problem is not the taxes but the way that it has consumed your life. Nobody should be subjected to this. What would it take for you to NOT think about this?
I used to think that the US would do the right thing. Now I am not so sure. The problem is that the US government no longer represents its citizens (whether homelanders or expats). The government has been hijacked by two private clubs – The Republican and Democratic parties who run the country for their own benefit.
There is nobody left in the U.S. that represents the citizens, the voters, the taxpayers.
You say you are no 80. What would it take for this problem to go away so that you can live in peace?
I have been trying to see what I can do. So far I have not found an answer; I regreted having gone to the USA in 1958 and more yet becoming an US citizen for trusting so much this country.
@MarkPinetree
What would your world look like if this problem were to go away? Remember you can’t control what others think, say or do. But, you can control your response (if any) and your own thoughts.
Question for you – Are you more upset about the objective incidents of citizenship-based taxation or are you more upset about your sense of betrayal and mistreatment by the US?
First and foremost I lost trust in the fairness of the USA. This shuck me up. Then I am scared because I never know if I am doing the right thing and what they can do to me. Third I don´t believe that year after year now I will be able to do all that is required from me. I dread every year to start the process, even though I have a CPA in NYC. Only answering her questionnaire yesterday took me more than one hour, How can you live under these circumstances?
@Markpinetree
Responding to:
“First and foremost I lost trust in the fairness of the USA. This shuck me up. Then I am scared because I never know if I am doing the right thing and what they can do to me. Third I don´t believe that year after year now I will be able to do all that is required from me. I dread every year to start the process, even though I have a CPA in NYC. Only answering her questionnaire yesterday took me more than one hour, How can you live under these circumstances?”
You are right. Nobody can live under these circumstances. It is nothing but a life of forms and worry. It is also impossible to know that you are doing the right thing or what they can do. But: you are relying on the advice of a CPA and as long as that advice is reasonably competent, it should allow you to argue “reasonable cause” in the event of a mistake. Another thing to realize though is that you are NOT in the US. Common sense suggests that they can’t do that much to you. What are they going to do? Send an “Obama Tax Terrorist” IRS Agent to your country. I doubt it. So on actual compliance issues, they may not be able to do as much as you think. Remember also, that your anxiety is the result of wanting to tax compliant and taking steps to do this. They should be happy with you.
That said, it does seem to me that they can cause you to do a lot to yourself. If you allow them to get you worried to the point where you can’t sleep and it is affecting your health, you are doing more to yourself (with help from them) than they could ever do to you anyway.
Frankly, (after reading your comments for awhile) it seems to me that they should hold you out as:
First, an example of of a model citizen – you are doing what Geithner never did – try to be tax compliant.
Second, an example of the very reasons why renunciations are on the rise.
On the issue of having lost trust in the “fairness” of the USA. You were conned. I was conned. We were all conned. The USA is a very very unjust nation. That’s the bad news. The good news is that you now realize it. You know what people in the U.S. will never know.
Wouldn’t it be nice to renounce U.S. citizenship. You would die a considerably more free man!
Honestly, I think you should stop worrying about this. You have done as much as you can! What more are you supposed to do?
Sometimes in life bad things happen to good people. The bad thing is U.S. citizenship. You can make it go away.
Thank you. I will try to follow your advices because I really have no choice. I have done all I can to learn what to do when I first learned of FBARS even thought I had an American CPA. At that time I was naive and that did not bother me because I thought that the USA was going to be fair with people like me. and really give me amnisty for not knowing about them. It was with horror that I realize that this was not so and that was at risk of becoming an outlaw. Since them I started with this ordeal that never ends. Yes I am not doing good things for myself. Since then I have spent a lot of money consultating lawyers and CPAs. My life changed. And I have no IRS representatives in the country where I live and work, And I do not know the consequences of renoucing because I have my two married duaghters, one engaged son and one granddaughter in the USA. And after living and working there for thirty years I have investments also there because I have not invested one cent of what I earned in the USA in another country. Today I met a Canadian here in my country. He could not believe what I told him. He said that he lived and worked five years in this country and never had to fill Income Tax Return on what he earned here in Canada. And it seems that if I am not mistaked he has a retirement acount in Canada and pay Canadian Taxes on it. but his medical expenses in this country are covered by their health system. I felt envious.
#americansabroad need their own representation in Congress. The mere right to vote is NOT sufficient for democracy
@Crystal London
Thanks for sharing. 40% of your life savings to come into tax compliance is incredible. It’s no wonder that many people will not do this. If you are willing to share – what sort of complexity could have justify these huge fees?
By “Reichsflugsteuer” I assume you mean the “Exit Tax”. I saw a recent article comparing the U.S. Exit Tax to the Reichsflugsteuer, which concluded that the U.S. Exit Tax is far worse.
You are not alone in fearing the U.S. government. The U.S. has turned into a “rogue nation” that doesn’t represent its citizens and is run by two private clubs – The Democrats and Republicans.
Hi Renounce citizenship
sorry for delay in response. Complexity was about what any other middle class professional in the UK might have these days: : a house, a mortgage, a few individual small AVCs, a few company pension schemes, some basic investment (Equity ISAs, NSIs). and years of forensic accountng fees to pay to become compliant. with 3520s, 3520as, FBARs, etc. the accountants were eye-wateringly expensive but worth it. I am working on my renunciation now and working towards the day when I don’t have to fear a predatory government. I have read a few of the the submissions to the House Ways and Means committee on overseas taxation and am heartened that at least Congress can no longer claim ignorance of the collateral damage being done by the Obama administration. Failure to change the laws would indeed confirm that the government takes the attitude that US citizens abroad are being punished for choosing to livein “foreign” places.
The final question is: it is good for the USA to have its citizens living and working abroad? Or not?…Just they be supported, encouraged? Or, punished?
@Thatisme
Two answers:
1. It is quite obviously good for the US to have its citizens working abroad.
2. The US government cannot see the connection between a strong, economically productive and respected US government and having its citizens abroad.
The US is run by a bunch of idiots.
@Crystal London
Thanks for your response. As horrible as your story is – there are many like it.
If the laws are not changed, there is an explanation beyond the US gov being willfully cruel.
That explanation is that the extreme partisanship makes change impossible and the expats are just unintended collateral damage.
Expats should have direct e-mail access to the Representatives and Senators from the last US State they resided before moving abroad. As things stand now only Americans in their Districts can e-mail them. Or, better yet, they should have their own representation.
We spent nearly 40% of our life savings on tax fees (and lawyers’ fees to buy the lawyer client privilege and the lesser Kovell privilege to the accountants) to get me up to date and as such will face a significantly less prosperous retirement. I owed a tiny sum of tax for the years in question. My british husband at the end of all of this, doesn’t reproach me too much but 99% of people would have been pushed to divorce, so I am blessed . Like anonymous’ husband he does question whether we had to spend it but like anonymous again I told him it was a ransom to buy us free. LIke anonymous I will have to work for years to make up our savings. I will be renouncing in the future; I have no choice; I get very emotional when I think of how I am being forced to give up my birthright and how I have imperilled my husband’s economic future. I am only just now starting to recover my health, eating and sleeping properly, now that I have come into compliance. Every day I wonder if the EX-PATRIOT act will be passed, it’s looking more likely every month; I worry if will I be able to visit my ageing parents and close friends that are still stateside. Every day I think of the phrase “Reichsflugsteuer” and marvel that the country I was so proud of for so many years has come to this. I do not believe that 160++ years of citizenship based taxation will be overturned in spite of the great work of Nina Olsen of the TAS and ACA and even the pending commission on Overseas Americans; the $16 trillion deficit is too great.
I love America, it’s the government I’m afraid of. I voted Democrat all my life but am very sad at what is happening
This is indeed a sad, umbelievable situation. How can the USA be so cruel to us especially when we have no representation and are easy preys:
Wow, @Crystalline, my heart goes out to you!!! I completely share your sense of having been betrayed. I concluded, in spite of risks of the Reed Amendment or Ex-patriot Act being enforced, that I was no longer going to put up with all this nonsense.
I renounced last month with my family’s blessing even though I may lose the right to visit them in future. However, I’m reasonably optimistic that it won’t be as bad as all that! I still believe we’re more collateral damage than their intended target. The U.S. government are callous but still doubt they’d become that predatory because it would cause diplomatic incidents.
I can’t help feeling that the true villans here are the tax attorneys who are charging extortionate fees to get innocent minnows into compliance… you should have been able to argue reasonable cause with a quiet disclosure.
That was my take on it, Anyway. I simolten refused to pay a lawyer that sort of money when I’ve lived in the U.K. for 25 years…these professionals are predatory sharks.
@Markpinetree
I know you are worried about what “might happen”.
Just came across something I think might be helpful to you:
“When I look back on all the worries I remember the story of the old man who said on his deathbed that he had had a lot of trouble in his life, most of which never happened.
Winston Churchill (1874 – 1965)”
By the way, not sure whether you are aware of this but Winston Churchill’s mother was a U.S. citizen.
“Winston Churchill was half American by birth – a fact of which he was deeply proud. In his first address to a joint session of the United States Congress, on 26 December 1941, he teased the assembled Senators and Representatives with the mischievous suggestion, “If my father had been American and my mother British, instead of the other way ’round, I might have got here on my own!”
http://www.winstonchurchill.org/learn/biography/genealogy/churchills-american-heritage
Not sure what that would mean for his citizenship status. But, it’s likely that he would not be happy about this today. The Obama administration has turned U.S. citizenship abroad into a cancerous tumor.
This is what I can not understand. I am Democrat, supporter of Obama, used to think of him of a just and fair man who wanted to do things right. Before his first election he supported us, Americans Abroad. After that not one word, only demands and threats.
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