Red, White and Through – Reasons to renounce US citizenship

This is one of the best articles I have seen on this subject. Note also that in addition to the IRS on the doorstep in Canada, the IRS has come to Asia.

Patrick Henry wrote, “these are the times that try men’s souls.”

Such words ring as true for American Expats today as they did for British Expats (American colonists), who went to war against the British Empire 1775-1783 to free themselves from the tyranny of “Taxation without Representation.”

Who in the US Congress today represents the interests of American’s abroad? Nobody! Instead, they view us as easy prey (no votes) for future revenue and are preparing the field for FATCA in 2013.

With the exception of Ron Paul and a couple of others, the politicians in Congress are completely ignorant of the history their own country. America’s forefathers: Thomas Jefferson, John Hancock, Benjamin Franklin, Thomas Paine, Patrick Henry, John and Sam Adams, etc. would be ashamed of the way Congress treats American Expats. George Washington would be ashamed of the behavior of the government sitting in the city bearing his name.

Like the British STAMP Act, FATCA will force many American Expats to “renounce” their US citizenship as our forefathers did in the Declaration of Independence in 1776. As an American Expat, reading the words of our forefathers every 4th of July brings tears to my eyes because the abuses of British Parliament and the King of England against American colonists as described in the Declaration of Independence are strikingly similar to the abuses against American Expats today.

“These are the times that try men’s souls.”

– a comment on the following article

Red, White–and Through

See Corrections & Amplifications below

A growing number of Americans living overseas are renouncing U.S. citizenship. The reason? Mounting tax and reporting obligations, lawyers say.

With the U.S. government struggling with huge budget deficits, government bodies such as the Internal Revenue Service and Securities and Exchange Commission have been cracking down on tax evasion and implementing new reporting requirements. In February, the IRS introduced a second offshore voluntary disclosure program aimed at noncompliant American taxpayers with unreported offshore bank accounts and assets.

The program promises Americans won’t face charges if they step forward voluntarily — they are given a deadline of Aug. 31 to do so — but they will still have to pay taxes and penalties. Those who don’t step forward voluntarily could face stiffer penalties or even jail time.

The U.S. is the only industrialized country that requires citizens to pay income tax on offshore earnings, and many are finding the complications and cost of maintaining U.S. citizenship abroad to be increasingly burdensome.

“Once they find out what the tax and reporting obligations are, it’s a bit onerous,” said Jay Krause, partner at Withers in Hong Kong, a law firm that specializes in tax law, trusts, estate planning and family law. He says Withers has seen an “exponential increase” in American clients giving up citizenship and green card holders renouncing their status.

Now expatriates in Asia, in particular, are coming under scrutiny by the U.S. government. Last month, Doug Shulman, commissioner of the IRS, said the bureau is targeting Asian bank accounts and that taxpayers should expect new criminal investigations and prosecutions.

“We definitely have been tracking migration of assets out of Europe and into Asia,” Mr. Shulman told reporters when introducing the disclosure program in February. He said the IRS is looking for offenders in places “you might not expect.”

Adds Joe Field, Asia senior partner at Withers: “Many Hong Kong companies were set up for purposes of evading U.S. tax, so now the IRS is going after those. They say they’re doing this, but don’t say what they are doing or to whom.”

Indeed, the IRS opened an office in Beijing in late 2008 to improve compliance for overseas tax payers. It also has an office in Hong Kong that handles criminal investigations.

Asia is historically home to a large number of “incidental” and “accidental” Americans — people who took on U.S. citizenship as insurance against political instability, or who have one parent who is a U.S. citizen but perhaps have never stepped foot in the U.S. For decades, many Chinese in Hong Kong and Taiwan got U.S. passports or green cards as protection against mainland Chinese takeover in the two regions. With these loose ties to American nationality, giving up citizenship can be seen as an attractive option.

“Many people who looked to America as the protector now see America is bent on coming after them,” said Mr. Field. “We’re getting a whole new class of client who is someone who says, ‘I want to go into the disclosure program and as soon as I complete it, expatriate.’ ”

You are encouraged to continue the article complete with amazing comments.

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