Go Back  FlyerTalk Forums > Travel&Dining > Travel Safety/Security > Checkpoints and Borders Policy Debate
Reload this Page >

Price to relinquish US citizenship hiked to match price to renounce US citizenship

Price to relinquish US citizenship hiked to match price to renounce US citizenship

Old Sep 20, 2015, 3:27 am
  #1  
Suspended
Original Poster
 
Join Date: Jul 2001
Location: Watchlisted by the prejudiced, en route to purgatory
Programs: Just Say No to Fleecing and Blacklisting
Posts: 102,103
Price to relinquish US citizenship hiked to match price to renounce US citizenship

The US Government's raised the price charged to relinquish US citizenship and it has been hiked up big time, up to the level to match the price to renounce US citizenship:

http://www.forbes.com/sites/robertwo...-in-12-months/
GUWonder is offline  
Old Sep 20, 2015, 6:44 am
  #2  
 
Join Date: Sep 2012
Posts: 574
I don't get how they can even charge for that.
Wouldn't that be like charging a Conscientious Objector from VietNam?
If you're mad as hell and not gonna take it anymore, the last
thing you want is some bureaucrat telling you it's gonna cost big time;
exorbitant taxation was often the reason for leaving in the first place.

Last edited by yandosan; Sep 20, 2015 at 7:21 am
yandosan is offline  
Old Sep 20, 2015, 8:29 am
  #3  
Suspended
Original Poster
 
Join Date: Jul 2001
Location: Watchlisted by the prejudiced, en route to purgatory
Programs: Just Say No to Fleecing and Blacklisting
Posts: 102,103
Originally Posted by yandosan
I don't get how they can even charge for that.
Wouldn't that be like charging a Conscientious Objector from VietNam?
If you're mad as hell and not gonna take it anymore, the last
thing you want is some bureaucrat telling you it's gonna cost big time;
exorbitant taxation was often the reason for leaving in the first place.
They are de facto charging for paperwork to be done and delivered to confirm the status change.
GUWonder is offline  
Old Sep 20, 2015, 2:32 pm
  #4  
 
Join Date: Nov 2008
Posts: 3,657
Originally Posted by GUWonder
The US Government's raised the price charged to relinquish US citizenship and it has been hiked up big time, up to the level to match the price to renounce US citizenship:
Naive question: what's the difference between relinquishing and renouncing citizenship?
jkhuggins is offline  
Old Sep 20, 2015, 2:48 pm
  #5  
Suspended
Original Poster
 
Join Date: Jul 2001
Location: Watchlisted by the prejudiced, en route to purgatory
Programs: Just Say No to Fleecing and Blacklisting
Posts: 102,103
Originally Posted by jkhuggins
Naive question: what's the difference between relinquishing and renouncing citizenship?
Well, beside the different basis for no longer being a US citizen, there are different legal consequences between those two paths for no longer being a US citizen: for example, different US tax treatment.
GUWonder is offline  
Old Sep 20, 2015, 5:42 pm
  #6  
Suspended
 
Join Date: Aug 2010
Location: DCA
Programs: UA US CO AA DL FL
Posts: 50,262
It's easy money and it's being charged people nobody particularly cares about angering. If you don't pay, you will continue to accrue US tax liability and that can be chased down in most countries. So, you pay. You may be angry, but what are you going to do about it? Renounce your citizenship?
Often1 is offline  
Old Sep 20, 2015, 6:13 pm
  #7  
Suspended
Original Poster
 
Join Date: Jul 2001
Location: Watchlisted by the prejudiced, en route to purgatory
Programs: Just Say No to Fleecing and Blacklisting
Posts: 102,103
Originally Posted by Often1
If you don't pay, you will continue to accrue US tax liability and that can be chased down in most countries.
That is anything but certain.

There are going to be some cases outside of the US that may show how constitutional and other fundamental rights trump tax collection efforts by foreign sovereigns to which foreign persons may claim no willful affiliation. I doubt that the US Treasury wants to see its tax treaties end up like Swiss cheese due to overreach aimed at foreign citizens who claim to have relinquished US citizenship, if they ever even acknowledged having it.

An interesting byproduct of this kind of rip-off fee structure is that a growing proportion of US citizens abroad may choose to not pursue US documentation of their foreign-born children in such a way as to burden their children with potential US extraterritorial claims against them. That would not suit a UST interested in maximizing long-term revenue sources.

Last edited by GUWonder; Sep 20, 2015 at 6:23 pm
GUWonder is offline  
Old Sep 24, 2015, 2:06 pm
  #8  
 
Join Date: Dec 2013
Location: Near the Beach.
Posts: 202
Originally Posted by GUWonder


An interesting byproduct of this kind of rip-off fee structure is that a growing proportion of US citizens abroad may choose to not pursue US documentation of their foreign-born children in such a way as to burden their children with potential US extraterritorial claims against them. That would not suit a UST interested in maximizing long-term revenue sources.
^^

Also, there are those who pay once and renounce their US citizenship rather than be ripped off time and time again. Their numbers are growing.
LifeontheBeach is offline  
Old Sep 25, 2015, 3:33 am
  #9  
 
Join Date: Sep 2012
Posts: 574
FATCA is the primary reason people are fleeing, right?
yandosan is offline  
Old Sep 25, 2015, 3:53 am
  #10  
Suspended
Original Poster
 
Join Date: Jul 2001
Location: Watchlisted by the prejudiced, en route to purgatory
Programs: Just Say No to Fleecing and Blacklisting
Posts: 102,103
Originally Posted by yandosan
FATCA is the primary reason people are fleeing, right?
Fleeing? Most of them seem to have been residing outside of of the US for much, most or even all of their life. FATCA is definitely some part of the picture, but so are the increasingly rising costs: of dealing with the US Treasury/IRS; arising from UST/IRS rules; of otherwise engaging with the USG as a US citizen; and/or of otherwise engaging in business outside of the US if perceived as a US citizen.
GUWonder is offline  
Old Sep 25, 2015, 10:11 am
  #11  
 
Join Date: Jan 2014
Posts: 288
Originally Posted by GUWonder
Fleeing? Most of them seem to have been residing outside of of the US for much, most or even all of their life. FATCA is definitely some part of the picture, but so are the increasingly rising costs: of dealing with the US Treasury/IRS; arising from UST/IRS rules; of otherwise engaging with the USG as a US citizen; and/or of otherwise engaging in business outside of the US if perceived as a US citizen.
Yes, it's important to remember that there are all kinds of problems associated with being a US citizen -- you are a pariah as a potential business partner because all the activities of the partnership need to be filed with the IRS, even if the partnership does no business in or with the USA And 90% of the partners have and never have had any connection to the USA, banks don't want your money, all sorts of activities that are perfectly legal for others are felonies under US law, and indeed many people aren't willing to marry an American because of the filing requirements. In fact, I'm sure the Vatican will never choose an American Pope because suddenly all the Vaticans finances would be subject to IRS reporting requirements.
Blogndog is offline  
Old Sep 25, 2015, 10:38 am
  #12  
Suspended
Original Poster
 
Join Date: Jul 2001
Location: Watchlisted by the prejudiced, en route to purgatory
Programs: Just Say No to Fleecing and Blacklisting
Posts: 102,103
Originally Posted by Blogndog
In fact, I'm sure the Vatican will never choose an American Pope because suddenly all the Vaticans finances would be subject to IRS reporting requirements.
That (i.e., a pope with US citizenship) would be a very interesting situation, but there would be workarounds. The pope would be a head of a sovereign state and thus have sovereign immunity; and the case that the Pope had relinquished US citizenship (by accepting to be head of a foreign sovereign state) could be rather compelling. And unless we get another pope who resigns, the sovereign immunity of the pope would be for life.

You do have me wondering about the taxation dynamics applicable to sovereign wealth funds.
GUWonder is offline  
Old Sep 25, 2015, 10:49 am
  #13  
Suspended
 
Join Date: Dec 2012
Programs: A3, AA. Plasticy things! That give me, y'know, Stuff!
Posts: 6,293
Originally Posted by Blogndog
In fact, I'm sure the Vatican will never choose an American Pope because suddenly all the Vaticans finances would be subject to IRS reporting requirements.
Regardless of IRS statements and probably fervent belief to the contrary, the Vatican, as a sovereign state in and of itself, can & will tell the US IRS to go get bent if they ever tried that.


Originally Posted by GUWonder
I doubt that the US Treasury wants to see its tax treaties end up like Swiss cheese due to overreach aimed at foreign citizens who claim to have relinquished US citizenship, if they ever even acknowledged having it.
[...]
That would not suit a UST interested in maximizing long-term revenue sources.
I've wondered at times what the actual UST/IRS policy is on that front. Certain governments outside the US structure things so that it is explicit policy for tax departments to maximize short term revenue - even at the expense of long term revenue and if it destroys companies entirely. New Zealand and Australia, for example, have explicit policies in that direction. I know of instances where they have bankrupted companies to gain overdue taxes owed even when the companies can show they have solid plans and financing in place to survive long term, and repay the tax debts and penalties. The tax authorities would rather get the money now over get the money later, keep people employed, gather penalty payments, etc.
SeriouslyLost is offline  
Old Sep 25, 2015, 12:19 pm
  #14  
FlyerTalk Evangelist
 
Join Date: Mar 2008
Location: DFW
Posts: 28,010
Originally Posted by SeriouslyLost
Regardless of IRS statements and probably fervent belief to the contrary, the Vatican, as a sovereign state in and of itself, can & will tell the US IRS to go get bent if they ever tried that.




I've wondered at times what the actual UST/IRS policy is on that front. Certain governments outside the US structure things so that it is explicit policy for tax departments to maximize short term revenue - even at the expense of long term revenue and if it destroys companies entirely. New Zealand and Australia, for example, have explicit policies in that direction. I know of instances where they have bankrupted companies to gain overdue taxes owed even when the companies can show they have solid plans and financing in place to survive long term, and repay the tax debts and penalties. The tax authorities would rather get the money now over get the money later, keep people employed, gather penalty payments, etc.
If the USG wants to maximize short time revenue perhaps efforts to collect unpaid taxes from government employees and people like Al Sharpton should get a little more attention.
Boggie Dog is offline  
Old Sep 25, 2015, 1:27 pm
  #15  
Suspended
Original Poster
 
Join Date: Jul 2001
Location: Watchlisted by the prejudiced, en route to purgatory
Programs: Just Say No to Fleecing and Blacklisting
Posts: 102,103
The IRS does collect deemed tax debts from federal government employees in the way it collects deemed tax debts from non-government employees too. And the IRS collection efforts directed at Al Sharpton are well within the range of what has been allowed to many others when: the IRS lacks confidence about its criminal investigation division being able to get DOJ to win a case on its behalf; or when the IRS isn't sure about the ability to make a timely collection of the debt (in full or even in large part) without running afoul of the kind of items indicated in my words below (following the quote).

Originally Posted by SeriouslyLost
I've wondered at times what the actual UST/IRS policy is on that front. Certain governments outside the US structure things so that it is explicit policy for tax departments to maximize short term revenue - even at the expense of long term revenue and if it destroys companies entirely. New Zealand and Australia, for example, have explicit policies in that direction. I know of instances where they have bankrupted companies to gain overdue taxes owed even when the companies can show they have solid plans and financing in place to survive long term, and repay the tax debts and penalties. The tax authorities would rather get the money now over get the money later, keep people employed, gather penalty payments, etc.
At least in practice, the IRS enters into payment plans/compromises (of formal sorts or otherwise) when and where: the IRS thinks it helps to maximize collection for debts it deems as being due; or the IRS otherwise thinks the debt is either not collectible or collecting (in whole or perhaps even in part) runs contrary to the public interest or reputational interest of the IRS. [The latter part of the latter is to avoid bad publicity such as what would happen if the IRS seized the cancer medicine funds of a cancer-hit child because the child was deemed to have a large IRS debt due.] At least when it comes to individual income tax.

With regard to corporate income tax, it's sort of the same and it sort of is different in practice; and there it may come down to what led to the tax debt, the management circumstances, and some other things.

While bankruptcy can be used to restructure/eliminate tax debts under some very limited circumstances, that doesn't work as well with tax debts as with non-tax debts. Relinquishing or renouncing US citizenship won't help with resolving tax debts already accrued or that become due as a result of provisions applicable to renunciation of citizenship (or of LPR status). Given that foreign resident status tolls the statute of limitations for IRS debt collections, relinquishing or renouncing US citizenship is certainly not an effective way to abscond from paying what the IRS deems to be due to it.
GUWonder is offline  

Thread Tools
Search this Thread

Contact Us - Manage Preferences - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service -

This site is owned, operated, and maintained by MH Sub I, LLC dba Internet Brands. Copyright © 2024 MH Sub I, LLC dba Internet Brands. All rights reserved. Designated trademarks are the property of their respective owners.