Price to relinquish US citizenship hiked to match price to renounce US citizenship
#1
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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/
http://www.forbes.com/sites/robertwo...-in-12-months/
#2
Join Date: Sep 2012
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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.
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
#3
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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.
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.
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#5
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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.
#6
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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?
#7
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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
#8
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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.
#10
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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.
#11
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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.
#12
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You do have me wondering about the taxation dynamics applicable to sovereign wealth funds.
#13
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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.
[...]
That would not suit a UST interested in maximizing long-term revenue sources.
#14
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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.
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.
#15
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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).
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.
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.
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.