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Old 14.02.2013, 23:31
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Giving up the blue passport because of FATCA - one member's experience

Friend and business colleague of Mark, former EF moderator Scott took a major step in 2012. After receiving his Swiss citizenship, he immediately turned around and within a few days took the oath of renunciation, turning in his US passport. The last piece of official paperwork from the US, the CLN (Certificate of Loss of Nationality) arrived only five weeks after giving up his passport in Bern.

Since the end of September 2012, Scott has been interviewed by several international news agencies regarding the loss of Swiss bank accounts due to his US citizenship and renouncing his US citizenship. The articles have been published in numerous press printed publications and websites. The three interviews were published here:

The Local 11th Feb 2013

WSJ in DE 22nd Oct 2012

USAToday 27th Sep 2012

He has been seen on Isaac Brock Society and offers his assistance to anybody interested in the reasons, pros&cons, process and what to expect in Bern through the closed FB group titled: "Renounce US Citizenship - Why and How".

Anybody with questions related to renounciation of US citizenship may PM me, I will forward Scott's e-mail to you... or contact Scott via Facebook: https://www.facebook.com/scott.schmith
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Last edited by jrspet; 14.02.2013 at 23:43.
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Old 15.02.2013, 08:53
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Re: Giving up the blue passport because of FATCA - one member's experience

Thanks for that jrspet. The articles go right to the heart of the matter; it's not that Americans abroad don't pay their taxes, it's that the burden of doing so is crippling them and making their lives a misery.

I renounce in a couple of weeks and then have the tax side to sort out. I wonder how many thousands of renunciations it's going to take before the people who matter bother to listen. Of course, it's not affecting them so why should they care. After all, have you ever seen a poor Congress person?
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Old 15.02.2013, 09:41
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Re: Giving up the blue passport because of FATCA - one member's experience

Obama and his clowns will be in for a big surprise when they find out they will have very very few Americans (due to US tax policy, FATCA and FBAR) able to promote US exports to Europe after they ink a fantasy Free Trade Agreement with the European Union.

http://www.bbc.co.uk/news/business-21439945

Just look at it from this perspective:

Switzerland and Norway, both non-EU countries, combined account for 10% of the value of goods the EU imports.

The US on the other hand, also accounts for 10% of the value of goods the EU imports.

Fine, Norway is a member of the EEA and Switzerland has a special bilateral relationship with the EU, both which ensure access to the EU market.

But, look at the scale of things. Two combined economies with a population of 13 million people export the same amount (in total monetary value, we are not even talking about a per capita basis) to possibly the largest economic bloc in the world than an economy with over 310 million people which spends untold billions on military installations all over Europe (very poor return on investment I must say!).

Quite pathetic for the US indeed. The EU is probably rejoicing in this, knowing that if they ink a deal with the US and the US doesn't change its citizenship-based taxation system, the trade relationship will be heavily unbalanced in favor of the EU (and the US will only have itself to blame!).
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Old 15.02.2013, 10:18
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Re: Giving up the blue passport because of FATCA - one member's experience

The US clearly doesn't care about "The People". Stepping a bit off topic, the Declaration of Independence is a part of history. Modern day US politics, citizen management and decision making have ignored this important building block of US history.

Back on topic, the articles offer some good reading. Am glad that someone is stepping forward and the journalists are not afraid to write about it.

The US is screwing their citizens, both abroad and within (in many ways ). Regarding FBAR and FATCA, these financial institutions that are turning down US persons are doing so in order to cover their backside. If just one US person sneaks in below the radar and the bank is caught NOT reporting this one person because the person claims the account in a last minute FBAR form trying to cover their own a$$. Then the bank will be heavily taxed when doing business within the US. Sorry folks, if I were on the Board of Directors at a bank outside of the US... I would consider voting to kick'em all out. Then write up a big clause stating that any US person that fails to claim their ties to the US will be charged for all forthcoming fines and taxation levied upon the bank. I know this will make me unpopular here But think about it. Put yourself in the shoes of the banks and consider the pros and cons. What would you do?

I will already agree with the most of you, the banks should stand up against the US and protect their customers, rights and image. However, without the support of the country's government... they are only a target used for US politics' shooting practice. These numbskulls sit in their over-padded leather chairs in DC and wait for someone to stand up against the US. ... enough bashing, we all know what happens then

For Medea Fleecestealer...The final taxation is completed with the Form 8854. This question appears under Part IV Section A:
Quote:
Do you certify under penalties of perjury that you have complied with all of your tax obligations for the 5 preceding tax years (see instructions)? ....................... Yes No
PDF Source
JC
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Old 15.02.2013, 11:00
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Re: Giving up the blue passport because of FATCA - one member's experience

Yes it is a real pity that this is turning into a bit of a circus. Just about all of my US friends here in Basel are very concerned about the state of affairs in the US. There seems to be a great reluctance to face up to some very pressing issues.

Printing money is not going to solve the problem in the long run. I do wonder how much US currency is actually in circulation...

And I wonder what will happen to the US when or if oil is no longer linked to the US dollar.

Excuse my lack of the appropriate jargon, I'm a pro sailor not a financial guru.
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Old 15.02.2013, 18:35
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Re: Giving up the blue passport because of FATCA - one member's experience

As long as Arab monarchies can't feed their populace on their own and as long as the US remains the world's premier agricultural power, you can guarantee that oil will continue to be priced in dollars.

The game changer will come when foreigners lose faith in US treasury bills as that will push yields upwards and create a really problematic debt issue (these "fiscal cliff talks" are a charade when yields are flat).

Just think of the stupidity of the US strategy: the US is borrowing money from China so that it can finance the US military to defend itself from China .
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Old 18.05.2013, 10:46
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Re: Giving up the blue passport because of FATCA - one member's experience

I would guess that such a large percentage are from Switzerland because it's one of the few places in the world where you can end up paying taxes to the US (because Swiss taxes are lower). I have American friends living in higher tax countries so they never owe any US taxes. They couldn't care less about this.

Dan
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Old 18.05.2013, 11:11
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Re: Giving up the blue passport because of FATCA - one member's experience

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I would guess that such a large percentage are from Switzerland because it's one of the few places in the world where you can end up paying taxes to the US (because Swiss taxes are lower). I have American friends living in higher tax countries so they never owe any US taxes. They couldn't care less about this.

Dan
a large percentage also tend to be "unintentional" citizens (they were born in the US to expat parents from elsewhere) or they naturalized in the US before returning to their home country without considering the tax implications. which is all fine, except that the decision tree for a UK citizen living in Switzerland who was born in the US, left at a young age and hasn't set foot on US soil in several decades is probably somewhat different than someone who was born a US citizen to American parents and who does not otherwise carry dual citizenship.

having just finalized my tax return for the first year we lived in Switzerland, I can tell you that the noise about taxes on income for US citizens living abroad is just that - noise. the only reason I owed any income tax for that year in the US is because we moved during the middle of the year, otherwise my US tax burden would have been less than what it will cost to pay a cleaning crew to clean our house for the landlord before we move.
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Old 19.05.2013, 07:14
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Re: Giving up the blue passport because of FATCA - one member's experience

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I would guess that such a large percentage are from Switzerland because it's one of the few places in the world where you can end up paying taxes to the US (because Swiss taxes are lower). I have American friends living in higher tax countries so they never owe any US taxes. They couldn't care less about this.

Dan
Too many Americans seem to be heavily addicted to this tax nonsense. For some Americans, it's all about the taxes! Idiots.

Were those American friends kicked of banks because of their US citizenship and due to American policy? Nope, so stop moaning about taxes. Seriously, Americans, there is much more to life than just taxes! Try to think of other things, ok? I mean, is there not a single American who is smart enough to realize that not everyone in Switzerland earns more than $150'000?
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Old 19.05.2013, 10:31
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Re: Giving up the blue passport because of FATCA - one member's experience

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Too many Americans seem to be heavily addicted to this tax nonsense. For some Americans, it's all about the taxes! Idiots.

Were those American friends kicked of banks because of their US citizenship and due to American policy? Nope, so stop moaning about taxes. Seriously, Americans, there is much more to life than just taxes! Try to think of other things, ok? I mean, is there not a single American who is smart enough to realize that not everyone in Switzerland earns more than $150'000?
For sure. The other point is that probably a lot of those expat Americans don't make enough money for it to matter. So they don't care.

Dan
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Old 21.06.2013, 15:11
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Re: Giving up the blue passport because of FATCA - one member's experience

Hi
I have just renounced my US Citizenship in Berne. All the paper's say, that from now on, I will be treated as any other alien.
So whenever this whole situation has quiet down (I'm still very young, I hope, the US will Change untill I'm in my 60ies and ready to spend my days Golfing in Florida... )
I still have my imediate Family in the US. So if I'm treated like any other Alien, I can get a Visa, filing the I-130 Form for a Green card for alien relatives?
Is this right? I mean, can I just go ahead and do that?
It seems like this whole renounciation thing is not thought trough entirely... They state, that have to contact IRS. OK, When? If theres no deadline, I can just call them a day before my 80iest Birthday and ask them if they'd like some money now, or what?
So I'm wondering if there still are ways to get back, like any other alien, aquiring a green card through Job, Money, Family, Lottery,....

Thanks for helping me out!
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Old 21.06.2013, 16:06
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Re: Giving up the blue passport because of FATCA - one member's experience

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Hi
I have just renounced my US Citizenship in Berne. All the paper's say, that from now on, I will be treated as any other alien.
So whenever this whole situation has quiet down (I'm still very young, I hope, the US will Change untill I'm in my 60ies and ready to spend my days Golfing in Florida... )
I still have my imediate Family in the US. So if I'm treated like any other Alien, I can get a Visa, filing the I-130 Form for a Green card for alien relatives?
Is this right? I mean, can I just go ahead and do that?
It seems like this whole renounciation thing is not thought trough entirely... They state, that have to contact IRS. OK, When? If theres no deadline, I can just call them a day before my 80iest Birthday and ask them if they'd like some money now, or what?
So I'm wondering if there still are ways to get back, like any other alien, aquiring a green card through Job, Money, Family, Lottery,....

Thanks for helping me out!
Boy, are you naive. You are supposed to file any outstanding back taxes once you've renounced, young or old, and you certainly can't wait until you're 80. You must be tax compliant for the last 6 years for FBAR filing (Foreign Accounts which I assume you have) by this time next year, paying any tax due, so you can file a 8854 form and be sure that your renunciation can't be revoked on tax evasion grounds. It hasn't happened yet, but there's always a first time.

Yes, at the moment you can apply for a green card, though why you'd want to after just renouncing beats me. You have the same chance as anyone else in getting one - but there are some people in the government who want to see renouncers/relinquishers banned for life from ever setting foot on US soil again. Also bear in mind that if you turn around and apply for a green card straightaway it might be seen that you didn't really want to give up US citizenship and the renunciation will be revoked and any outstanding taxes/penalties applied.

Yes, you should be able to apply for a visa to visit just like anyone else, but there have already been reports of some people being turned back at the border:

http://thetaxtimes.blogspot.ch/2012/...forcement.html

Frankly, if you want to live/work in America, you should have stayed American. Why did you renounce in the first place?
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Old 21.06.2013, 16:14
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Re: Giving up the blue passport because of FATCA - one member's experience

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It seems like this whole renounciation thing is not thought trough entirely... They state, that have to contact IRS. OK, When?
Looks more like you went through the renunciation process without thinking.

There are dozens of references online. If you don't know what to do before and after making such a decision and going through with it... Nobody to blame but yourself.

Look up IRS Form 8854. Remember, like MF said, you have to be IRS reporting compliant for a number of years before sending the Form 8854 with your CLN. You have your CLN yet?
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Old 21.06.2013, 16:37
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Re: Giving up the blue passport because of FATCA - one member's experience

Looking for some extra input on this one. We watched the SRF news last night and they had a report on a vote in Bern. Something about adopting FATCA? OH didn't explain it very well because he didn't see the whole piece.

Basically he said it's the first non-Swiss law that will be effective here, and that the way the vote was done, if the U.S. makes changes to the law in the future, those changes automatically take effect here, regardless of Swiss law. Anyone have a better sense of what really happened and what it means??
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Old 21.06.2013, 16:55
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Re: Giving up the blue passport because of FATCA - one member's experience

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Looking for some extra input on this one. We watched the SRF news last night and they had a report on a vote in Bern. Something about adopting FATCA? OH didn't explain it very well because he didn't see the whole piece.

Basically he said it's the first non-Swiss law that will be effective here, and that the way the vote was done, if the U.S. makes changes to the law in the future, those changes automatically take effect here, regardless of Swiss law. Anyone have a better sense of what really happened and what it means??
Well, FATCA disregards Swiss and all other countries' laws anyway so that's nothing new.

If it was about the voting that's been going on this week, the bill was rejected. Basically it was a bill put forward by the US on a "take it or leave it" basis which would have allowed the Swiss government to temporarily suspend Swiss bank secrecy laws for a year. That would then have allowed the banks to pass info on to the US in FATCA style without being taken to court over the matter. As it's been defeated the US will probably now go after the banks through the US courts.
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Old 21.06.2013, 16:42
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Re: Giving up the blue passport because of FATCA - one member's experience

You should also be aware of this:

Tax consequences of presence in the United States after expatriation.
If, for any tax year during the 10-year period in which you are otherwise subject to section 877, you are present in the United States for more than 30 days in a calendar year ending in such tax year, you will be treated as a U.S. citizen or resident for that tax year. You will be subject to U.S. tax on your worldwide income unless the following exception applies.

Exception.


You can be present in the United States for up to 60 days without being treated as a U.S. citizen or resident if you are performing personal services in the United States for an employer who is not related (within the meaning of sections 267 and 707) to you and you meet either of the following requirements.
  • You were a U.S. citizen and, within a reasonable period following your expatriation, you became a citizen or resident fully liable to tax in the country in which you, your spouse, or either of your parents was born; or
  • For each year in the 10-year period ending on the date of expatriation, you were physically present in the United States for 30 days or less.
See Pub. 519, U.S. Tax Guide for Aliens, for details about what constitutes a day of presence in the United States.

http://www.irs.gov/instructions/i8854/ar01.html

Shit, I didn't know about the 30 day rule. Did any of you? Have to keep that in mind if I ever go on holiday there again. Or is this only applicable to covered expats?
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Old 21.06.2013, 17:30
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Re: Giving up the blue passport because of FATCA - one member's experience

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...
Shit, I didn't know about the 30 day rule. Did any of you? Have to keep that in mind if I ever go on holiday there again. Or is this only applicable to covered expats?
Didn't know about it either. From the Pub. 519, 2012 version:

"Substantial Presence Test

You will be considered a U.S. resident for tax purposes if you meet the substantial presence test for calendar year 2012. To meet this test, you must be physically present in the United States on at least:

1. 31 days during 2012, and
2. 183 days during the 3-year period that in-cludes 2012, 2011, and 2010, counting:
a. All the days you were present in 2012, and
b. 13 of the days you were present in 2011, and
c. 16 of the days you were present in 2010.

Example. You were physically present in the United States on 120 days in each of the years 2010, 2011, and 2012. To determine if you meet the substantial presence test for 2012, count the full 120 days of presence in 2012, 40 days in 2011 (13 of 120), and 20 days in 2010 (16 of 120). Because the total for the 3-year period is 180 days, you are not considered a resident under the substantial presence test for 2012."

So I think you're safe if it's just normal, short holidays?
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Old 21.06.2013, 17:46
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Re: Giving up the blue passport because of FATCA - one member's experience

Yeah, but if we go it's usually for around 4 weeks. Last time in 2007 I think it was slightly over that possibly. Allows us time to get over the jetlag and actually enjoy the trip. Still, not likely to be doing it again any time soon.
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Old 26.06.2013, 12:01
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Re: Giving up the blue passport because of FATCA - one member's experience

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You should also be aware of this:

Tax consequences of presence in the United States after expatriation.
If, for any tax year during the 10-year period in which you are otherwise subject to section 877, you are present in the United States for more than 30 days in a calendar year ending in such tax year, you will be treated as a U.S. citizen or resident for that tax year. You will be subject to U.S. tax on your worldwide income unless the following exception applies.

Exception.


You can be present in the United States for up to 60 days without being treated as a U.S. citizen or resident if you are performing personal services in the United States for an employer who is not related (within the meaning of sections 267 and 707) to you and you meet either of the following requirements.
  • You were a U.S. citizen and, within a reasonable period following your expatriation, you became a citizen or resident fully liable to tax in the country in which you, your spouse, or either of your parents was born; or
  • For each year in the 10-year period ending on the date of expatriation, you were physically present in the United States for 30 days or less.
See Pub. 519, U.S. Tax Guide for Aliens, for details about what constitutes a day of presence in the United States.

http://www.irs.gov/instructions/i8854/ar01.html

Shit, I didn't know about the 30 day rule. Did any of you? Have to keep that in mind if I ever go on holiday there again. Or is this only applicable to covered expats?
Based on my reading of the 8854 instructions, the 30 day rule applies to those who expatriate under section 877, i.e., "covered expats". It should not apply to those who are not covered expats.
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Old 26.06.2013, 12:11
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Re: Giving up the blue passport because of FATCA - one member's experience

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Based on my reading of the 8854 instructions, the 30 day rule applies to those who expatriate under section 877, i.e., "covered expats". It should not apply to those who are not covered expats.
Whew, that's a relief! Thanks.
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