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Old 18.02.2015, 11:51
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Tax Axis of Evil: America, Eritrea & N. Korea

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Old 18.02.2015, 12:56
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Re: Tax Axis of Evil: America, Eritrea & N. Korea

Great video. This should be played on the Daily Show.
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Old 18.02.2015, 13:35
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Re: Tax Axis of Evil: America, Eritrea & N. Korea

According to the Wall Street Journal, some Americans abroad are not registering their children's births with the US. This will help children born with the American citizenship taint to avoid discrimination by banks and in the job market. A quote from the article:

"An American woman who didn’t want to be named and who lives in Zurich with her dual Swiss-German husband, said the American friends she consulted advised her not to apply for a U.S. passport for her daughter unless there was a specific need. “My ancestors gave up everything to move to the U.S. in the late 1800s and here I am back in Europe and not giving my daughter the right to be a U.S. citizen, a right that others have risked their life or even died to have,” she said. “Seems a bit strange but it just doesn’t make sense for us in the moment.” "

http://blogs.wsj.com/expat/2015/02/1...s-citizenship/
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Old 18.02.2015, 13:51
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Re: Tax Axis of Evil: America, Eritrea & N. Korea

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Sadly, I'll be British.
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Old 18.02.2015, 14:28
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Re: Tax Axis of Evil: America, Eritrea & N. Korea

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...the American friends she consulted advised her not to apply for a U.S. passport for her daughter unless there was a specific need...
That´s a typical scenario where >>the difference between passport and citizenship<< is not understood.

It can very well be the case that the child is >>automatically a US citizen from birth<< without applying for anything.

The strategy of "just not registering birth with US institutions" may backfire pretty badly.
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Old 18.02.2015, 16:09
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Re: Tax Axis of Evil: America, Eritrea & N. Korea

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That´s a typical scenario where >>the difference between passport and citizenship<< is not understood.

It can very well be the case that the child is >>automatically a US citizen from birth<< without applying for anything.

The strategy of "just not registering birth with US institutions" may backfire pretty badly.
Really? How? The child is born outside the US so there's no betraying US birthplace, no record of their birth anywhere in the US system, no SSN number and no passport. Yes, there might be a problem if they want to visit the States and border control query why the child doesn't have a US passport when the parents do, but I'd be sensible enough not to go back there unless it was absolutely and vitally necessary.
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Old 18.02.2015, 16:12
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Re: Tax Axis of Evil: America, Eritrea & N. Korea

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Really? How? The child is born outside the US so there's no betraying US birthplace, no record of their birth anywhere in the US system, no SSN number and no passport. Yes, there might be a problem if they want to visit the States and border control query why the child doesn't have a US passport when the parents do, but I'd be sensible enough not to go back there unless it was absolutely and vitally necessary.
This all revolves around the idea "...how should they find out..." It may all be true, maybe nothing ever happens. However, it doesn´t change that the kid might be a US-citizen, and thus liable for taxes, even retrospectively...

If you want to be sure to have nothing to do with it, why not renounce and be done with it for sure?
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Old 18.02.2015, 16:43
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Re: Tax Axis of Evil: America, Eritrea & N. Korea

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This all revolves around the idea "...how should they find out..." It may all be true, maybe nothing ever happens. However, it doesn´t change that the kid might be a US-citizen, and thus liable for taxes, even retrospectively...

If you want to be sure to have nothing to do with it, why not renounce and be done with it for sure?
I'm not saying it doesn't. But if you want to renounce and do things properly to get yourself out of the US tax system altogether then you're going to need to file 5 years of back tax forms and an 8854 form for which you'll need an SSN. You MIGHT be able to renounce and then file using an ITIN form instead. But you've still got the hassle/paperwork/costs involved if you can't do it yourself. Plus it's going to cost you $2,350 for the renunciation on top. Better if you can to do what Tina Turner did and get Swiss citizenship and then relinquish the US one. At least that would save you the renunciation fee.
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Old 18.02.2015, 20:35
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Re: Tax Axis of Evil: America, Eritrea & N. Korea

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...Better if you can to do what Tina Turner did and get Swiss citizenship and then relinquish the US one. At least that would save you the renunciation fee.
I would be surprised if that´s the case:

#1 I think it´s not possible to relinquish the US citizenship if that yields you stateless, i.e. you need to have another citizenship in any case

#2 The fee is also payable in any case. It´s for relinquish the US citizenship, no matter what else affects you.

I might be wrong, I´m not an expert in US citizenship.
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Old 19.02.2015, 06:40
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Re: Tax Axis of Evil: America, Eritrea & N. Korea

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I might be wrong, I´m not an expert in US citizenship.
Correct.
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Old 19.02.2015, 08:08
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Re: Tax Axis of Evil: America, Eritrea & N. Korea

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Great video. This should be played on the Daily Show.
A poster at Isaac Brock Society disputes that North Korea has Citizenship Based Taxation, meaning that only the U.S. and Eritrea have this byzantine tax practice. This is the comment by Shadow Raider:

"North Korea doesn’t have CBT (Citizenship Based Taxation). In fact, it doesn’t have taxes at all, except on resident foreigners (RBT) and nonresidents (of any citizenship, only on North Korean income). Instead of taxes, the government basically owns everything. The idea that North Korea has CBT comes from an incorrect interpretation of North Koreans working abroad. The North Korean government makes contracts with foreign companies and sends its citizens to work there, but the companies only pay a whole amount to the North Korean government, which in turns pays a salary to the workers. Apparently the government keeps most of the money, but it’s not really a tax, it’s a subcontract. North Koreans who manage to leave the country on their own are not taxed by North Korea on their foreign income.
So it’s not even an axis, it’s just two. But you can also compare with the countries that used to have CBT: Soviet Union, Bulgaria, Vietnam (communist countries), Myanmar (military dictatorship), Mexico and the Philippines (democracies but copied the US tax code as a neighbor or former US territory). And all of them eventually abolished CBT."

So, it's the U.S. and the tin-pot African dictatorship of Eritrea that continue with Citizenship Based Taxation. A nice companion for the U.S.
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Old 19.02.2015, 09:08
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Re: Tax Axis of Evil: America, Eritrea & N. Korea

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#1 I think it´s not possible to relinquish the US citizenship if that yields you stateless, i.e. you need to have another citizenship in any case
Your speculation would be correct for swiss non-dual citizens, but you're wrong on US citizens (according to state.gov).
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Old 19.02.2015, 09:11
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Re: Tax Axis of Evil: America, Eritrea & N. Korea

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Really? How? The child is born outside the US so there's no betraying US birthplace, no record of their birth anywhere in the US system, no SSN number and no passport. Yes, there might be a problem if they want to visit the States and border control query why the child doesn't have a US passport when the parents do, but I'd be sensible enough not to go back there unless it was absolutely and vitally necessary.
If, however, the IRS does by some means find out, as the inevitably do, they are famously without a sense of humor with respect to the sort of argument described above. Kind of like billag, but worse.

I might also imagine that the parents would prefer to claim the dependent deduction on their child at some point. Or, should they get audited and the IRS sees a dependent on their Swiss taxes but not their American. Or really, if they get audited, full stop.

The point is, your strategy is "don't ever let them find out you exist." Apart from cramping one's lifestyle in terms of hiding one's existence from the United States, you are also digging a progressively deeper hole the longer you go with the strategy - and remember, the IRS only has to get lucky once during the lifespan of the child. Better to go through the front door and deal with it, than try to beat the system, because the system will beat back.
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Old 19.02.2015, 09:36
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Re: Tax Axis of Evil: America, Eritrea & N. Korea

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If, however, the IRS does by some means find out, as the inevitably do, they are famously without a sense of humor with respect to the sort of argument described above. Kind of like billag, but worse.

I might also imagine that the parents would prefer to claim the dependent deduction on their child at some point. Or, should they get audited and the IRS sees a dependent on their Swiss taxes but not their American. Or really, if they get audited, full stop.

The point is, your strategy is "don't ever let them find out you exist." Apart from cramping one's lifestyle in terms of hiding one's existence from the United States, you are also digging a progressively deeper hole the longer you go with the strategy - and remember, the IRS only has to get lucky once during the lifespan of the child. Better to go through the front door and deal with it, than try to beat the system, because the system will beat back.
During the Nazi period many Jews and part-Jews ("Mischlingen") hid their Jewish heritage through falsified documents, such as the Ahnenpass (ancestry passport) and Aryan Certificate. At times the clergy in Germany supported the fight against this discrimination:

"Opposition clergy helped many racially persecuted individuals by providing them with fake passports (Ahnenpässe) as a personal document necessary for survival."

https://en.wikipedia.org/wiki/Ahnenpass
https://en.wikipedia.org/wiki/Aryan_certificate

Statistics are showing a sharp decrease in registration of American children born abroad. An explanation for this is that parents with U.S. citizenship are protecting their children from a life-time of employment and banking discrimination.
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Old 19.02.2015, 11:50
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Re: Tax Axis of Evil: America, Eritrea & N. Korea

Shadow raider?
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Old 19.02.2015, 20:55
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Re: Tax Axis of Evil: America, Eritrea & N. Korea

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If, however, the IRS does by some means find out, as the inevitably do, they are famously without a sense of humor with respect to the sort of argument described above. Kind of like billag, but worse.

I might also imagine that the parents would prefer to claim the dependent deduction on their child at some point. Or, should they get audited and the IRS sees a dependent on their Swiss taxes but not their American. Or really, if they get audited, full stop.

The point is, your strategy is "don't ever let them find out you exist." Apart from cramping one's lifestyle in terms of hiding one's existence from the United States, you are also digging a progressively deeper hole the longer you go with the strategy - and remember, the IRS only has to get lucky once during the lifespan of the child. Better to go through the front door and deal with it, than try to beat the system, because the system will beat back.
Here's the story of a Swedish woman, accidentally born in the US in 1962 and who lived there for three months before her parents returned to Sweden. If she has any children, they would also automatically be US citizens, due to their mother's accidental birth in the US. Since she doesn't consider herself a US citizen, I doubt she bothered to register her children at the US Embassy in Stockholm.

http://www.svt.se/nyheter/regionalt/...ter-amerikaner

To see video version with English subtitles, click twice on right arrow, i.e., move to 3/3, and then start the video.
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Old 20.02.2015, 00:13
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Re: Tax Axis of Evil: America, Eritrea & N. Korea

In an Economist story about Boris Johnson renouncing his US citizenship there was also this gem:

"A neighbour of this correspondent, who was born in America but moved to Britain as a child, recently received a huge bill from the IRS, out of the blue, for many years of unfiled taxes. He had not realised that he owed anything; he had always paid taxes promptly in Britain. The IRS was so aggressive that he feared he might lose his technology business; he even discussed divorce with his wife as a way to shield their assets. In the end, he settled for a six-figure sum. He, too, has since renounced his citizenship."

http://www.economist.com/news/united...glishmans-home
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Old 20.02.2015, 01:23
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Re: Tax Axis of Evil: America, Eritrea & N. Korea

I just renounced my greencard and now trying the wifey to renounce her citizenship. Don't want my kids to be forced the passport either...
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Old 20.02.2015, 09:19
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Re: Tax Axis of Evil: America, Eritrea & N. Korea

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I would be surprised if that´s the case:

#1 I think it´s not possible to relinquish the US citizenship if that yields you stateless, i.e. you need to have another citizenship in any case

#2 The fee is also payable in any case. It´s for relinquish the US citizenship, no matter what else affects you.

I might be wrong, I´m not an expert in US citizenship.
Read what I wrote Chris. Tina Turner obtained Swiss citizenship and then relinquished her US one. She did not become stateless and the fee doesn't apply if you relinquish rather than renounce. The two are not the same thing.

Any American who obtains another citizenship with the intention of relinquishing the US later commits an "expatriating act". This is what Tina did. There are several other ways it can be done: serving in a foreign military as a commissioned or non-comissioned officer, serving in a foreign government at any level. The main thing is that you did it knowing you would lose your American citizenship if you did so. Your intent at the time of committing the act is key to being able to reliquish.

To renounce requires no expatriating act. You simply make the decision that you want to lose your US citizenship and swear to this in front of the Consul at any US embassy or consulate. In this case the fee is payable.
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Old 20.02.2015, 10:01
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Re: Tax Axis of Evil: America, Eritrea & N. Korea

Here is the petition to the White House to remove FATCA requirements, not many signatures so far.

https://petitions.whitehouse.gov/pet...broad/dwZ1c5wL
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