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Old 12.05.2009, 21:47
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US Tax Problem

Hello everyone,

I am back on this forum after a few years of silence (almost 3 years...).

Here is my issue:

I was born 40 years ago in the US from french parents and lived 7 years in America from age 0 to 7 before returning to Europe. I never lived or worked in the US and I stayed in the US 2 months since I left the country in 1975. To be honest, I don't really feel yank...

I am technically a US tax payer but I never filed a tax return to the IRS in my life. I discovered that I was requested to do so just a couple of years ago anyway.... I don't really plan to go back to the US to live or/and work (apart from holidays).

The problem is now getting serious because my employer (swiss bank) is ordering me to fill out a W9 form (to report my existence to the IRS...) and warning me that they will lift banking secrecy in my case. Will I then hear from the IRS automatically afterwards?

I am thinking of giving up my US citizenship but really, will they bother me? Am I the kind of fish they are looking for? I find that a bit hard to believe. I am by no means a millionaire and and my liability to US taxes would not be very high (a few hundreds o USD a year according to my calculation) as I pay taxes in Switzerland. But I don't want to deal with the red tape.

I was thinking, would any of you have a thought on my case? I know it really is a personal situation but I would really appreciate comments from anyone familiar with this topic or who is in the same kind of situation.

Thanks in advance

Kristofolo
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  #2  
Old 12.05.2009, 22:46
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Re: US Tax Problem

Just one small question, how does your employer even know you have a US citizenship? I would expect your French one (would be the one you use for permits etc? no?).

This doesn't answer your question but was a curiousity.
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Old 12.05.2009, 22:53
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Re: US Tax Problem

Quote:
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...

I am thinking of giving up my US citizenship but really, will they bother me? Am I the kind of fish they are looking for? I find that a bit hard to believe. I am by no means a millionaire and and my liability to US taxes would not be very high (a few hundreds o USD a year according to my calculation) as I pay taxes in Switzerland. But I don't want to deal with the red tape.

....
The IRS do not know how big a fish you are before yanking you out of the water.
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  #4  
Old 12.05.2009, 23:43
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Re: US Tax Problem

My employer is bank and as a result they require all their employees to hold an account. And to open an account you need to fill out a form with very indiscreet questions like : "Are you an american citizen?" I could have said no but this is difficult to hide because of my birthplace (in the US)..... Saying that you are french does not matter, they just want to know if your american. All that is part of the Qualified Intermediary program.
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Old 12.05.2009, 23:58
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Re: US Tax Problem

Personally, I would just contact the IRS and ask them.....the IRS does not have infinite amount of money to go after tax cases....especially complicated international ones, they tend to do high profile ones to scare people (see Wesley Snipes).

http://www.irs.gov/localcontacts/art...101292,00.html

or
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Old 13.05.2009, 09:14
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Re: US Tax Problem

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My employer is bank and as a result they require all their employees to hold an account. And to open an account you need to fill out a form with very indiscreet questions like : "Are you an american citizen?" I could have said no but this is difficult to hide because of my birthplace (in the US)..... Saying that you are french does not matter, they just want to know if your american. All that is part of the Qualified Intermediary program.
It seems the US citizenship is a big liability, at least for those USs living outside USA. Ever considered to drop it?
Anyway, are you sure you need an account with your employer? You might want to check this out.
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Old 13.05.2009, 09:27
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Re: US Tax Problem

Just FYI (as someone who is actively considering dropping his American citizenship should the opportunity come up): dropping your citizenship now will not eliminate your past liability, and I believe the US government even considers you liable for taxes up to 5 years AFTER you give up your citizenship.

If you don't fess up, you will likely face problems should you ever visit the US, and they may - or may not - pursue you through treaties with other countries, though I'm no expert in that area.

Cheers
Lance
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Old 13.05.2009, 09:37
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Re: US Tax Problem

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Just FYI (as someone who is actively considering dropping his American citizenship should the opportunity come up): dropping your citizenship now will not eliminate your past liability, and I believe the US government even considers you liable for taxes up to 5 years AFTER you give up your citizenship.

If you don't fess up, you will likely face problems should you ever visit the US, and they may - or may not - pursue you through treaties with other countries, though I'm no expert in that area.

Cheers
Lance
In this case let's hope the US government will wage less war, and therefore would not need your money any more.
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Old 13.05.2009, 11:02
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Re: US Tax Problem

Kristofolo,

I'd recommend getting professional advise in this situation.

In the meantime, here is an article from American Citizens Abroad that might be helpful:

http://www.aca.ch/joomla/index.php?o...=227&Itemid=46
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Old 13.05.2009, 11:25
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Re: US Tax Problem

interesting article meloncollie. that's what happens when the servant becomes the master... is there any other country doing this?
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  #11  
Old 13.05.2009, 20:13
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Re: US Tax Problem

Mike, I don't need this bank account, they require (they force...) all their employees to have one!

As Melancolie suggests, I am more and more thinking about getting pro advice...
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Old 13.05.2009, 20:52
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Re: US Tax Problem

Can they really force you to?

If the account is under USD 10,000, there is no requirement to report it to US authorities?
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Old 13.05.2009, 20:56
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Re: US Tax Problem

I went to a seminar recently put on by a company called US Tax and Financial services.

Most, or maybe all, reps of the firm are tax attorneys specializing in US taxation for US citizens in Switzerland or UK.

If nothing else, checking out their website would be a good place to start:

UStaxonline.com

Address:

uS tax and financial services
Dreikonigstrasse 31a
8002 Zurich


Good luck... dealing with IRS can be very stressful.
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Old 15.05.2009, 19:31
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Re: US Tax Problem

Thanks to all of your for your comments and advices.

I will post to let you know how I am doing.
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Old 17.05.2009, 20:26
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Re: US Tax Problem

Basic rules:
http://www.irs.gov/businesses/small/...=97324,00.html
http://www.irs.gov/newsroom/article/...108654,00.html
http://www.irs.gov/faqs/content/0,,id=199936,00.html
http://www.irs.gov/pub/irs-pdf/p54.pdf

Expatriation rules:
http://www.irs.gov/businesses/small/...=97245,00.html
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