Tax Matters: It Was the Best of Times, It Was the Worst of Times
Originally published in the Michigan Business Law Journal:
This memorable line from Charles Dickens’ A Tale of Two Cities, published in 1859, could possibly describe the seemingly current state of affairs regarding U.S. citizenship. The government estimates that there are as many as 11 million undocumented immigrants in the United States and millions more in the process of applying for Green Cards, citizenship, or visas. At the same time, a record number, albeit small in comparison, are surrendering their U.S. citizenship. In 2014, 3,415 people gave up their U.S. citizenship and in the first quarter of 2015, 1,335. The cause of most of this action seems to be the U.S. tax system.
Unlike any other country in the Organization for Economic Cooperation and Development, the U.S. taxes its citizens and Green Card holders on their worldwide income in addition to strict financial information reporting laws (FBAR and related forms). Now, it also appears the Foreign Account Tax Compliance Act (FATCA) has discouraged some foreign institutions from wanting to do basic banking and investment activities with U.S. taxpayers. The result is that millions of Americans living overseas, including dual citizens, face onerous and expensive tax and informational filing fees each year even if they have minimal income.
Read the article in its entirety: It Was the Best of Times, It Was the Worst of Times
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