Last week I had a woman in here who came in here completely gung-ho
about relinquishing her citizenship and she came in with her young daughter.
By the end of it you know there were tears
rolling down her cheeks because her 10-year-old daughter is an American
but who's never lived in the United States. you know and trying to explain,
you know, what that means to be an American was really quite moving but she's so emotionally tied to that being part of her identity, yet
for tax reasons it so completely made sense to her. Sad that she felt that she had to be in
this position to relinquish her citizenship. If you have a US passport, if you have US citizenship you're taxed on all your income worldwide
regardless of where you live regardless of your domicile. As if
wherever you're living is like the 51st state. The consensus is that there are three countries that base tax purely
on citizenship: the United States, Eritrea and North Korea. This is something we jokingly refer to as the Tax Axis of evil. FATCA is very complicated
legislation. FATCA is a piece of legislation that
was put in place by the US it's legislation it's actually aimed at
banks and financial institutions. If you want to continue to do business
with the US then you essentially have to name names, you have
to name who your American clients are. So it was a pretty easy decision I think for
a lot of financial institutions because if they wanted to deal with the US they had to become compliant. Every bank in the world had to report
their American citizens to the United States, and this created an
enormous amount of headache and cost for banks, and so many
European banks decided that they weren't going to have any American clients. There are a number of banks now, say in the UK, who are actually writing to their client base asking if they're
an American. Because the onus is on them, is on the
banks and financial institutions to provide this information and if they
don't provide this information they can be heavily fined. So it's really a way that the IRS is strong-arming non US institutions into double checking for them who the Americans are, so they can match
those up with tax records they have on file. And there are seven and a half million
Americans living abroad, it would be the 13th biggest state. That's bigger than Louisiana, Nebraska. We don't have anybody
particularly in Congress who looks after our interests as Americans abroad. We don't have anybody in in the senate. I would love to know how
many people in congress speak other languages, how many have passports and how many
actually ever lived abroad because the way rules are written right now Americans abroad are treated like second-class citizens in terms of the onerous legislation that affects them and so the more burdensome it gets, the more complex it is, the more people are going to renounce, it's that simple. Individuals who give up US citizenship
or expatriate from the US are reported in a document that congress produces, it's called the Federal Register. You can see that the
number of expatriates is at the highest level that it's ever been. So many people renouncing American citizenship, they're not doing it to avoid taxes they're paying higher taxes in Sweden, or Britain... it's more to get rid of the headache and the fear
that they might be violating one of the hundreds of thousands of pages of the US tax code. I mean I've had clients where their parents were graduate students, they were born in the United States and then they moved back here, never
completely fully understood of course because they didn't grow up in
a US household. They didn't understand what it meant to be an American in terms of tax. I have a deep appreciation and love for America, I grew up thinking I was American, but the truth is I've lived almost all
my life abroad and if America wants to make it extremely expensive and
difficult for me to be American, then sadly I'll be British. I had to pay two thousand three hundred
fifty dollars for the pleasure of renouncing my US citizenship, and it
used to be four hundred dollars a year ago. but I paid it and there are other people renouncing as well yesterday, and the numbers have
gone up and they will continue to go up. When you get caught between two systems you don't get the benefit of either system, and that becomes where the problem is for Americans living abroad. No one renounces, that I know of, because they don't love America, or they in any way dislike America, I think the
great hope is that somehow congress can fix this.
