On 4/19/2012 8:10 AM, Home Guy wrote:


http://www.dailymail.co.uk/news/arti...ing-taxes.html

Record 1,800 people renounced U.S. citizenship last year alone, up eight
times the number of those who did in 2008

US one of few countries to tax its citizens on income earned while
abroad

Taxes for ex-patriots are notoriously difficult; income up to $95,100
isn't taxed under Foreign Earned Income Exclusion, but wealthy must also
pay 'exit tax' to leave States

Many expats are unaware of complicated laws and often have to pay
thousands of dollars in in fines

As millions of Americans are scrambling to get their tax returns
postmarked by this evening, a smaller sect did something much more
drastic and renounced their US citizenship.

Last year alone, almost 1,800 people renounced their U.S. citizenship or
handed in their Green Cards – and many of them said it was because of
tax reasons.

That's a record number since the Internal Revenue Service began
publishing a list of those who renounced in 1998. It's also almost eight
times more than the number of citizens who renounced in 2008, and more
than the total for 2007, 2008 and 2009 combined.

In fact, Superman declared plans to renounce his U.S. citizenship a year
ago, in Action Comics.
'Truth, justice, and the American way' - it's not enough anymore,' the
comic book superhero said, after both the Iranian and American
governments criticized him for joining a peaceful anti-government
protest in Tehran.

But those of more modest means renounce, too. They say leaving America
is about more than money; it's about privacy and red tape.

Two filing requirements affect Americans abroad: the Report of Foreign
Bank and Financial Accounts - which has been around since 1970 but now
carries penalties for noncompliance - and the Foreign Account Tax
Compliance Act, passed in 2010 with the aim of reducing offshore tax
evasion.

The first regulation requires all Americans, including those living
abroad, with at least $10,000 in overseas bank accounts, to file a
supplementary form disclosing all of their foreign accounts.

That includes any accounts in which the U.S. citizen has a financial
interest. That could include a joint account with a spouse or child,
accounts for corporations in which the American owns more than 50 per
cent of the value of shares of stock, or any trust or estate that
benefits the U.S. citizen.

The tax compliance act - the newer law - asks foreign financial
institutions such as banks, hedge funds, and private equity funds to
provide the IRS with information on U.S. clients.

Institutions that do not comply will be subject to a 30 per cent
withholding tax on certain U.S.-sourced payments and proceeds of
property sales beginning in the 2013 tax year - for instance, dividends
on investments in U.S. companies.

Some expatriates say they were unaware of the first regulation for years
and even decades. In 2008, the IRS received only 218,840 such filings.
American nationality law grants citizenship to almost everyone born in
the United States or born abroad to American parents, regardless of how
much time they've spent in the United States. Many may not even know the
extent of their U.S. ties.

In 2004, the stakes for noncompliance rose. Failure to file meant
potential fines and criminal charges. Americans abroad can be punished
for noncompliance even if they owed no income tax - and IRS data show
that most of them don't owe money.

Income up to $95,100 isn't taxed under a rule called the Foreign Earned
Income Exclusion. In 2009, the income cap was $91,400, and 88 per cent
of all taxpayers claiming the foreign earned income exclusion owed
nothing.

Since 2008, the IRS has offered several voluntary-disclosure grace
periods during which expatriates can file back taxes without facing
criminal charges - but with the possibility of incurring penalties.

'Americans abroad are terrified. We've had people pay tens of thousands
of dollars in fines. We've had people … pay huge amounts of back taxes,'
she says. 'Up to this point, we never heard of anyone renouncing, or if
they did, they didn't talk about it,' says Ms Serrato, who says her
group does not advocate renunciation.

A characteristic of human nature is to vote with one's feet. I find is
quite amusing how the government becomes more oppressive whenever the
P.L.L.C.F. get control of things. ^_^

TDD