The US just lost this court case against 300,000 Americans. Here's why
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- Опубликовано: 16 окт 2024
- It's a good time to be an American abroad!... kinda
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It's so America for them to make it easier to renounce the citizenship of their citizens rather than just allowing Americans who live in the rest of the world to not pay taxes in a country they don't live in.
Dual citizenship is a blessing and a curse.. One must decide what's more important lol
@@Killswitch1411 It's only the US that makes it a curse... I have two other citizenships apart from my US passport (EU+UK) and they don't make me do anything...
@@baconoverflow4384 no there is another country Eritrea
@@romainsavioz5466 Yes, but even Eritrea only charges a flat 10% tax on their citizens abroad. Not nothing, but it does not prevent Eritreans living abroad from accessing brokerage accounts globally, opening bank accounts and savings plans abroad, or forcing extremely burdensome tax paperwork that takes months of their life away like in the USA. So yes, Eritrea is bad, but it looks like a saint compared to the US.
@@An_Attempt As someone with Eritrean blood... they are a lot more corrupt about it to be honest...
Interesting topic. Given USA was kinda founded on no taxation without representation, it’s all rather ironic…
The whole of USA currently is pretty much a joke
Its the swamp monsters within the cracks of the government. Big reason people were so mad about them trying to hire more IRS agents to screw us more.
And yet no one dares suggest disband the IRS, otherwise you're considered "right wing".
The Boston tea party has come full circle
@pootis that’s the fig leaf of excuse I guess… as Evan said the politicians don’t actually represent overseas citizen’s interests and there is no specific Senator/Rep for them… I’m not sure that U.K. offering those living in America the right to vote in U.K. elections would have placated them and prevented the revolution 😆
I'm an accidental American. I learned about having to report taxes 'abroad' from Evan's earlier video and have been trying to get all my taxes sorted out since. It's taken me over a year to prove that I haven't lived in the US since I was 4 months old. Now I finally have done, I can get a Social Security Number. When it arrives, I will get up to date with the IRS and then I can look into renouncing my citizenship. 'Land of the Free' indeed.
Why'd you have to prove that? I'm in a different situation (left the US when I was 13) but about to start the Streamlined process too
@@baconoverflow4384 for the streamline process, you have to prove you didn't know you had to file taxes abroad. My parents are both British and moved back to the UK when I was really young so it's pretty clear that I wouldn't necessarily know. But proving I wasn't in the States for long periods of time thirty years ago isn't so easy. I don't know why they can't just check their own records though, as they must know when I entered and left their country through their border control.
As a fully lived in and born American, looking to see if I can live abroad this is when I realize just hoh chained I am to this country. They want your money
@@baconoverflow4384 now I think about it, I can't remember if it's the streamline process or the application for a SSN that required I prove I didn't know it was a requirement. If you already have a SSN you may be fine.
@@benlime1235 yeah I have a SSN... and I've been handing it to banks whenever they ask, so the IRS knows I have accounts in at least 3 countries... Now I know why they always ask lol! Thanks, appreciate the advice 🙏
I'm an accidental American (two British parents who had me when they briefly worked in the states for
Genuine question how do they take anything from you if you've lived I'm the UK all this time surely you don't have any USA based assets for them to take?
@@tbrooke3016 tbh I just haven't risked it. I don't want to know what they could do! I don't have any American bank accounts but I would like to be able to enter the country to visit on holiday and don't want issues with the IRS
@@lizzieb704 I'm afraid not having any US bank accounts isn't necessarily sufficient to have dropped below the radar. The US has used it's banking muscle to bully overseas banks into releasing data; it's a "if you want to do business with the USA, you are going to do this" deal. And of course, every financial institution in the world pretty much needs to do business in the USA, so they comply.
They used this muscle to force overseas banks to tell the IRS all the details of their customers in other countries just in case any of them turned out to be US citizen. Even the Swiss caved in to this. I know that this impacted trust fund holders - all trusts in the UK got billed a large sum of money (like, £2k) by their administering bank to do the paperwork required to show that the trust holders were not US citizens. I don't know if this also swept up retail banking, but the precedent is there; the IRS may already know all about your UK bank accounts and who you are; they just can't do anything about it whilst you're outside the US.
I would seek professional advice before thinking of entering the USA, or transiting there, or even getting close to it (such as Canada; I don't know what extradition arrangements exist).
Also, beware that some air routes to some places that are a long way from the USA actually fly over it (e.g. Europe->Japan is now over the Arctic Ocean and Alaska); one doesn't want to be involved in an unplanned technical diversion to Anchorage if the IRS have you're name on their list!
Sorry to be alarmist, but the US has dragged people off planes that are merely transiting through the US, and their courts don't care if an accused person's journey to the court was in any way "irregular".
@@tbrooke3016 Watch Evan's video on that one too. Basically America has bullied the rest of the world into doing their dirty work for you. That's why when you open a bank in most countries, there's always a little tick box to confirm that you're not a US citizen.
It's such a funny term accidental American. 😂
My high school English teacher actually nearly renounced her citizenship, but was forced to move back to the states from overseas because she could not afford the renunciation fee, nor the taxes and fees for two different countries. They charged her so much to live overseas that she HAD TO move back to America. And she openly told my classroom that if it was not for the fees the American government charged her to be a citizen of a country she did not live in, she would be teaching in that country right now.
I'm so happy to hear some of these issues are coming undone.
"Land of the Free*"...
*not free to leave
@@LRM12o8 *Terms and conditions may apply.
@@LRM12o8to quote a comment on another Evan Edinger video: “trying to leave the USA is like trying to leave a cult”
I have flat out refused to travel to the US while pregnant, because if I understood the news story about accidental Americans (from a few years back) correctly, even a child from two non-US citizens who don't live there but happen to have the misfortune to give birth there will be subject to this extortion. It's such a strange thing to force people who have very little to do with you to be your citizens...
Plus I have no desire to run the risk of facing the costs of the US medical system, of course.
From what I heard they can't force it if both parents are not working or living there for a certain amount of time.
Anyways that's just what I heard.
There's also the added issue now of any pregnancy complications becoming life threatening in certain parts of the US, due to the overturning of abortion laws. In some states, there are outright bans with exceptions for if the mother's life is at risk. However, it means that doctors have to wait until the mother's life is definitely at risk before intervening rather than when the issues first start or risk legal implications. It's also often the case that if the mother is miscarrying, but the foetus technically still has a heartbeat they can't do anything (which puts the mother at risk of infection).
So basically, REALLY don't be pregnant in the US right now, because there are no good options. I just feel sorry for the people who live there and have no choice!
Sucks being poor
US Citizenship is structured this way because of slavery-post civil war it was a way to ensure that if you were born on US soil you are a citizen. (Which is why you can demonstrate citizenship with a birth certificate.) It’s honestly kinder to children who grow up there than say Italy 😅
@@nicolef9456 That's interesting :) I have no issue with citizenship by soil rather than blood either - but I would think you would limit it to people who LIVE there, rather than including those who are passing through 😅
The more I learn about the american tax system the more I understand why people hate it so much
Try dealing with it when you’re eighteen and have barely a clue what’s going on (this is after taking two tax classes) and having to do this until the day you die. I’m in my late twenties now and just now understand what to expect every year. Fun times. Land of the expenses.
The insane thing is all this is recent (relatively), most of the U.S didn't even have income tax til the 1930s, and taxes back then were simpler. Now we have taxes on taxes and taxes for paying taxes its insane. I love living here but when 60% of your money goes to paying for nukes and securing rights to oil in parts of the world because its cheaper than producing our own I question whether our forefathers fought for the right thing.
I'm half American, half Australian. When my parents got divorced I decided to move to Sydney with my mother. Renouncing my citizenship was my 25th birthday present to myself. I have no desire to live in that place ever again.
I'm in a similar boat. Have wanted to renounce since I was 5 years old and have lived in Australia since I was 2, so I have no allegiance to the US. Only thing barring me from it is the price because I'm disabled and poor
Damn, that’s a good birthday present. I was born in the states, both my parents were too, but as a disabled female person, I honestly wanna leave. It’s one of my hopeful goals that I can have a family (however that looks, and if it’s safe to do so, climate-wise) and the US is scary to raise a family in, even if you aren’t having biological kids or are worried about climate change.
Too much death just for money here… Obviously that capitalist stuff is pretty much everywhere, but the US makes it way more cultish than other countries by comparison tbh.
As an American who lives in Canada, this is *huge* for me! Thank you for this video; I'd likely not have learned about this otherwise!
Canada and the US have a tax treaty, so a certain portion of what you pay to one country come off the taxes from the other. So if you run into this, have a look into that.
Someone in the Netherlands made a website about this, because he found out that he is an American because only his mother is American, he has never been to the US and don't want to go to the US anyway. The website is to support US immigrants in these tax issues, something like that.
I still can't wrap my head around how fucked up it is that the US is able to just throw its weight around and make 114 different countries (Including the Vatican City!) pass laws to allow them to enforce FATCA.
I am a dual US Mexican citizen but have lived in Mexico the majority of my life. I get nothing from the US. No services. No nothing. I don´t even have a US passport right now. I have no plan to ever live in the US. I have no plans to even VISIT the US. And yet, here I am,giving them money.
Happens with the EU sometimes. Like the GDPR legislation or USB-C for iPhones legislation.
@@kiradotee Yes, but that's not costing anyone anything. Unlike this nonsense.
IMPERIALISM ! Does it ring a Bell for you?
@@mtlopez13 jumm parece más politicas de Al Capone y la Cosa Nostra
My brothers were born in New York, but spent most of their lives in Europe and revoked their US citizenship when they turned 17 because there were only negatives and no advantages to keeping it, beyond the right to live in US.
And for many living in the USA is their only goal to a better life because other countries make it much harder to get citizenship. Its all on a case to case bases. They didn't see it as a benefit if they never needed to live in USA, since they already live in a place they feel gives them the quality of life they want.
@@Killswitch1411 you can have a good life and not having to be in America.. it's not thee country everyone wants or needs ....
@@wendykelly8551 did I say to have a good life you can only in USA? No I didn't.. so learn how to read.
@@Killswitch1411 much harder to enter the USA than any EU country.
@@klimtkahlo yeah I don't think that's correct lol.. Look at our Southern border. Its very easy to enter. Might be harder or take longer to get actual citizenship.
In the UK, and met a friend at Uni who is a US citizen by descent, as her mother was born there. After watching these videos, I asked her how she felt about the situation. She did not know about it. She is 18, and thus legally needs to be filling in these forms. Neither her, nor her mother, new about the rules regarding overseas taxation. Now, what are they supposed to do? Her mother may have been 'evading' the tax system for over a decade entirely unknowingly. She might be too. But if they file now, maybe they'll be caught and then what'll happen? And so it just seems incredibly scary, and thus, they avoid thinking about it. Great system. Really positive.
Honestly the IRS has absolutely no budget to find people like them so they can go about their lives trying not to think about it. But if they start making big waves in some industry or win big… the irs will find a way possibly. Always a risk. But if they’re out of the system… they can stay hidden
@@evan Yes, mainly they are going after the money. Because the U.S. has the most millionaires and billionaires it is all about making sure the rich have to pay. But in reality, the rich are adept at hiding their money so only those without the means to hire lawyers and accounting firms get inconvenienced. Yes, every once in a while they will catch a rich person hiding their money in the Bahamas or in some other tax haven, but mostly they just make ordinary people miserable.
There are programs on the IRS website that you can take part in to make it 'right.'
It's incredibly stressful, still a risk, and may require a lawyer, but it's worth taking a look at what the options are if your friend's mom is ever planning to go back. (been there, done that)
@@evan, UK banks are legally obliged to inform the IRS of all customers who have US citizenship. They can be subject to fines if they don't pass on the information.
If you have had a bank account since before the FATCA came into force, there's no way of them finding you unless you let them know.
However, now everyone who opens a new bank/savings account has to fill in a question about US citizenship on the application form - you even have to provide documentation that you aren't.
My husband (UK citizen) even had to provide documents (birth certificate and passport) to his financial advisor when he retired and was consolidating the investments from his pension pot into a plan providing us with a monthly income.
Getting advice from a group like American Expatriates or similar will help, but based on just that, technically, they may not require to file if their income is low enough. For a single filer, Under 65 years old and have a gross income of at least $12,550. Over 65 and have gross income of at least $14,250. Married to a US citizen and file jointly and it's higher, If you marry a non-US citizen, that drops to a fiver.
Also, if US by descent, because of how US citizenship works, just having a parent isn't enough, there is a residency requirement for the parent passing on and evidence that has to be provided to the US embassy. Plenty of Americans abroad didn't file their kids before FATCA, even less do now, and if she doesn't have a US birth place, many find it easy to get around.
It's insane to me that other countries comply with the American governments demands on this.
Well when your currency is the world’s reserve currency and everyone is using it you do have leverage
It's probably a treaty.
@@eattherich9215 there’s no treaty involved
What about some EU legislations? I'm sure companies in other countries have to comply with GDPR when they're dealing with a EU citizen.
@@kiradotee banks who don't follow this requirement are banned from doing business in the US, but worse, are banned from doing businesses with American companies. Both Visa and MasterCard are American. A bank choosing not to offer their customers any internationally accepted bank cards are facing a serious competitive disadvantage, for catering to, all in all, a very minor group.
An the EU doesn't want to press the matter, because they feel there are more pressing things to fight over. If they try to start a trade ear with the US over this, it would be absolutely devastating to the EU economy.
Damn I had no idea this was even a thing, how barbaric that you'd even have to pay taxes for a country you don't live in, don't work in, don't own property in etc
And sometimes never even stepped your feet on!!! Like people who have US parents or like one of the examples here in the comments where someone was born on a cruise ship when they were sailing in US waters.
One of my friends is from Australia and she lived in the USA for 10 years and became a us citizen. She moved back to Australia last year, and doesn’t have any plans at the moment to move to the US again. After finding out about the taxing situation, she is looking to renounce her us citizenship before it gets really tough. I really hope this goes through for her sake.
I'm German and I had a classmate who was born when her parents were in the US on vacation, so even though the whole family never lived in the US and her parents are German, she had the US citizenship. Would be interesting to know whether and if yes when she renounced that citizenship.
honestly I'm surprised they let them into the country as many people try to have their child born in the USA to gain them citizenship.
@@Killswitch1411 I doubt that concernes most european contrys, most europeans love to visit USA, tho very few wants to move there.
@@dennisbohman3848 I'm not talking about stuck up Europeans
@@Killswitch1411 It wasnt suposed to be "stuck up" it is like that, we charish "our", kind of freedom much higher than the freedom USA striving for = money/career what ever the cost, (god forbid taxation), 100x to lage wallpaper wall houses and extreme patriotism ex: (swear allegiance each day first thing at school), right to carrie guns. We accept taxation and enyoj others to be able to afford medication, helthcare, public transportation, take sick leave and stil got money to survive. I bet USA is a gourges contry with plenty of amazing nature, a lot of nice humble people, tho we got too diffrent mindsets, simple as that.
@@Killswitch1411 lol, you're really daft if you think that Germans would do that to live in the USA of all places! 🤣
EDIT: Oh and btw, if you are so concerned about people giving birth in your country in order to force a right to live there, then maybe you should stop forcing your citizenship on anyone who happens to be born in your country, rather than banning pregnant tourists from entering it. You're shooting yourself in the foot, lol! 💁♂️
Although I must say it's very American of you to be afraid people might exploit a law that was made to exploit _them._ 😉
This is actually one of my favorite types of your content, especially as an american who intends to live abroad for at least several years.
ditto of this being my favourite content! currently not living in my "home" country, so i like hearing about the different things to look out for on my end!
One problem with renouncing U.S. citizenship is that if they determine that you did it to avoid tax liability, you can be barred from entering the U.S. for life. Quite a deterrent for people with family back home!
I had no idea that's pretty draconian. Especially when some countries don't allow double citizenship.
@@unixtreme True, though naturalizing in such a country would provide a defense to being accused of renouncing for tax reasons, since the country of one’s new nationality requires it.
That's a fake news. In theory it's true, in practice No-one has ever been barred. It's hard to prove you did it for taxes. Especially since there is an exit tax and a covered expatriate status.
@@patienceisalpha The provision is 8 U.S.C. § 1182(a)(10)(E), and you are right that it is almost never used. (It has been used twice between 2002 and 2015.) However, the existence of this provision has probably deterred a lot more people from renouncing.
@@azotic1 they are ill advised then. As long as you file your last 1040 and 8854 you're good to go. Don't look backwards
I had no idea that FATCA even existed. I hope that case goes to court and gets the fee removed back to zero again, because no one should have to pay a dime to renounce their citizenship. The court case is absolutely correct; renouncing should be a citizen's right, and it shouldn't cost a thing. 😤
Why shouldn't they? Don't you think there's administrative cost involved with something that's 100% optional? There are so many other things that we shouldn't be paying fees for, this one I'm OK with.
@@SmallSpoonBrigade i’m OK with paying fees but over $2000 for renouncing is ridiculous in my opinion.
@@SmallSpoonBrigadeso many other countries only charge around $20-80 if they do have a charge. And you’re forgetting that when renouncing your citizenship was free, not many people cared to do it, so there was no real need to have such a big charge. Now with the abroad taxation, a lot of people will want to, but $450 is ridiculous because believe it or not, the number of Americans living abroad is not that high to put a large strain on the government. America needs to care more about its own citizens and stop putting a death grip on those who left the land and don’t want to come back. Land of the free also means that companies and billionaires are free to take all your money and keep you away from your basic rights
I had a friend in highschool whose mom prematurely gave birth to her while the parents were on a cruise. Her mom wasn‘t due yet, but it just so happened that the ship was sailing in US territory when her contractions started. I lightly touched on this subject while talking to my highschool friend, but thinking about it now, it must‘ve been weird for her since she’s never lived in the US and never knew a life there.
I'm so hoping this is a step in the right direction for us US expats. Its such a headache and literally keeps me up at night when it comes to tax time.
One of my cousins is an accidental American. They never lived out there. I really hope the their sake that the fee is LOWERED back to the 450 dollars this year. It’s disgusting what it currently costs.
Thank you, Evan! I'm glad to know there is someone else out there as passionate about this topic as me!
Omg, thanks for this. My daughter is accidental American. She's wanting to renounce. I'm considering renouncing myself. Now we know to wait.
Btw, I'm same as you, paying accountant every year, reporting my bank balances every year, and getting ear-bashed by my husband who wants to move house, but won't sell whilst I have citizenship because I'll owe CGT on my half to the US!
This is really good news, keep us updated!
Lookup form 8854. If renounce you may still be liable for CGT on your assets even if you do not sell them.
Thank you, Evan! This is such good news! As an American in Australia, I have brought this to the attention of many American friends and family back in the States. Some of the more conservative people in my family tend to bring up the consulate offices and how we're benefitting from those, so we should have to keep paying taxes. I'd love to hear your perspective on this and if consulate offices really do much (if anything) for Americans abroad. (I'm also getting a flashback to the Simpsons episode when they visit Australia.) Thanks for the great videos and hopefully we will hear more good tax news in the next year or so! Cheers from Down Under, Kaitlyn xx
I'd just watched this video and was about to send it to you in your comments! Cheers from Melbourne :)
Consulate offices? Hahahahahahaha. All international offices, certainly for IRS and citizenship renunciation, have been closed for several years now. An American abroad has no access at all to tax assistance from the IRS via their local consulate, unlike homelanders who can just pick up the phone. Americans abroad are unserved by 'their' consulates, period. This, in addition to their specific issues being utterly unserved by 'representatives' in Congress, makes Americans abroad the most highly charged and taxed and most unserved citizens in the world.
I literally just started working in a company that does tax returns for US citizens who live in my country, and I really feel for some of our clients... there are so many additions to non-US residents on an already complex tax system - really blows your mind.
At least it's not as expensive here (about a third of the price you said).
My mum is an American citizen. She lived the first five years of her life there before moving to the UK. She’s never been back but she has always been an American citizen and not claimed a British citizenship either. She is now 66 and hasn’t ever paid back any taxes back to the US. I also have a few aunts and uncles who are in a similar situation. If they get found out, they might be in a bit of bother.
If they extra hiring of IRS agents was to ever go through.. She might wanna change her identity lol
@@Killswitch1411 They'd need a ton of them. There's sooo many people in that situation
@Frozenbizkit they were never hiring extra agents. That is a Republican made up story. The 87,000 was over 10 years and to replace any staff leaving or retiring. Most IRS staff are office workers, not agents.
@jester 1two let me guess all a conspiracy.. bro sit down and shut up. Let me guess they're not also trying to ban gas ovens.. just shut up. Agents staff.. either way more staff to pin tax payers to the wall to capture more money to pay for their wars etc.
I mean, surely the logic of citizenship-based taxation would rather imply that non-Americans living in the US shouldn't have to pay any US taxes? Somehow, I suspect that isn't what happens in practice.
Nope. They just want everyone’s money. The citizen thing is just to make it look like the immigrate are protected. But if they can get them to pay taxes, they do.
That would be brilliant!!!
I'm sure US citizens who live in the US would even renounce their citizenship if it meant they don't have to pay any tax. 😆😆
Maybe they would replace it with a system of having to pay whatever back taxes are owed once one crosses the US border.
Actually, a very large chunk of our tax revenue comes from 'undocumented' immigrants. They get a temporary anonymous tax identification number that they can file their taxes under; it has a benefit of protecting them, to a degree, from deportation, grants them OCEA rights (worker safety), minimum wage, and some employment protections. But they are not eligible for welfare or social security. They pay full taxes, including social security, but they aren't allowed to claim it unless they get citizenship. Even then they will only count the amount paid starting from the date they got their social security number.
Sadly, many 'employers' dislike this, and purposefully hide this from immigrants so they can hire them illegally- keeping a tight and abusive leash on them under the threat of being arrested or deported.
It's also why the claim that social security is running out thanks to baby boomers is bull. We have an bottomless cow to milk for revenue.
@@aycc-nbh7289 That is too close to the reality of the situation.
I feel very torn up about this information as i'm obviously happy about a potential fee decrease but also very upset because i JUST RENOUNCED IN DECEMBER AND HAD TO PAY THE FULL $2350
Maybe they’ll give it back 🙈
You made the best choice you could have with the information you had at hand. Congrats on renouncing!
@@evan lol
Great to hear! I’m coming up on five years of tax compliance and I can’t wait to get rid of this albatross.
Love your rant mate keep em coming
Much appreciated
I'm an American living in the USA, and I recently was encouraged that the U.S. Department of State just started allowing online passport renewal on a trial basis, and it looks like they'll make it permanent. It was so nice to be able to do the application online and pay by credit card and not have to pay postal fees to mail in a paper check (cheque) for payment and print and mail all the forms. I have to appreciate the small wins where I can get them!
That kind of service has been available for years in Denmark (sure its had its teething problems but thats government for you).
@Scaven666 I'm glad your country's people have benefited from a good system. I hope the U.S. starts heading in a better direction for regular people soon. I fear where this country will be if that doesn't happen.
Paper check? The 80s says hello =)
@@dennisbohman3848 Yes, it's very old school for sure.
In New Zealand, not only can you apply online, but you can take your picture with your camera and upload it. Then you pay online, and the passport is sent directly to your home, and you are sent a tracking number to see where it's up to. I want that here in Australia but at least we can do pretty much everything online.
This is amazing!! I’ll finish my masters in france in a couple months. And I’m starting to think about citizenship
haven't watched your videos in a while, but i was watching a lot when you were moving into your new place and found myself nodding at the cool new stuff in the background. looks very lovely; glad you've settled well!!
Welcome back!
I’m an accidental American. Never lived there but my mum was American. About 10 years ago paid a fortune to renounce. So happy I did it then as now I am married and own a house!
EVAN THANK YOU. Really there should be no taxing forms being required in any way at all.
This is so important! I was born in the US and moved to Australia when I was 2. I have never wanted to be a US citizen. I am very vocal about never setting foot in the country and that the only reason I have the citizenship is because I am too poor to get it renounced.
This is hope! I look forward to the outcome of this being in favour of us accidental Americans
Thanks for the update Evan! It’s thanks to you that I’ve gained the courage to pursue a better life outside the US. Maybe one day I’ll be free of the shackles from this stupid greedy country
I knew of accidental landlords and accidental parents, now I’ve learned about being an accidental American.
Good Morning Evan! I am your neighbourhood friendly age 44 ex-American dwelling in the paradise of North Yorkshire. My wife and I moved our family here a year ago for a multitude of reasons (primarily to work for, support, and resist privatisation of the NHS), and I have followed YOUR journey for years now. Thank you for the updates- we are grateful for all the content you provide, but especially info like this and culture clash material, which makes us feel a BIT less mad for making the move.
Love and Respect!
Evan this is a brilliant video! As a UK accountant whose previous employer provided US Tax Return services I cannot tell you how many calls I fielded with teary accidental Americans on the phone having just discovered during an overnight deep internet dive that they were supposed to have filed for X years and are terrified of the implications. From the comments, sounds like there's a lot of your viewers that have been through that very moment and I'm sure this video will bring them some comfort ❤👏
Thanks Evan for another very informative video on the hot mess that is the USA's double taxation / FATCA rules. Ever since I found out I had to file as an accidental American some years back, becoming "compliant" and then keeping up with my tax/FBAR returns has been a real nightmare, both psycologically and financially. It's good to see some good news on this for a change.
As an American expat in the UK, it's only easy for me to do taxes cause I'm unemployed....if that doesn't just feel soooo 'Merican, lol
Wait, if you’re an expat in the uk, and you’re unemployed, how are you living there without a work visa? Are you on a family visa or something?
@@thedeutschman9905 I'm privalaged with duel citizenship.
@@literaltrashpigeon5570 nice, that’s cool. I’m planning to live in the UK after I graduate college, so I’m ready for the tax nightmarEs lol. Who’d you get your British citizenship from?
This video will make my partner's day (he's American, I'm British/New Zealander). We aren't married and are honestly on the fence about doing so because it would mean I would have to start declaring my earnings to the IRS. It's wrong on so many levels that we have genuinely considered having a wedding ceremony but just not signing the paperwork.
Case in point: We had a joint bank account in New Zealand. My partner wasn't living in the country at that time, so I was the only one using it, and basically used it as a savings account. We then discovered that if an account has more than $10,000 USD in it, it has to be reported to the IRS and may be subject to taxation. All of that money was mine, but it didn't matter; my partner was a U.S. citizen and his name was on the account. That made the money fair game in the eyes of the IRS.
THANK GOD it was just under the threshold, so we never had to report it. Ever since, we've kept our finances totally separate and will continue to do so. He plans to renounce his U.S. citizenship when his parents pass away.
Actually, if you got married you wouldn't have to report your earnings to the IRS. Your American husband could file "married filing separately". Of course, that makes it more punitive for the US citizen as you don't profit from advantages for married couples, but it would keep you out of the IRS system. That is how I always filed since my husband is not a US citizen. On the other hand, half of everything you own together is still reported to the IRS. The alternative is simply not to file. The IRS doesn't have the capacity to come after you and they don't know if your husband is required to file or not. That is a very personal decision.
I am american and my SO is european. I am in the same boat. It may be better if we are separate. It is kinda disappoint and very unromantic.
I want to thank you for these videos because NO ONE ELSE talks about this. Im a US citizen living in the Netherlands and there is so much shit I have to go through to just never touch US soil ever again. Just let me leave !!!
Also an American (born and raised) living and working in the UK for the past few years. Thank you for using your platform to highlight these issues, as so few people know about this. US tax season is the most stressful part of the year for me, and the accountant fees are insane. Sending positive vibes for a smooth tax season for you and other American expats out there.
As I'm waiting for my flight at this very moment of watching this, this is really good to know. I'm going to school in Bournemouth, and hopefully get the new graduation visa after so that I can try to immigrate too. It's good to know the price is going down!
This topic fills me with unbelievable amounts of rage!!! I am so glad to hear this update. I am very close to renouncing, although it will make my parents who immigrated there very sad. I'm not sure what would happen to my accrued social security if I do this though.
As far as I know, you would always receive Social Security, but not Medicare overseas
Really fascinating video! I moved to the UK 18 months ago and am hoping to live here long term… hopeful that they change the citizenship based taxation (rn I’m a student so I don’t really pay anything in taxes to the US gov lol)
As Evan points out, even if you have no income and don't owe any taxes, you must still file an income tax return with the IRS to prove that is the case.
@@michaelmedlinger6399There is a filing minimum - or a single filer, Under 65 years old and have a gross income of at least $12,550. Over 65 and have gross income of at least $14,250. Married to a US citizen and file jointly and it's higher, If you marry a non-US citizen, that drops to a fiver. That's why Evan didn't learn about it when he was a student.
Accidental American too lol. Lived there til I was five, but not since. Haven’t made over the thresh-hold but am almost 29 now, oop. Just found out about the citizen tax even being a thing only a year or two ago and still have no idea what to do about it lol. My dad’s American, and he had no clue what I was talking about when I tried to ask him about it, (which bodes well). He DID start getting his pension recently though, so he has some contact? So GODDAM confusing. Would never have known about it if some living-abroad American friends hadn’t talked about what a pain it was lol.
Now they need to pull the fangs on FACTA, because until about 5 years ago I pretty much ignored the fact I was living in America until 1989 until this came in.
I've not earned a penny in American since 1995, but have to file taxes?
Nuhuh.
Ironically, I know I am not over the threshold because I CAN'T AFFORD TO PAY 1-2K A YEAR TO FILE ZERO TAXES EACH YEAR TO SOMEWHERE I'VE NOT LIVED IN SINCE BUSH SR. WAS PRESIDENT!
I'm also an American living in the UK - I moved here in 2012 and became a citizen in 2018. My father passed away in 2019 and I received an inheritance. In the UK, you have no taxes on inheritance unless it's over X amount. Which, is quite high. My little inheritance was around $99k. I had to pay the US 12% of it even though I've not lived there for years! The UK charged us nothing! At the end of 2019, I got a tax form from the US and had to fill out (again) my inheritance income. eye roll...
Thanks for the great and informational video!
Been there. Renounced in 2009, to protect myself. I get Social Security, taxable in the UK, so I file every year. But I use the form my tax accountant worked out when I renounced, copy it onto the form for the year, and send it off. My accountant said he probably wouldn’t bother, but I don’t trust my luck with the IRS. I had forgotten all the F-words till you mentioned them! And no more nightmares about taxes, fines, and prison!
What’s worse, is that a tourist couple who has a kid while on holiday in the US is automatically a US citizen **AND** they generally can’t renounce the citizenship until they’re 18. They may have no links to the country whatsoever other than they were in a hospital for LESS than a week because the airlines didn’t allow Mum to leave because she was “too” pregnant.
One of the chromosomes being an american flag had me in tears!😂😂
OoooOOh we love an update for the expats. It’s such a life struggle trying to decide whether renouncing is the right move long-term.
As an accidental American it’s always good to hear updates on this stuff
When I saw the title I was hoping this was the topic! Great video, thanks for the update 👍
really useful information as an american who plans to move abroad in the next couple years. thank you for compiling the information like this, i absolutely would not be able to figure this out on my own
I hope things are changing for the better!
I'm an American who's going to be moving to London for my Master's degree in March (and potentially another 2 years with a graduate visa). Excited but also taxes?? Yikes.
You mentioned in a previous video that if you renounce your US citizenship, it makes it difficult to return to the states to visit family, vacation, etc. Is that true, or has that changed?
I would also be interested to knoe
It's only difficult if you don't have another citizenship that has visa free access to the US. If you have UK citizenship and renounce US citizenship you can still visit the US visa free but will still have to do an ESTA
They will run you through the wringer if you renounce; they are definitely prejudicial. Once you are without US citizenship, you lose all human rights as far as border control is concerned. The automated system will flag your name as well.
I am American looking to move abroad. The fact that they tax the crap out of you is like an abusive parent that tricks you into never leave home. It is ridiculous.
It occurs to me that, for many accidental Americans, the best course of action would be to renounce citizenship before turning 18, so that one never gets to tax paying age.
Guess what. They don't make that easy!
It looks (after a little light searching) like that, in practise, there is a narrow window of opportunity between 16 and 18. Any younger and you're presumed too immature to understand the consequences of relinquishing US citizenship. And you have to prove it's the minor's own free will, which involves an interview where the minor has to convince the officer that they know what they're doing and that their parents aren't forcing them into it. And you can't do this inside the USA, you have to be resident abroad...
I can see that they could make it very difficult to get that interview...
For all practical purposes, you can't. They have 6 months after they turn 18 to renounce, and even then, they may still be subject to the fee and the exit tax.
In the same boat, not accidental American but left the US 35 years ago...Fatca is a pain in the........
Even our children are affected, when applying for a mortgage for example.
Waiting for the day that FATCA gets trashed completely!
They just need to abolish citizen based taxation.
Greetings from Budapest. Thank you very much for this. All the best!
Thank you for these updates and educating people about this topic, this is incredibly useful info and helpful!
I'm retired living out of the United States in Africa. Social Security income is below so no taxable income. I basically pay about $300USD Every year for residency card. Since I am not required to file, I don't and if I did decide to file, I would not be allowed to file electronically because I have no taxable income. So I just keep my resident address in America and the government does not know I am not in the US. Flying under the radar so to speak. But not really, IRS rules do not requure I file. Keeping it simple!
Thank you for this! Unfortunately the country I fell in love with doesn't allow dual citizenship and makes becoming a citizen very hard . Why did I have to fall for such a cruel maiden haha.
😭 In other words, I will likely end up permanently US-only citizenship while living abroad and dealing with this issue.
If it is unreasoably difficult to give up your old citizenship then in many countries you can be exempted
@@HansVonMannschaft That might be an option. Once I get closer to that date I'll look into it, and maybe the laws will have changed by then.
The reason this was made in the first place was trying to capture rich people evading taxes internationally, but it was twisted by bureaucrats to punish regular citizens as opposed to targeting rich people not paying their fair share.
"No taxation without represeantation" is the very idea which sparked the American war of independance. As a resident of London (which does not have any US congressmen or senators) how can the US government seek to justify taxing you (or any other Americans living abroad)? Seems like a fairly simple legal argument given that this (pretty basic) idea is one of the pillars of the US constitution. Am I missing something? As for renunciation, surely the first right in any democracy is the right to dissent from it and say "no thanks and goodbye" - how could that come with a fee? Bizzarre.
Could it be that the exorbitant fee is a bit of a "sheepdog" method for keeping the would-be sheep from leaving? I've seen this idea hinted at in other comments, but written differently. It certainly feels that way to those of us in lower tax brackets. I'm no sheep, but my finances ain't exactly top of the herd. 😜🤣
FATCA even ends up affecting non-US citizens in the UK. I've been sent forms in the past relating to a charity account I help manage where the sole purpose is to determine that no US citizens are involved so we don't have to send money to the IRS. At least we only had to do it once though!
Interesting. I worked in IT for a UK bank. You have no idea how complex some of the reporting stuff a UK bank has to do in order to comply with FATCA etc - it gets worse if - as most are - the bank is also listed on the US Stock Exchange. Some aspects of internal staff training vary depending on if you're a US citizen or green card holder.... and that's for a UK company... talk about ultra mures and overreach!
I will say, as a new UK working American I am so thankful for these videos. I would be absolutely clueless on this if I hadn't been following your channel. Thank you for saving me from the IRS lol! NO TAXATION WITHOUT REPRESENTATION. Reverse tea party time.
As an accidental American, thanks for the update :)
Citizenship based taxation is crazy that makes no sense at all what a dirty nasty thing to do to your own people
Doesn't the US also have citizenship automatically if you were born in the country so e.g. mum was on holiday in Boston baby popped out a little early and even though the parents are both from the UK and have never even lived there because Baby was born on US Teritory they're now a US citzen.
Yes! This happened to me! So I'm an American citizen despite no familial links and growing up in another country and I have to figure out all these tax forms
It was probably really cool in the 1950s to be born a USA citizen and had lots of advantages - back then.
Hi there Even, I am a US citizen living in England as well. I am in Paignton by the sea. I have been here for about 3 years. I am disabled. So I am exempt from paying taxes as I get SSDI from America. I find the whole situation crazy. I have watched your videos for about as long. I have loved your videos about US vs UK. I too got the stimulas from covid. The only problem is they stopped doing the Federal stimulas and just had state stimulas. Which is bad for me as with inflation here my money doesn't go very far. I didn't know about any of this stuff about taxes and such. Thank you for sharing your experiences. Amy from Indiana.
Hoping they get rid of Fatca and Fbar at some point since they admitted to not having the resources to even process them all.. I remember when I first watched your video on the subject and it made me super anxious. Doubt it will be gone by the time I move abroad but I really hope they just get rid of it all together or at least revise it a bit and have it apply only for high income earners eventually.
Thank you for this information. I was not aware of this. 😮
Boy, that is one helluva segue. Nicely handled sir (which is, funnily enough, something you might hear if you happened to be searching for *that* content which you might not want the government to know about)
I was born in the US while my parents were working there but grew up abroad and I had to start actually filing stuff at 16 (but I don’t think I would’ve been liable to pay anything till 18), idk if it’s just the rule or specific to my situation but it sure wasn’t a fun surprise
British here. Err didn’t the US fight a war of independence over taxation and representation 🤔. Feels oddly ironic 🤷♂️
so my brother-in-law is a lawyer in Canada and he makes his entire living off this dealing with Canadians with dual citizenship. He leads the largest US citizenship renunciation practice in the world. I mean being a tax lawyer he's going to make money somewhere else but this is going to destroy this avenue for him.
It won't; most of his work is probably helping with the exit tax. The US will take 40% of all your assets sold at market value on the way out; this includes retirement investments. The fee is only a part of the problem.
The other big problem with renouncing citizenship is that you need to have another citizenship first - which usually takes 5-10 years of residency in the other country, and isn't even possible in every country. So even if you want to, you can't do it for years
2:58 he said England! Angry Scots in coming! 😉
so..... a person born in say England, to american parents. Never sets foot in America. They are a American, and subject to taxation? Crazy. Whatever happened to "No taxation without representation"
8:09 - "...he's looking Topeka little bit!" - nice pun for Kansans, there!
I know my state capitals ;)
Very interesting and may I say a very stylish jumper.
This is fantastic news. If only the other issues attached to renunciation also get done away with too. That would be best. I grew up in the US but have been living abroad since the late 90s. I've been complying with all the FATCA crap since it started in the Obama era. I was a couple years behind and had to submit for previous years which was stressful. I did spend a couple of years in the UK and found HSBC willing to allow Americans to open accounts there in case you are still having issues. Great video thanks.
I've often heard Americans say "no taxation without representation", so what representation do you actually have when living abroad? Can you still vote in local/state/federal elections, and if so can they actually do anything for you if needed?
You can vote but it's a pain in the @ss because you still have to use paper ballots and vote by snail mail. You also have to request the ballots in advance (they aren't sent automatically) or you won't get them in time.
@@WouldntULikeToKnow. thanks for clearing that up, I've often wondered how it worked.
Yes, you can vote. But the 9 million Americans abroad are distributed across the country based on where they last lived. Because of this, the needs of this block are usually ignored by politics. Consequently, they usually declare victory before even opening the mail-in ballots, which included all of the citizen's aboard; quite literally, their votes do not matter.
At the end of the day, it is representation in name only. If they were given explicit representation in congress separate from the states, then they would be the equivalent to the 9th largest state in the union. And they would pbobly have only three statements: ' Leave Us Alone, Stop Going to War, and Keep the Global Econmy as stable as possible'
Yes, you can vote if you live in a foreign nation, but, ironically, if someone lives in a US territory (Puerto Rico, Guam, etc.), they cannot vote.
I was hoping they were going to stop the requirement to file taxes when you live abroad.
Good to see that the party of small government made this a very high priority to fix.
My dad was born in Chicago when my grandparents were there for my grandfather's sabbatical. They left the US when my dad was one month old. He is still paying taxes to the US for that...
As your Dad is a US citizen & still paying taxes there, that should also make you a US citizen too.
It seems like they still don't have a plan on when to reduce the fee. Lots of renouncers online seem to think it was just said to stop the court case and it will be never happen. 😢
Good job. Evan! Thanks!
@evan Don't forget that while the US makes damn sure individual citizens pay all these taxes, US companies can set up overseas offices specifically to dodge all those taxes.
Very unfair.
Either the US should drop the whole citizenship based taxation, or at least be equal and make sure every damn US company also pays all the taxes world wide, too.
The parents of accidental Americans do not for the most part have U.S nationality.
Fabien Lehagre,
President of the Association of Accidental Americans
Soz for that type I should have used a different word!