Last year 1,780 Americans renounced their citizenship. Expatriates are finding out that the land of the free isn’t so free anymore. The bloated U.S. government is in need of money, and many are finding greener pastures elsewhere. But there is a price to be paid. If you think the I.R.S. is going to let you off scot-free, you’ve got another think coming. Here is a sample of what is going to happen to you for daring to leave the collective, as reported by the Wall Street Journal:You might owe an exit tax. U.S. citizens who expatriate are treated as though they sold all of their property the day before they renounce, even if they will continue to own it and pay property or other taxes.
Capital gains (net of losses) are taxed at the current top rate of 15%, after an exemption of $651,000. The tax on some assets, such as an individual retirement account, will be at ordinary income rates up to 35%, notes Dean Berry, an attorney with Cadwalader, Wickersham & Taft in New York.
The tax applies to U.S. taxpayers whose net worth is greater than $2 million or whose average annual income tax for the past five years is $151,000 (adjusted for inflation).
There are important exemptions; one involves people who have been dual citizens from birth. For more information, see the instructions to IRS form 8854.
You will have to certify that you have been tax-compliant for the last five years. The upshot: Expatriation is a bad strategy for coping with past noncompliance.
Your heirs could get a big tax bill. The U.S. heirs of wealthy taxpayers who renounce their citizenship usually owe inheritance tax equal to the U.S. estate tax on assets left to them by the expatriate. (This doesn't apply to spouses who are U.S. citizens.)
What is even more perverse is if your parents are foreigners, and you were accidently born on U.S. soil, than according to an asinine Supreme Court ruling, you’re considered an American citizen. That used to be considered a good thing. But not today, and especially, if you live abroad and never considered yourself an American.Also, unlike many countries, the U.S. has a broad definition of who is a citizen—including, for example, people born on American soil. That produces a large number of "accidental citizens" who don't consider themselves American but nevertheless owe U.S. taxes.
Steven Cantor, a lawyer at Cantor & Webb in Miami, says he recently had a Latin American client accused by the Internal Revenue Service of hiding offshore accounts, but who was a citizen only because he was born here after his mother sought medical attention during a difficult pregnancy. Mother and son immediately moved back home.
"He had no U.S. passport or Social Security number and had traveled to the U.S. on a tourist visa, but I had to struggle to convince the IRS of his innocence," Mr. Cantor says. An IRS spokesman declined to comment on the case, but said the agency has since clarified the rules to provide reduced penalties for U.S. citizens in such circumstances.
Hell, even a Clinton sycophant and campaign contributor hauled ass out of this country. Does anyone remember Denise Rich?
Well, at least Mrs. Rich got what she wanted: a pardon for her husband. The rest of us – true or accidently born here – will be stuck with a slobbering, avaricious federal government.Source: http://online.wsj.com/article/SB10001424052702303879604577410021186373802.html
No comments:
Post a Comment