Swiss banks cutting ties with American clients, Average of 3000 americans surrendering citizenships yearly for being citizens of better countries.
Here is a sign that life is getting complicated for U.S.
taxpayers with assets abroad: More of them are deciding they are better off
cutting official ties with America.
In the first half of 2013, 1,809 people renounced their
American citizenship or permanent-resident status, according to a tally by
Andrew Mitchel, a tax lawyer who tracks U.S. data. At that pace, the 2013 total
would double the previous high of 1,781 renunciations in 2011.
Daniel Kuettel, a Colorado native who lives near Zurich,
says he gave up his U.S. citizenship in October because he feared he wouldn't be
able to get a mortgage now that some Swiss banks are cutting ties with American
clients.
"It was a really difficult decision. I had to think
about what was best for me and my family, to reduce the risk," says Mr. Kuettel,
a 41-year-old software developer. He says his income was below the limit the
U.S. allows overseas taxpayers to exempt and he owed no U.S. taxes.
Associated Press
As required by law, the IRS compiles a list of those who
renounce their citizenship, and the names are published in the Federal
Register.
Much of the money comes from well-heeled taxpayers. The
top 10% of taxpayers who went through one of the Internal Revenue Service's
limited-amnesty programs had account balances over $4 million, the U.S.
Government Accountability Office estimated in a March report. The programs are
one way for taxpayers who have missed past filings to come into compliance.
But many U.S. taxpayers who aren't wealthy also are
finding it harder to attend to routine financial matters abroad, because some
foreign institutions don't want to face the cost of complying with U.S.
requirements.
Amid the crackdown, some face stiff U.S. tax bills and
crippling fines over undeclared assets. Paying lawyers and accountants to help
meet the various reporting and filing requirements routinely costs at least
$1,000 a year, and often much more, experts say.
Other people say they are considering whether to
renounce but are reluctant to take such a drastic step. Renouncing can cause
additional complications, including another steep bill because of an exit tax
the U.S. imposes on those who meet certain income or asset thresholds.
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