Sunday, May 13, 2012

FATCA, again

Peter Spiro points us to last week's NY Times story on FATCA and asks: "How many tax stories get this kind of play? NYT must have some reader traction on this.  Remember: the US is the only country other than Eritrea that taxes its external citizens."  Maybe things are not so crystal clear on Eritrea.  Peter thinks FATCA "[m]ight even violate international law, insofar as states can't arbitrarily obstruct expatriation."  From the NYT:

"new U.S. regulations — and much tougher enforcement — are catching some Americans in legal nets designed to snare terrorists, money-launderers or wealthy tax-evaders. Many Americans overseas — not just the rich — have had to pay thousands of dollars in fees for tax accountants or Internal Revenue Service fines.
...A growing number of Americans living abroad are renouncing once-valued U.S. passports. Some 1,780 people gave up U.S. nationality last year, eight times the 2008 level and the largest number in more than a decade."
Correlation ⇏ Causation, but it's a provocative statistic.   It's also bad when your taxpayer advocate says things like this:

"Nina E. Olson criticized the agency for not explaining the laws better to international payers; for issuing regulations so complex that compliance can be arduous and costly; and for issuing “potentially devastating penalties for even inadvertent noncompliance.”

1 comment:

  1. I actually have had some email communication with the woman in Canada who couldn't renounce on behalf of her developmentally disabled son mentioned by Peter Spiro. I might try to get her to comment over here.