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Comment by timthelion | Hacker News Reader

I am an American living in Prague and will be among those to give up their citizenship. The new FBAR requirements and the recently pushed through changes that require foreign banks to report are really a huge burden. It is a significant legal risk to be an American overseas. The fines are insane for failiure to report, even if you owe no taxes! You can easilly land yourself with a $20 000 - $80 000 fine for having a hundred bucks in the bank and no income. Indeed, it's not just double taxation, it's tripple taxation, because I have to have a special bank acount that is for Americans, and the fees for the "American expat" bank account are much higher than the ones for a normal bank account.

But I think that it is wrong to present this as a taxation issue. I would be fine with paying a percentage of my income in taxes. There are some benefits to being a US citizen, like that the army will rescue you if there is a civil war ;). But the fear uncertainty and doubt that surrounds these new regulations makes it nerve racking to be a citizen. Every expat I know here has nightmares about an audit comming and having all of their assets seized. And it has happened to some of them too! And that legal risk is no longer a form of taxation, because taxes are percentual (the more you earn the more you pay), but when you end up having to pay a fine that is higher than your net worth, that's just robbery.

We used to be a free nation, but thanks to austerity the 'r' had to be removed.

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> There are some benefits to being a US citizen, like that the army will rescue you if there is a civil war

This is a common myth. If you don't intend to return to the USA there are no benefits to US citizenship, only downsides. The US may or may not rescue you if there's a civil war (see the fate of people in Yemen), but if they do, they will charge you for it at military rates you almost certainly cannot afford:

https://travel.state.gov/content/passports/en/emergencies/cr...

See "Will the US government pay for my travel? What will it cost?" which says, essentially, that no, it won't. This is unlike other countries which DO evacuate citizens for free and DO NOT charge taxes on non-residents.

My dad was evacuated from Yemen by the military when the civil war there broke out. That blue passport was his ticket out of a country that was rapidly disintegrating. He was not charged anything for that. So they don't always charge you (indeed I've never heard of it).

http://www.latimes.com/world/middleeast/la-fg-yemen-us-citiz...

http://www.flyertalk.com/forum/16061379-post8.html

My dad was evacuated 15-20 years ago. Before that, Yemen was a poor but pretty peaceful country. I think we should evacuate the folks stuck there now, but the state department isn't wrong to say that they've had a lot of notice and shouldn't have been there in the first place.

Didn't know about that situation with US citizens in Yemen, one of the comments posted in response to the LA Times article says Russia ended up evacuating them? Is that true, or just propaganda? The only source is RT..

> LA Times article says Russia ended up evacuating them?

This would be irony overload.

For someone who still remembers the cold war this is almost unthinkable.

How so? The US and RU have a history of helping each other in situations like this.

Know of any examples where I can read an account of this.

It brings up my Rocky 4 warm fuzzy

> they will charge you for it at military rates you almost certainly cannot afford

Your link says "We charge you the equivalent of a full coach commercial fare on a comparable mode of transportation at the time that commercial travel ceases to be a viable option."

Yeah, but they don't. I posted links to support that elsewhere.

Still, the original argument wasn't about total cost, it said that being evacuated was a service you get just for being a US citizen. Not the case.

In a parallel thread, mike_hearn links to https://goatpath.wordpress.com/2011/02/11/how-much-can-an-ev... .

The 45 minute flight from Port Au Prince, Haiti (after the earthquake) to Santo Domingo, DR cost $841.11.

I think this is because 'full coach commercial fare' is the most expensive coach option. Very few ever purchase it, excepting those who want full flexibility to change the schedule without extra fees, or request a class upgrade if available.

> but if they do, they will charge you for it at military rates you almost certainly cannot afford:

But the link you posted said "We charge you the equivalent of a full coach commercial fare on a comparable mode of transportation at the time that commercial travel ceases to be a viable option."

Where'd you get the "military rates" part?

that's what they say of everything they buy for themselves too, and I've never saw a military contact that wasn't overcharged.

When was the last time you bought a full fare couch ticket? People are usually buying "double deep discount" tickets. Most of the time you can buy first or business fares for cheaper.

So, the US spends hundreds of billions of dollars a year on the military, but can't rely on it to protect its citizens to the degree that the Indian military (with a budget less than 1/10 of the US military's) protects its citizens? Sounds about right.

The state department has been warning people to avoid Yemen for over a decade. Likewise they've had over a year of notice as actual organized violence has increased in the country. Up until the summer last year, people could've left at any time on a commercial flight.

$3-$5k is something you almost certainly cannot afford? For getting out of an active warzone that sounds like a steal to me :)

"If you don't intend to return to the USA there are no benefits to US citizenship, only downsides."

Seriously? US citizenship means you can travel with a US passport, which allows visa-free travel to many, many countries: https://www.passportindex.org/byRank.php

TIL that both UK and US passports are the most powerful passports in the world.

Only in terms of the countries you can travel to without a visa. Go just about anywhere with a Canadian passport and they'll wave you past, almost like they're annoyed you think you might be considered a security risk.

I got a 6 month visa in the UK while laid over at Heathrow in under 10 minutes. Under "Reason for your stay in the UK" I wrote "a cigarette."

Why did you need a visa to get a cigarette? Canadians don't need a visa to enter the UK for tourism/transit/business, subject to some maximum amount of time (90 days IIRC, but definitely more than enough to buy a packet of cigarettes).

I was holding a carton of Marlboro Reds purchased in Berlin, so I didn't even need to buy any. I'm fairly certain we still need a visa, but it's basically an automatic process.

If you have a Euro passport, you might as well torch your American one. There is no benefit to being identified as an American overseas when you have a European passport. In fact I would argue it is more dangerous. My family that were stuck in Kurdistan were able to avoid violence against Americans because they had Swedish passports. That little blue book is a death sentence in some places where something else wouldn't be.

"If you have a Euro passport, you might as well torch your American one."

Even if that were true, what proportion of US citizens living outside the US (the class to which my comment and the immediate parent referred) have a 'Euro passport'?

Very, very small, and only those who've lived in the EU long enough to obtain citizenship.

That doesn't make what I said less true. You speak to counter the claim of downsides to having an American passport, I'm providing evidence of harm to your livelihood in some parts of the world for having an American passport (versus any other kind of passport).

"You speak to counter the claim of downsides to having an American passport"

No, I spoke to counter this claim: "If you don't intend to return to the USA there are no benefits to US citizenship, only downsides."

I did not comment on the downsides. I spoke only of the benefits, which the parent comment said did not exist.

I lived in Nigeria during a period of violence when thousands died. One of my enduring memories was the reactions of the Americans living there at the time. They were so sure that the army would come and save them and when it didn't they were dumbfounded. When someone from the US eventually turned up after the violence had all died down all the US citizens were offered was the opportunity to be part of the convey out of the city.

I wonder where the dead set certainty that the army will save them comes from?

Movies perhaps?

yes, movies like Tears of the sun. considering the number of US citizens, they are all over planet and it's a rather unreasonable expectation.

generally US citizenship meant much more in the past than it means now since there are more interesting places to live (albeit in long term US might still prove as best spot... or not).

When the most recent war broke out in Yemen, the Indian govt managed to evacuate its citizens from Yemen using their navy and if you take into account the size of the Indian diaspora in the Arabian Peninsula including Yemen, it wasn't an easy feat and I can't imagine that the USG wouldn't be capable of carrying out a similar evacuation plan or doing what it could to get their citizens out of harm's way abroad.

I highly doubt there are many Indians in Yemen. It's a poor country and doesn't have many migrant labourers like the UAE or Bahrain do.

Also the Americans I knew seemed to expect helicopters to come pick them up and all that. Saying to your citizens they need to get out and we've got a navy ship in port that you can get on if you want isn't really evacuating your citizens.

A simple search would lead you to: https://en.wikipedia.org/wiki/Operation_Raahat_(India)

So people went to a port or airport. It's not really a rescue as much as just having a few more planes picking people up than usual.

Air India also played a major role in the 1990 evacuations from Kuwait. Considered to be the largest civilian evacuation, airlifting 170,000 Indians stranded in Kuwait.

https://en.wikipedia.org/wiki/1990_airlift_of_Indians_from_K...

Helicopters would come pick them up from the airport or embassy if it was necessary. The violence in Yemen started relatively far from the population centers where most expats are/were and progressed relatively slowly. They had plenty of time to get out of the country via normal transportation options. If outright combined arms conflict had suddenly erupted in the city, you can bet the various developed militaries of the world would have provided protection for their citizens to leave.

Also, a naval vessel absolutely qualifies as evacuating your citizens.

You can bet that if outright combined arms conflict had suddenly erupted in the city various developed militaries of the world would have provided protection for their citizens to leave. That's visibly demonstrated by every civil war. Give me an example of a developed military that's gone into an armed conflict to rescue citizens. The closest I can think of is the rescuing of hostages. That's not quite the same thing though and very rare.

> That's visibly demonstrated by every civil war.

No it's not. Especially so with the civil wars in the Arab world, they didn't spring up virtually overnight and almost across the board started well away from the capital cities where most expats and embassies/consulates are.

> Give me an example of a developed military that's gone into an armed conflict to rescue citizens. The closest I can think of is the rescuing of hostages. That's not quite the same thing though and very rare.

There are a variety of examples of this by practically every developed country. In the last two decades it's been relatively common in Africa and the Middle East. The US in particular has a number of such cases which can be found in this list: https://en.wikipedia.org/wiki/Timeline_of_United_States_mili...

Hostage rescues are very rare, I agree. That's an extreme measure.

The US government, by contrast, didn't really help out any US citizens in Yemen.

Do you think the government is going to come and forcibly remove them from the country if they don't want to leave? The state department has warned people against going to the country for over a decade, and likewise has issued advisories to all of the expats living there the entire time they're there. Anyone with any sense got out of the country a while ago. The vast majority of those left are foolhardy individuals who didn't think it would get as bad as it is.

Capable? Maybe. Willing to exert itself on behalf of US citizens in danger? Nope.

http://www.theguardian.com/world/2015/apr/01/american-civili...

The US evacuated government staff and contractors, but abandoned anyone else.

They weren't "abandoned". They were told very earnestly to leave, but they wanted to stay and work on mostly oil fields and continue to make admittedly large sums of money. In general the state department has been warning people about traveling to Yemen for over a decade, and likewise has been issuing travel advisories and other updates to the people living there. Far from "abandoned".

It would be said if poor Indians foot the bill for bringing back well off Indians who left for better life abroad.

Indians in ME are across the economic spectrum, and mostly blue collar but there are also white collar. Yemen is very close to India. Your smug comments demonstrate your ignorance than anything else.

It almost sounds like the insurance business. You're lured by the flashy ads. You sign the contract. Shit happens. The insurance company tries to weasel out if they can away with it. New insurers happily ignore the stories.

Uh, did any of those American citizens make their way to the US embassy? That's how you get out of the country if violence is breaking out. Nobody in government would even know you're there beyond some database.

Yeah, they're not going to launch a Saving Private Ryan search for every US citizen in the country.

Actually, you are supposed to register if you live outside the USA with the State department.

Actually, no. There is no "supposed to." You can register with the State Department if you live outside the US, just like you can register with the US if you travel outside the US. The web site is http://travel.state.gov/content/passports/en/go/step.html .

Do you really think that every one of the millions of American citizens who travel or live overseas each year is supposed to tell the US about their current location?

Do you really think that every one of the millions of American citizens who travel or live overseas each year is supposed to tell the US about their current location?

I didn't presume there was such a requirement, but I also wouldn't have been surprised if the fine print somewhere made it a selectively enforced requirement. It doesn't strike me as more or less onerous than some other actions that are currently required.

There is no "supposed to."

I think you are correct, but when an official government agency "encourages" a certain behavior, it's not too much of a stretch to presume that one is "supposed to" do it:

  We encourage all U.S. citizens travelling or residing 
  overseas to notify the closest U.S. Embassy or Consulate of 
  their contact information so that, in an emergency, we can 
  contact them to provide important safety and security 
  information, or support during a crisis.

https://step.state.gov/STEP/Pages/Common/FAQ.aspx

What would your guess be as to the chances that some sort of registration will be made requirement in the future?

"Supposed to" implies either a requirement or a moral obligation. There is neither. "Should" doesn't have that same sense. Perhaps the word you meant? It would very much surprise me if that fine print exists as I looked for terms like that when I moved overseas, to make sure everything was legitimate.

Such a requirement is very unlikely for travelers. It's just not practical given how often plans can change. (I visited a salt mine in Austria. To my surprise we crossed into Germany during the tour. Would I need to tell the US about those 20 minutes in Germany, and when?) How much would it cost to run such a system? What happens if the system breaks - and we know the foreign tourist tracking system breaks? What are the advantages to the US?

It's more possible for permanent residency. But the US doesn't even require that of domestic citizens, despite the clear advantages there would be to know where people live. So I don't think it's going to happen any time soon. And what would be the penalty of getting it wrong?

When a citizen has made their way to usually the largest, most well connected city in the continent already it's not much of a rescue.

And yes they were expecting a Saving Private Ryan moment.

I'm also an expat, living in the UK. The FBAR isn't too bad at all, it takes 30 minutes to file electronically if your records are in order. The real burden is filing my annual taxes. I'm a contractor with a limited liability company, common setup in the UK. However in the US, this is treated as me having financial interest in a foreign C-Corp, which has an extremely complicated tax return. Fortunately I have a family member who is an accountant and loves new "challenges". Other people in similar situations spend several thousands a year to file their taxes.

I've heard elsewhere that foreign banks were closing down accounts of American expats because the customers aren't worth the FATCA paperwork. Have you encountered any trouble with that?

We've seen trouble with this in Canada. My partner's investment manager is basically kicking us out because we're living in the US now.

That can happen. One of my colleagues had this problem, except he solved it by not being American (he'd not returned a form which they'd sent, asking him to confirm his lack of American citizenship).

I expect the reporting requirements are a burden for small banks, especially ones competing heavily on price rather than offering a full service. I'm not American, but am a similar burden to a bank, and was strongly advised to open an account only with the country's largest bank.

This was literally in the article.

Yes, sorry I mean that I'd read about this in several other places had assumed that it's become a common occurrence. But nvarsj's comment suggests that it's been no big deal for him. I'm curious if he's personally run into banking problems, or just the pile of tax paperwork.

I'm an American living in Europe. I report my income to the IRS every year, like you. Reading your comment gave me a scare -- what exactly would trigger the $20,000-80,000 fine or asset seizure?

Is it a failure to report income taxes at all? Or do you make so much more than $100k/year that the double taxation is killing you?

I'm just trying to figure out what, other than their already-reported income being audited, has got all of your expat friends so spooked...

When many expats came abroad, the rules were rather lax. They didn't have to file US taxes due to their low incomes.

Later the rules changed, and they had to file taxes. Those who didn't know about the change ended up having to pay a big fine.

Lately, a new requirement was the need to file FBAR forms for every foreign bank accound and security: https://www.irs.gov/Businesses/Small-Businesses-&-Self-Emplo...

Many people didn't know about the new requirement, and they had to pay big fines.

What will be the next new requirement that startles people who don't have any contact with the country? No one knows. That is the risk, the uncertainty that there might be a requirement that you don't even know about...

Ahh, thanks for the explanation (and the link). Much appreciated.

It is even worse for US Persons in Canada, many of whom have never even been a US resident in their entire life. The reason is our tax treaty... If you file in Canada, you're good. At least that is how it was. Now they are going after these people because capital gains are exempted from this aspect of the treaty so they think they are compliant by having filed in Canada, but then find out a house the sold 10-20 years ago should have been declared even if they have never had to file US taxes before.

It's not the tax failure -- it's the failure to report bank accounts to the US Treasury. Here's an article about it: http://money.cnn.com/2015/04/01/pf/taxes/irs-penalties/

The Foreign Earned Income exclusion does not apply to capital gains, investment or any other "unearned income." So a retired person would by able to claim the FEIE exclusion -- they'd be taxed as if they lived in the United States (with deductions for foreign taxes paid.) Pensions, disability payments, annuity payouts.. not under the FEIE. So for a lower-income retired person, double taxation is a huge problem.

It's the failure to file a FBAR every year that has meant some people have paid outrageous fines. That's separate from the income tax return.

For me, I got an inheritance that I didn't really remember from a relative who passed away years ago. It was put into a foreign bank account since this person wasn't a US citizen and passed away in the country of their birth, and since I got it as a minor I basically ignored it, figuring I could just leave it as a bit of an emergency fund.

When I found out about the new rules and then remembered the bank account (10 years later!) I realized I was probably not in compliance. That's one thing that spooks people: $2000 in a bank account you forgot about can lead to disproportionate fines. I had to do a lot of paperwork to get into compliance, and because I had to transfer the money I actually lost a lot in a poor exchange rate (due to various constraints).

What austerity are you talking about? That's not a US thing. There's been no austerity here; government spending has continued fairly normal growth once you factor out the stimulus spending.

Although since that seems to be what a lot of EU governments are calling "austerity", perhaps we have had it.

Remember how a large percentage of gov't administrators complained that their normal annual budget increase being lowered slightly was a cut? Remember how they cut services that didn't even depend on that increase in response? Calling it "austerity" is at least as honest.

If you have union contracts dictating that your costs go up by X% a year to roll over personnel, then a budget increase of less than that is indeed a cut as you'll be laying off personnel to meet the budget.

See also: Every departmental budget ever, public or private (non-unioned employees expect a small annual raise as well)

Due to inflation, budgets must increase each year. If you don't increase the budget in line with inflation, it's a cut in practical terms.

A prevarication is a lie in practical terms. Automatic budget increases are justified at the end of every fiscal year by spending all of the leftover money, i.e. unneeded money that was automatically budgeted is spent on crap solely to justify getting more unneeded money.

That may happen, but like the "cadillac welfare queen" is an exception, not the rule. For most departments, they run out of money before the end of the fiscal year.

I disagree. I worked in a few different government departments that depended on funding.

We always had a surplus at the end of the year and the boss would tell us to spend it on anything and everything because if we didn't, there would be less money in funding the next year.

The amount of waste was incredible and it made me angry. It's why I went into the private sector/started my own company.

You also almost could never get fired. We had so many bad employees that basically sat to get a paycheck and take up space. If you are really lazy, it's great.

Because of this game that is played, it's very difficult to tell if a department 'ran out of money' or just spent it to meet next year's budget.

Ask yourself, honestly, what percentage of the entire budget was that end of year splurge? In my experience it's very small, much smaller then the year to year cost inflation.

There's tons of waste in any large organization. In my experience, private companies have more waste (resources and personnel) then public organizations as they have much less oversight.

The goalposts are all over the place. The only reply I have for this is that private institutions only waste my money if I own them, the government wastes my money by force.

You mean the 2013 budget sequestration never happened?

Tell that to the departments that are getting $1.1T less over an 8 year period.

Between the sequestration and the lack of budget increases, the US has been going through a period of federal austerity.

Maybe it's just me, but when I think "austerity" I don't think such small-single digit percentages. If our government is that sensitive to such small piddling decreases in income, then the problem lies in the government anyhow, not the income decrease... on the timespan of your life, there will be years where the income will have to go down. Be it major famine, major natural disaster, or the need to fight an actual war again, you can't build a government edifice that only works if you feed it 105% of what it got last year, every year, after inflation, or it will fail anyhow.

Of course, expecting fiscal responsibility from a government is a fool's errand. Screaming like a stuck pig and running around yelling "AUSTERITY! AUSTERITY!" if one even breathes a threat to feed them less, and then blaming everything bad that ever happens again on the AUSTERITY is exactly what I'd expect from them. What on Earth will they actually do when something bad happens?

Anybody that thinks $1.1T is a "small piddling decrease" must be a truly wealthy person. Can you spare the government that pittance? We'd all benefit from it.

Lived in Australia for 5 years. Was several months late filing FBAR my first year. Did it on time my second year. Completely forgot my 3rd and 4th year. Filed 3 at the same time on my 5th year. I was never contacted by the IRS for failing to file on time.

The point being, it's scare tactics. I filed a complaint with the https://www.irs.gov/Advocate and they are well aware of the issue. They have brought it up repeatedly in their report to Congress. The IRS's response is an FU and it shows how toothless the Advocate's office is. You can see their report on international issues here https://www.irs.gov/pub/tas/2011_arc_internationalmsps.pdf, The reporting requirements section is close to the bottom.

So to someone in the same boat as you you'd say just file the tax return and be done with it? I looked at the FBAR online form and could not imagine ever filling that out when I permanently live overseas, it actually infuriates me.

Hi!

I work for the IRS and we'd love to get this squared away. Please contact me at collection0010@irs.gov and we can resolve this immediately.

Best

Hi, I'm a Canadian business owner who does lots of US contract work and I have colleagues who are US persons in both countries.

Every time a US Customs agent asks me if I will ever be interested in becoming a citizen I laugh and tell them about situations like this.

When I was young I dreamed of moving to the US, now it is a huge joke because of all the paperwork and FACTA's "Hotel California" implications. Now I will never apply to be a US citizen. Especially because I would have addditional paperwork until I die.

BTW, this even affects Canadians and Canadian legal entities as we're all forced to declare we are not US Persons even if it is obvious we are not.

FACTA is an overreach of power and the IRS should do a better job pushing back against laws like this. The US was once known as "the place to do business" (at least in the Americas) but now it appears to be just a gigantic bureaucracy.

I think it is good people are renouncing their citizenship... Perhaps it is the only way to let the government know how bad the system is.

"the recently pushed through changes that require foreign banks to report are really a huge burden"

The OECD is adopting CRS which is a wider-reaching version of FACTA. 51 countries are adopting it in September 2017. Another 34 (including Hong Kong, Switzerland, Singapore, and the United Arab Emirates) will adopt it a year later, in 2018.

I have (some) hope that what we're seeing now is the teething pains and they'll go away in a few years. But (as a fellow expat) I agree it is not a great time right now :(

I am an American in Norway...

I thought you only had to file FATCA for bank accounts that had more than $10,000 USD in them at some point in the past year. Not a few hundred. Are you sure about that? (if so, oh sh*t)

You have to fail FACTA regardless if you hold an overseas account. If you hold less than $10k USD than it's a few check boxes and takes less than 10 minutes

Nope. You must file FBAR for all of your accounts only if the sum of them ever exceeded US$10,000 during the year. That requirement has been around for many years.

The IRS rules concerning FBAR are here: https://www.irs.gov/Businesses/Small-Businesses-&-Self-Emplo...

And the pertinent text from that page: "Who Must File an FBAR United States persons are required to file an FBAR if: 1. the United States person had a financial interest in or signature authority over at least one financial account located outside of the United States; and 2. the aggregate value of all foreign financial accounts exceeded $10,000 at any time during the calendar year reported."

FATCA is a new burden on foreign financial institutions that requires them to report to the US government on US citizens who have accounts at their institutions. It's meant banks in several countries have refused services to US citizens and closed their accounts.

This is only if you are self-employed or a small business owner, correct? If you are an American living abroad and working for a company does FBAR apply to you?

Any United States person has to file if they have more than $10,000 held in a overseas account.

A United States person is defined as:

"United States person includes U.S. citizens; U.S. residents; entities, including but not limited to, corporations, partnerships, or limited liability companies, created or organized in the United States or under the laws of the United States; and trusts or estates formed under the laws of the United States."

(There are exemptions for very specific circumstances)

A lot of United States persons living overseas are unaware that they need to file, and a lot of permanent residents or H-1Bs in the US are unaware that they also need to file if they still have assets held overseas. They have ramped enforcement up over the last few years so a lot of people are out of compliance and don't realize it. Thankfully at least at the

See:

http://business.financialpost.com/personal-finance/taxes/unc...

(Disclaimer: Not an accountant. Consult an accountant for tax related advice)

It's a bit more complicated than that. Right now, you have to file for every bank account you own (or have signature authority for) if the combined worth is more than $10,000. So it's not as bad as I wrote at first, and I appoligise for that, I had forgotten about that factor. But it still surprises people.

Edit:

Oh, and the worth is calculated as the maximum value during the year. So if you get a contract filled for $10 000 and someone wires you the money, even if you imediately pay the rent and therefore have no money in the account, you still have to report the account.

I think you need to report in any case, the $10,000 might be a threshold below which the bank does not inform you to the USA. The real threshold below which the bank needs to look at you is $50,000, or if you have stocks, funds, or investment-grade products, such as some insurances, $0, but some banks are using a lower threshold. Also do note that this is for preexisting accounts - new accounts need to be looked at and can end up being reported irrespective of the amount they hold.

FBAR requires you to report an account held overseas in excess of $10,000. This is separate from the reporting you do on your tax return and separate from the reporting institutions are required to do for FATCA.

FBAR is more insidious for the individual because any US taxpayer (not just citizens) is required to file an FBAR and $10,000 is a stupidly low number. Worse even if the money overseas isn't yours (in the case you have say signature authority over an account because of power of attorney) you still have to file. Even worse once one account tops $10,000 you have to report all of them even if they have zero balance. It's also not clear what constitutes an account. Example does a PayPal account count ?

The only conclusion I can come up with is that FBAR is basically there to make it easy for the Feds to do a Martha Stewart and get you for lying, because proving tax evasion is a bit hard.

(Disclaimer: Not an accountant. Consult an accountant for tax related advice)

From https://www.irs.gov/Businesses/Corporations/FATCA-Informatio...

Taxpayers with a total value of specified foreign financial assets below a certain threshold do not have to file Form 8938

From https://www.irs.gov/Businesses/Corporations/Do-I-need-to-fil...

You must file Form 8938 if: 1. You are a specified individual. tick! 2. You have an interest in specified foreign financial assets required to be reported. tick! 3. The aggregate value of your specified foreign financial assets is more than the reporting thresholds that applies to you: If you are a taxpayer living abroad you must file if: You are filing a return other than a joint return and the total value of your specified foreign assets is more than $200,000 on the last day of the tax year or more than $300,000 at any time during the year

For once, the IRS pages on this topic seems pretty clear.

Not sure if you are aware of this or not but Form 8938 is different from FBAR. FBAR is filed with the department of the treasury and the threshold is only $10,000.

Yes, form 8938 is for FATCA. I'm addressing the parent comment regarding filing for FATCA. I guess the parent had FBAR and FATCA confused.

Oh, you are right. I was mixing up FATCA and FBAR.

At least part of the complication is that overseas equivalents of 401k funds that may be mandatory to contribute to are often considered to be bank accounts by the IRS.

Have you come across anyone who has been fined under this law? I have not and know many people who are rubbish at filing on time or even in the same year. I've not seen any enforcement commensurate with $20k fines willy nilly. Not that I like the law, I've just not seen it enforced.

Non-enforcement of draconian laws is the problem. Especially if actually following those laws is difficult to impossible.

It means that your fate is not decided by the law, but by arbitrary decisions of random officials. It is the opposite of rule of law.

This is a pretty huge problem in the US, though it doesn't get talked about much. The people who do suffer the penalties often get smeared so that people think this isn't a problem and couldn't happen to them ("It's like having Al Capone go to jail for tax evasion.").

For FBAR? There's an amnesty program in place which was introduced during the summer of 2014, which is better than then fines possible under the voluntary disclosure program. See http://www.forbes.com/sites/robertwood/2014/06/18/irs-announ... . That reduced the outrage some.

Before then, http://www.reuters.com/article/us-usa-taxes-foreign-idUSTRE7... reports that after 26 months of work, and at one time with a likely penalty of $172,000, the final penalty was $25,000 total. Does that count as "come across"?

Even without paying the fine, http://www.thelocal.se/20120306/39522 reports "while Pamela may no longer be facing a seven-figure penalty, she's already racked up a bill of $40,000 in accountants' and lawyers' fees." Most of the cases I've heard of (the Reuters piece includes more) are of people who paid penalties under the voluntary disclosure program or had to spend a lot on accountant fees to get things straightened out.

And there's still the stress of worrying if a minor mistake out of ignorance when I send the information to my accountant might still end up with huge penalties in the future.

How does the US enforce this?

What happens if someone with no plans to visit the US and no income from the US that could be garnished says "So - come and get it if you want it"?

Well, obviously they can't. This is especially so for American citizens who are citizen by blood, have never set foot in the US, and have no family to visit.

But notice how they've been working on new rules like FATCA that go after the citizen's bank, assuming the bank does any sort of business in the US?

For all I know, in 10 years the IRS will force the bank to extract penalties directly from someone's account.

the founder of a big french game studio filled for ipo two years after giving up his green card (not even citizenship).

the irs got the french gov to freeze all his assets claiming he was giving up citizenship to evade taxes.

Seriously fuck the government.

It seems rather strange to rescind citizenship because of tax issues, aren't there qualified tax advisors that can handle all of that for you? At least here in Germany they are quite affordable and usually pay for themselves because of the tax savings you get due to their advice. If you consult one you can also be rather confident that you don't accidentally forget about some new regulation.

You need a tax advisor/accountant who is qualified in both the US and Germany and has knowledge of cross-jurisdiction issues. These people are expensive. Until now, only big corporations needed such advisors.

In Germany they are commonplace because the German system is the most intricate snake nest of paperwork and bureaucracy. Love the country, but jesus christ how could the system ever be navigated by one person, let alone a foreigner?

Is Germany really as convoluted, or more convoluted, than the US case law, the patchwork of local tax legislation in the US, or the US tax code, for example? I never understood how those things could ever be navigated by one person.

My ex and I used to use the same accountant to file our taxes. As a Canadian citizen, our accountant charged me $100CDN, my ex who had joint US/Canadian Citizen was charged $500-$2000CDN depending on the year and the amount of work that needed to be done.

So, yeah, there are qualified tax advisors who can help but it's painful.

and even after that $2k is gone every year, you're still not sure you can't be fined.

I've had to fix my taxes every year that i had paid Ernest & young to prepare them for me. had i trusted them blindly as most people do, I'd be subject to a couple $20k fines. of course, those depends on you being big/of interest enough to be bothered by the irs. but i like to have clean books and not count on luck.

That's the real problem with the IRS. I've made mistakes on my taxes before and got a "Oops, you owe us $2000 more, pay by XXX to avoid interest and penalties" from the CRA. The IRS jumps straight to large fines and penalties, especially for ex-pats.

For simple cases like a German with only German income filing in Germany, yes. But you do that yourself, if you spend a few hours reading up on the deductions. In the case of the OP, there is no 'upside' (i.e., potential to get a return if your deductions are high enough); it'll cost you if you made any money, regardless of whether it's been taxed already elsewhere. Plus what the others have said.

For many people it isn't about taxes. It's the fact that due to FATCA they can't even have a bank account in the country where they have lived and worked for many years. Banks in some countries have closed the accounts of US citizens due to the cost of compliance with FATCA. Imagine suddenly being unable to cash your paycheck or pay your bills because as a US citizen you are a pariah to the banks of the country in which you live..

Cashing a paycheck is largely non-issue as cheques are almost gone in Europe (except France, UK and Ireland - but they're soon to be gone there too) - see https://en.wikipedia.org/wiki/Cheque#Europe

But it makes the problem even bigger, because there is a push to go cashless (like fines if you pay cash over a certain amount - starting around 10k euro) and it's working - Sweden has 40% less currency in circulation than 10 years ago.

So you get can't paid at all because they don't issues checks, they direct deposit to your bank account, which you no longer have thanks to FATCA.

What do you mean by "austerity"? The US government has spent $8T under Obama in new debt (and that beats the previous record set immediately before by George W Bush- it's not a partisan thing, both parties over spend.)

As an american who has lived overseas, I totally agree with you about FBARs, it's beyond unreasonable.

But where is the austerity?

https://en.wikipedia.org/wiki/United_States_budget_sequestra...

The FBAR requirement is not new. It's been around for decades. FBAR is part of the Bank Secrecy Act form 1970. The problem is the $10K threshold is not indexed for inflation.

The reason the fines are so high is to catch criminals & tax evaders.

If you have a couple of hundred in the bank you don't have a filing requirement anyway.

Army coming to rescue? Nope. Here's a story about the US specifically NOT going to rescue Americans in Yemen:

http://www.bloombergview.com/articles/2015-04-22/americans-t...

Have a look at this evacuation application:

http://www.state.gov/documents/organization/211837.pdf

Here's the key wording:

"3. I understand that: (a) I will be billed for the cost of my/our transportation no greater than the amount of a full-fare economy flight, or comparable alternate transportation, to the designated destination(s) that would have been charged immediately prior to the events giving rise to the evacuation. (b) My obligation to repay my loan will not be considered paid in full until it clears through the account of the Treasurer of the United States. (c) Until I have paid my loan in full, I and all listed U.S. citizen family members will only be eligible for a limited validity U.S. passport. (d) If my loan is in default, I and all listed U.S. citizen family members will not be eligible for a limited validity U.S. passports. (e) My loan will be subject to interest, penalties, and other charges for late payment as directed by law and regulation. (f) I will be liable to pay any costs for collection."

If you're interested in reading the State Department Budget:

http://www.state.gov/documents/organization/100033.pdf

You'll notice that US Citizens Services is self-funded from fees collected from Americans using their services. I'm not saying that's wrong or right, but by comparison, the Social Security Administration doesn't charge fees for services.

The US is the ONLY country besides Eritrea that taxes non-resident Americans. Interestingly, Eritrea's tax warrants "investigation" by Swiss authorities: http://www.swissinfo.ch/eng/controversial-levy_swiss-prosecu...

And from the British: http://www.theguardian.com/global-development/2015/jun/09/er...

Yet, the US does the exact same thing.

Here's an economist article discussing the situation in more detail: http://www.economist.com/news/leaders/21605907-americas-new-...

In the Facebook group Citizenship Taxation, FATCA and Citizenship Based taxation are the key topics. There are countless stories of double taxation (despite normalization agreements, as those agreements don't cover certain taxes like French Social Charges.)

My primary complaint about Citizenship Based Taxation is that Americans abroad have no representation. You register to vote in your "state of residence" -- so while you can just pick a state at random if you want, the fact is that we do not have representation because the representatives from a state represent residents of that state. It is illegal to register to vote in a state in which you aren't resident. To register to vote as an overseas American, you effectively have to commit fraud.

There's also the related issue of "Accidental Americans" -- these are Americans who became Americans by virtue of birth to American parents even if they have never set foot in the US. Many of them don't even realize that they are Americans -- however, they have FULL tax liability to the United States on all their income for their entire life. When they open overseas bank accounts, banks often discover they are a "US Person" and thus their accounts are subject to either not being opened or subject to seizure by the US treasury department for failing to report the account per FATCA. Violations start at $10,000 per incident. Here's an article about those penalties: http://money.cnn.com/2015/04/01/pf/taxes/irs-penalties/

My opposition to Hillary Clinton and Bernie Sanders is based exclusively on their support for FATCA (Bernie voted for it) and Citizenship Based Taxation. Clinton was the one who introduced the $450 citizenship renunciation fee (now raised to $2300.) Democrats Abroad is on record opposing Rand Paul's repeated bills to repeal FATCA. They also oppose the lawsuit challenging both FATCA and the constitutionality of citizenship based taxation.

I know this was a long rant, but this issue is one I face continually and it has harmed a large number of people for minimal benefit.

The myth that American citizenship has "value" to an overseas American is just that.. a myth.

Blows my mind that you people can't even vote when living abroad. As a Swiss, the embassy registers me in either my home canton or my last residential canton for votes (i.e. all the people referendums) and elections. They send me the voting letters to my Japanese home address. Free of charge.

Things like this and the Flint water scandal make me want to never work in the US, even if it's just a year. Dealing with your tax authorities? No thank you.

I'm a US citizen living in Sweden. I still vote in the US, as if I were a resident from where I used to be. In fact, I have a ballot for two municipal offices on my desk right now. (This is the second ballot I've gotten this year. The first was for a school bond. The US has a lot of elections.)

In reference to briandear's comment "It is illegal to register to vote in a state in which you aren't resident", that simply isn't correct.

However, I don't know what happens with Americans who were born overseas and are citizens because their parents were citizens, but who have never been resident in the US. Ahh, https://www.fvap.gov/citizen-voter/reside gives details.

He's right and wrong. Living in Sweden, you cannot just decide to register to vote in New York City or Minneapolis just because, as you don't meet the criteria to register.

But, once registered, you can vote as an absentee indefinitely from wherever you came from.

I'm not sure how it works in other situations, but I know that a few of my friends who joined the military moved to Texas and New Hampshire, as the military treats you as a resident of the state in which you enter service for tax purposes.

I'll quote briandear more fully: "so while you can just pick a state at random if you want, the fact is that we do not have representation because the representatives from a state represent residents of that state. It is illegal to register to vote in a state in which you aren't resident. To register to vote as an overseas American, you effectively have to commit fraud"

None of that is right. You cannot pick a state at random. The representatives are also there to support the overseas voters and citizens. And you do not need to be a physical resident in the state in order to register to vote overseas in the state. Moveover, registering as an overseas voter is not effectively committing fraud.

So I disagree with you. briandear was wrong on all points relevant to the snippet I quoted. Otherwise, I think your first two lines make the same points I made.

However that doesn't account for State laws which, many are explicit -- the country in which you reside. I know that isn't how it works in practice, but technically, if you aren't a resident, you aren't a resident -- regardless of your parents.

Correct. But you don't need to be a physical resident to vote in a state. (Nor can you pick a state at random.) Here's what the government says, from https://www.fvap.gov/citizen-voter/additional-info :

> Citizens residing outside the U.S. may not arbitrarily choose which State to declare as their legal voting residence without meeting the State's residency requirement. The following are basic guidelines to follow in determining voting residency:

> * Your "legal State of residence" for voting purposes is the address where you last resided immediately prior to your departure from the U.S. This residence remains valid even though the citizen may no longer own property or have other ties to their last State residence and their intent to return to that State may be uncertain.

> * Voting in an election for Federal offices only may not be used as the sole basis to determine residency for the purposes of imposing State and local taxes. If you claim a particular State as your residence and have other ties with that State in addition to voting, then you may be liable for State and local taxation, depending upon that particular State law. Consult your legal counsel for specific questions or situations.

The qualifier "for voting purposes" is why there's no fraud.

They send me the voting letters to my Japanese home address. Free of charge.

I get letters like that, too, also addressed to Japan but bearing a conspicuous bald eagle. An American citizen is a resident of the last state one had legal residence in for voting purposes even if one has no particular intent to return to it. One's friendly local State Department employee will happily confirm this:

http://travel.state.gov/content/passports/en/abroad/legal-ma...

For voting purposes, your state of legal residence is generally the state wherein you resided immediately before leaving the United States, even if you no longer own or rent property or intend to return there in the future. Twenty-four states and the District of Columbia specifically allow U.S. citizens who have never resided in the United States to register where a parent would be eligible to vote.

Thanks for the heads up, looks like P had some false information.

This is absolutely false. All US citizens (who are otherwise eligible) living abroad can vote.

They can vote, but registering where you don't actually reside is a violation of many state laws.

Kindly point to the relevant state law which requires you to be a physical resident of the state, and thereby disallows deployed members of the military and overseas voters from voting in the state. There may be some, but I've not heard of one.

In any case, your complaint was about the lack of representation in Congress for overseas citizens, excepting by those who fraudulently declare residency in the state. The Uniformed and Overseas Citizens Absentee Voting Act says the state must allow overseas voters to vote in federal elections, and therefore do have representation, and without resorting to fraudulent means.

Thanks. I can't believe people on HN are defending FBAR. Go and take a look at the online form. It is disgusting how intrusive it is. I thought HN is supposed to be opposed to government intrusion into privacy.

..except when it supports people 'paying their fair share.' Many people on HN have never met a tax they didn't like.

You're wrong about voting: americans living abroad register in their last state of residence, and can vote in those elections. It's not illegal to do so. Most states have programs specifically to assist overseas voters, and the federal government provides overseas voting support to americans living abroad through the FPCA program. No fraud is committed.

While I generally have been supportive of Bernie's stance on things, it's disturbing to hear that he supports FATCA.

I went digging for more information and it seems that he now is potentially supportive of residence based taxation instead of citizen based taxation.

From reddit.com/r/expats4sanders, http://www.democratsabroad.org/our_candidates

There are many different scenarios which the law as it currently stands do not adequately cover for.

Scenario:

* Parent gains US citizenship through immigration. Parent inherits from grandparents.

* Person gains US citizenship through immigration. Person inherits from parents foreign bank accounts.

* Based on my understanding, US now has a claim on monies which have at no point entered the US, nor have been derived from US related activities.

* This is crazy.

I'm totally fine with paying taxes on income derived from being in the US but to have to pay US taxes on income derived elsewhere is just insane overreach.

I'm not a tax expert but don't think the scenario you describe is correct.

In most countries when you inherit it's the estate that is taxed and generally the estate is taxed in country of domicile of the estate rather than citizenship of the recipient.

In your scenario the estate would would be taxed by the country of domicile, and then the remaining money transferred to you. If you were a US person then you would be taxed on any interest or capital gains from that point onwards.

That said this kind of thing is generally fairly complex (determining country of domicile for example is not obvious) so generally you would involve an accountant or tax professional.

To be clear, the money is not intended to transfer into a US bank account. So for all intents and purposes, it has remained outside the US and will continue to do so.

The point being that the US has no business trying to tax income generated from funds that has never entered the country. Residence based taxation (like the rest of the world) would address this immediately.

Almost all countries tax foreign income of residents. In your example you would be taxed on gains beyond the initial amount in all countries that aren't considered to be tax havens.

(The non-domiciled rule in the UK being one notable exception)

https://en.wikipedia.org/wiki/International_taxation

Bernie voted for FATCA in 2010, thus an opposition to CBT is in opposition with his record.

Out of curiosity, do you now have a citizenship in Prague? I am unaware how it works for Americans living in the EU.

https://www.justlanded.com/english/Czech-Republic/Czech-Repu... gives an idea of what's needed to become a Czech citizen.

It's different for different countries in the EU.

Besides Prague being a beautiful place, what else made you decide to live there?

I am thinking about living in Europe too.. but it has been difficult to decide.

Thanks and cheers.

I'm not the one who moved to Prague.

hey I know that username. greetings from my new home in S. Korea :-)

'Round round, get around, CGHS grads sure get around! Saw your wedding pictures. Best of wishes for your newest resettlement.

My grandmother is from Prague. I didn't actually "decide" to move here. My mother offered me a house that she was to inherit in return for comming to take care of an eldery aunt. It was a deal that I couldn't refuse...

I am able to apply for Czech citizenship as I have been in the country for more than 5 years. I now have to pass some language exams and interviews. I hope that the fact that my grandmother is Czech will help.

Will help with the language, or with the bureacracy? I'd be surprised about the latter, but I'd also be surprised if they gave much trouble to an educated productive individual. Hodně štěstí!

With the bureaucracy... I need to show that I have familly, work, and social ties to the country:

http://www.mvcr.cz/clanek/udeleni-statniho-obcanstvi-ceske-r...

A large part of the process is a motivational interview.

Can you explain what you mean by austerity and how it is responsible for new taxes?

To my knowledge there's treaties with the vast majority of countries to avoid double taxation if you're not making more than a very large amount of money ( filed taxes last year and ended up with a giant goose egg)

Yes, but the legal risk is that if you don't fill out the forms right, then you have your assets seized and you get a huge fine. It has nothing to do with how much you pay and everything to do with how good your accounting is.

There are treaties with some countries, but most of these treaties have "reverse loopholes." E.g., on any freelance income, a 15.5% Social Security tax from the first dollar, with no exemptions. Also, you pay the higher of both countries taxes for each kind of income. E.g., if the US has lower taxes than the other country in general, but higher taxes on cap gains , you pay the US the delta on the cap gains.

Actually, no. The US has tax treaties with roughly 1/3rd of the countries in the world (source: https://www.irs.gov/Businesses/International-Businesses/Unit...). If you're not in one of those countries, too bad.

Further, these tax treaties differ from country to country and don't always offer the same protections. Here, read the 42 page US/France tax treaty (https://www.irs.gov/pub/irs-trty/france.pdf) and try to figure out how you'd be impacted if you were living in France.

We expats don't just have to hire accountants to do our taxes, we often have to hire international tax lawyers, EVEN IF WE DON'T EARN ENOUGH TO PAY US TAXES!

Studies have repeatedly shown that the majority of expats are abroad to find a job, to teach, to volunteer, or for love. We're taxi drivers, waiters, English teachers, farmers, computer programmers, and so on. We're normal people who are being massively screwed by rhetoric in the US.

As an expat myself I always had the ability to get these services from my employer, in some cases I have even insisted that this will be part of the employment contract just like any relocation package.

That's only one type of tax treaty. There are also Totalization Agreements. Quoting https://www.irs.gov/Individuals/International-Taxpayers/Tota... :

> The United States has entered into agreements, called Totalization Agreements, with several nations for the purpose of avoiding double taxation of income with respect to social security taxes. These agreements must be taken into account when determining whether any alien is subject to the U.S. Social Security/Medicare tax, or whether any U.S. citizen or resident alien is subject to the social security taxes of a foreign country.

You'll notice that's a much smaller list of counties.

(When I went to the local Swedish tax office to request a copy of the declaration that I needed to include in my US tax forms, to say I was covered under the Totalization Agreement, they didn't know at first what I was talking about. Asking for the form also must have triggered something, because a month or so later I got a phone call from the Swedish tax office asking for why I needed that information, and asking for a copy of my most recent US tax forms.)

> We're normal people who are being massively screwed by rhetoric in the US.

Yup. Same goes for normal people who move the other way. The anti-foreign(er) consensus in the US political system/debate is almost as bad as the "tough on crime" madness.

And of course that's reflected in what people think. I remember being in a discussion after an interesting EE380 session (so not exactly bottom of the pile) and one of the guys started ranting about the evils of H1Bs driving down wages. I mentioned I was on an H1B and that what he said was illegal. He asked me how much I made, I asked him to guess. He mentioned a number. I said "multiply by at least 3". He kind of shut up after that...

>I mentioned I was on an H1B and that what he said was illegal

The problem is that some companies break the law by playing around with job descriptions and job duties. There are people who aren't against immigration but who are against the H1B visas.

But the problem there is companies breaking the law, not the H1B visas, the people or the companies that use them legally.

And of course the knee-jerk reaction is to make the laws even more draconian than they already are, when a significant portion of the problems are caused by the very draconian nature of the current laws (and non-enforcement against companies that flout them).

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