Hacker News Reader

Comment by pembrook | Hacker News Reader

This is not a tax dodge. There is no way to dodge taxes as a US citizen by moving abroad, the US is the only country in the world with a real global taxation system.

EDIT further information I posted below:

The US has the unique position of being able to actually enforce this due to the fact the USD is the reserve currency of the world and every country needs to stay on the good side of the US Treasury to transact in the global economy. FATCA requires all foreign financial institutions to report on any US citizen assets.

In fact, the laws are so strict, they make living abroad as an honest middle-class expat a total nightmare. I have friends who cannot find a single bank in their country that will work with them because of the reporting requirements of working with US citizens. They cannot save in foreign banks and they cannot invest either due to the US penalizing foreign Mutual fund/ETF purchases by private citizens.

View on HN

I'm sure Erich Schmidt has access to resources not available to your friends. There is absolutely the potential for a tax angle to this application, perhaps involving creating business entities in Cyprus to avoid the IRS's reach. That is of course just my suspicion and I could be wrong, but I think my suspicions are reasonable enough to dispute the strength of your claims ("There is no tax dodge. There is no way to dodge...")

It's amazing to me how strongly people want to believe there's some magical way that rich Americans are avoiding taxes by hiding money in exotic locales.

This was possible in the past for Americans, but it doesn't make sense anymore. That's the truth. The secretive Swiss banks and numbered accounts you read about in adventure novels as a kid are all reporting on US citizens now.

It doesn't matter how much resources Eric Schmidt has, the US government has more resources and power than Eric Schmidt. Especially given he's a widely known public figure, he'd be the perfect target of any investigation.

US taxes are already extremely favorable to the rich. Do you seriously think he'd risk his freedom and reputation over something so stupid?

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

Also, https://www.icij.org/investigations/fincen-files/global-bank...

Banks saying one thing and doing another.

Uh what?

There is no "the US government has more resources" – like it's a big blob. It comes down to something like the IRS enforcement division, which is consistently getting kneecapped with budget cuts. So no, actually it really is between your 15 high priced lawyers and whatever team of 5 people the IRS has working your case with limited time because they're stretched thin.

FATCA compliance issues won’t just get the IRS on your back. You also have to deal with the US department of treasury.

The US treasury is not handicapped by regulation in the same way the IRS is. We’re talking extradition and jail time, not just having to pay back taxes.

The Venn diagram of banks where you’d feel safe storing millions of dollars and that would also be willing to help you defraud the US Treasury are exceedingly small. It’s just not practical.

> The Venn diagram of banks where you’d feel safe storing millions of dollars and that would also be willing to help you defraud the US Treasury are exceedingly small. It’s just not practical.

You only need 1. However, the solution isn’t to move money from your account to a bank which then hides what’s going in from the US government. The solution is to make a terrible investment say buying land from Bob for 10 million only to sell it to Sally for 5 million. Meanwhile an associate of Bob, Sally, or both moves 4 million to a holding company owned by you.

That gets 4 million in a secret account, let’s you offset capital 5 million in capital gains, and pays 1 million for money laundering.

Repeat as needed. Sure, 4 million in a hidden account is less useful day to day, but it’s insurance if you need to flee the country or happened to go bankrupt etc.

Your amounts are laughably low for the person who sparked this topic of discussion. Eric Schmidt has $14.2 billion dollars.

4 million in a stash account is nothing more than weekend vacation money.

Let's be honest, for most people hiding your money from the government, just means you can't access it anymore---which makes it essentially useless to you. For the current day mega-rich, they don't have any ties to the maffia, or other shady operations that would incentivize them having black-money funds.

Re-invest your money for low taxes, pay your taxes, and you will still be a billionaire next year, and won't have to every worry about black helicopters snatching you from your yacht.

As I said repeat as needed, some people move billions using such methods over time. And yea, doing this to money isn’t as useful day to day again as I pointed out, but that’s not what it’s for. We are talking insurance not tax evasion.

It’s a mistake to think of Money as a fungible assets without any distinguishing characteristics. Set aside 10% in ultra safe investments and your protected from market crashes but not the government freezing your assets, bankruptcy, or your ex wife taking you to the cleaners. Schmidt would be a fool not to set aside ~50 million in some hidden accounts specifically because it’s a small enough amount as to be meaningless today, but plenty of money to hide out comfortably in a non extradition country.

> The solution is to make a terrible investment say buying land from Bob for 10 million only to sell it to Sally for 5 million.

Or if you're Russian, a condo in Trump Tower, NY...

FATCA doesn't create tax obligations it has nothing intrinsically to do with tax it has to do with financial transparency, which yes can help to catch people who are evading tax but if you're structuring your affairs legally FATCA has no impact on your taxes.

I'm not claiming he is _definitively_ doing so, even just in part for tax purposes. Nor am I claiming he is not already able to use many advantageous tax loopholes in the US.

I only claim two things. One, that by most reasonable definitions, Cyprus is a tax haven -- there is even a recent sordid history there, exposed in The Cyprus Papers. And two, given tax havens are often used as a means to minimize tax in transferring wealth from one generation to the next [0] among other things, I think it's a dubious claim to say "There is no dodge" as you have so unequivocally done.

[0] Via Panama and Jersey, not Cyprus, but for example these schemes were used by David Cameron's father, and by Jimmy Carr before he bowed to public pressure -- all quite legal and non-magical, and I'm sure US citizens could use similar schemes, in spite of their global reach. https://www.theguardian.com/politics/2012/apr/20/cameron-fam...

Cyprus is not a tax haven. The Cyprus Papers were about people paying for Cyprus citizenship to get the benefits of being a citizen of the EU.

A casual search shows that plenty of tax advice and preparation organizations think Cyprus is a tax haven. And The Cyprus Papers show that the local authorities likely intentionally failed to enforce rules regarding PEPs. A culture of intentionally weak enforcement makes Cyprus an even more advantageous haven.

Panama papers mean nothing to you?

For an American? They mean nothing. The list of Americans in the Panama Papers is extremely small, and all of them shifted their money before 9/11.

It's simply not possible to do stuff like that anymore.

Thanks, I didn't realize what a small percentage the Americans were.

Cryptocurrencies get used for this purpose.

Thee are other reasons to move local than hiding money, Cyprus is famous for agreeable estate tax. Seems a likely candidate given Eric Schmidt's age.

Yes and no. US taxes favor certain types of wealth accumulation and wealth accumulation over income. But US taxes aren't particularly good to the rich, certainly not by global standards and certainly not in many states.

There absolutely are sophisticated tax structures both domestically and internationally that do require a certain degree of scale to benefit from them, though past a certain point make less sense.

Switzerland perhaps, but there is still plenty of tax evasion going on in the middle east and Dubai for instance.

That being said, I think you are right about Schmidt. It can't be for something so simple, being that high profile.

Wouldn't he be able to form business ventures in Cyprus in which he could own a stake, but which would pay him very little taxable income? Furthermore, wouldn't he be able to grow those ventures and later take a distribution when his pals in US Congress abolish the "global taxation" nonsense? Or alternatively, by renouncing US citizenship?

What other reasons are there to seek citizenship in a country like Cyprus?

It's an easy way for European citizenship

A lot of European states have a wealth tax as well as estate tax, which is not a good thing for an old dude worth $17B. Heck, it's not even a good deal for someone like me, if you run the numbers.

Coincidentally, Eric Schmidt was a big supporter of Biden's plan to "tax the rich". The _other_ rich, that is, not himself, of course.

Um, I don't think they do (I am from UK living in Germany). "Spain, Norway, Switzerland, and Belgium"[1] have a wealth tax, Switzerland is not in EU. So 3 of 27 EU nations have wealth tax.

I would say Norway is an outlier too due to oil revenues and other quirks. The only large nation in that list is Spain.

[1] https://taxfoundation.org/wealth-tax-europe/

He does not need to be a citizen to form a business or establish tax residency in Cyprus.

He can set up business ventures in Cyprus regardless but that wouldn't help him much in most cases as he's then going to trigger all the controlled foreign companies rules and if he renounces his US citizenship he's over the $2 million asset threshold so he'll have an exit tax, I think it's highly unlikely he'll ever do that, though he might be setting up his family members to do so since under most of these programs you get citizenship not only for you but also for your family.

Someone in Eric's position will most benefit from the use of trusts and charities to improve his tax position.

But Cyprus citizenship has tons of other advantages:

1. Having an EU citizenship allows you to live and spend an unlimited amount of time in any EU member state vs 90 days out of every 180 days for a normal American so if he wants to retire to a beach in Spain for 5 months at a time he can't currently do so but this will allow him to

2. It gives him visa free travel to various parts of the world that he might not otherwise have, most notably Russia. If you're in Eric's position and say you want to do some business and investing in Russia the hassles related to travel might not be worth it for you and it makes it so much easier if you've got a second passport that allows you to go without issue

3. As mentioned you're setting up your family for a future with more options

4. You're creating a back up plan for yourself

As an aside, BTW, I would not recommend setting up any business ventures in Russia at the moment. Rumors have been swirling that Putin has Parkinsons, and will announce his departure in January. Kremlin denies, of course, but Duma (Russian parliament) is currently working on legislation granting former presidents _very_ broad immunity even after the presidency ends. The fact that they're working on something like that with like 4 years to go in Putin's presidential term is unlikely to be a coincidence.

Having a foreign citizenship doesn't change your ability to use international structures to reduce your taxes unless you give up your US citizenship.

It is possible to use such structures in some cases without needing to give up your US citizenship.

But there are plenty of non-tax reasons to get a second citizenship.

> There is no way to dodge taxes as a US citizen by moving abroad

Well, no way to "legally avoid"; "dodge" is broader, and there are probably many ways of dodging taxes that are easier if the institutions you deal with in your daily life aren't subject to US jurisdiction and regulations designed to expose tax evasion to US authorities.

Also, typically you want to have at least one national citizenship, so if you are planning to legally avoid US taxes by renouncing US citizenship, getting some other citizenship is usually step one.

Of course, there are other reasons it is convenient to have citizenship in an EU member state, even if you are a US citizen, so its not necessarily step 1 of a tax dodge.

you still have to pay exit taxes on renouncing, so not clear this is a good way of avoiding tax.

Exactly, he couldn't avoid expatriation taxes on anything he currently owns.

(https://www.irs.gov/individuals/international-taxpayers/expa...).

Also... if the renunciation is motivated by avoiding taxes, the person is banned from re-entering the USA.

excerpt[1]: If the Department of Homeland Security determines that the renunciation is motivated by tax avoidance purposes, the individual will be found inadmissible to the United States under Section 212(a)(10)(E) of the Immigration and Nationality Act (8 U.S.C. 1182(a)(10)(E)), as amended.

EDIT REPLY to : "Would they have to prove intent?"

Probably not because granting admission into the USA of a non-citizen (ex-citizen) is at the discretion of the Executive Branch of government and doesn't go through "due process" of any court system. So no "burden of proof" required.

[1] https://travel.state.gov/content/travel/en/legal/travel-lega...

Would they have to prove intent?

Then COVID is the perfect cover for shifting citizenship. It gives a plausible non-tax reason for making the change.

Someone who is worth $15B would be very well-advised, and if he's been thinking about doing this in the past, his advisors may have decided that now is the right time to pull the trigger. Also helps to have plenty in the news these days, to avoid becoming 'the story' on a slow news day/week.

Why would COVID be perfect cover for giving up your US citizenship? It might be good cover for getting another, sure.

You got it — the timing is good for this step, which is adding a new citizenship. Then he can drop his US citizenship in the future, after his new one is established.

But why would the timing of this step matter?

USA expatriation taxes are quite steep. I'm not a lawyer, but I believe that all unrealized gains of all assets are taxed upon exit as if the assets were being sold. Further, I think that income generated by through US companies (like investments) are taxed as US income for ten years after renouncing citizenship.

Also, forget about coming back (say for a friend's wedding or an important medical procedure), the laws assume that high net worth individuals are leaving to avoid future taxes.

> aren't subject to US jurisdiction

Every single financial institution that transacts in US dollars (so, all of them) is subject to the power of the US Treasury.

So many people want to believe all the rich are hiding their money abroad.

For American citizens, this simply isn't true and hasn't been for a decade or more. It's not feasible. Also, American capital gains taxes (the ones rich people mostly pay) are extremely low compared to most places in the EU anyways. Its not worth the risk even if you can find a nefarious organization to help you do it.

Did you somehow miss the whole Panama papers shebang? Yeah, the rich do hide their money abroad.

There was a surprising low number of Americans in those documents, which date back into the 1970s. In 2010 there were significant changes in US law which effectively removed places like Panama papers from happening again moving forward.

These are the reasons the poster above you stated the decade limitation. He is correct.

Renouncing US citizenship makes you pay taxes as if you sold everything you owned on that day and then died (or something close to that) - it doesn’t help you with any past profits (n fact, likely to harm) though it might help with future profits if you moved to a lower/different tax jurisdiction.

It used to be possible. Ted Arison renounced his US citizenship when the end of his life was visible, thus avoiding estate taxes. This prompted an immediate change (you are a US tax payer for 10 more years after renouncing) and later redone with the current “you are dead to us” treatment.

Eduardo Saverin took a bet with FB: he renounced, which set his tax obligation at X. Then FB went down, which meant he had to pay a larger percentage of his wealth. But then FB shot up significantly, so he ended up saving much on taxes (as to whether he did this to avoid taxation is not settled - he naturalized in Singapore which does not allow dual passports. Arison moved to Israel which does, so it was clearly a taxation avoidance plan)

> they make living abroad as an honest middle-class expat a total nightmare

There was a guy a few days who wrote an article about giving up on his US nationality exactly for that purpose

https://larrysalibra.com/goodbye-usa/

(found on https://hnblogs.substack.com/p/hn-blogs-51120)

How on earth did a Republican administration just pass a massive tax reform bill and not address this?

> This is not a tax dodge

I bet he is well into only paying capital gains territory. Like Warren Buffet who said he pays less than his secretary [1]

[1] https://money.cnn.com/2013/03/04/news/economy/buffett-secret...

Buffet says he pays a lower rate than his secretary, not a lower amount.

Absolutely. Im just saying Schmidt isn't an idiot and probably has his taxes in order. This Cypress citizenship might be an effort to evade taxes but I would be surprised if that was the major reason.

So, what is this? His passion for the Mediterranian? Reconnecting with his ancestor's roots?

BTW: All tax systems are draconian, at least to the middle class. Not to people who can afford creative lawyers.

My guess, ease of movement in the EU for him and his kids.

When you've got Eric Schmidt money, you probably want to have the ability to live and vacation anywhere you want, whenever you want. Otherwise you're limited to 90 days in the EU at a time as a tourist.

Many EU countries sell citizenship in exchange for very modest investments. Cyprus, however, is a very suspicious choice.

Many EU countries sell permanent resident status, not citizenship.

There are many EU countries that have some type of golden visa, but for a citizenship Cyprus is the fastest one - AFAIK you can get it in 6 months if you invest $2m. The other countries require years of stay for citizenship.

I doubt this has much to do with tax, or that he is about to renounce his US citizenship. It just makes it easier to stay and live in the EU (with family) for extended periods of time, nice extra passport to have if money is no object.

I think Cyprus has come under fire for this so unsure how long it will last.

Oh really? Which ones? I'd only think of Cyprus and Malta

Well, Romanian passports aren't uncommon among Russians in London. It's just not a very official scheme.

Many of them have annoying requirements, like having to live there, possibly coming along with pesky tax obligations. Yuck!

If you compare countries by how well they collect taxes, I am pretty sure it will completely correlate with how well their middle classes are doing.

So it’s really hard to see how taxes are draconian for the middle classes. Or draconian at all.

“Middle class” is a very vague term; I assume in this case it refers to people rich enough to have a “nice bonus” from their investments, but not rich enough to actually live off their investments.

For this group, I can believe it’s awkward and annoying, mainly because I am in it and I find investment T&Cs (and the consequences of being wrong) scary and confusing. However, I would not use the word “draconian” — I take the view that paying my taxes buys a civilization to live in, and that this is a very good deal.

I'm not against taxes, it was my cynical way of expressing that it is impossible to evade them for most people while it is quite easy for those who already have more than enough.

> I take the view that paying my taxes buys a civilization to live in, and that this is a very good deal.

That is a fair way to look at it, but I'm sure you agree that salesmen of all kinds love when people have that view, since it's easy to get them to wildly overpay for a product.

The "draconian" was a reference to a different comment by parent (https://news.ycombinator.com/item?id=25038688).

Whatever your opinion is about taxes and the middle class: It's easy for the wealthy to not pay taxes - that was my whole point.

It becomes a tax dodge only when you renounce your US citizenship, which some millionaires have done already, such as Eduardo Saverin

"The only country" that you know of.

According to this, https://en.wikipedia.org/wiki/International_taxation#Taxatio..., Hungary, Myanmar have the same as the US. Spain and Turkey and several others have it for some citizens.

None of those countries are able to actually enforce that however, in the same way the US can.

Myanmar, Turkey, etc. do not have the power to force foreign banks to report on all of their expat citizens.

His step 2 could then be to renounce his US citizenship.

In which case you pay an "exit tax" equivalent to the tax hit from liquidating all your assets, e.g. capgains on all held stock.

Renouncing citizenship never works as a tax dodge, unless you have some reason to expect large future gains in your assets that aren't reflected in their current market prices.

Like what Facebook's cofounder did right before the IPO.

Unlike Schmidt, Saverin was not born a U.S. citizen. He only became a U.S. citizen when his parents emigrated to FL during his teenage years.

Also, unlike Schmidt, Saverin has spent most of his adult life actually living outside of the U.S. and had been living outside of the U.S. for years before finally renouncing his citizenship.

> Renouncing citizenship never works as a tax dodge, unless you have some reason to expect large future gains in your assets that aren't reflected in their current market prices.

It also could make sense if you expect future income tax rates to be much higher, or if you expect new taxes (e.g., wealth taxes) to be enacted.

Or if you expect a major bear market and you were going to liquidate your holdings anyway.

Rich people don’t liquidate due to the huge tax consequences. They would purchase derivatives to de-risk their portfolio.

US long term capital gains taxes are between 0 and 20% [1]. The popular definition of a bear market starts at 20%; if you are really bearish, you might "expect the S&P 500 to lose about two-thirds of its value over the completion of the current market cycle" [2].

Either way, giving up 20% of your gains beats losing between 20% and 66% of your entire holdings (initial investment + gains).

Regarding derivatives, they are (1) not free, (2) of limited duration [3] and (3) only as good as the counterparty [4]. They can make sense if you have good reasons to expect a short blip. The longer and deeper you think the downturn will be, the less useful they become.

[1] https://www.bankrate.com/investing/long-term-capital-gains-t...

[2] https://www.hussmanfunds.com/comment/mc200901/

[3] https://en.wikipedia.org/wiki/LEAPS_(finance)

[4] https://en.wikipedia.org/wiki/Option_(finance)#Counterparty_...

You should look into leaving the united states without leaving the united states.

https://www.gq.com/story/how-puerto-rico-became-tax-haven-fo...

Also, didn't california just pass a CEO tax? Does it apply to him?

Could he retire from Google, take his money, and resign his US citizenship?

That's what Tina Turner did, she is now a Swiss national, she does not pay taxes to the US anymore https://en.wikipedia.org/wiki/Tina_Turner

This is not a tax dodge. There is no way to dodge taxes as a US citizen by moving abroad, the US is the only country in the world with a global taxation system.

It’s not to avoid criminal justice either as Cyprus is a lapdog to the US for extradition, same as the UK is.

This in itself is not a tax dodge but if he wanted to this would set him up to be able to renounce his US citizenship and still have a good passport much like Edwardo Saverin and others.

The easiest way is to move to Puerto Rico.

But then you have to live in Puerto Rico.

Even with the possibility of traveling all the time as long as you aren't on the mainland for 6 months, Puerto Rico is just not attractive enough.

Everyone I know that was trying to take advantage of Act 60 (previously Act 20 and Act 22) all left when the COVID pandemic started. It was just too clear that the infrastructure was too poor.

You can declare you no longer want to be US citizen.

It costs about 3k USD

and 40% of assets over $2m. Thanks, Obama :(

What 40% are you talking about?

Here it says 23.8%: https://1040abroad.com/faq/renouncing-u-s-citizenship/

I could swear it was 40%, but I'm too lazy to look it up more. Suffice it to say Uncle Sam gets his pound of flesh and more.

Hey what happened to this idea they had to create google country? Didn’t fly?

Uhm acquiring another citizenship to give up American can totally be a tax dodge. The key is giving up the American one.

Sort of. Giving up U.S. citizenship comes with an expatriation tax [0] on all assets including foreign assets. The purpose of this tax is to deter people from renouncing citizenship and then selling off assets while avoiding paying capital gains on them.

So expatriation can protect you from paying taxes on capital gains from future assets, but it doesn't do much to protect you from capital gains on assets you currently own.

[0] https://www.irs.gov/individuals/international-taxpayers/expa...

> In fact, the laws are so strict, they make living abroad as an honest middle-class expat a total nightmare. I have friends who cannot find a single bank in their country that will work with them because of the reporting requirements of working with US citizens.

What? This is not true at all. Getting a bank in most other countries is not hard at all and certainly not a "nightmare."

As a U.S. citizen you must still file taxes and an FBAR that merely reports your assets in foreign accounts, but I've never seen a bank have any problems opening an account for an American, in any country.

Then you didn’t look. There’s some rule from the ‘1940s which says only a SEC-licensed broker can manage securities for a US tax payer. It was mostly ignored outside the US until 2010 but since then, together with FATCA, is very much enforced.

Most of my US expat friends are lucky in that their local banks will let them have a checking account and sometimes even a savings account, but no other services are available to them. (And no local brokers would touch them with a 10-feet pole).

>Most of my US expat friends are lucky in that their local banks will let them have a checking account

No, it's not luck. Getting a bank account is not the chore you are making it out to be. A securities broker for trading stocks -- that I have never tried -- but when it comes to opening a regular bank account, there are no major hurdles whatsoever. Your expat friends, assuming they are living legally in another country, got bank accounts because it is easy to do, not because they were lucky.

The one exception to this would be those living in another country without any formal residence permit, then in that case, it would be problematic in any country since you are technically not allowed to actually live there and many countries do not allow that for citizens of other countries (not just the U.S.).

I've lived all over the world and I have never known a single person in the American expat community who was denied opening a regular bank account anywhere -- again, assuming they were legally living in the foreign country.

I have known. Totally legally residing expats. Everyone who persevered was able to get one, but some gave up after 4 months of back and forth of increasingly onerous requests.

And none of them was able to get any reasonable saving rate - saving accounts pay less than local government bonds in just about every place, but the most anyone was able to get was a savings account with low interest (and in some cases, not even that).

I have a friend in Israel who was born in the US, and has a US passport, but has not set foot in the US since age 6 (40 years ago). It didn’t matter in the past, but over the last 10 years he has been increasingly told to take his business elsewhere by every financial institution; big banks will do checking and saving. Nothing else is allowed.

There is definitely more to the story than either you are telling or that you know. I am certain of that.

Also, this:

> And none of them was able to get any reasonable saving rate - saving accounts pay less than local government bonds in just about every place, but the most anyone was able to get was a savings account with low interest (and in some cases, not even that).

Has nothing to do with whether you can open a bank account, and is an entirely different topic. In the Netherlands for example (and most European places), all regular bank account offerings are the same for all residents, regardless of their actual citizenship.

Oh, the offering is the same. But you can get up to 0.5% more buying a government bond than the (equivalent, risk wise) bank deposit - except that due to SEC rules, the local bond purchase is unavailable to US taxpayers (even if they are also local citizens). In that sense, is taxpayers (even if they hold a local citizenship) are discriminated against.

And no, at least in Israel, there isn’t any more to the story. Each of the big three Israeli banks have paid between $400m and $900m in fines for noncompliance with US law, and as a result they offer the minimal services they can without getting sued. I’ve heard similar stories about places in Europe where I am less familiar with the details, so I won’t say it’s necessarily the same in Europe - but in Israel, that’s most definitely the case - and I heard it from both customers and bank officers.

> Getting a bank in most other countries is not hard at all and certainly not a "nightmare."

I don't know about "most" countries, but my American colleagues in Germany and Switzerland complained about the difficulty of doing anything related to finance (banks, brokers, taxes) because of their extra tax liability. I personally had to sign quite a few forms certifying that I am not a US citizen or a greencard holder or in any other way tax liable in the US, so it does seem to be a big deal.

The original thread was about finding a "single bank" and in that regard, it is not a problem to open a bank nearly anywhere, including in Europe (assuming legal residence there). Brokers, that might be a different matter, if you wish to trade European stocks from a European account. Taxes can be the added hassle of having to file in the U.S. regardless of where you live, but we were originally discussing getting a bank account, which is straightforward.

You're right, they can't find a bank because they don't have a visa that allows them to work. It is common for people to say they "live" somewhere while doing visa runs, leaving and re-entering the country, in order to remain.

It's unfortunate that this statement [1] is so prominently placed in this thread. That's social media for you I guess.

[1] "I have friends who cannot find a single bank in their country that will work with them because of the reporting requirements of working with US citizens"

Yeah Americans in particular are famous around the world for choosing to live in places they have not tried to legally reside in, and so much of these anecdotes are likely coming from stories like that.

Even in the U.S. it can be very hard if not impossible to open a bank account with an American bank if you are not legally living there, so the shoe fits on both feet.

Reply on news.ycombinator.com