Americans abroad are giving up their citizenship as banks shut down accounts

On the other hand, I wouldn't recommend living in Uruguay; I had very good reasons to leave and I don't see myself returning anytime soon. And I'd argue any European passport is better than an Uruguay one - you can freely live and work in Europe, and you can visit the US without any visa.

If you have the green card "in" at least 8 of the last 15 years, you have the privilege of paying the exit tax when you give up the visa status. (Well, you pay extra tax only if you are "rich" for certain definitions of "rich". You will certainly have a giant mountain of tax forms to fill in.)

If you terminate your green card before that magic moment of holding the permanent resident visa "in" 8 of the last 15 years, then you can exit the United States cleanly and easily, with minimal paperwork and no risk of extra tax.

That's why I tell people who want to come to the USA to avoid getting the permanent resident visa and get a different visa status instead.

Disclaimer. I am a lawyer. I am an international tax lawyer. My office does a LOT of expatriation cases where we log people out of the U.S. tax system and the U.S. nationality system.

Considering you get to deduct $100k of your foreign earnings, it's not like they are trying to rake John Doe Expat over the coals.

Unless sufficient checks are in place, governments will grow their power and control every year, and this is one of the ways they do it.

The more laws you unknowingly violate the more vulnerable you are to capricious prosecution.

Aaron Swartz is a good example of this-- while he did break a legit law (arguably) the penalties and the illegitimate laws thrown at him were designed to give the prosecutors and the courts the power to effectively disappear anyone they want.

If you think FACTA is bad, look at money laundering. Moving money between your checking and savings and a third account is "money laundering" under the federal law.

Even if you renounce US citizenship, I think you still owe US taxes for 10 years afterwards.

You can help fund attacks against this stuff here:

http://www.adcs-adsc.ca/

and here stateside:

https://fatcalegalaction.com/

The solution is simple: the US needs to join the remaining 99% of the developed western world and switch to residence-based taxation instead of the current citizenship-based regime. In other words you tax people within your physical borders only (citizen or not), but suspend their tax obligations when they leave for as long as they leave, unless they still have income-producing assets within the borders of your country.

* Taxes overseas are not something you can just whip up Turbotax to handle. You oftentimes need to reconcile foreign tax statements with your US ones to compute tax credits. Worse, the foreign tax ones are rarely due on the same deadlines as the US ones, and foreign currencies need to be converted and so forth. The whole thing is difficult for most people but almost completely unworkable for entrepreneurs owning corporations overseas, owing to the need to file obscure and complex Controlled Foreign Corporation tax forms. Budget around $5,000 in tax prep fees per corporation for those, even if your corporation is a dormant LLC with no money passing through it.

If they bank (or its parent) wants to be able to do business in the US, yes.

This is part of the same overreach as insisting data resident in an Irish data centre, belonging to an Irish entity, is subject to the US courts in violation of Irish and EU law.

I actually think the US tax return laws are reasonable -- there have to be some obligations for citizens to go along with the rights they have.

Hm, I can somewhat understand that? If I was moving out of Germany and got into trouble abroad, I would expect (and receive) help from the German consulate/government. Paying at least some taxes for that seems reasonable, as long as double taxation and all that is avoided.

So when do I get my vote for president :-)

The IRS is the enforcer, not the source.

That's blaming the bullet instead of the gun

You can start here: http://www.propublica.org/article/how-the-maker-of-turbotax-...

For what it's worth, as a dual citizen of UK and New Zealand I've only filed a tax return twice in my life - when I was a contractor.

I tell the banker to keep my cash in the bank in Lichtenstein, and I use that bank account to pay my rent, buy food, and other ordinary things.

The Sultan of Brunei tells the banker to take all of his money and plow it into the U.S. stock market.

Tiny Bank of Lichtenstein takes all of the Sultan of Brunei's money and plops it into the U.S. stock market. Buys Google and Apple stock and all that fun stuff.

One day the Sultan of Brunei calls up the bank and says "I would like $1 billion of my money back because I need spending money." The banker sells a bunch of Apple and Google stock until there is $1 billion of cash ready to wire back from New York to the Sultan of Brunei's bank account in Lichtenstein so the Sultan of Brunei can spend his own money.

The Sultan of Brunei, by the way, is not taxable in the U.S. on the capital gain that was made when the banker bought him Apple shares at $75 and sold those shares at $100.

If Tiny Bank of Lichtenstein has the right kind of paperwork in its files about me -- its only U.S. citizen customer, with a trivial amount of money in his bank account -- then the Sultan of Brunei's $1 billion will be wired from New York to Lichtenstein with no problems.

If Tiny Bank of Lichtenstein does NOT have the right kind of paperwork in its files about me -- its only U.S. customer -- then the Sultan of Brunei's $1 billion will face a terrible fate. Thirty percent of that $1 billion will be withheld, and 70% of the money will be wired to the Sultan's bank account in Lichtenstein.

The Sultan of Brunei only gets $700 million in his account. He is grumpy and yells at the banker.

Key metaphysical insights:

1. The 30% problem is imposed on gross money leaving the United States. It has no relationship to whether that money is taxable or not.

2. The U.S. government is threatening the customers of foreign banks with financial loss as a method for forcing the foreign banks to do its bidding. It is not too far off from suggesting that the continued health of your wife and children might be in jeopardy, so why don't you just do me this little favor.

3. If the bank looks at its customer base, who are they going to throw under the bus? Answer: me, the U.S. customer. My presence as a customer creates enormous risk -- risk of penalties payable to the U.S. government, but more importantly a risk that the bank will become unattractive to the Sultan of Brunei. And they don't want to lose the Sultan of Brunei as a customer.

This is why FATCA is so evil. And this is why Americans abroad are increasingly willing to give up their passports.

EDIT. There is a reporting threshold -- foreign banks don't need to report small account holders like me. Adjust my little story to pretend I put $100,000 in the bank. Or adjust my little story to assume -- correctly -- that a bank account that has $10,000 in it today (and is thus fully compliant with FATCA nonreporting) might have $100,000 in it tomorrow and land the bank in a metric tonne of compliance shit.

Such is life. It appears the mean human society has always tended towards oligarchy. If you can't beatem, joinem?

The idea that the US government is owed taxes for transactions that happen in other countries is kind of absurd.

What if the British declared that you owe them income taxes (after all, america was a british colony, they could consider us subjects)?

You'd see that as absurd, yet Britian has more claim on US citizen income taxes than the US has on a chinese product being sold in europe.

I hope Brazil dont agree with that..

Now imagine the contrary.. would the US government help another country to collect tax from its citizens if they ask to?

If such a marketplace were to be legally implemented it should be far more complicated than a simple swap of citizenship between two people. Even then, the liquidity of citizenship would undermine its value, for better or worst.

The two major political parties have organized themselves for citizens outside the United States but predictably they have other drums to beat. The D and R debates tend to be indistinguishable from the Itchy and Scratchy Show. The ACA is even-tempered and contains both D and R members.

The foreign banks respond: "Ok, we won't deal with any Americans", which makes life harder for Average Joe Expat

The kicker comes if you decide to move back home and either have a green card or US citizenship.

2. Are the numbers reported by the U.S. government accurate?

3. To the contrary, the annual expatriation numbers appear to be increasing.

Remember, you don't get to just renounce. You have to petition the government for permission to have a hearing to renounce, and then you have to show up at this hearing -- in an embassy on foreign soil-- and give them reasons to let you renounce.

IF you say the wrong thing, they will not let you renounce.

The old adage "love it or leave it" forgets that we are, as far as the federal government is concerned, cattle, who can only wander off if we aren't too valuable. If you are worth several million, you will not be able to renounce without paying hefty taxes, and even then you probably need to rent some politicians with pull to influence the situation.

In many ways the tax code is the scab over the festering and oozing mass that is the budget that most represents the problems in the government that are going unsolved. If you want to find problems to solve, that is where you will find them.

For a more personal point of view, how sure are you that you will never, ever decide to retire to, say, Costa Rica?