As the controversy over tax inversions continues to rage on, there is another telling sign that more and more Americans are finding the country’ tax code too frustrating to handle. It’s not just U.S. companies that are giving up their U.S. citizenships, so-to-speak. An increasing number of expatriate Americans are renouncing their citizenship as the country’s tax-filing requirements continue to grow increasingly burdensome.
It’s Been Good
There are more than six million Americans who live in foreign countries, not counting those serving in the military. Many of those expats live in European countries, but more and more are starting to call places like Tokyo, Singapore and Hong Kong their home. As the U.S. government has been pushing harder to gain detailed information on these people and their financial records, more of them are simply throwing their hands up in the air and giving up on the country they love, for good.
Time to Move On
According to the IRS, during the first six months of this year, almost 1,600 Americans relinquished their U.S. citizenship. What’s more, over the entire 12 months of 2013, 2,999 people officially said goodbye to America. That number was three times higher than the total in 2012 and way above the all-time record of 1,781 that was set in 2011.
Why Are They Leaving?
So why are so many Americans kissing the United States goodbye? Is it because they don’t want to pay their taxes? Although in some cases, yes, there are people who are trying to ease their tax burden, that’s not really the main reason behind all these renunciations. According to several financial advisors and lawyers, who are dealing with clients giving up their citizenship, it’s not the taxes, but rather the tax filing.
What Form Is That?
As tax laws and codes change each year, the filing process gets more and more difficult for taxpayers who have to fill out all the forms. It takes detailed record keeping and filing, as well as hours upon hours to get everything straight, in order to be compliant and accurate with the IRS. The latest burden for all of these Americans living outside of the U.S. is the Foreign Account Tax Compliance Act (FATCA), which is taking aim at those who are trying to hide money overseas. However, FATCA’s far-reaching arm is also effecting those who are doing things right.
FATCA Is Looking for You
That’s because FATCA can penalize anyone who misfiles even if they do it by accident. Those fines start at $10,000 and the IRS can also seek criminal penalties if they believe the person withheld the money on purpose.
Don’t Give Up On America; Get Help
If you are an American citizen living abroad and you’re tired of all the complicated changes in tax laws each year, you don’t have to give up on the country you love. At GROCO we know taxes, including International taxes. We can help you file all the necessary tax forms and make sure that you are compliant, even with FATCA. So contact GROCO and hold onto your U.S. passport and keep your red, white and blue waving.
The post Why Are More Americans Kissing Their Country Goodbye? first appeared on Advisors to the Ultra-Affluent – Groco.
