US to start revoking passports of American expats with tax debts

15 posts in this topic

So, it seems that around 389k US-nationals around the world have received some unpleasant letters from the IRS that their US passport might become revoked due to tax debts.

 

Read more about this here:

https://www.internationalinvestment.net/news/4005562/us-start-revoking-passports-american-expats-tax-debts?utm_source=Adestra&utm_medium=email&utm_term=&utm_content=&utm_campaign=New%20Newsletter%20-%20Special%20Report%201&utm_campaignid=6026&utm_cmdid=123483

5dfcbc03f136f_UStaxdebts.JPG.6311985173d

Since we are specialized in offering financial/investment advice to US Expats who live in Germany, we do also have an excellent network of tax advisors who are specialized in assisting such clients with their US-taxation issues. Happy to help if you want... :-)

 

Cheerio

 

I am a professional independent insurance broker, financial adviser, and authorised advertiser. Contact me.
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Is it cheaper than trying to give the passport up by yourself ? Asking for a (my) child. This worldwide taxation bit wouldn't be so bad if you didn't need a professional to deal with the paperwork - this should be simple. Bah.

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Good thinking. It costs a record amount of $2,350 to renounce it yourself. So, this might be an option for Americans with dual citizenship who have no income from th US.

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1 hour ago, LukeSkywalker said:

this might be an option for Americans with dual citizenship who have no income from th US.

 

If they have no income, how would they owe taxes? OK, they could have owed for a long time. 

 

Do you think they would ever be able to travel to the U.S. on their other passports?

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28 minutes ago, fraufruit said:

If they have no income, how would they owe taxes? OK, they could have owed for a long time. 

 

Americans are taxed on worldwide income, not just US income.  So it is entirely possible to owe taxes without having an income in the US.

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I thought there was an agreement against double taxation on income. One reports it but can't be taxed by both countries.

 

I know nothing.:ph34r:

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if you live in Germany, you won't pay tax in the US as between the earned income exclusion and the foreign tax credit, you're covered by the tax treaty (provided you pay your German taxes of course)

 

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1 hour ago, fraufruit said:

Do you think they would ever be able to travel to the U.S. on their other passports?

I don't know. I just know some Americans who are quite fed up with the yearly complicated paperwork although they have no income from the US. Think of simple employees with simple situations (single, rental home, just a savings account, etc.). I believe the US is the only country on the planet where it's citizens must hand in an annual tax declaration even if they have no residency in the country or income. 

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eritrea is the only other afaik

 

maybe north korea, but you can't generally leave :(

 

filing taxes is bad enough, but complying with the FATCA and FBAR stuff is much much scarier and worse.

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I know. I pay my tax person over there upwards of $600 each year just to file for my investments. No income. OK, a little income from investments but not enough to pay taxes.

 

I'm thinking this new law is to get people who probably left the U.S. owing taxes. They may be blocked from re-entering or face charges if they do.

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As I noted it's not the taxes I am worried about, it's the unnecessarily complicated reporting. Some of it really sounds like the IRS is offended if someone doesn't live in the US. As in "you live abroad; you must be up to no good". Not like "you are a 13 year old with a current account in the UK and a German Sparvertrag with some Sparkasse that your grand dad gave you".

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6 hours ago, Marianne013 said:

Is it cheaper than trying to give the passport up by yourself ? Asking for a (my) child. This worldwide taxation bit wouldn't be so bad if you didn't need a professional to deal with the paperwork - this should be simple. Bah.


They’re unfortunately only talking about revoking a passport, not citizenship..  

 

(I completely agree with you)

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And if you're iin  arrear of child support payments of $2,500 dollars or more you wont get a passport either, until you pay up the child support. 

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1 hour ago, fraufruit said:

I'm thinking this new law is to get people who probably left the U.S. owing taxes. They may be blocked from re-entering or face charges if they do.

Yes, I believe that's exactly what it's for.  And in all fairness, people should know these rules.  We may not like them, but we should be aware of them.

 

As a US citizen one owes the US tax on one's worldwide income.  But if one resides in Germany (and many other countries with whom the US has tax treaties) one may credit the taxes paid to the German govt against what one owes the US.  Technically, only by filing the return is one able to claim the credit.  And technically one can be penalized at a later point for not filing the return even though in practice it currently doesn't generally happen.

 

Many US expats, such as my friend's daughter who has lived in England for 10 years, are simply not filing US taxes.  They assume it doesn't matter because they still won't end up having to pay anything. But that's playing with fire.  The IRS can decide at some future point to come after these folks with penalties.  We may not like it, but those are the rules.

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