Sunday, February 9, 2014
US Citizen Expatriation's Rose to Record Last Year
Posted by Charleston Voice
With the US Treasury intimidating and threatening foreign governments to snitch on foreign depositors perhaps they're getting a feeling America doesn't want them anymore. And with the IRS the collection agency for the Fed there's no place to turn.
Last year saw a record for expatriation by U.S. taxpayers, exceeding by two-thirds the previous high set in 2011.
According to the Treasury Department, 630 individuals renounced their U.S. citizenship or ended their long-term U.S. residency by turning in their green cards during the fourth quarter.
The fourth-quarter figure brought to 2,999 the total number of expatriations for 2013. The previous record was 1,781 in 2011, said Andrew Mitchel, a tax lawyer in Centerbrook, Conn., who tracks the data.
The Treasury is required by law to publish a list of the names of expatriates quarterly. The list doesn’t indicate when people expatriated or why. It also doesn’t distinguish between people giving up passports and those turning in green cards.
Mr. Mitchel attributed the surge to increased awareness of the obligation to file U.S. tax returns, the increasing burden of compliance and the fear of large penalties for failure to file U.S. returns.
“Above all, fear seems to be driving this increase in expatriations,” Mr. Mitchell said.
The U.S. is unique among developed nations in requiring citizens and green-card holders to file tax returns, regardless of where they live, he noted. People who expatriate also can be subject to exit tax.
U.S. officials have been conducting a campaign against undeclared offshore accounts since 2009, when Swiss bank UBS AG admitted that it helped U.S. taxpayers hide money abroad.
The Swiss bank paid $780 million and turned over information on more than 4,400 account holders to the U.S., ending decades of Swiss bank secrecy.
Switzerland’s oldest bank, Wegelin & Co., closed down in 2012 and pleaded guilty to helping U.S. taxpayers hide more than $1.2 billion.
In addition, the U.S. has indicted almost two dozen foreign bank employees and investment advisers—and more than 100 U.S. taxpayers—in connection with undeclared offshore accounts.
On Thursday, the U.S. Attorney’s Office for the Southern District of New York announced the indictment of another Swiss adviser, Peter Amrein. According to the indictment, Mr. Amrein worked with Edgar Paltzer, a Swiss adviser who pleaded guilty last August to helping U.S. taxpayers hide assets abroad.
Mr. Amrein couldn’t be reached for comment. It isn’t known if he has a U.S. attorney.
This week, Internal Revenue Service Commissioner John Koskinen told a congressional committee that since 2009 more than 43,000 U.S. taxpayers have entered a special program for taxpayers with undeclared offshore accounts and paid more than $6 billion in back taxes, interest and penalties.
Experts representing such taxpayers estimate that the IRS still is due several billion dollars more.
The Foreign Account Tax Compliance Act may also be encouraging some taxpayers to expatriate, experts said. Set to take effect this year, it requires foreign financial institutions to report account information to the U.S., both for U.S. citizens and green-card holders living in the U.S. and abroad.