New Disclosure Requirements Cause a Spike in Americans Giving Up Citizenship
Under FATCA, foreign banks are required to notify the U.S. Internal Revenue Service (IRS) about accounts held by U.S. taxpayers. A primary goal of the rules is to cut the power of nations the U.S. considers to be tax havens. First approved by Congress in 2010, the new disclosure requirements are aimed at recouping hundreds of billions of dollars the government says it loses each year in unpaid taxes.
The United States is the only country out of 34 in the Organization for Economic Co-operation and Development (OECD) that continues to tax citizens with dual citizenship regardless of where they live. For expatriates, filing taxes in two countries often means a large amount of paperwork.
In addition to the large amount of paperwork, some Americans are simply hoping to avoid the new disclosure requirements, while others are exhausted from dealing with overly complicated tax filings and the ever-changing tax code. Moreover, lower tax rates in other countries are very appealing and lessen concerns over wealth preservation.
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If you have any questions about this World Business & Tax Update, please contact your WithumSmith+Brown professional, a member of WS+B’s International Services Group or email us at [email protected].
Kimberlee Phelan, CPA, MBA
Practice Leader, International Services Group
609.520.1188
[email protected]
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To ensure compliance with U.S. Treasury rules, unless expressly stated otherwise, any U.S. tax advice contained in this communication is not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.
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