Americans Living Abroad Hand in Green Cards to Avoid Taxes
1 year ago
Record number of people say goodbye to their cards because of Uncle Sam
Uncle Sam isn't just making Americans mad in the states, but overseas as well.
In the last year, 1,800 people renounced their citizenship and the main reason was taxes.
The IRS began publishing a list of those who renounced in 1998 and this is the highest amount to ever give up their citizenship. It's also almost eight times more than the number of citizens who renounced in 2008, and more than the total for 2007, 2008 and 2009 combined.
The U.S. is one of the only countries who taxes its citizens for any income they make abroad. While many Americans meet their tax deadline in April, those overseas have a June deadline and a much more difficult process. An estimated 6.3 million overseas Americans file their taxes every year.
The only way to legally escape having to file for taxes is to renounce your citizenship and that's what many have begun to do.
The IRS publishes in the Federal Register the names of those who give up their citizenship, and some who renounced say they haven't seen their name on the list yet. It's a practice known as "name and shame" where people are seen as willing to give up their citizenship for financial reasons.
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Nina Olson, the U.S. taxpayer advocate for the IRS, is the individual who receives the most complaints from Americans overseas.
"The complexity of international tax law, combined with the administrative burden placed on these taxpayers, creates an environment where taxpayers who are trying their best to comply simply cannot," the report reads. "For some, this means paying more U.S. tax than is legally required, while others may be subject to steep civil and criminal penalties. For some U.S taxpayers abroad, the tax requirements are so confusing and the compliance burden so great that they give up their U.S. citizenship."