Dennis G. Rears

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Remove the "no" and "spam" from the "nopicaspam" for a real return =
address.
I, "Dennis G. Rears" wrote in message =
news:...
    > -
    > Remove the "no" and "spam" from the "nopicaspam" for a real return =
address.
    > "EvelynVogtGamble(Divamanque)" wrote in =
message
    > news:[email protected]...
    > >
    > >
    > > Mxsmanic wrote:
    > > >
    > > > "S Viemeister" a =E9crit dans le =
message de
    > > > news: [email protected]...
    > > >
    > > > > It was my understanding that if it were
    > > > > determined that renunciation of US citizenship
    > > > > had been done primarily to avoid tax liability,
    > > > > that the renunciation was null and void in the
    > > > > eyes of the US - making it difficult, if not
    > > > > impossible, for the former citizen to enter
    > > > > the US again.
    > > >
    > > > If reentering the U.S. is important to a person, he probably won't
    > renounce
    > > > citizenship in the first place.
    > >
    > > That seems a logical assumption. (Seems to me it would have to be a
    > > tremendously large "tax liability" to make renouncing one's =
citizenship
    > > a reasonable alternative to paying up, if one intended to return to =
the
    > > U.S.!)
    >=20
    > If I remember correctly that law passed for the extreme rich (net =
worth over
    > $10 million) who gave up thier citizenship to avoid estate taxes and =
some
    > capital gains. It was never meant for the the persion earning a =
"normal
    > level salary".
    >=20
    > dennis

Going to the IRS site, I found the following:

http://www.irs.gov/businesses/small/...,id=3D97245,0=
0.html

Among other things it states:

begin quote --->The expatriation tax provisions apply to U.S. citizens =
who have renounced their citizenship and long-term residents who have =
ended their residency, if one of the principal purposes of the action is =
the avoidance of U.S. taxes. The expatriation tax applies to the 10-year =
period following the date of the action.

If you expatriated in 2001, you are presumed to have tax avoidance as a =
principal purpose if:

a.. Your average annual net income tax for the last five tax years =
ending before the date of the action is more than $115,000, or=20
b.. Your net worth on the date of the action is $579,000 or more=20
Ruling Request

If you are presumed to have tax avoidance as a principal purpose because =
you meet either of the previous tests, you may be eligible to request a =
ruling from the IRS that you did not expatriate to avoid U.S. taxes. You =
must request this ruling within one year from the date of expatriation. =
For information that must be included in your ruling request, see =
section IV of Notice 97-19, 1997-1 C.B. 394, and Notice 98-34,1998-2 =
C.B. 29.
-------> End Quote


I wonder how many people this exempts. There is also a knowledge burden =
for the IRS. The don;t know how many people are out of there. A lot of =
expatriates do not file income tax returns.



dennis

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Remove the "no" and "spam" from the =
"nopicaspam"=20
for a real return address.
 I, "Dennis G. Rears" =
<[email protected]> wrote=20
in message news:...
    > -> Remove the "no" and =
"spam" from the=20
"nopicaspam" for a real return address.> =
"EvelynVogtGamble(Divamanque)"=20
<[email protected]> wrote in=20
message> news:[email protected]...> >> >> > =
Mxsmanic=20
wrote:> > >> > > "S Viemeister" <[email protected]> a=20
=E9crit dans le message de> > > news: [email protected]...>=20
    > >> > > > It was my understanding that if it =
were>=20
    > > > determined that renunciation of US citizenship> =
    > >=20
    > had been done primarily to avoid tax liability,> > > =
    > that=20
the renunciation was null and void in the> > > > eyes of =
the US=20
- making it difficult, if not> > > > impossible, for the =
former=20
citizen to enter> > > > the US again.> > =
    >>=20
    > > If reentering the U.S. is important to a person, he probably=20
won't> renounce> > > citizenship in the first =
place.>=20
    >> > That seems a logical assumption. (Seems to me it =
would=20
have to be a> > tremendously large "tax liability" to make =
renouncing=20
one's citizenship> > a reasonable alternative to paying up, if =
one=20
intended to return to the> > U.S.!)> > If I =
remember=20
correctly that law passed for the extreme rich (net worth over> =
$10=20
million) who gave up thier citizenship to avoid estate taxes and =
some>=20
capital gains. It was never meant for the the persion earning a=20
"normal> level salary".> > dennis
Â
 Going to the IRS site, I found =
the=20
following:
Â
http://www.irs.gov/businesses/small/...icle/0,,id=3D=
97245,00.html
Â
Among other things it states:
begin quote -> End Quote
I wonder how many people this =
exempts. There is=20
also a knowledge burden for the IRS. The don;t know how many =
people are=20
out of there. A lot of expatriates do not file income tax=20
returns.
Â
dennis

------=_NextPart_000_0343_01C31E22.3EADBA40--

Paul D.Smith

On a light note (so don't flame me please ;-) ), can't you now commit, or
just be accussed of, unamerican activities and have your citizenship
revoked? They might have a hard time justifying revoking it AND taxing you
at the same time.

On a serious note, I'm surprised to hear that many US expats don't file tax
returns. My wife has to although she never pays any US tax. She has to
simply state that she paid tax in the UK and didn't earn enough for the US
to try and get their grubby fingers on it. So aren't these non-filing
ex-pats committing a crime? In the present climate, I certainly wouldn't
want to have any sort of "record" if I ever intended to visit the US again
(and my in-laws sort of assume that I will ;-) ).

Paul DS.

"Dennis G. Rears" wrote in message
news:[email protected]...
Remove the "no" and "spam" from the "nopicaspam" for a real return address.
I, "Dennis G. Rears" wrote in message news:...
    > -
    > Remove the "no" and "spam" from the "nopicaspam" for a real return
address.
    > "EvelynVogtGamble(Divamanque)" wrote in message
    > news:[email protected]...
    > >
    > >
    > > Mxsmanic wrote:
    > > >
    > > > "S Viemeister" a écrit dans le message
de
    > > > news: [email protected]...
    > > >
    > > > > It was my understanding that if it were
    > > > > determined that renunciation of US citizenship
    > > > > had been done primarily to avoid tax liability,
    > > > > that the renunciation was null and void in the
    > > > > eyes of the US - making it difficult, if not
    > > > > impossible, for the former citizen to enter
    > > > > the US again.
    > > >
    > > > If reentering the U.S. is important to a person, he probably won't
    > renounce
    > > > citizenship in the first place.
    > >
    > > That seems a logical assumption. (Seems to me it would have to be a
    > > tremendously large "tax liability" to make renouncing one's citizenship
    > > a reasonable alternative to paying up, if one intended to return to the
    > > U.S.!)
    > If I remember correctly that law passed for the extreme rich (net worth
over
    > $10 million) who gave up thier citizenship to avoid estate taxes and some
    > capital gains. It was never meant for the the persion earning a "normal
    > level salary".
    > dennis

Going to the IRS site, I found the following:

http://www.irs.gov/businesses/small/...d=97245,00.htm
l

Among other things it states:
begin quote --->The expatriation tax provisions apply to U.S. citizens who
have renounced their citizenship and long-term residents who have ended
their residency, if one of the principal purposes of the action is the
avoidance of U.S. taxes. The expatriation tax applies to the 10-year period
following the date of the action.
If you expatriated in 2001, you are presumed to have tax avoidance as a
principal purpose if:
Your average annual net income tax for the last five tax years ending before
the date of the action is more than $115,000, or
Your net worth on the date of the action is $579,000 or more
Ruling Request
If you are presumed to have tax avoidance as a principal purpose because you
meet either of the previous tests, you may be eligible to request a ruling
from the IRS that you did not expatriate to avoid U.S. taxes. You must
request this ruling within one year from the date of expatriation. For
information that must be included in your ruling request, see section IV of
Notice 97-19, 1997-1 C.B. 394, and Notice 98-34,1998-2 C.B. 29.
-------> End Quote

I wonder how many people this exempts. There is also a knowledge burden for
the IRS. The don;t know how many people are out of there. A lot of
expatriates do not file income tax returns.

dennis

Mxsmanic

"Paul D.Smith" a écrit dans le message de news:
[email protected].. .

    > On a light note (so don't flame me please ;-) ),
    > can't you now commit, or just be accussed of,
    > unamerican activities and have your citizenship
    > revoked?

The Attorney General wants to enact a law to that effect, but it hasn't been
done yet.

I don't know how constitutional it is to revoke citizenship. The SCOTUS has
already said that it cannot be implicitly renounced (it must be explicitly
renounced), so I should hope there would be some protection against
revocation as well. Truly, if the government starts doing that, the
so-called freedoms and protections of the U.S. have pretty much evaporated.

    > They might have a hard time justifying revoking it
    > AND taxing you at the same time.

Since many forms of taxation are already difficult to justify and are
practiced anyway, I don't think that ethical or moral questions would have
any influence on their actions.

Me

"Paul D.Smith" wrote in message news:...
[snip]
    > On a serious note, I'm surprised to hear that many US expats don't file tax
    > returns. My wife has to although she never pays any US tax. She has to
    > simply state that she paid tax in the UK and didn't earn enough for the US
    > to try and get their grubby fingers on it. So aren't these non-filing
    > ex-pats committing a crime?


IIRC, you are not required to file if you pay no tax. Been a while
since I haven't had to file a return, but I do remember in the tortured
old days reading through the material to ensure that I didn't have
to file that year. There are some exceptions though and I'm sure
they change yearly.

    > In the present climate, I certainly wouldn't
    > want to have any sort of "record" if I ever intended to visit the US again
    > (and my in-laws sort of assume that I will ;-) ).

Well, and more to the point, it is easier to file, even having to
pay nothing, and to have the paper trail in place. If you suddenly
stop, or worse yet, stop and start again, you might find yourself
the subject of an audit.

[snip]
    > I wonder how many people this exempts. There is also a knowledge burden for
    > the IRS. The don;t know how many people are out of there. A lot of
    > expatriates do not file income tax returns.


Well, but more to the point, don't show up on the IRS's radar screen
at all. They probably aren't paying into social security, they may
have few if any state side witholdings. They aren't paying any state
income tax. Really, they aren't leaving any money trails at all that
the IRS might "sense".

Earl Evleth

On 20/05/03 10:12 am, in article
[email protected], "Paul D.Smith"
wrote:

    > On a serious note, I'm surprised to hear that many US expats don't file tax
    > returns.

Some really don't know. I knew an American who has lived for years in
Canada, a professor in a major university there, who did not know it was
US law he had to file an income tax return. I ran into a couple of
Americans in Europe, same thing. They were clueless.

The moment of truth comes if they return to the US to work, since the
IRS can ask, "hey, where are your returns for 1985-1999???"

Earl

Dennis G. Rears

--
Remove the "no" and "spam" from the "nopicaspam" for a real return address.
"Paul D.Smith" wrote in message
news:[email protected]...

    > On a serious note, I'm surprised to hear that many US expats don't file
tax
    > returns. My wife has to although she never pays any US tax. She has to
    > simply state that she paid tax in the UK and didn't earn enough for the US
    > to try and get their grubby fingers on it. So aren't these non-filing
    > ex-pats committing a crime? In the present climate, I certainly wouldn't
    > want to have any sort of "record" if I ever intended to visit the US again
    > (and my in-laws sort of assume that I will ;-) ).

    > Paul DS.


I have read in a couple of publications that many expats aren't even aware
of the requirement to file a tax return. A lot of them think that because
they make less than $80K and would owe no tax, they, are not required to
file. While they are breaking the law by not filing, the actual
consequences are minor if no tax is due. Yes, terrible things could happen
in theory but for those folks making less than $80K they just aren't on the
radar screen.

dennis

Dennis G. Rears

--
Remove the "no" and "spam" from the "nopicaspam" for a real return address.
"Mxsmanic" wrote in message
news:[email protected]...
    > "Paul D.Smith" a écrit dans le message de
news:
    > [email protected].. .
    > > On a light note (so don't flame me please ;-) ),
    > > can't you now commit, or just be accussed of,
    > > unamerican activities and have your citizenship
    > > revoked?
    > The Attorney General wants to enact a law to that effect, but it hasn't
been
    > done yet.
    > I don't know how constitutional it is to revoke citizenship. The SCOTUS
has
    > already said that it cannot be implicitly renounced (it must be explicitly
    > renounced), so I should hope there would be some protection against
    > revocation as well. Truly, if the government starts doing that, the
    > so-called freedoms and protections of the U.S. have pretty much
evaporated.

It's a little bit off topic but this URL is a good resource for USA dual
citizenship info.
http://www.richw.org/dualcit/

dennis

Dennis G. Rears

--
Remove the "no" and "spam" from the "nopicaspam" for a real return address.
"me" wrote in message
news:[email protected]...
    > "Paul D.Smith" wrote in message
news:...
    > [snip]
    > > On a serious note, I'm surprised to hear that many US expats don't file
tax
    > > returns. My wife has to although she never pays any US tax. She has to
    > > simply state that she paid tax in the UK and didn't earn enough for the
US
    > > to try and get their grubby fingers on it. So aren't these non-filing
    > > ex-pats committing a crime?
    > IIRC, you are not required to file if you pay no tax. Been a while
    > since I haven't had to file a return, but I do remember in the tortured
    > old days reading through the material to ensure that I didn't have
    > to file that year. There are some exceptions though and I'm sure
    > they change yearly.

I do not believe this is true. If your income is above a few thousand and
you make use of the $80K exemption you are required to file. This whole
topic should now go to misc.taxes.moderated now...

dennis

Dennis G. Rears

--
Remove the "no" and "spam" from the "nopicaspam" for a real return address.
"Earl Evleth" wrote in message
news:BAF01EBA.2DFF%[email protected]...
    > On 20/05/03 10:12 am, in article
    > [email protected], "Paul D.Smith"
    > wrote:
    > > On a serious note, I'm surprised to hear that many US expats don't file
tax
    > > returns.
    > Some really don't know. I knew an American who has lived for years in
    > Canada, a professor in a major university there, who did not know it was
    > US law he had to file an income tax return. I ran into a couple of
    > Americans in Europe, same thing. They were clueless.
    > The moment of truth comes if they return to the US to work, since the
    > IRS can ask, "hey, where are your returns for 1985-1999???"
    > Earl

The problem for the IRS is they don't know who these people are. It is
hard enough for the IRS to go after people who haven't file in years even
though they live in the states and have USA income. How in the world are
they going to know if these people even had income? There ae people in the
states who leave the workforce for 10-20 years and then come back.

dennis

Tandp

Much as this topic may be of general interest, it might be OT in RTE,
with all due respect.
My news server has two other expat newsgroups listed, and I don't
see any discussion of it in these NGs.
Comments?
Tom

    > "Dennis G. Rears" schrieb:
    >
    > Remove the "no" and "spam" from the "nopicaspam" for a real return
    > address.
    > I, "Dennis G. Rears" wrote in message
    > news:...
    > > -
    > > Remove the "no" and "spam" from the "nopicaspam" for a real return
    > address.
    > > "EvelynVogtGamble(Divamanque)" wrote in
    > message
    > > news:[email protected]...
    > > >
    > > >
    > > > Mxsmanic wrote:
    > > > >
    > > > > "S Viemeister" a écrit dans le
    > message de
    > > > > news: [email protected]...
    > > > >
    > > > > > It was my understanding that if it were
    > > > > > determined that renunciation of US citizenship
    > > > > > had been done primarily to avoid tax liability,
    > > > > > that the renunciation was null and void in the
    > > > > > eyes of the US - making it difficult, if not
    > > > > > impossible, for the former citizen to enter
    > > > > > the US again.
    > > > >
    > > > > If reentering the U.S. is important to a person, he probably
    > won't
    > > renounce
    > > > > citizenship in the first place.
    > > >
    > > > That seems a logical assumption. (Seems to me it would have to be
    > a
    > > > tremendously large "tax liability" to make renouncing one's
    > citizenship
    > > > a reasonable alternative to paying up, if one intended to return
    > to the
    > > > U.S.!)
    > >
    > > If I remember correctly that law passed for the extreme rich (net
    > worth over
    > > $10 million) who gave up thier citizenship to avoid estate taxes and
    > some
    > > capital gains. It was never meant for the the persion earning a
    > "normal
    > > level salary".
    > >
    > > dennis
    >
    > Going to the IRS site, I found the following:
    >
    > http://www.irs.gov/businesses/small/...=97245,00.html
    >
    >
    > Among other things it states:
    >
    > begin quote --->The expatriation tax provisions apply to U.S. citizens
    > who have renounced their citizenship and long-term residents who have
    > ended their residency, if one of the principal purposes of the action
    > is the avoidance of U.S. taxes. The expatriation tax applies to the
    > 10-year period following the date of the action.
    >
    > If you expatriated in 2001, you are presumed to have tax avoidance as
    > a principal purpose if:
    >
    > * Your average annual net income tax for the last five tax years
    > ending before the date of the action is more than $115,000, or
    > * Your net worth on the date of the action is $579,000 or more
    >
    > Ruling Request
    >
    > If you are presumed to have tax avoidance as a principal purpose
    > because you meet either of the previous tests, you may be eligible to
    > request a ruling from the IRS that you did not expatriate to avoid
    > U.S. taxes. You must request this ruling within one year from the date
    > of expatriation. For information that must be included in your ruling
    > request, see section IV of Notice 97-19, 1997-1 C.B. 394, and Notice
    > 98-34,1998-2 C.B. 29.
    > -------> End Quote
    >
    > I wonder how many people this exempts. There is also a knowledge
    > burden for the IRS. The don;t know how many people are out of there.
    > A lot of expatriates do not file income tax returns.
    >
    >
    >
    > dennis

Stephen Gallagher

    > On a serious note, I'm surprised to hear that many US expats don't file tax
    > returns.

Most of them just don't realize that they're required to do so,
especially ones who have never lived in the US or who moved
out of the US at a young age. Since nearly every other country
follows the policy of imposing taxes based on residency or
source of income, it just doesn't occur to many people that the
US considers their non-US income income as taxable, when they
don't reside in the US.

Also, the closest example that Americans encounter regarding the
starting and stopping to pay income taxes is when they move from
one US state to another. A person who lives in New Jersey pays
state income tax to New Jersey, on his worldwide income.
If he later moves from New Jersey to California,
he stops paying income tax to New Jersey (unless the income is earned
there) and he starts paying income tax to California on his worldwide
income. And that makes sense because he's no longer receiving the
services that NJ income taxes support. Similarly, many people would
simply apply the same principle and believe that since they no longer live
in the US, they wouldn't have to pay US income tax (unless it was income
from the US). Of course, under the current law, they're wrong.

A former co-worker of mine, lives in Prince Edward Island, Canada.
She was born and lived in the US until she was 16, and then she
moved to Canada when her mother married a Canadian. She's
lived in Canada for about 15 years (still a US citizen), and she's
never filed a US tax return because she's been unaware of
the requirement. When I told her, she wouldn't believe me. In
fact, I mentioned that because her children are also US citizens
(by descent), this requirement would also on them once their
income increases to the minimum level requiring a tax return.

    > My wife has to although she never pays any US tax. She has to
    > simply state that she paid tax in the UK and didn't earn enough for the US
    > to try and get their grubby fingers on it.

The same scenario applies to me. I've lived in Canada for the
past eight years and I've never had to pay any US income tax
since moving here, although I've had to file a US tax return each
year telling the IRS that I owe them $0.00.

    > So aren't these non-filing ex-pats committing a crime?

Yes. Although the IRS is more likely to be tough with someone
who actually ended up owing them taxes than with someone
who never filed but would have owed them no tax anyway.
This is especially true for US citizens who have never worked
in the US or had US income, and therefore never had to file a
US tax return at all. They may be required to file some back returns,
but if they don't owe anything, they'll likely not be hit with any
penalties. But I'm not encouraging any US citizens to not
file their taxes just because they would owe nothing.

I remember reading that at one time, the government was considering
changing the tax policy so that citizenship didn't come into play when
determining tax liability (it would be residency or source of income).
This was back in the 1970s though, and it never went anywhere.

Stephen Gallagher

Stephen Gallagher

[email protected]>...
    > [snip]
    > > On a serious note, I'm surprised to hear that many US expats don't file tax
    > > returns. My wife has to although she never pays any US tax. She has to
    > > simply state that she paid tax in the UK and didn't earn enough for the US
    > > to try and get their grubby fingers on it. So aren't these non-filing
    > > ex-pats committing a crime?
    >
    >
    > IIRC, you are not required to file if you pay no tax.

You are required to file if your income exceeds the minimum
level for filing that applies to anyone, even if no taxes are due.
For example, a person whose tax withheld was exactly equal
to his taxes owed would still have to file, even though he would
not be sending the IRS a cheque, nor would the IRS be sending
one to him. Similarly, a person whose income was excludable
under the foreign earned income exclusion still has to file, even
if no taxes are owed.

Earl Evleth

On 21/05/03 1:04, in article
[email protected], "Stephen Gallagher"
wrote:

    > If he later moves from New Jersey to California,
    > he stops paying income tax to New Jersey (unless the income is earned
    > there) and he starts paying income tax to California on his worldwide
    > income.


One tax liability which can follow you from state to state and out of
the country is with retirement systems. I was at the University of
California and left, but allowed my retirement investment there
to remain. When 60 came they contacted me saying I had to take
retirement and I said I wanted to wait until 65. They said, OK
but you`ll not get any more! The alternate choice was to roll
it over into an IRA which I did. Then later I exported the IRA
to a brokerage concern in New York. The State of California tax
office found out and tried to tax me for the total of the IRA
as California income

Money going into the IRA is tax free both at the Federal and State
level, so the State did not want their hold on me to evaporate
by my moving around. I responded that I had not removed any money
from the IRA so it is not taxable in California, nor was I a resident
there.

But the State had a point. Had I taken my retirement in California
they would have recovered the taxes they had not received in the
past.

And I had a point. Indeed if I were forced to pay a tax to California
I would have entailed a Federal tax burden by taking part of the IRA
to pay the tax!

Years have passed since then and I have the IRA out of the State and
I assume that state has forgotten about me. But in fact, what legal
hold could they have on me? None, in a practical sense.

Earl

Stephen Gallagher

    > > If he later moves from New Jersey to California,
    > > he stops paying income tax to New Jersey (unless the income is earned
    > > there) and he starts paying income tax to California on his worldwide
    > > income.
    >
    >
    > One tax liability which can follow you from state to state and out of
    > the country is with retirement systems.

A federal law was passed by Congress several years ago
regarding this, and states are not permitted now to
tax pensions or IRA/401k distributions on the basis that the
beneficiary was residing or working in that state when the
pension credit or IRA/401k contribution was originally earned.

It's where you live when the distribution is made that
matters (at least on a state tax level).

Stephen Gallagher

Grey

On Tue, 20 May 2003 23:42:42 +0200, tandp wrote:

    >Much as this topic may be of general interest, it might be OT in RTE,
    >with all due respect.
    >My news server has two other expat newsgroups listed, and I don't
    >see any discussion of it in these NGs.
    >Comments?

yeah, what are the expat groups?