Maz

An interesting article I came across: LINK

This is something I would seriously consider if the US wants too much money for the privilege of not being in the country for a long time... if daughter were not born in the US and wasn't a dual national, I'd do it the moment I got my NZ citizenship...

Sally

did you get the job, Maz?

penguinsix

What the article didn't mention is that the IRS still goes after some who give up their citizenship for up to 10 years if their income / assets are above a certiain level. They also go after people who give up Green Cards who have assets over a certain level. There is a presumption that you are giving up citizenship to dodge taxes, so they keep after you.

http://www.debito.org/naturalization2.html

Rete

Go for it. No reason to keep a citizenship that not wanted and/or needed. You can always visit as a visitor in the future.

Maz

I'm waiting on the employer to do their checks (references, credit checks - it's a financial institution, and background check) then I'll get a job offer sent via courier.

They do? Bastards! :curse:

There's a ban for 10 years though, isn't there? If our daughter decides to do her OE and come to the US for any considerable length of time, I wouldn't be able to visit her.

I just think it's woefully unfair of the US to tax based on citizenship, not residency.

Dan725

I think that unless you are earning a substantial amount, its largely a non issue. If you are non resident for tax purposes, you get a substantial break anyway especially if double taxation agreements are in force.

And how exactly does the IRS know exactly how much this woman is earning anyway, what with her Swiss bank account and all....I think there are alternative ways and means around this over giving up your citizenship.

penguinsix

I've heard the 10 years, and repeated it, but I'm not sure exactly where in the code it is located. It may be urban legend (though I've heard some speak of it authoritatively).

There are some pretty draconian rules about ex-US citizens. First, if they judge you as a tax dodger, you are banned--FOR LIFE, though enforcement is still being sorted out I think (some say it is unconstitutional).

http://www.law.cornell.edu/uscode/ht...2----000-.html

(E) Former citizens who renounced citizenship to avoid taxation
Any alien who is a former citizen of the United States who officially renounces United States citizenship and who is determined by the Attorney General to have renounced United States citizenship for the purpose of avoiding taxation by the United States is inadmissible.

Also, I've read that if you return to the US from > 30 days, you are re-classified as a US citizen in the eyes of the IRS. Joy.

http://www.irs.gov/instructions/i8854/ch01.html

Tax Consequences of Presence in the United States After Expatriation or Termination of Residency

If, for any tax year during the 10-year period in which you are otherwise subject to section 877, you are present in the United States for more than 30 days in a calendar year ending in such tax year, you will be treated as a U.S. citizen or resident for that tax year. You will be subject to U.S. tax on your worldwide income unless the following exception applies.

p.s. Generally the amount that is required for this to kick in is > $500,000, which more and more people are qualifying for when they sell there houses.

If you are serious about this--you need to talk to a tax lawyer who specializes in US expat issues.

AmerLisa

What would happen if you needed to come to the US if your daughter were sick or injured?

penguinsix

I've did a bit of digging and can't find a 'legal' ban on travel to the US after renunciation, but I have found many many sites that say 'good luck getting a visa--you'll need it.' There is a famous legal case of a guy who renounced his citizenship, but still wanted to live in the US after he was done travelling the world. The State Department ruled he did not renounce because he didn't realize the effects of renunciation (basically, if he is so dumb to think this, he is too dumb to have renounced).

I'm sure it is done, but it would be difficult. Again, something for the lawyers.

p.s. you probably already know that you cannot renounce on behalf of your children. Only they can do it, and only after 18.

Maz

Well yeah that is the biggie. I just hope she settles in to NZ enough, and that if she does her OE, she chooses Europe over the US in any case.

It's weird that the State Dept decides why an individual has renounced... I wonder if the individual can appeal?

Over $500K? Nope, our house is on the market for just under half that amount, so we're safe there. Not rich, but comfortably off.

Redlippie

I would definitely speak to a tax attorney before doing such a thing.

Dan725

Then I wouldn't be worrying about it too much. If you live outside the US for 330 days or more in a year, you are exempt on the first $82,400 earned by you personally. And even then, if you are paying foreign tax, in a county where double taxsation agreement is in force, I think you can claim a foreign tax credit.

Maz

We're safe then. Thanks Dan - and everyone else!

Wonder if I'll have any problem holding 3 passports...

Dan725

No worries. You will still have to file a return each year, but at least you won't owe anything! Small price to pay to come and go from the US as you please I reckon.

Here is the start point for the official IRS site on foreign tax matters: http://www.irs.gov/faqs/faq13-7.html

Redlippie

I don't think it is a problem. Many South AFricans here have 3