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Accidental American protest groups want out
| Published: | 24 Apr at 6 PM |
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The IRS’s strict rules governing tax liabilities for US expats are hitting hard on the so-called ‘accidental Americans’ living and working overseas.
In the bulk of cases, accidental Americans were born in the USA but moved overseas with their parents when they were still young children. They’ve made their lives in a foreign country, from education through getting jobs, paying their taxes, owning homes and having a partner and children, but the IRS still considers them Americans liable for FATCA taxation. As a result, their financial lives in their present countries of residence are a misery.
Legal challenges for accidental Americans are many, beginning with refusals to requests for a bank account, the inability to get a loan or mortgage and the impossibility of making an investment. The reason for the refusals are obvious and understandable – no foreign bank wants to be drawn into the FATCA net, its costs, its compliance nightmares and the possibility of making an innocent mistake on its annual FATCA report are all anathema to financial institutions worldwide. Escaping the net for expats is almost impossible as over 100 world countries have FATCA treaties with America, as have as many as 300,000 global financial institutions.
A Canadian accidental American group is now challenging FATCA in the courts, and another group based in France has enlisted President Macron’s assistance in raising the issue with the US government. The group, Accidental Americans in France, simply want to know the easiest way to renounce their citizenship as the only way to get themselves out of the mess. There’s a hefty fee and outstanding taxes must be settled before they’re rid of the burden of US citizenship acquired by accident at birth. French lawmaker Marc Le Fur is on their side, saying France should not allow itself to be an auxiliary tax collector for the USA.
In the bulk of cases, accidental Americans were born in the USA but moved overseas with their parents when they were still young children. They’ve made their lives in a foreign country, from education through getting jobs, paying their taxes, owning homes and having a partner and children, but the IRS still considers them Americans liable for FATCA taxation. As a result, their financial lives in their present countries of residence are a misery.
Legal challenges for accidental Americans are many, beginning with refusals to requests for a bank account, the inability to get a loan or mortgage and the impossibility of making an investment. The reason for the refusals are obvious and understandable – no foreign bank wants to be drawn into the FATCA net, its costs, its compliance nightmares and the possibility of making an innocent mistake on its annual FATCA report are all anathema to financial institutions worldwide. Escaping the net for expats is almost impossible as over 100 world countries have FATCA treaties with America, as have as many as 300,000 global financial institutions.
A Canadian accidental American group is now challenging FATCA in the courts, and another group based in France has enlisted President Macron’s assistance in raising the issue with the US government. The group, Accidental Americans in France, simply want to know the easiest way to renounce their citizenship as the only way to get themselves out of the mess. There’s a hefty fee and outstanding taxes must be settled before they’re rid of the burden of US citizenship acquired by accident at birth. French lawmaker Marc Le Fur is on their side, saying France should not allow itself to be an auxiliary tax collector for the USA.
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