Renunciation of Taxes

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The American citizenship has been renounced by a firm stream of American Citizens. The rate of renunciation on the US citizenship increased since the tax rules that were made stricter were implied. A large number of Americans that live in the other countries get to face tax bills extremely high. The also face the complexity to obtain and manage the financial accounts and also the difficulty in the saving rules of the retirement. Many advocates have commended the government of US to charge its citizens of the tax on the basis of their residency in the country instead of charging them on their citizenship. This step would help lower the obstacles.

Similar is the case of Jenny, who left USA almost 30 years ago. She emigrated from the USA to the Britain in the late 80’s and then moved to Canada. She has been in Canada for about 15 years and is a permanent citizen there. She was a citizen of USA and recently renounced her citizenship to America on October, 17, 2018.

Moving to Canada changed her life and the rules related to the taxes she had been facing. The tax situation for people who live abroad as an American has been very intricate. The reason for that is that United States of America is the only country that imposes taxes on people on the basis of their citizenship no matter they have been living there or not while other countries tend to impose tax on basis of residency. The government of USA has stiffened its rules and regulations more in the latest years to make it even harder for the USA citizens to avoid or dodge to pay their taxes by walloping their money offshore. The USA citizens living in the foreign countries it makes it even more complex to discover monetary institutions who will permit them to open financial records and accounts. 

Jenny says that she wanted to renounce her USA citizenship for a long time but finally did it when she heard of the taxes she had been charged off for the citizenship of America. It had been in the back of my mind probably for decades but it came to my head when we start to get all these newspapers or articles in the paper this year. Then I realized I has some bank accounts and after I counted I realized I had over 30 accounts and I just felt overwhelmed by the owner’s tax’ Jenny said. ‘I had to pay the tax and if I missed a single one I had to pay a $10000 fine. It was an account that was inactive, had like one dollar in it’. She says that even the thought of it was becoming a cause of stress in her life so she found an accountant and started the process of tax return.

Jenny isn’t alone in it there are a couple numbers of foreign based USA citizens who had been facing the similar situation. They had a feeling of resentment for the government of USA on the issue. Jenny says ‘Mainly the resentment was because they were causing the largest source of anxiety in my life. There was a constant worry. When it comes to the tax time my Canadian tax was very straight forward, I was no longer to pay taxes for England and this huge tax was building throughout the year in the USA that I’d be thinking about and all its preparation far more than I had to do for my Canadian taxes’. 

America is followed by probably five thousand tax returns every year by the Americans that live abroad and less than five hundred actually have to pay any tax. The real struggle than to pay tax is to keep track of the paper work. ‘I figured it was taking forty hours of my time every year. I had to go back to every bank and get prints out the entire year. The only fear I had was that I would never be able to enter USA but I started taking these seminars that helped me understand the process of renunciation’.

One does not need a lawyer for renunciation. Just fill in the forms and go through the process but there is a 2350 $ fee that they have to pay for the process because of the rules of renunciation and it has increased substantially during a short period of time. The interviews for renouncing have been limited for the embassies around the world by the US government. Toronto has been on the longest waiting list that is 18 months. People have started pre booking for the renunciation of citizenship for their children because of the long waiting time. They might cancel the appointment later if they do not want to use it. 

The part most of the people are worried about is the embassy interview as it is thought that they do not like people renunciation at such a great rate that is why they increased the waiting time to make the number look smaller on papers. ‘The lawyers used to scare people about this but my understanding s that they don’t even allow lawyers into the interview’ says Jenny. ‘My interview went not very nervous because I myself made few inquiries about the process ad they were so used to of a great number of Americans coming and doing this, they were just very professional, extremely helpful and very different from the fear people have, at least my own stems from experiences from immigration. I remember when I applied for my Nexus card when I went to the immigration on the American side first thing he said to me when he saw Canadian was what! Is your citizenship not good enough for you?’ In Jenny’s experience the just asked the reasons of renouncing at the embassy. 

Excepting any vicissitudes, Americans overseas will have to endure to contend with the multifaceted tax rubrics they face.

 

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