# 1st contact from my bank, what happens if I just close the account before answering?



## calamar

Hello, although US born, my foreign parents moved the family to Luxembourg when I was one year old. I did have a US passport from that time although I have never renewed it since I don't have any links or travel with the US. I have lived all my life in Luxembourg and have been saving to buy cash a house for me and my family. Just when I was about to buy a house, I received a letter from my bank informing me that I am a "US person" as I was born in the USA. The bank threatens to close the account if I don't get back to them within a month with a W9.

My question is, what happens if I close the account by transferring the balance to my wife and my mother and then reopen a bank account with less than 10.000 USD at another bank? (and declare that one if needed). Do you think my current bank would report anyway my previous balance since they do not have the formal proof I am a US person?

I am not a tax cheat, I plan to file my taxes in the USA now that I found out I need to do that, and since I have paid my Luxembourg taxes I will probably owe nothing. My relatively substantial savings are the product of frugal living and inheritance. My goal is not to file the FBARs and 8938s as the relatively high savings level plus the fact that I live in a country known as tax haven (even though I work in manufacturing) plus the fact that at work I have signatory powers of the company's bank account (thus my employer would have to declare them) all this makes for a lot of paperwork. By closing the current bank account and opening a new delclared account under the 10.000 USD I hope to fly under the radar and not burden my children future (I found out in this forum that as my children they are considered as US citizens too although we never applied for any passport). 

I welcome your comments and thank you in advance.


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## Nononymous

First off, it doesn't sound like your children would inherit US citizenship - the rule is that you would have needed to live in the US for five years, with three of those years after the age of 14. 

I can't give a specific answer about what would happen if you closed your account because I don't know the details of the Luxembourg IGA. However, what I suspect is that your bank is obliged to report "suspicious" account closures. So if they've asked for a W9 and you've refused to give them one or responded by closing the account, that might trigger reporting. This may not have any real-world impact of course, as the US government will only get a name and an address and a bank balance, after that it's up to them to decide whether this is a lead worth pursuing, and they likely don't have the resources to go after anyone who isn't very rich, nor might they have the legal means to collect money from anyone with no US assets.

One thing to consider, though, is will you be able to open another account as easily, with your US birthplace? Unfortunately it's not as easy to stay off the radar in Europe given that banks have stricter ID standards for account opening, and will see citizenship or place of birth on the applications. In Canada those questions were never asked, and with new accounts now it's only one question ("Are you a US person?") that one is free to answer untruthfully. 

If you were planning to become tax compliant anyway (you don't necessarily have to, ignoring this is an option) then why would you not file the FBAR forms? It's common enough to have high balances prior to a house purchase, you won't be taxed or penalized for that. 

I think the work situation is probably more serious - you don't want to hide that from your employer, and I'm pretty sure your employer doesn't want to have all sorts of financial information reported to the US government.


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## calamar

Thanks for your answer Nonomymous. I agree that the risk of my children is limited as we have not applied for a US passport but if I remember correctly an ancient post here they are still "latent" US citizens. However the risk is almost zero, I agree.

Regarding the new bank account I will need to say I am a US person, there is no way around it, now all the banks clerks are trained to detect "US indicia" such as birth places. That means filing a W9 of course but since I hope my current bank will not report on me because just by chance I closed my account with them (insert excuse here) with the high balances over the years.

Regarding the US taxes, I have no problem filing them (other than the inconvenience and the principle), I am just a salaried employee with nothing to hide.

Regarding my employer, they will not be happy about this but I don't think they can fire because, worst case they will retire my signing rights over the accounts , although this will make my job harder......


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## Bevdeforges

I think you may be overthinking this one.

The banks are going to have to report your accounts simply based on the US birthplace. Whether they have a US social security number to go with that or not is about the only difference to your filling out the W9 or not. But the FBAR filings are literally only information filings - and actually what you report on the FBAR is different information from what the banks report on those accounts. (I.e. you report the "high balance" and the banks are only reporting a year end balance). 

Also, I'm not so sure your employer has to report anything at all. On the FBAR, if you have signature authority over your employer's accounts, you only report the name and address of your employer. The employer only has to report information if you hold 10% of the company's stock or have a very high powered title/position. The fact that you can sign checks may or may not obligate them to report anything - but that's their problem, not yours.

If you're looking to become compliant, filing the FBARs every year is probably the least "threatening" thing you can do and to some extent it's an easy way to keep the IRS/Treasury Dept. off your back. 
Cheers,
Bev


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## calamar

Bevdeforges said:


> I think you may be overthinking this one.
> 
> The banks are going to have to report your accounts simply based on the US birthplace. Whether they have a US social security number to go with that or not is about the only difference to your filling out the W9 or not. But the FBAR filings are literally only information filings - and actually what you report on the FBAR is different information from what the banks report on those accounts. (I.e. you report the "high balance" and the banks are only reporting a year end balance).


thanks for your answer Bev, but why the bank would report a US born individual if they have no formal proof this person may be a "US person"? For example, an individual might be a former US citizen that renounced subsequently to his US citizenship. Probably they will want to play it safe and report on me anyway, right?

Regarding the "high balance" reporting requirement, do we have to prove it or provide a bank statement?


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## Nononymous

calamar said:


> thanks for your answer Bev, but why the bank would report a US born individual if they have no formal proof this person may be a "US person"? For example, an individual might be a former US citizen that renounced subsequently to his US citizenship. Probably they will want to play it safe and report on me anyway, right?
> 
> Regarding the "high balance" reporting requirement, do we have to prove it or provide a bank statement?


Basically everyone born in the US is automatically a US citizen - the exception being children of diplomats - so it's a reasonable assumption on the banks' part. If you have a US birthplace the only way you're not a citizen is if you've renounced, in which case you can show the loss-of-nationality paperwork to the bank.


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## chuck846

Nononymous said:


> Basically everyone born in the US is automatically a US citizen


Today that may be true - but if a certain politician running for nomination has his way - that may change


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## Nononymous

chuck846 said:


> Today that may be true - but if a certain politician running for nomination has his way - that may change


Might be the one benefit of voting for the man. #MeinTrumpf


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## iota2014

calamar said:


> thanks for your answer Bev, but why the bank would report a US born individual if they have no formal proof this person may be a "US person"? For example, an individual might be a former US citizen that renounced subsequently to his US citizenship. Probably they will want to play it safe and report on me anyway, right?


It's a good deal worse than "playing it safe" - they're _required_ to report your account, if you have a US place of birth, unless you can prove you've renounced.

See https://www.treasury.gov/resource-c...ents/FATCA-Agreement-Luxembourg-3-28-2014.pdf


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## Bevdeforges

calamar said:


> thanks for your answer Bev, but why the bank would report a US born individual if they have no formal proof this person may be a "US person"? For example, an individual might be a former US citizen that renounced subsequently to his US citizenship. Probably they will want to play it safe and report on me anyway, right?


In most countries, the banks will simply submit their data to the national banking authority and let them decide what to strip off to report to the IRS.



> Regarding the "high balance" reporting requirement, do we have to prove it or provide a bank statement?


No. Most folks I know submit a good faith estimate (and personally, I usually add a healthy margin onto whatever number I report - just to be sure). They normally won't compare your FBARs to your tax returns unless they spot a serious discrepancy or "oddity" on the tax returns.
Cheers,
Bev


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## calamar

thanks a lot guys for all this input, this is getting scary and it looks like I will have to waste a lot of time getting myself squared away.

Do you know if I have to report also the balances of my minor children savings accounts? They are the account holders but my wife and myself control the accounts as legal representatives.


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## BBCWatcher

Yes since you have "signature authority."


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## ForeignBody

I am not sure what you are trying to achieve, since you say that your plan is to become tax compliant.

Closing an existing account and opening a new one probably just complicates the situation. If you wish to become compliant look through the IRS Streamlined Procedure. It is designed for people in your situation.


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## calamar

I am trying to protect my children from having to undergo all this filing once they become adults. Nononymous wrote in another thread that theoretically children born to US citizens are considered US citizens even if the US parent never tells the consulate about them. Post 7 of the US citizenship thread.


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## chuck846

calamar said:


> I am trying to protect my children from having to undergo all this filing once they become adults. Nononymous wrote in another thread that theoretically children born to US citizens are considered US citizens even if the US parent never tells the consulate about them. Post 7 of the US citizenship thread.


It is a sad state of affairs. Perhaps someday the US will adopt a flat tax. Think of all the money THAT would save the world.


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## calamar

I have the link of the thread referred in my above post as I know have hyperlink privileges:

http://www.expatforum.com/expats/expat-tax/988297-us-citizenship-thread.html


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## calamar

chuck846 said:


> It is a sad state of affairs. Perhaps someday the US will adopt a flat tax. Think of all the money THAT would save the world.


Fatca is not about money, after all it must cost much more to implement than what is bringing. It is about control and the power of the Leviathan State. Pharaohs would commission useless (if beautiful) pyramids to state their power. Fatca is about the same: knowledge, control and power.


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## Pacifica

calamar said:


> I am trying to protect my children from having to undergo all this filing once they become adults. Nononymous wrote in another thread that theoretically children born to US citizens are considered US citizens even if the US parent never tells the consulate about them. Post 7 of the US citizenship thread.


Calamar,

Your children are likely okay. They are not necessarily US citizens although you are. You have to reside or be physically present in the US a certain number of years to pass on the citizenship, and you mentioned you lived all your life in Luxembourg since you were one year old. See attached chart from US Citizenship and Immigration Services to determine if your children were born US citizens.

Child born in wedlock:
https://www.uscis.gov/policymanual/PDF/NationalityChart1.pdf

Child born out of wedlock:
https://www.uscis.gov/policymanual/PDF/NationalityChart2.pdf

Nononymous' comment is correct, but that discussion was on a different aspect of children's citizenship - that being that if the child's citizenship exists, it exists independently of registration. 

In your case, it sounds likely you didn't meet the US residency requirement to pass on the citizenship.


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## iota2014

> Fatca is not about money, after all it must cost much more to implement than what is bringing. It is about control and the power of the Leviathan State. Pharaohs would commission useless (if beautiful) pyramids to state their power. Fatca is about the same: knowledge, control and power.


I'd say it's just the opposite: FATCA is about fear.

America doesn't feel powerful, and doesn't trust anyone - not even (or maybe especially) His own citizens.


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## calamar

Pacifica said:


> Calamar,
> 
> 
> In your case, it sounds likely you didn't meet the US residency requirement to pass on the citizenship.


good to know thanks. The family curse will die with me  

it is so sad that a country created by the most freedom loving people that ever existed (the Founding Fathers) ends up like this.


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## calamar

iota2014 said:


> I'd say it's just the opposite: FATCA is about fear.
> 
> America doesn't feel powerful, and doesn't trust anyone - not even (or maybe especially) His own citizens.


a minority can only control a majority through fear (and disinformation). Fear is a means to achieve an end: control.

Disinformation is also important: you have to dumb down the population you control lest they get ideas.


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## Nononymous

calamar said:


> I am trying to protect my children from having to undergo all this filing once they become adults. Nononymous wrote in another thread that theoretically children born to US citizens are considered US citizens even if the US parent never tells the consulate about them. Post 7 of the US citizenship thread.


Not quite - children born outside the US are only citizens if the US citizen parent meets the residency criteria of having lived 5 years total in the US, 3 of which after the age of 14. 

If the US parent met the criteria, the children are citizens from birth. In practice, if the consulate isn't told and they don't have a US birthplace, they can probably ignore their citizenship - though in either case you might get into odd situations where a bank knows that the parent is a citizen and makes assumptions or asks questions about the children.


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## BBCWatcher

To elaborate slightly, if your children are U.S. citizens in legal fact, there is nothing you can do to "protect" them from their legal obligations to the U.S. They simply have those legal obligations, and parents cannot revoke them or waive them.

You can choose to leave their U.S. citizenships _undocumented_, but for a variety of reasons (discussed in a separate thread) I don't recommend that. But whether their citizenships are documented or not, their citizenships exist (or don't), and thus the legal obligations exist (or don't). That switch is either on or off. There is no in between -- it's very binary.

When they are either 18 years old or legally emancipated, whichever comes first, they, of their own independent free wills, can decide whether or not they wish to renounce their U.S. citizenships. Parents cannot do this for them, and there is no earlier option available.

Bottom line: if you're born a U.S. citizen in legal fact, you remain a U.S. citizen in legal fact for at least your entire childhood -- and for life if you never take any action, even if you're undocumented. There is nothing a parent or anybody else can do to change a child's possession of U.S. citizenship. Many other countries have the same provision in their citizenship laws.


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## iota2014

BBCWatcher said:


> ...whether [children's US] citizenships are documented or not, their [US] citizenships exist (or don't), and thus the legal obligations exist (or don't). That switch is either on or off. There is no in between -- it's very binary.
> [..]
> Bottom line: if you're born a U.S. citizen in legal fact, you remain a U.S. citizen in legal fact for at least your entire childhood -- and for life if you never take any action, even if you're undocumented.


That's very metaphysical. What is the significance of a citizenship if it's never documented?

Hypothetical question about a hypothetical child born abroad to a US parent. 

Say this hypothetical child is indeed entitled to US citizenship, but the birth isn't registered at a consulate, and no one has any proof of time spent by the US parent in the US. When adult, the child applies for a US passport, but the application is unsuccessful due to lack of required documentation to prove US citizenship. 

In binary on/off terms, does the child have the legal obligations of a US citizen? Should the child try to enter the US with a non-US passport, or would that be illegal?


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## BBCWatcher

iota2014 said:


> What is the significance of a citizenship if it's never documented?


It's significant when it becomes significant. The most common scenario would be if an undocumented U.S. citizen gets into some fairly serious (or worse), alleged criminal trouble in or with the United States.(*)



> When adult, the child applies for a US passport, but the application is unsuccessful due to lack of required documentation to prove US citizenship.


That's another problem, one that also concerns me as a parent.

Conceptually it's pretty simple, though. An undocumented U.S. citizen is, in legal fact, a U.S. citizen. That legal fact can then later be: (1) involuntarily documented (as in serious criminal matters), (2) voluntarily documented (e.g. a delayed but successful U.S. passport application), or (3) incorrectly unrecognized/denied (a young adult who struggles unsuccessfully to get his/her U.S. citizenship documented, perhaps after a parent's death or disability, in the sort of scenario you describe). Two of those three outcomes are rather awful, aren't they?

....And for what? To save a $2350 renunciation fee (2016 dollars) that a young adult child _might_ ask you for someday? As I've said before, I'm not that cheap. I think it's truly dumb to leave a baby's citizenship in the world's largest economy undocumented -- that's how I feel. I have the same view about a baby's other citizenship(s), with only very historically rare exceptions over relatively short durations, shorter than a childhood. (Think Nazi Germany, World War II.)



> Should the child try to enter the US with a non-US passport, or would that be illegal?


If a U.S. citizen (in fact terms) who is incorrectly unrecognized -- officially denied recognition in an administrative or judicial proceeding that reached a conclusion -- enters the U.S. on a non-U.S. passport, there's no passport violation. The government has incorrectly determined that that person who should be a citizen isn't, so he/she cannot be bound by citizen-based obligations unless and until the government takes a different view. However, in the past such behavior might have undermined a U.S. citizen's claim for recognition. Nowadays probably not.

(*) This particular problem could get _really_ bad in certain rare cases. There are some countries that do not tolerate multiple citizenships well at all, and such countries might not even try to "reclaim" their citizen who is ensnared in some U.S. criminal matter as a U.S. citizen. "He's/she's yours, America," basically. That's a peril of an undocumented citizenship that suddenly surfaces at the most inconvenient time.

Another example: political office. There have been several cases, in several countries, when a citizen of Country X runs for elected office, and his/her opponents discover he/she is actually also an undocumented citizen of Country Y. That can be very politically damaging, quite unlike a clean renunciation at age 18.


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## Bevdeforges

Eh, if a tree falls in the forest and there's no one around to hear it does it make a sound? (Or however that old saw goes.)

Thank you for spelling out your thoughts and concerns on the matter, but what you feel to be significant may not be at all the same for others. Lots of people are born, grow up and die without US citizenship and are perfectly content with their lot in life. An undocumented US citizen may honestly never miss what you find to be the "advantages" of US citizenship. It depends on so many things. Can we just let this one die a natural death, please?
Cheers,
Bev


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## byline

calamar said:


> it is so sad that a country created by the most freedom loving people that ever existed (the Founding Fathers) ends up like this.


I'm sure the irony is not lost on those of us dealing with this situation that American colonists fought and won a war over this whole issue of "taxation without representation."


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## maz57

How about the person who performed a relinquishing act with intent to lose their US citizenship but never got a Consulate appointment and paid the exorbitant fee to get a CLN? 

The present day upside-down Alice-in-Wonderland US citizenship/CBT/FATCA situation has now gotten to the point that possessing documentation proving one is not a US citizen is becoming more important than a document proving one is a US citizen.


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## BBCWatcher

byline said:


> I'm sure the irony is not lost on those of us dealing with this situation that American colonists fought and won a war over this whole issue of "taxation without representation."


What's the "irony"? U.S. citizens living overseas have the same voting rights. You are represented. One of the two major political parties even bends over backwards to assign convention delegates exclusively to Americans living outside the U.S.

I'm not aware of any other country that extends voting rights to its overseas citizens as comprehensively as the United States does. Some countries (e.g. Italy) dilute votes, some (e.g. Canada) have no provisions, and some (e.g. United Kingdom) have time limits since last domestic residence. Does anybody know of a country that's at least equal to the U.S. in terms of overseas voting rights?


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## chuck846

BBCWatcher said:


> What's the "irony"? U.S. citizens living overseas have the same voting rights. You are represented. One of the two major political parties even bends over backwards to assign convention delegates exclusively to Americans living outside the U.S.
> 
> I'm not aware of any other country that extends voting rights to its overseas citizens as comprehensively as the United States does. Some countries (e.g. Italy) dilute votes, some (e.g. Canada) have no provisions, and some (e.g. United Kingdom) have time limits since last domestic residence. Does anybody know of a country that's at least equal to the U.S. in terms of overseas voting rights?


What you say is 'partilly' correct. As Us citizens living abroad we can vote for 'only' presidential and senatorial candidates.


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## BBCWatcher

chuck846 said:


> As Us citizens living abroad we can vote for 'only' presidential and senatorial candidates.


No, you can also vote for your representive to the House of Representatives. You can also vote in all special elections for federal office.

But "so what"? You are electing your representatives to the only government bodies who can potentially tax you. (They only currently tax the non-U.S. source income of about 6% of overseas Americans to any degree.) State governors, state senators, state representatives, mayors, and other state and local officials cannot and do not tax Americans genuinely living overseas who are not state residents and who have no property or income in/from that state. If you are a state resident then you can vote for state and local officials. State and local bodies can sometimes tax property held in that state or locality, but property ownership is never a qualification on its own to vote. If you reside in Kansas and own property in Detroit you don't become eligible to vote for Detroit's mayor.

There is no "irony" here. There is taxation with representation, full representation. Indeed, many Americans living overseas have taxation without representation _in the countries where they live_! That's the irony if there is any.


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## byline

BBCWatcher said:


> What's the "irony"? U.S. citizens living overseas have the same voting rights. You are represented.


I am represented how, exactly? I have no tangible interests in what happens in my former U.S. states of residence because I don't live there. I have no tangible interests in electing a U.S. president because I no longer live there. The U.S. representatives I could elect, if I chose to do so, have practically no interest in me because I don't live there. There's nothing in my life they could realistically care to represent. So where is my U.S. representation in all of this U.S. taxation? Nil. The truest representation I have is in the place where I live.


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## BBCWatcher

Hey, you're the one who claimed you have taxation without representation. But you have representation. Like every resident of every U.S. state you vote for your representative to Congress (the House), your two senators, and for the President and Vice President. Indeed, you have more representation than residents of the District of Columbia and of U.S. territories get. (Although at least some of the territories set their own tax policies. D.C. is a genuine "taxation without representation" problem, and therefore you should favor statehood for the District, right?)

So now you want to complain about something different, the _adequacy_ of your democratically elected representation? OK, you can do that, but get in line.


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## Bevdeforges

BBCWatcher said:


> Does anybody know of a country that's at least equal to the U.S. in terms of overseas voting rights?


France. Overseas residents have their own legislative representatives and the overseas voters have their own "conscriptions" based on the country in which they vote. They also vote at the embassy rather than having to request and hope to receive absentee ballot materials by post. (It's also doubtful that absentee ballots are counted in many precincts if the margin of victory is greater than the number of absentee ballots received.)

You should also try and contact your Congressional Representative from overseas. Most have no idea they have overseas constituents, do not open mail postmarked from outside their district and won't allow those living outside the district to send e-mail via their websites.
Cheers,
Bev


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## BBCWatcher

Bevdeforges said:


> France. Overseas residents have their own legislative representatives and the overseas voters have their own "conscriptions" based on the country in which they vote.


OK, so does Italy. But if you look at Italy you'll quickly discover that overseas Italians' votes are diluted to about one third the voting power of their domestically resident counterparts. The U.S. does not dilute overseas voting power. Does France?



> You should also try and contact your Congressional Representative from overseas.


You're also making arguments about the _adequacy_ of representation. Get in line. But if your representative is inadequate, you're free to vote against him/her -- at full and equal power to a similarly situated, domestically resident U.S. person.


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## BBCWatcher

OK, answering my own question, according to the French government there are just over 1.6 million French citizens living overseas. The domestic population of France is about 66 million. (Not all can vote, but we'll go with that since that's also true of overseas French citizens -- children, for example.) That overseas population represents about 2.4% of France's domestically resident population.

In the French National Assembly there are 577 members, and 11 represent overseas French citizens. (This was only introduced in 2010, by the way. Up until 2010 there wasn't any such representation.) Thus the fraction of representatives is about 1.9%.

One could adjust the domestic population a bit to exclude non-citizens, but even so there does appear to be a bit of overseas voting dilution. It's not as bad as Italy.


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## Bevdeforges

BBCWatcher said:


> OK, so does Italy. But if you look at Italy you'll quickly discover that overseas Italians' votes are diluted to about one third the voting power of their domestically resident counterparts. The U.S. does not dilute overseas voting power. Does France?


No idea what you mean by "diluting" voting power. The French overseas have their own representatives in the assembly, elected by their overseas district residents to represent the interests of French citizens living overseas. (And yes, the French can also vote in the French presidential elections.)



> You're also making arguments about the _adequacy_ of representation. Get in line. But if your representative is inadequate, you're free to vote against him/her -- at full and equal power to a similarly situated, domestically resident U.S. person.


You're assuming the absentee ballots are even counted. Also, with gerrymandering, most long-time overseas residents have no clue what their current congressional district might be. Nor do the legislators have a clue if and how many overseas constituents they might have.

But frankly all this has nothing to do with a "1st contact from my bank" anyhow.
Cheers,
Bev


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## BBCWatcher

Bevdeforges said:


> Also, with gerrymandering, most long-time overseas residents have no clue what their current congressional district might be.


They don't have to. They just request ballots through the services at FVAP.gov, and they get the right ballots.

By the way, only House districts can be gerrymandered. Senators represent whole states, and the President and Vice President represent the whole nation. Only one of your five federal office holders could be in a gerrymandered district.



> Nor do the legislators have a clue if and how many overseas constituents they might have.


They might also not have a clue how many Superman and Batman fans they have in their districts. But none of that is relevant to whether you, the overseas American, have full federal representation and equal voting power to your domestically resident counterpart. You do. You might have a "bad" representative (as your domestically resident counterpart might also), but you get your full voting share in deciding whether to elect or reelect any candidate or office holder.



> But frankly all this has nothing to do with a "1st contact from my bank" anyhow.


I didn't make the false claim of "taxation without representation."


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## Bevdeforges

I think this thread has drifted far enough for now.
Cheers,
Bev


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