# Tax considerations if you're moving to the US



## eucitizen (Dec 8, 2011)

beware, beware, beware of moving to the usa.

do you know what is happening?

look up FATCA and FBAR and the 8854 report and you will learn some eye opening things that will make you never want to live there.

if you move to the USA your home (european?) bank will kick you out and refuse to keep you as a customer.

once you get a green card or stay for too long the USA will try to tax you for the rest of your entire life and if you make any reporting mistakes (even if no taxes owed) they will try to confiscate your life savings, retirement, make you sell your home, etc.

my advice to any middle class people is stay away, stay far, far away.

the only people who may still be interested in moving to the US, getting a green card or applying for residency would be very poor and unskilled people, no college education, no chance in life that they will ever make any assets they might want to retire on.


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## twostep (Apr 3, 2008)

eucitizen said:


> beware, beware, beware of moving to the usa.
> 
> do you know what is happening?
> 
> ...


You may want to substantiate some of your statements with official links. My EU bank has not "kicked me out" in 30 years:>)


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## Bevdeforges (Nov 16, 2007)

eucitizen said:


> beware, beware, beware of moving to the usa.
> 
> do you know what is happening?
> 
> ...


Nonsense.

A few European banks have refused to open new accounts for Americans living overseas out of fear of the reporting requirement (for them, the banks) related to FATCA. (FBAR has been around for a while and is vaguely similar to reporting requirements for foreign accounts imposed by several European countries.)

If you take US citizenship, then, yes, you incur a life-long filing obligation for taxes. There are tax treaties which allow you to avoid double taxation whether you live abroad or merely have income sources outside the US. But they do not confiscate your life savings for "any reporting mistakes." You're actually in more danger of losing assets for failure to file (if you're subject to reporting - which requires substantial balances held overseas). If you make mistakes (honest mistakes) in your filings, you will have a chance to correct them.

You remain subject to US tax laws while you hold a green card, but if you leave the US for a period of 12 months or more, you are expected to surrender your green card - and with it, your filing obligations.
Cheers,
Bev


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## eucitizen (Dec 8, 2011)

Dear Bevdeforges let me respectfully disagree.

And since you deleted my prior postings with much information I think anyone who is planning to move to the US should know, will you please let me add this simple reference.

Anyone who is considering moving to the USA should read the thread on this website about expat tax and make up their mind for themselves:

Expat Tax - Expat Forum For Expats, For Moving Overseas And For Jobs Abroad

If you have never been outside of your home country it would be best to refrain from posting reassuring messages when you do not have to live through the reality of the situation.


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## eucitizen (Dec 8, 2011)

*vaguely similar*



Bevdeforges said:


> Nonsense.
> ...
> 
> (FBAR has been around for a while and is vaguely similar to reporting requirements for foreign accounts imposed by several European countries.)
> ...


You are right, European countries do make you report foreign accounts.... IF you are a RESIDENT taxpayer you have to report them to the country you live in and pay TAXES to!

A French person who lives in France has to report his foreign accounts to France.

But a French citizen who lives in Germany does NOT have to report his foreign accounts to France!

European and international common practice dictate that you must report and be taxed in the country of your RESIDENCE. You are not required to keep up on tax laws and reporting in a country you do not live in.

There is a major, major difference here and apparently some people just don't get it.

If you are LIVING in a country, and have a bank account in that country, it is not a "FOREIGN bank account" to you! It is your main bank account!

If you are living in a country, and have a bank account in ANOTHER country, obviously that is a different story and your local tax authorities might want you to report it to them.

The other HUGE difference is the size of penalties and the vigor with which the authorities go after those penalties.

So: 

- No pursuit of citizens if they are living abroad
- Requirement to only report to the authorities of the country you are living in, not the country you were born or your parents were born
- Penalties more reasonable and linked to the size of the tax liability not some outrageous amount

The European reporting requirements have absolutely no common measure with what FBAR reporting requirements are trying to do.


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## Bevdeforges (Nov 16, 2007)

eucitizen said:


> You are right, European countries do make you report foreign accounts.... IF you are a RESIDENT taxpayer you have to report them to the country you live in and pay TAXES to!
> 
> A French person who lives in France has to report his foreign accounts to France.
> 
> ...


The US has taxed its citizens based on citizenship since the early 20th century. It's a PITA, it's "unfair" but that's how it has been for over 100 years. There are tax treaties to handle the double taxation issue. Not a perfect solution, but it works ok for most.



> There is a major, major difference here and apparently some people just don't get it.
> 
> If you are LIVING in a country, and have a bank account in that country, it is not a "FOREIGN bank account" to you! It is your main bank account!
> 
> If you are living in a country, and have a bank account in ANOTHER country, obviously that is a different story and your local tax authorities might want you to report it to them.


Logically, no argument. But if you've got US citizenship, you play by the US rules. Unfortunate, but true. 



> The other HUGE difference is the size of penalties and the vigor with which the authorities go after those penalties.


For years, the IRS has excused those who become aware of their filing obligation and file a few years of back tax returns, showing that they have no tax obligation. The precise number required is changing, but I'd be very interested to hear if you have any hard evidence of anyone who has been prosecuted or fined under these statutes without showing willful intent to evade taxes. 



> So:
> 
> - No pursuit of citizens if they are living abroad
> - Requirement to only report to the authorities of the country you are living in, not the country you were born or your parents were born
> ...


FBAR is relatively mundane stuff and has been in existence for years- it's the new FATCA requirements that are causing the current flap. The new FATCA requirements have yet to come into effect (and one of the most "feared" forms for FATCA is still only in draft form, so we have no idea exactly what is going to be required anyhow) and to my knowledge no one has yet been penalized under those regulations. The current "enforcement" efforts are directed toward the international banks who have branches and offices in the US, not so much against individuals.

And in any event, the IRS enforcement resources outside the US are limited - by budgets, manpower and other factors. Even in the US, the IRS has a fairly strict priority as far as investigating and pursuing potential frauds and evasions.

While, yes, people considering moving to the US (or any country) should look into the tax situation they may be getting themselves into, it's not necessarily the overriding consideration for taking the big decision.
Cheers,
Bev


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## Bevdeforges (Nov 16, 2007)

You'll note that I've moved this digression into a thread of its own.

Although you raise a valid point about the potential tax consequences of moving to the US, and especially of taking US citizenship while there, it seems hardly polite to jump into a thread asking for information of a completely different sort. So, now there is a separate thread for discussing the tax consequences of moving to the US from elsewhere.
Cheers,
Bev


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## Guest (Dec 14, 2011)

I made a similar thread to this one a couple of months back. There are actually some very serious issues that you need to consider if you want to move to the US. Check out the thread for more info:

http://www.expatforum.com/expats/am...-america/93418-you-want-live-usa-careful.html


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## eucitizen (Dec 8, 2011)

*how about Der Spiegel is that good enough?*



twostep said:


> You may want to substantiate some of your statements with official links. My EU bank has not "kicked me out" in 30 years:>)


Here is the latest, please read the article not just the title; in fact even if you are not a US citizen but only a US resident you are targeted by this:

Reaction to US Tax Law: European Banks Stop Serving American Customers - SPIEGEL ONLINE - News - International


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## Bevdeforges (Nov 16, 2007)

Do note, however, that this article refers only to "US investment customers" - those with investment accounts that trade stocks and bonds through the banks. Regular checking and savings accounts are not affected here.
Cheers,
Bev


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## twostep (Apr 3, 2008)

eucitizen said:


> Here is the latest, please read the article not just the title; in fact even if you are not a US citizen but only a US resident you are targeted by this:
> 
> Reaction to US Tax Law: European Banks Stop Serving*American Customers - SPIEGEL ONLINE - News - International


Similar laws have been in effect. W8 is reported on both sides and actively enforces. There is no difference in taxation of citizens and permanent residents.

Those being familiar with this magazine will question some of the contents. 

Banking is a free enterprise and as long as an institution stays within the guidelines of compliance it has the right to refuse customers. Keep your investment in the US. Fees are generally lower anyway.


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## JohnSoCal (Sep 2, 2007)

eucitizen said:


> once you get a green card or stay for too long the USA will try to tax you for the rest of your entire life and if you make any reporting mistakes (even if no taxes owed) they will try to confiscate your life savings, retirement, make you sell your home, etc...


That is totally false. I have made many reporting mistakes over the years and have never had a problem. In fact I got behind and didn't file a return for 5 years. I ended up by filing them all at one time and everything was OK. Actually the IRS is very easy to work with as long as you don't cheat nor lie. I don't know where you got your information from but it sure hasn't been my experience nor anybody else I know.


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## JohnSoCal (Sep 2, 2007)

eucitizen said:


> Dear Bevdeforges let me respectfully disagree.
> 
> And since you deleted my prior postings with much information I think anyone who is planning to move to the US should know, will you please let me add this simple reference.
> 
> ...


That thread is about American citizens living in Canada that failed to file their US returns. Most of these were draft dodgers that went to Canada during the 60's. The US IRS has already stated that is not their intention to go after people that failed to file because they weren't aware of the requirement. It is aimed at the the tax cheats that hide their money offshore.

In any event, it has absolutely NOTHING to do with people moving to and living in the US. This thread you have referred to is in the Canada forum and is not relevant to people living in the US.


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