# Greetings fellow expats:My situation



## Manos

Hello everyone!

First time poster.

As you can imagine 2 days ago I stumbled upon this forum based on something a friend of mine heard about this FATCA deal

My situation is the following

Dual citizenship:American/Greek

Born in the US to Greek/American parents

Left as a 10yo to Greece

Never went back to the US to live nor work

Never to this day acquired US income,US property or US bank accounts

Six years ago I served in the Greek army

Married to a Greek woman and have two children.

Live in Greece for the past 29 years

Working in Greece for the past 6 years

Prior to working I was studying in Greece and unemployed

Pay taxes in Greece with no criminal record and without owing taxes to the Greek government (taxes here are very high)

All bank accounts opened here with Greek identification (though country of birth is US)

5 years ago when I became a parent I called the US embassy in Athens to ask them if my child is an "automatic" American.They asked me if I lived in the US after the age of 13 and if I have ever filed taxes.Both answers were NO from my part.Hence they told me they could get citizenship only through my father(dead) or mother and a lot of paperwork has to be done.Never even bothered with it.

The question I want to ask is how serious is it that I have never filed taxes back to the US.For heavens sake I thought you are taxed based on your residence country.

How come the US has not informed me and many other US citizens I spoke to about this since being an adult for the past 20+ years. I'm well nearing towards 40yo.They've known my SSN,my address here in Greece since my father renewed our passports when I was 24.Not even the two banks in which I have accounts that in total do not surpass 100.000 dollars did not inform me.

Now I read everywhere that an American citizen should disclose his bank accounts on FBAR .Initially when I heard about FBAR I thought it was a joke to what I thought it meant ( F...ed Beyond All Recognition)

Now how should I proceed to this situation.I make almost 35k$ dollars gross income per year.

Do I file taxes even though I pay taxes here in Greece?

Do I stay under the radar?

Do I start filing back taxes only if I receive a notice from the IRS? 



I do not plan on going back to the US ever.

Should I just let this go by?I mean I know there is a treaty between the US and Greece for double taxation (as with many other countries).

Can the IRS order to have me extradited ( ok maybe I got carried away)?

Should I go on on renouncing my US citizenship?

Any insight would be gladly appreciated.

Sorry for the long post and I hope my English is understood.I hope I haven't butchered the grammar and syntax.


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## diharv

Various options. Become compliant and stay a slave for life or become compliant and renounce or relinquish. Another option is renounce ASAP and do nothing further but get that CLN ,or renounce and then file the exit tax form only . There is one poster on this forum who has done this . Or do nothing at all a la Nononymous.
Your child is not a USC in any way shape or form. Tell anyone who tells you otherwise to stick it.
As for the US govt it seems like one hand does not know what the other is doing so no surprise there. Many expats collect social security from the US yet have never been told they need to file taxes with the IRS . Same goes for passport renewals from what I have read on this forum and my own experience. But this could all change in the future but expecting a govt to actually get it's expletive together is kind of a stretch.


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## Nononymous

Once you get past the initial panic - which is a fairly common response to this unpleasant discovery - you can take some time to consider your options. There is no great hurry.

As described above, you have three basic options:

1. Become US tax compliant. You will almost certainly never owe the US money, but you'll have to file a bunch of forms each year for the rest of your life. It's not clear what you'd gain by doing this if you have no plans to return to the US, since the IRS likely has zero ability to punish or penalize you if it learns of your existence - nor any reason to if you owed nothing anyway. Just because you lived in the US as a child and had a passport renewed once does not mean that you'd be on the tax radar. 

2. Renounce your US citizenship. This has become expensive, they raised the fee to $2350. To extract yourself from tax obligations you'd need to do a bunch of filing (last five years tax and six years FBAR plus an exit form thing I don't fully understand). As mentioned above, you can renounce without going through the tax process, but if it's the tax obligations you're worried about, I'm not sure this is a wise course of action, though of course it has enormously satisfying symbolic value. 

3. Ignore the US completely. Continue as you were. That is what I am doing, in a fairly similar situation. I was born in the US to Canadian parents, who moved back to Canada when I was a small child, so I am a dual citizen. I can only speak to the Canadian situation, but our government here has stated that they will make no effort to assist the US in the collection of any fines, penalties or taxes owed by Canadian citizens. I'm not interested in making my existence known to the IRS and putting myself on the paperwork treadmill, particularly as I'd likely owe nothing anyway.

Caveat 1 - Passports. For years I used a Canadian passport to enter the US, but due to my US birthplace was told to use a US passport - this is the law. If you don't plan on traveling to the US, you don't need a US passport. Unfortunately I need to cross the border from time to time. Though there's no evidence that passport renewals are brought to the attention of the IRS, I took the precaution of renewing from a temporary address in Europe. 

Caveat 2 - FATCA. This is the new system for bank reporting and information exchange. You, like I, have the unfortunate stigma of a US birthplace. So your bank in Greece may one day insist that they must report information about your accounts to the US authorities, or demand your SSN. They may threaten to close your account if you do not cooperate. (Or, because Greece is not Switzerland, they may not care at all.) I'm beginning to encounter that problem here in Canada. It's not clear to me that being reported will have any consequences, at least for the next few years, but I'm also looking at ways to protect myself by moving my money to smaller "local" institutions that are exempt from reporting.

PS It's interesting that the Athens embassy asked about tax filing when you inquired about your children's citizenship. As I understand the rule, that is completely irrelevant.


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## Clinton F. Bateman

Unfortunately the only legal thing to do is file returns. You are an ideal candidate to renunciate, but to do that you have to certify that you are current on your past tax returns. If you stick your head in the sand, you run the risk of the IRS finding out, in light of new FATCA reporting. Then you could possibly face criminal charges. You would be an ideal candidate, for the Streamlined program. This would require you file 3 years of returns and 6 years of FBARs. Then the IRS will forgive the prior year filings.


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## Nononymous

Clinton F. Bateman said:


> Unfortunately the only legal thing to do is file returns. You are an ideal candidate to renunciate, but to do that you have to certify that you are current on your past tax returns. If you stick your head in the sand, you run the risk of the IRS finding out, in light of new FATCA reporting. Then you could possibly face criminal charges. You would be an ideal candidate, for the Streamlined program. This would require you file 3 years of returns and 6 years of FBARs. Then the IRS will forgive the prior year filings.


Criminal charges for what, exactly? Criminal charges enforced against a Greek citizen living in Greece how, exactly? For being unaware of filing obligations, with income and assets so low as to have owed zero?

This is the sort of scaremongering that makes one suspicious of the compliance-industrial complex.


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## Clinton F. Bateman

Just stating the facts. There are criminal penalties for not filing returns and information reports. I'm not trying to scare anyone. IRS handles that. 

Are you familiar with the Carl Zwerner case? $1.5 million in penalties awarded by a US jury on a balance of $1million. Yes, he was fined more in penalties than what was in the account. 

People are obviously free to make their own decisions. But they should be informed decisions based on the facts.


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## Nononymous

Not sure that a Florida *resident* with over a million in an undeclared Swiss account is exactly equivalent to a Greek citizen (with US birthplace) living and working in Greece with modest income and savings. Just saying.


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## Nononymous

I don't claim to be an expert. However:

1. If failure-to-file penalties are based on percentage of what is owed the IRS, then those penalties would be zero for most non-compliant expats or "accidental Americans" of modest means, who typically owe nothing due to FEIE or FTC etc. So minimal risk there.

2. Yes, in theory there are horrid fines for failure to file FBAR reports. However, the US ability (and willingness) to collect these fines beyond its borders is open to doubt.


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## diharv

Nononymous said:


> Not sure that a Florida *resident* with over a million in an undeclared Swiss account is exactly equivalent to a Greek citizen (with US birthplace) living and working in Greece with modest income and savings. Just saying.


Exactly . Inside their borders yes the laws have teeth. Outside I'm not so sure much more can happen than geting kicked out of your bank and not being able to go to disneyland.


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## maz57

Clinton F. Bateman said:


> Unfortunately the only legal thing to do is file returns. You are an ideal candidate to renunciate, but to do that you have to certify that you are current on your past tax returns. If you stick your head in the sand, you run the risk of the IRS finding out, in light of new FATCA reporting. Then you could possibly face criminal charges. You would be an ideal candidate, for the Streamlined program. This would require you file 3 years of returns and 6 years of FBARs. Then the IRS will forgive the prior year filings.


One renounces their US citizenship; one doesn't renunciate. But one does expatriate by going through the renunciation process. Renouncing (i.e. renunciation) is accomplished by going to a US consulate and swearing an oath that one wishes to lose their US citizenship. A Certificate of Loss of Nationality (CLN) will be sent by US Dept. of State in the mail a number of months later. There is a possibility (because of the Greek military service) that the OP could relinquish instead of renounce and save the outrageous $2350 fee.

The renunciation process has absolutely nothing to do with a person's tax situation. You don't have to certify anything about taxes to lose US citizenship. The consular official might advise you that you should contact the IRS to seek information about exiting the US tax system, or not; this seems to vary from one consulate to the next.

Whether or not to become US tax compliant is a totally separate question and can be done before or after losing US citizenship. Criminal charges would only be warranted if the non-compliance is willful, simply not the case with the OP. If the OP wanted to "do it by the book" they could enter Streamlined and file 5 back years instead of the usual 3 plus 6 years of FBAR. That plus a current year return and a Form 8854 exit return would be the end of his US tax obligations.

In this situation I think the OP could do nothing after renouncing and never hear anything from the US government. For all the IRS knows (basically nothing!) the OP could have a low enough income to have never even had a filing obligation. Having a CLN in hand should satisfy the bank with respect to FATCA reporting. The reach of the IRS into the far flung corners of the world is greatly exaggerated.


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## StewartPatton

maz57 said:


> One renounces their US citizenship; one doesn't renunciate. But one does expatriate by going through the renunciation process. Renouncing (i.e. renunciation) is accomplished by going to a US consulate and swearing an oath that one wishes to lose their US citizenship. A Certificate of Loss of Nationality (CLN) will be sent by US Dept. of State in the mail a number of months later. There is a possibility (because of the Greek military service) that the OP could relinquish instead of renounce and save the outrageous $2350 fee.
> 
> The renunciation process has absolutely nothing to do with a person's tax situation. You don't have to certify anything about taxes to lose US citizenship. The consular official might advise you that you should contact the IRS to seek information about exiting the US tax system, or not; this seems to vary from one consulate to the next.
> 
> Whether or not to become US tax compliant is a totally separate question and can be done before or after losing US citizenship. Criminal charges would only be warranted if the non-compliance is willful, simply not the case with the OP. If the OP wanted to "do it by the book" they could enter Streamlined and file 5 back years instead of the usual 3 plus 6 years of FBAR. That plus a current year return and a Form 8854 exit return would be the end of his US tax obligations.
> 
> In this situation I think the OP could do nothing after renouncing and never hear anything from the US government. For all the IRS knows (basically nothing!) the OP could have a low enough income to have never even had a filing obligation. Having a CLN in hand should satisfy the bank with respect to FATCA reporting. The reach of the IRS into the far flung corners of the world is greatly exaggerated.


Absolutely correct. Thanks for saving me the trouble of responding to that guy.


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## Bevdeforges

maz57 said:


> In this situation I think the OP could do nothing after renouncing and never hear anything from the US government. For all the IRS knows (basically nothing!) the OP could have a low enough income to have never even had a filing obligation. Having a CLN in hand should satisfy the bank with respect to FATCA reporting. The reach of the IRS into the far flung corners of the world is greatly exaggerated.


I think this is really the key thing. But even without renouncing, the risk is also related to the level of income/assets that are "exposed" to IRS scrutiny. Assets sitting in the US are going to be reported to the IRS and can become subject to seizure in the case of a "dispute" (or, according to one article lately, mere suspicion on the part of the IRS). What FATCA adds to the equation are the reports from non-US "financial institutions" - however that is defined - though the ability of the IRS to seize foreign assets is open to question.

For those of us of modest means, it's a risk evaluation exercise. And the available options range from "flying beneath the radar" to full compliance, with partial and "selective" compliance somewhere in the middle of that. Renunciation may or may not be part of that strategy.
Cheers,
Bev


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## BBCWatcher

There's a lot of hyperbole in this thread. Let's cut to the chase.

1. While there may be an IRS income tax return filing "obligation," the penalty for failure to file if you owe zero U.S. tax is precisely zero. Assuming you're paying Greek income taxes, it's _improbable_ you owe/would owe any U.S. tax.

2. There is a published penalty for failure to file FinCEN Form 114, rarely enforced (at least at present) if the only offense (and only if intentional). My advice here would be to take the 10 minutes per year and file that form via the Internet, the only way it can be filed. You're then done for the year. File it before June 30 each year, and that's that.

3. Greece's unemployment rate currently exceeds 25% (and may get _even worse_), and the Eurozone's unemployment rate exceeds 11%. There's no other way to describe Europe's current situation except as a deep, long-term economic depression. The unemployment rate in the United States is half that of the Eurozone's, never mind Greece's. In my view given these simple contemporary realities alone there is current, _extreme_ option value possessing a second, developed economy citizenship (outside the EU/EEA) in addition to Greek citizenship. That particular second citizenship costs you nothing except 10 minutes per year to file a financial report. Indeed, it costs $2350 (or perhaps more) to terminate it!

Most people would (and do) keep their second citizenship in these circumstances. That would be quite _rational_, and I'm a believer in rational choice.


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## Nononymous

BBCWatcher said:


> There's a lot of hyperbole in this thread. Let's cut to the chase.


Actually, with the exception of the accountant suggesting criminal penalties, I thought we were all being very restrained, reasonable and accurate. Even rather consensual.


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## maz57

BBCWatcher said:


> That particular second citizenship costs you nothing except 10 minutes per year to file a financial report. Indeed, it costs $2350 (or perhaps more) to terminate it!
> 
> Most people would (and do) keep their second citizenship in these circumstances. That would be quite _rational_, and I'm a believer in rational choice.


While I agree that a viable Plan B is always a good idea, the way things have gone the last few years it's debatable whether possessing US citizenship as a second option decreases or increases risk. Who knows what the Greek banks will do? It's possible they might follow the lead of other European countries and close (or even worse, freeze) accounts held by US citizens. We are all in unknown territory here and I'm sure the OP is presently trying to make that calculation.

Are you suggesting he file his FBARs but skip filing tax returns even if over the threshold?


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## BBCWatcher

maz57 said:


> Are you suggesting he file his FBARs....


If meeting the threshold for filing, yes, I'm suggesting he file FinCEN Form 114.


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## Ioli

*FATCA is here!*

Mano! I am so sorry for our situation, but I am so happy to have found another person in Greece who is worried about this. My story is similar to yours, we moved back here when I was six (so I've been living in Greece for the last 36 years of my life). I realized the difficult situation we're in a couple of days ago when I recieved my FATCA letter froma alphabank. 

As far as I could find out Greece has not yet signed a FATCA agreement with the US. (If someone knows otherwise, please let us all know). BUT the banks have already instructions about "US Persons" (lucky us). Not all banks are eager to cooporate in the same way as banks with us ties I think. For example in other banks I was told that if I didn't show up with an american passport, they wouldn't go looking for me themselves. But the situation might become different once an agreement is signed. It's disappointing that there has been no information in the Media about this FACTA agreement here in Greece, other than an article in "Kathimerini" where the consequences on the Greek Americans are not even mentioned. It would be a nice thing to know, if all political parties are willing to sign such an agreement, given that we have elections next Sunday, but nobody really cares. 

I don't know what to do. Since I got FACTAed, I suppose that one day information about me will go to the IRS whether I sign the w-9 form or not. But it's not very easy to comply either. For one thing I'd have to find a very competent tax advisor here in Greece, which whithout references from friends could be very risky. Another problem would be the greek habits about bank accountants. I think I'm in the accounts of every member of my family (even my kid's saving accounts). So before the IRS I would take credit for all these accounts. Filing FBARS for the last 6 years is worse than a nightmare. Then I'm self employed struggling with enough greek tax legislations in the last years. I think one should pay self employment tax before one could file for the foreign income exclusion. For 3 years? That would meen financial suicide for me. And what if something goes wrong and I have to pay penalties? I don't think that anyone can guarantee that a streeming procedure can evolve smoothly. 
My husband is Greek, so that meens I must file as "married filing seperately". That makes a difference to the limits for the FBAR I think, but there might be more problems. 

But what can I do, now that I got a FATCA letter? What happens if I ignore it? 

Even if I renounce now, I won't be safe.

I admire Canadian Americans for their fighting the situation. I wish we could organize something in Greece too. I don't think that most Greek Americans are aware of the situation, given the political and financial crisis here in Greece and the lack of information from the American side. 

Even so, could anyone suggest a tax advisor here in Greece? The embassy has a list, but I don't think that being on this list means that you are good as well (though it could be the case of course). 

We should spread the FATCA news in Greece, avoid banks that cooporate too soon with FATCA, fight back.


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## Bevdeforges

According to this FATCA - Archive there is a bliateral agreement with Greece since November. (Scroll down the page to the lists of countries without links to the actual agreement.)

The best thing to do is probably to fill out the W-9 form and submit it to the bank. Just because you have bank accounts doesn't necessarily mean you have to file a US tax return. And, don't forget that the FBAR (now FinCEN) filing requirement is just a listing of your overseas accounts - with full recognition that you may not actually have any "income" from any of them, especially jointly held accounts or those over which you have only signature authority.
Cheers,
Bev


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## Ioli

Thank you Bev! I have been calling the bank, the ministry of finance etc. since this morning, but nobody knew anything about it. Only that this FATCA thing is about financial criminals (just like me I suppose  )It seems that because of the political situation, this agreement has not been voted in parliament yet? So the banks don't have official information about what the ministry of finance who will act as an intermediate will ask for. Until then I have a right not to sign they told me. But if we do have a government in a week it won't take long to finalize the whole thing. 

Why do you say that I don't have to file a US Tax return? I thought that if I earn more than a certain amount (is it 10.000 dollars?), I do have to file a tax return (that's what I read at least, in the past two days). If I don't actually have to pay taxes because of some 1953 agreement, I still have to file the tax returns. Or did I understand it all wrong?

FBAR is the same as FinCEN???


There must be some way out...


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## BBCWatcher

Right, Greece and the United States reached an "agreement in substance" on November 30, 2014. Their agreement is not in force yet, but both governments have agreed to the details.

I absolutely agree with Bev. You may have a requirement to file FinCEN Form 114 ("FBAR") annually. It's an electronic form, and it's a simple list of your non-U.S. financial accounts.

_If you are fully compliant with Greece's tax system_, including social insurance contributions, it is highly improbable you would owe any U.S. income tax. The penalty for non-filing a U.S. income tax return if you legally owe zero U.S. tax is zero -- there is no penalty. The requirement (if it exists) to file a U.S. income tax return (IRS Form 1040, including possible Form 8938 FATCA attachment) is a completely separate requirement from FinCEN Form 114.

If you are not fully compliant with Greece's tax system then you still have that problem. The U.S. doesn't add to your difficulties. It merely reminds you of them.

If you're paying anybody to file only FinCEN Form 114 you're overpaying. It's a very, very simple form.


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## Ioli

Hi! No, I am fine with the greek taxes and the social insurance (I might be one of the few who still is) thank God... But I still don't understand, I called a tax preparer and he told me I should do some amnesty procedure (streaming something), and this means I have to file 3 years tax forms and 6 years FBARs. I just can't start doing it only from this year on, I have to do this streaming. It's really all so new to me (not even greek to me I suppose), maybe I still misunderstand something. I am sorry.


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## BBCWatcher

By the way, I should point out that there is another possibility. You mentioned financial challenges, as many people in Greece have. If you have a relatively modest income or lower, it's _possible_ you really should file a U.S. tax return. Why? Because the U.S. provides cash payments through its tax system to qualified individuals and families in certain circumstances.

One example is the Additional Child Tax Credit (ACTC), and another is the Earned Income Tax Credit (EITC). The ACTC is worth up to US$1000 per U.S. citizen child, and the EITC is worth up to US$496 (for overseas resident U.S. citizens). The ACTC would be unlikely from your description, but the EITC is possible. So, if you file, could you get up to US$496 in free money from the IRS, just because you're a U.S. citizen, even though you haven't been to the U.S. since age 6? Possibly.

This week the U.S. President will propose a substantial increase in these tax benefits, by the way. Perhaps in the future, at least after the next U.S. election, they might be increasing.

Anyway, what is written above is correct, but let's not forget the possibility that some U.S. citizens living in Greece (and elsewhere) possibly qualify for free money from the IRS, as long as they file. (They do have to file a tax return to claim that money.) Obviously there's also no penalty if you fail to file and are entitled to one of these free money benefits, but that money would be lost.


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## BBCWatcher

OK, I'll try again.

In U.S. tax law, there is a big difference between being "required" to file a U.S. tax return and the penalties associated with non-filing. _If you genuinely owe zero U.S. tax (or less -- in other words, you're entitled to receive free money from the IRS)_ then the penalty for late filing or not filing at all is zero. There is no penalty.

It is very unlikely that a resident of Greece, a comparatively high tax jurisdiction, would owe any U.S. tax. (Not impossible, but very unlikely.) Therefore, it's very unlikely that there is any penalty if you fail to file. (There's also no reward if you qualify for that and fail to file.)

So that's why we're telling you to relax somewhat. Yes, it's worth checking to see if you either owe some U.S. tax or are entitled to receive some free money from the U.S. But it's nothing to panic about at all. (Maybe if you lived in Dubai there'd be some more concern. Maybe.)

FinCEN Form 114 is different -- a separate requirement. Yes, you do want to file that if you meet the filing threshold. There is a penalty if you don't file that form, though the penalty has not been enforced much at all up to this point. But with new government data sharing it will be enforced more in the future. There is no tax associated with FinCEN Form 114. It's an information filing only, and it's a very simple form.

Make sense?


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## Ioli

Oh yes you do, thank you for your patience! . Ok, I think I'll start to calm down... I don't think I qualify for any benefits, at least for my kids (my 3 children have only greek citizenship, since I haven't lived in the states at all after the age of 16, actually since I was six), but not getting in trouble with the IRS is THE benefit for me... So, there shouldn't be any risk for me in complying. If that is the case, the wisest thing to do is the streaming procedure and be on the safe side from now on.


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## BBCWatcher

OK, so let me summarize when you _might_ owe U.S. tax if you live in Greece. You _might_ owe U.S. tax if any of these situations applies:

1. You receive more than US$100,000 in income from work and your Greek income tax rate on your income above that amount is lower than the U.S. rate. (Very unlikely.)

2. You receive more than US$10,000 in passive income (income outside work, such as interest, dividends, capital gains, etc. -- might be from private pensions or your own savings) and your Greek income tax rate on your passive income above that amount is lower than the U.S. rate. (Very unlikely again.)

3. You earned income from self-employed work and you did not contribute into the Greek social insurance system for that work. (Once again, very unlikely.)

4. You have non-trivial income from the United States ("U.S. source income"), such as bank interest or stock dividends. (For the fourth time, very unlikely.)

I'm oversimplifying but only slightly. As you can see, though it's not impossible to owe U.S. tax, it's just not that likely if you live in Greece. No tax owed means no penalty even if you do not file a tax return with the U.S. IRS.

Once again, FinCEN Form 114 is different. That form is e-filed with the U.S. Treasury Department and a completely separate requirement.


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## Ioli

I am in your debt. Thank you soooo much. You are right about all things (they are not the case). I wouldn't know about nr. 2, having rental income in Greece. But the situation doesn't look doomed after your posts! Thank you!


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## Bevdeforges

Ioli said:


> Why do you say that I don't have to file a US Tax return? I thought that if I earn more than a certain amount (is it 10.000 dollars?), I do have to file a tax return (that's what I read at least, in the past two days). If I don't actually have to pay taxes because of some 1953 agreement, I still have to file the tax returns. Or did I understand it all wrong?
> 
> FBAR is the same as FinCEN???
> 
> 
> There must be some way out...


I didn't say you *don't* have to file a US return, merely that you *may not* have to file a US return. It depends on your circumstances, but if you're married to an NRA (non-resident alien - i.e. NOT a US citizen), then if you file, you would normally file as "married, filing separately" - and to be "required" to do that, you'd need to have at least $3500 in income in your own name.

Given that you left the US as a child and have not lived there since the age of 14, it's highly unlikely you'd qualify for any of the refundable credits anyhow. 

If you have more than $3500 in interest on your Greek bank accounts, then yeah, you probably should file. (But I'd start out by just filing this year - i.e. 2014 - and skip the Streamlined stuff - at least to start out with. As far as they know, you haven't had your own income in prior years and they've got far, far bigger fish to fry. Plus, the Congress is threatening to cut the IRS budget yet again.)

And yes, FinCEN is just the FBAR forms gone virtual - a royal PITA for folks who don't have computers, nor any interest in getting one. I wind up filing FBARs for a friend or two here who are computer-literate (or interested). But once you set it up, you just file the same list of accounts year after year unless something changes.
Cheers,
Bev


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## BBCWatcher

The Earned Income Tax Credit (EITC), worth up to US$496 (tax year 2013 figure; 2014 may be different) in free money for qualified overseas residents, is not allowed when filing "Married Filing Separately."

Age and time since leaving the United States have nothing whatsoever to do with whether or not you qualify for the EITC. You can be a U.S. citizen or U.S. national who has never even visited the United States and still possibly qualify for the EITC and other refundable tax credits.

Many U.S. citizens and U.S. nationals in Greece are likely to qualify for the EITC. Times are very tough in Greece, incomes are limited, and income taxes are relatively high. That's exactly the set of circumstances when more people qualify for the EITC. I don't know about Loli specifically, but obviously it's worth checking.


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## Ioli

Bevdeforges said:


> I didn't say you *don't* have to file a US return, merely that you *may not* have to file a US return. It depends on your circumstances, but if you're married to an NRA (non-resident alien - i.e. NOT a US citizen), then if you file, you would normally file as "married, filing separately" - and to be "required" to do that, you'd need to have at least $3500 in income in your own name.
> 
> If you have more than $3500 in interest on your Greek bank accounts, then yeah, you probably should file. (But I'd start out by just filing this year - i.e. 2014 - and skip the Streamlined stuff - at least to start out with. As far as they know, you haven't had your own income in prior years and they've got far, far bigger fish to fry. Plus, the Congress is threatening to cut the IRS budget yet again.)


Then I do have to file, if the income limit is $ 3500 annualy when filing seperately. A school teacher would earn about $12000 here, it's difficult not to earn more than $3500 in a year if you're working. 

I hadn't thought about just "doing my duty" from this year on. It's tempting. I'll speak with the tax advisor about it, though I suppose he would advise against it, since he'd get paid less..


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## Ioli

BBCWatcher said:


> The Earned Income Tax Credit (EITC), worth up to US$496 (tax year 2013 figure; 2014 may be different) in free money for qualified overseas residents, is not allowed when filing "Married Filing Separately."
> 
> Many U.S. citizens and U.S. nationals in Greece are likely to qualify for the EITC. Times are very tough in Greece, incomes are limited, and income taxes are relatively high. That's exactly the set of circumstances when more people qualify for the EITC. I don't know about Loli specifically, but obviously it's worth checking.


I'ts so true... I have many friends who are dual citizens I will let them know about this possibility. That would be an unwelcome effect of the FATCA/ tax complying issue for the IRS !


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## Bevdeforges

Just for the record, this is the information regarding the EIC: Publication 596 (2014), Earned Income Credit (EIC)

Click on the link to "Can I Claim the EIC?" and there is a nice little chart that sums up the requirements. A couple constraints to note:

- you can't claim it if you file "married, filing separately" (and if you file jointly with a NRA spouse, you have to include all his/her worldwide income on the forms) nor can you take the FEIE to exclude your "earned income"

- if you don't have a "qualifying child" you must have spent at least half of the year in the US

- if you do have a "qualifying child" there is a residency test anyhow, which states that said child must have lived with you at least half the year in the US, unless you are military personnel stationed outside the US

So generally speaking, there won't be many Americans married to NRAs living outside the US who are going to qualify for the EIC.
Cheers,
Bev


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## Nononymous

Ioli said:


> I admire Canadian Americans for their fighting the situation.


I'm not sure it's going to change much, but it's comforting, at any rate.

I'm going to repeat the advice to relax. The main thing to remember is that you are a Greek citizen living in Greece, presumably with no US assets - so the US knows very little about you, and has near-zero ability to ever collect anything from you, and near-zero chance that you would every owe the US any money. Can we assume that you have no interest in returning to the US? Your children did not inherit citizenship.

Some options, on a gradually increasing scale of cooperation with the US:

1. Move to a bank that won't ask for your place of birth when you open an account - probably this is no longer possible, and in a few years' time all banks would have caught up. 

2. Fill out the W9 with your bank and wait for the US to send you a letter informing you of FBAR reporting obligations - how else would you have learned about this? Given the apparent chaos in the IRS, it might take years.

3. Begin filing FBAR (FinCEN) forms online, from this year forward. (But not tax reporting - if you owe nothing, there's no penalty for not reporting.)

4. Begin filing tax returns from this year forward, even if they report zero owing.

5. Go through the whole streamlined procedure (6 FBAR and 3 tax returns, roughly) to be officially caught up.

I'm at option 1 right now - zero compliance, possibly switching financial institutions to avoid FATCA reporting. In your situation I'd look seriously at that option, but if it's not possible then go to option 2 or 3 and leave it at that. Unless there's a decent payback in free money - which sounds very unlikely - I don't see the point of filing tax returns. 

Renouncing US citizenship is expensive ($2350) and only removes future tax and reporting obligations after you've become fully compliant and gone through an exit procedure.


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## Ioli

No, I'm not thinking about moving to the US. Neither my husband nor my children are citizens and it is a country that I don't know, my parents were also Greeks that had lived in the States for less than a decade I think. I don't have any ties to the country. I think and dream in greek. I'm at home here. 

I have started to calm down with the help of you all, but it was quite a shock to find out that I am tied to a taxing system other than the greek. One feels threatened as you surely know. And restricted. I* still don't know how real estate property is affected by my "status". Do I also have to report our appartement or whatever we own?* Freeky!

Most friends I have spoken to here (dual citizens themselves) plan to do nothing at all about this. They hope they will never get the FATCA letter and if they do they are going to ignore it. I think I was among the first to recieve one. I closed my account in this bank already, but they told me it makes no difference (though I think they are not being legal, when they ask for w9, given that the parliament has not sealed the agreement yet). What I don't understand is why they ask for w9s from every US person and not only from people with the high balances they are interested in. It is amazing how nothing really functions in Greece anymore, but this bank is set out to find the US persons even before the Parliament has agreed. If we were so keen in finding the Greeks who are evading taxation, we might not have ended in this dreadful financial situation as a country. 

It also hurts to think that although this is my country, I've lived here for ever, I pay my taxes and do my duty in every way, now that it comes to choosing sides, my country casts me out as a foreigner.

P.S. Now I noticed something new again. "Tax reporting" is not "filing tax returns"????


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## Bevdeforges

Honestly, I'd stick with level 2 or 3 on Nononymous' list. As he says, if you have no US assets, the only real visibility you'll have in the IRS system is whatever the banks report. And if you don't surpass the $3500 threshold in interest paid you by the banks, you can pretty much assume the IRS will just assume that's all your income and that you don't need to file anyhow.

But don't worry about your real estate holdings in Greece. Even the FATCA forms are looking for "financial assets" - specifically exempted are assets held for your personal use. If you owned a string of apartments that you were renting out to make money, then fine, that's a "financial asset." But the house or apartment you live in is NOT a financial asset.

This becomes a "render unto Caesar" type of thing. Provide the minimum amount of information you're required to provide and if they have questions, they'll be in touch. (Don't hold your breath to hear from them, though.)
Cheers,
Bev


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## Ioli

It still is a bit scary, but I'll try! Hopefully I will never hear from them. Or maybe there will be some tax reform and they'll leave us in peace. 
I nice idea for Greece would be to start taxing the Greek Americans who live in the States. Since taxation here is high, I don't think the US will appreciate it much (and it would help Greece out of the financial crisis). Even better if all FATCA countries did the same (I know, not possible, it's nice to dream about it though!)


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## Nononymous

Ioli said:


> P.S. Now I noticed something new again. "Tax reporting" is not "filing tax returns"????


I mean the same thing - filing tax returns. I use "reporting" as shorthand, which is probably not accurate.

FATCA is an unpleasant mess. I'm somewhat sympathetic to the banks, they have a gun pointed at their heads if they have any dealings with the US, really no choice but to cooperate. What I don't like is when they request citizenship information from account holders who would be exempt from FATCA reporting, whether because their balances are too low, or they have account types that are not reported according to the agreement between governments. In this case, nothing should be reported, but I'm still not comfortable with the banks having the information. 

(This is my current problem. Our regular bank has not requested anything from me, yet, but an investment firm wants confirmation of US citizenship and my SSN even though my investments are all in retirement accounts that are exempt from reporting under the terms of the US-Canada IGA. I've refused to answer the question on the grounds that they don't need to know this if they're not to report on my accounts.)

In your case, I might stick to option 1 for now, but do a little research to see what is going to be reported under FATCA. It could well be the case that your account balances are low enough (in Canada the limit is US$100k) that nothing should be reported if you identified yourself by completing a W9. I say "should" because you can't guarantee that the bank won't simply hand over a list of all its US citizen account-holders, if they think this is "safer" or it's less work for them.


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## Nononymous

Ioli said:


> I nice idea for Greece would be to start taxing the Greek Americans who live in the States. Since taxation here is high, I don't think the US will appreciate it much (and it would help Greece out of the financial crisis). Even better if all FATCA countries did the same (I know, not possible, it's nice to dream about it though!)


If every country did to its (dual) citizens in the US what the US does to its (dual) citizens abroad, the US might rethink things a little. One can but dream...


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## Nononymous

Ioli said:


> Most friends I have spoken to here (dual citizens themselves) plan to do nothing at all about this. They hope they will never get the FATCA letter and if they do they are going to ignore it.


That's the spirit! In this case, tax evasion is a good thing.


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## Ioli

Sad, but if there wasn't the possibility of being punished for not having reported having "foreign" accounts, we wouldn't be avoiding FATCA (at least most of us living outside the US). My balances are not reportable (after paying the taxes here, there isn't much left ), so why do they threaten us? 

Still I have to wait (as you said) to see what kind of informationthe ministry of finance will demand from the banks.


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## diharv

Nononymous said:


> I mean the same thing - filing tax returns. I use "reporting" as shorthand, which is probably not accurate.
> 
> FATCA is an unpleasant mess. I'm somewhat sympathetic to the banks, they have a gun pointed at their heads if they have any dealings with the US, really no choice but to cooperate. What I don't like is when they request citizenship information from account holders who would be exempt from FATCA reporting, whether because their balances are too low, or they have account types that are not reported according to the agreement between governments. In this case, nothing should be reported, but I'm still not comfortable with the banks having the information.


From snipets I've read at IBS it seems (some) banks may be following a scorched earth policy , ie carpet bombing all US citizens and all ther accts whether or not they are reportable. Probably with the attitude that they may as well lump everything together and fire it off to CRA and let them figure it out. They may be thinking that everything will eventually become reportable anyway once the USG figures out that FATCA is not turning out to be the cash cow they envisioned it to be. I'm speculating of course but that seems to be the jist of some things I've read and it makes for interesting forum fodder !


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## Bevdeforges

I don't know if the Canadian agreement is any different from the French one, but I do note that the reporting thresholds for the foreign banks are considerably lower than the reporting thresholds for the "US persons" required to file FATCA paperwork with their US tax returns. And, that even banks specifically exempted from reporting under the bilateral agreements are posting notices about FATCA requirements on their websites and such.

That said, however, my bank here has yet to ask me to fill out a W-9. OK, I did take my US nationality off my bank record once I got my French nationality (kind of asked to do it as a sort of joke/test) - but I know they have my place of birth on record. We'll have to see when/if they start trawling their records for US birthplaces or other "incriminating evidence."
Cheers,
Bev


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## Nononymous

Ioli said:


> Sad, but if there wasn't the possibility of being punished for not having reported having "foreign" accounts, we wouldn't be avoiding FATCA (at least most of us living outside the US). My balances are not reportable (after paying the taxes here, there isn't much left ), so why do they threaten us?


You really can't be punished. I would look into this to be certain, of course, but I expect that the US has no ability to collect fines against Greek citizens living in Greece. So it's not much of a threat if you don't have any connection to the US.

In Canada, the government clearly stated that it will not collect any type of penalty assessed by the US against Canadian citizens.


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## maz57

Ioli said:


> It still is a bit scary, but I'll try! Hopefully I will never hear from them. Or maybe there will be some tax reform and they'll leave us in peace.
> I nice idea for Greece would be to start taxing the Greek Americans who live in the States. Since taxation here is high, I don't think the US will appreciate it much (and it would help Greece out of the financial crisis). Even better if all FATCA countries did the same (I know, not possible, it's nice to dream about it though!)


If a significant number of other countries adopted citizenship based taxation, the world taxation system would collapse in a smoldering heap. The US economy would experience a loud sucking sound as all those other countries claimed the taxes due from their expats who immigrated to the US.

That's what amazes me about the countries who tripped over each other to sign IGAs. What they really agreed to was to formally allow the US to divert a portion of their national wealth to the US treasury. What were they thinking?


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## diharv

maz57 said:


> If a significant number of other countries adopted citizenship based taxation, the world taxation system would collapse in a smoldering heap. The US economy would experience a loud sucking sound as all those other countries claimed the taxes due from their expats who immigrated to the US.
> 
> That's what amazes me about the countries who tripped over each other to sign IGAs. What they really agreed to was to formally allow the US to divert a portion of their national wealth to the US treasury. What were they thinking?


Q: What do you do when a very large broke desperate bully points a gun to your head and threatens you?
A: Whatever he asks of you!


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## maz57

The question is; were there any bullets in the gun? But it's too late now!

But I get your point. It's like dealing with a crack-head. Totally unpredictable.


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## BBCWatcher

diharv said:


> Q: What do you do when a very large broke desperate bully points a gun to your head and threatens you?


If the United States government is "broke," what does that make the Greek government? 

Hint: The United States government is not broke. It's quite politically fashionable around this forum to make that claim, but it just ain't so, even if repeated often. The U.S. has a moderate and falling national debt (as a percentage of GDP, a reasonable way to assess these things), substantially lower than that of, oh, to pick a random example, Canada. Much/most of that debt is domestically held, and practically all of it is denominated in U.S. dollars, the currency the U.S. government itself issues. The U.S. government continues to be able to borrow at historically low nominal and real interest rates at any debt maturity. The U.S. also has moderate-to-low tax rates compared to other developed countries and thus tremendous untapped taxing power -- much more taxing potential than, say, France. (Though France isn't broke either, and France doesn't even control its own currency.)

The U.S., _just like all developed (and most developing) countries_, wants to reduce or eliminate tax evasion and other financial crimes such as money laundering, violations of international trade sanctions, etc. The U.S. is not the first country to negotiate international financial data sharing. There have been many, many such bilateral agreements around the world way before FATCA.

With respect to refundable tax credits available to U.S. persons living overseas, the most common one is probably the Additional Child Tax Credit. However, Bev, I do not see any general requirement for U.S. residence -- I'm going to disagree with you there. Please check, but as I understand it the U.S. residence requirement only helps determine whether a _child_ qualifies for participating in the EITC (and thus acts to raise household income limits for EITC eligibility). U.S. residence is not a generalized requirement for the filer as far as I can see. Married U.S. persons cannot file Married Filing Separately, as I noted. Check IRS Publication 596 for details.


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## Ioli

diharv said:


> From snipets I've read at IBS it seems (some) banks may be following a scorched earth policy , ie carpet bombing all US citizens and all ther accts whether or not they are reportable. Probably with the attitude that they may as well lump everything together and fire it off to CRA and let them figure it out. They may be thinking that everything will eventually become reportable anyway once the USG figures out that FATCA is not turning out to be the cash cow they envisioned it to be. I'm speculating of course but that seems to be the jist of some things I've read and it makes for interesting forum fodder !


I was wondering wether the banks themselves (the ones with the most american ties) have their own instructions directly from the US (through their business associates, or their bank partners, or anybody else - I really don't know anything about the banking system), or if there are general FATCA instruction from the US side regardless of each national agreement and those specific banks are eager to more than please the US.


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## Ioli

Bevdeforges said:


> We'll have to see when/if they start trawling their records for US birthplaces or other "incriminating evidence."


It still amazes me that almost a month after "the substantial agreement" between Greece and the US, my bank has already started searching after a US birthplace and has already sent out letters. Really amazingly efficient when it comes to FATCA and the US, when one thinks about how everything is collapsing here....


----
I have to organize my post FACTA life now. I'll have to get my name out of all accounts that are not really mine (is it only a greek custom, just for safety reasons to have your name in each family member's account? I suppose so....), more accounts meen more FATCA letters. It's good for FBARs too, less accounts, less work.


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## maz57

BBCWatcher said:


> If the United States government is "broke," what does that make the Greek government?


More broke. A fundamental difference is that Greece can't print the money it needs to operate; the US can. Not only that, the US gets to print the world reserve currency, a tremendous advantage over every other country in the world. Enjoy it while you can because it won't last forever. Don't believe me? What happened to all the other countries/empires which achieved world domination both militarily and financially. Answer: they're history. Why? Answer: more often than not, massive debt.

If Greece collapses it will be a serious problem and very bad for Greeks (yes, it could happen) but the world financial system will survive that catastrophe. If the US collapses we're all in trouble.


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## BBCWatcher

Greek banks are acting quickly because Greece might switch to the U.S. dollar soon. 

I'm joking (I think), but it's not completely out of the question. Panama, Ecuador, El Salvador, East Timor, Palau, the Federated States of Micronesia, the Marshall Islands, the British Virgin Islands, Turks and Caicos, the Caribbean Netherlands, and (mostly) Zimbabwe all use the U.S. dollar as their official currencies. Several other countries peg their currencies to the U.S. dollar.


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## maz57

Ioli said:


> I have to organize my post FACTA life now. I'll have to get my name out of all accounts that are not really mine (is it only a greek custom, just for safety reasons to have your name in each family member's account? I suppose so....), more accounts meen more FATCA letters. It's good for FBARs too, less accounts, less work.


If you have 25 or more accounts, you don't have to enumerate them all on the FBAR. I haven't done an online Fincen114. but I would expect it's the same deal.


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## BBCWatcher

maz57 said:


> What happened to all the other countries/empires which achieved world domination both militarily and financially. Answer: they're history. Why? Answer: more often than not, massive debt.


OK, since the U.S. federal debt (held by the public) is decreasing as a share of GDP, according to your view of history and your standard the U.S. is becoming more dominant (or at least not less dominant)?

U.S. GDP is very roughly $20 trillion (about $19.6 trillion it looks like, to be more precise) in 2014, current dollars. U.S. federal debt held by the public in nominal 2014 dollars is about $10.3 trillion. That's about a 52.6% debt to GDP ratio on that basis.

No, that really, really isn't scary. But if you think it is, go ahead and place a gigantic bet on inflation and soaring U.S. federal government borrowing costs. There are many, many ways to place that bet in financial markets if you're so inclined.

I wish you luck in that bet.


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## Bevdeforges

Just take a look at the chart I referenced: 

Under the rules for "Rules if you have a qualifying child" it says:


> 8. Your child must meet the relationship, age, residency, and joint return tests.


and the Residency test says:


> Your child must have lived with you in the United States for more than half of 2014.


And under the column headed "Rules if you do not have a qualifying child" it says:


> 14. You must have lived in the United States more than half of the year.


It all comes from Publication 596.
Cheers,
Bev


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## BBCWatcher

I stand corrected, Bev.


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## Ioli

*Outrageous!*

The first article about the Greece FACTA agreement has been published today in Greece. If it isn't misleading! I know it doesn't make sense to read an article via google translator but one gets the message! 

So the FACTA agreement according to the newspaper serves mainly Greece! So the title: *Agreement with the US IRS about Greek US deposits*!!!!!!!!!! a title which is explained in the second paragraph: _this agreement allows the greek government to have information from american banks in all states about accounts of Greek citizens, if there is a suspicion of money laundering or if these citizens are simply evading taxes_!!!! (Lucky us humble Greek to have succeeded to obtain such a fine agreement!!)

The writer has missed the whole point! According to the article _ the banks are obliged to obtain the personal information of the US citizens (!)  with deposits more than $350000 and to withhold 30% in some cases_ (actually it says something about dividends, but I don't really know what they are. 

Hard to be a good journalist, if you don't do your little research on the net first....


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## BBCWatcher

Yes, these agreements can involve bidirectional financial data sharing. Greece has a significant problem with illegal tax evasion, so the data from the U.S. (and from other countries) are valuable to help reduce that problem.


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## Ioli

BBCWatcher said:


> Yes, these agreements can involve bidirectional financial data sharing. Greece has a significant problem with illegal tax evasion, so the data from the U.S. (and from other countries) are valuable to help reduce that problem.


I do understand this, but this is not the only aspect of the FATCA agreement and any other is not sufficiently mentioned in the article. The consequences on the Greek American citizens living in Greece are totally ignored.


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## maz57

Good luck on Greece getting some reciprocal info out of the US.


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## Bevdeforges

Regardless of what the article in the Greek press had to say, I would take a scan of the actual bi-lateral agreement (in English) when it becomes available on the Treasury Dept. website: FATCA - Archive (Greece is down on the bottom of the list without a link to the actual text of the agreement - but just wait a few days or weeks and it should turn up.)
Cheers,
Bev


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## Ioli

Thank you! I will.


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## Ioli

There is an english shorter version of the article, that appears in this version completely rational, no emphasis is given on the particular gain for the greek side in this agreement. 

What is also missing in the english version is the statement that in cases where the agreement is not reciprocal between a country and the US, the banks will supply the information on the "american accounts" by themselves. Is that allowed? What does the article mean by this?


----------



## Nononymous

Ioli said:


> What is also missing in the english version is the statement that in cases where the agreement is not reciprocal between a country and the US, the banks will supply the information on the "american accounts" by themselves. Is that allowed? What does the article mean by this?


That is how FATCA works, unfortunately:

1) If there is no reciprocal agreement between the US and the government of Country X (IGA) then all banks in Country X must comply by reporting their US-person account data directly to the US; if they are deemed not to be compliant, they could have 30 percent of all their US transactions withheld - which obviously would be a death sentence for a bank that did significant business with the US.

2) If there is a reciprocal agreement (IGA) then the foreign banks report this information to their own government, which then exchanges the information with the US. 

I think that everyone prefers the IGA route. It protects the banks from having to deal directly with the US, in theory it gives foreign governments access to information about US accounts held by its own residents, and it allows for greater exemptions to be negotiated - the IGA with Canada, for example, excludes various tax-protected savings and retirement accounts from being reported, and spares small local credit unions from almost all reporting requirements.


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## Ioli

Then we must consider ourselves lucky that there is going to be an IGA agreement for us... I suppose it's the only wayt to look at it. It's sad having to choose the lesser of tue evils.


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## BBCWatcher

Or the better of two goods if you believe the Greek government ought to be able to collect taxes it is legally owed. If somebody has a better idea than simple financial data sharing for how governments can cooperate in fighting international tax evasion, great, let us know.

For the record, according to estimates based on shares of GDP, Greece's tax evasion problems are about 10 percentage points higher than the EU average.


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## Nononymous

BBCWatcher said:


> Or the better of two goods if you believe the Greek government ought to be able to collect taxes it is legally owed. If somebody has a better idea than simple financial data sharing for how governments can cooperate in fighting international tax evasion, great, let us know.


This is disingenuous. We've had this discussion before. The issue isn't the virtues of information exchange to help governments discover where their *resident* taxpayers have stashed money, the issue is citizenship-based taxation.

Why should the US need to know where I or the OP deposit our paycheques? We don't live or work in the US - we left the country as children.


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## maz57

BBCWatcher said:


> Or the better of two goods if you believe the Greek government ought to be able to collect taxes it is legally owed. If somebody has a better idea than simple financial data sharing for how governments can cooperate in fighting international tax evasion, great, let us know.


I'll believe it when the US actually starts to send some data from US banks to a foreign government. The only thing the US promises in these IGAs is to kinda, sorta, maybe look at reciprocity sometime in the unspecified future, if they get around to it. Resident Greek taxpayers who have stashed their cash in US havens can breath easy for the time being.


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## Ioli

BBCWatcher said:


> Or the better of two goods if you believe the Greek government ought to be able to collect taxes it is legally owed. If somebody has a better idea than simple financial data sharing for how governments can cooperate in fighting international tax evasion, great, let us know.
> 
> For the record, according to estimates based on shares of GDP, Greece's tax evasion problems are about 10 percentage points higher than the EU average.


If there is a threshhold of $50000 that interests the FATCA agreements, I think it is not legal to give my personal information to anyone. And if the FBAR threshhold is $10000 I don't think it is legal that the IRS knows anything about any accountholder who has less money. And If the US government wants to tax me, I would have appreciated, if I was told on time, e.g when I had my passport renewed 15 years ago. THEY have my address, they could have mailed me a letter. They could have organized a wonderful campain on CNN. They could have a nice episode on "the good wife". Really anything would have helped alerting the "US Persons" living abroad. My problem is not tax evading, it is that I obey the law in Greece in every way and now I find out that I must agree to an "amnesty" deal in order to obey the law in the US. And to deal with a certain bureaucracy that seems mercyless to me. 

And anyway, I feel cheated. Is my government and the US goverment trying to convince me that Greece is an offshore haven? That any sane american would come here to trust his illegal gains to the powerful greek banks? Where everything is stable, the language is easy and everything so organized. The greek government is trying to stop the greeks from getting their money out of the country. There has been a HUGE scandal about the rich who rushed to get their money abroad during the first year of the crisis. We've got elections on Sunday. Do you know what the man in the street (or the granny next door) is doing? Everybody is withdrawing their money from the banks and hiding it in their houses, because they are afraid that if the government changes or if something goes wrong we'll be out of the Euro or whatever else.... 

So, in our case how is it a case of tax evasion?


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## Bevdeforges

maz57 said:


> I'll believe it when the US actually starts to send some data from US banks to a foreign government. The only thing the US promises in these IGAs is to kinda, sorta, maybe look at reciprocity sometime in the unspecified future, if they get around to it. Resident Greek taxpayers who have stashed their cash in US havens can breath easy for the time being.


I actually read the US-France agreement and in that, the US government promises to send the French every instance of a French resident who is being paid $10 or more in interest or other income from a bank account in the US. Would be real curious to know how many people/accounts that involves.
Cheers,
Bev


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## Ioli

BBCWatcher said:


> Or the better of two goods if you believe the Greek government ought to be able to collect taxes it is legally owed.
> 
> For the record, according to estimates based on shares of GDP, Greece's tax evasion problems are about 10 percentage points higher than the EU average.


And of course you are right about Greece. It would be a great help if Greece could trace money that evades taxes. But does it have to sacrifice my privacy and my peace of mind?

And fine, now I know that I have to organize my life around two fiscal systems. Could they please forget any "amnesty" and can I start now? I didn't know anything about it, if they told me when I was in kindergarten in the States, I'm sorry, I forgot.


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## Nononymous

Bevdeforges said:


> I actually read the US-France agreement and in that, the US government promises to send the French every instance of a French resident who is being paid $10 or more in interest or other income from a bank account in the US.


Every instance of a French *resident*. My point exactly.


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## Nononymous

Ioli said:


> So, in our case how is it a case of tax evasion?


It's not tax evasion. 

If you were to give your bank a W9 and do nothing further, there's probably a good chance you'd never hear from the IRS, and if you did, I'd be quite certain you could safely ignore them. You have no US assets or income, and would owe them nothing anyway. What are they going to do - rendition to a secret prison somewhere?

I agree though, I am not happy with banks collecting citizenship information for accounts that are exempt from FATCA. That is what I'm resisting here in Canada. I think it's due to an excess of caution (or laziness) on the banks' part.


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## Ioli

I was just checking the agreement with Germany. This is the definition of a US reportable account: 
The term“U.S. Reportable Account” means a Financial Account maintained by a Reporting German Financial Institutionand held by one or more specified U.S. Persons etc. 

Is this the same in all agreements? Does it meen that the banks rightly demand information about all US Persons holding an account?

Why are the foreign reportable accounts the ones giving a certain interest and the americans all, regardless of interest? 

Did I understand it correctly?


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## Nononymous

My guess is there's a difference between a "reportable account" - an account belonging to at least one US person - and accounts subject to reporting under the IGA. For Canada I think nothing is reported below $100k balance (or something like that) and all tax-protected savings accounts (for retirement or education) are completely exempt. But maybe any account belonging to a US person is considered "reportable" so banks are gathering SSN and citizenship data for everything, just to be safe.

Our banks typically did not ask for citizenship information when opening accounts, so they will have great difficulty identifying US persons. They now ask when you open a new account, but I don't know if they require proof, so you can probably just lie and say no - it may even be a simple check-box on an online application. (I should test this with an online bank, out of curiosity.) My situation is a bit more complex, I'm having an issue with the investment broker used by my family, he presumably knows about my citizenship because my mother told him, at which point he is obliged to act, but I'm refusing to answer the question, let alone supply him with my SSN (which I long ago lost, in any case).


----------



## Ioli

Our bank has already run a search in the "Place of Birth" information. All those who were born in the States are recieving FATCA letters. Another bank is sending out letters to all its customers, saying that if they are US Persons they should contact the bank.


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## Nononymous

Our banks never recorded place of birth, so it's more difficult for them. They can only search for US mailing addresses (which is of course pointless for finding US citizens living in Canada) and suspicion. At some point they may mail out letters to 30 million customers asking everyone where they were born, at which point 500,000 dual citizens will likely tell them to go to hell (estimated number of US citizens in Canada ranges from half a million to a million).


----------



## maz57

Bevdeforges said:


> I actually read the US-France agreement and in that, the US government promises to send the French every instance of a French resident who is being paid $10 or more in interest or other income from a bank account in the US. Would be real curious to know how many people/accounts that involves.


Straight from the US/Canada agreement: 

Article 6

1. Reciprocity. 

The Government of the United States acknowledges the need to achieve equivalent levels of reciprocal automatic information exchange with Canada. The Government of the United States is committed to further improve transparency and enhance the exchange relationship with Canada by pursuing the adoption of regulations and advocating and supporting relevant legislation to achieve such equivalent levels of reciprocal automatic information exchange.

Blah, blah, blah. To date, there are no such regulations nor is there any legislation even in the proposal stage. Congress isn't even talking about it. That's about as vague a promise as you can get. 

US banks will not be searching for Canadian residents amongst their customers and they certainly will not be reporting anything to Canada even if they know their customer is a Canadian.

Looks like the French were far better negotiators.


----------



## Ioli

maz57 said:


> Looks like the French were far better negotiators.


In the canadian agreement (at least in the FATCA archive which was mentioned above) there is the following definition of a Canadian reportable account: The term
_“Canadian Reportable Account” means a Financial Account maintained by a Reporting U.S. Financial Institution if
: (1) in the case of a Depository Account , the account is held by an individual resident in Canada and more than $10 of interest is paid to such account in any given calendar year; or etc..._

Where as in the french agreement there is also also the paragraph you mentioned about reciprocity: Reciprocity
.
_The Government of the United States acknowledges the need to achieve equivalent levels of reciprocal automatic information exchange with France. The
Government of the United States is committed to further improve transparency and enhance the exchange relations hip with France by pursuing the adoption of regulations and advocating and supporting relevant legislation to achieve such equivalent levels of reciprocal automatic information exchange._

So it must be the same in all agreements. And I suppose it means that the US acknowledges which accounts should be reported IN CASE they ever condescend to report them... 

But I haven't read any agreement as a whole (I'm saving it for the greek one), so I wouldn't know what more there is in the agreements.


----------



## maz57

The thing is, US financial institutions are not looking for accounts held by Canadian residents nor is there any US law which compels them to look. That's the point of these IGAs. Foreign governments agree to pass legislation compelling their banks to do certain things but the agreements don't bind the US government or US banks to do anything. 

After signing the IGA the individual foreign country then passes it's own legislation to implement the agreement and compel their banks to report. The US, for it's part, hasn't signed any such legislation. (Apparently they did try, but they were immediately sued by the Florida and Texas banking associations and it will be tied up in the courts for years.)

Generally speaking, a Canadian resident who wished to open a US account would have to keep that fact a secret and supply US contact information, otherwise the bank would refuse to open it in the first place. I know because I've tried. In such a scenario how could that US bank ever know that I actually lived in Canada?


----------



## Ioli

Then this is all a sham. 

Except for the cases in which the foreign country knows or suspects that one of its residents holds an account in the US, which doesn't help that much. They'd have to run a search in all the banks by name. It doesn't make sense.


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## maz57

Bingo!


----------



## Bevdeforges

Don't know about the Canadian or Greek agreements, but the French one also includes a couple of annexes that specify financial institutions and specific types of accounts that are exempt from being reported.

Generally speaking, they exempt local or regional banks that do not do business outside their own country (or who do not advertise for foreign customers, even if they have a few). They also specifically exempt from reporting certain very popular types of (tax advantaged - usually tax free) savings and investment/retirement accounts. 

OTOH, everyone I know who banks with BNP Paribas has received a W-9 request if they have US nationality or show a US birthplace (place of birth being part of your standard identification here). I bank with a small, regional bank and so far have heard nothing, even though they did post something on their website about FATCA. (Of course my combined total accounts in that bank have yet to come up to the $50,000 threshold for reporting mentioned in the US-France agreement.)
Cheers,
Bev


----------



## maz57

Bevdeforges said:


> Don't know about the Canadian or Greek agreements, but the French one also includes a couple of annexes that specify financial institutions and specific types of accounts that are exempt from being reported.
> 
> Generally speaking, they exempt local or regional banks that do not do business outside their own country (or who do not advertise for foreign customers, even if they have a few). They also specifically exempt from reporting certain very popular types of (tax advantaged - usually tax free) savings and investment/retirement accounts.
> 
> OTOH, everyone I know who banks with BNP Paribas has received a W-9 request if they have US nationality or show a US birthplace (place of birth being part of your standard identification here). I bank with a small, regional bank and so far have heard nothing, even though they did post something on their website about FATCA. (Of course my combined total accounts in that bank have yet to come up to the $50,000 threshold for reporting mentioned in the US-France agreement.)


The Canada/US IGA is similar. Small institutions ("Local Client Base", usually credit unions) are exempted as are the various tax-advantaged (i.e. "Registered") savings and retirement accounts. Such Registered accounts are not, however, exempt from US taxation if a person is wants to be compliant. That gives rise to the possibility of "selective compliance" as you call it, otherwise the US tax on such accounts would defeat their purpose.

The roll-out of W-9s is far less advanced in Canada. All one needs to open an account is local ID with birthdate and local contact info, plus a SIN (Canada's equivalent of a SSN). Place of birth or citizenship is never asked for, in fact it would be considered a privacy violation. Consequently the Canadian banks have a massive and technically difficult job to ferret out the US persons amongst their customers. It should be an interesting next couple of years.


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## Nononymous

maz57 said:


> The roll-out of W-9s is far less advanced in Canada. All one needs to open an account is local ID with birthdate and local contact info, plus a SIN (Canada's equivalent of a SSN). Place of birth or citizenship is never asked for, in fact it would be considered a privacy violation. Consequently the Canadian banks have a massive and technically difficult job to ferret out the US persons amongst their customers. It should be an interesting next couple of years.


I've seen US personhood as a checkbox on an application screen at the local bank, but no other fields such as citizenship or place of birth. My prediction, for the next few years at least, is that Canadian banks will do the bare minimum for new accounts. You will either check yes or no on an online application, with no verification, or bank personnel will ask you a question, with no verification. So very easy to lie.


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## maz57

I've managed to consolidate my accounts down to only three institutions since I retired. Not one word about FATCA, FATCA reporting, or US citizenship from any of the three. Not online, not by mail, and not in person at the branch. When I checked just for curiosity I did notice a footnote at the bottom off the account opening page of one of them that said, "We are sorry, but we do not offer any accounts to US citizens at this time".


----------



## Ioli

I am sorry to keep bothering you, but It's not easy to understand everything in these agreements. Where the thresholds are mentioned the agreement mentions "preexisting accounts (prior to June 2014?) 
Preexisting Individual Accounts.The following rules and procedures apply for purposes of identifying U.S. Reportable Accounts among Preexisting Accounts held by
individuals (“Preexisting Individual Accounts”).
A. Accounts Not Required to Be Reviewed, Identified, or Reported
.
Unless theReporting Canadian Financial Institution elects otherwise, either with respect to all Preexisting Individual Acco unts or, separately, with respect to any clearly etc. (pg. 20).

Does this mean that the thresholds apply only to accounts before June 2014 and that accounts existing after this date are ALL reportable?

And the deadline for reporting preexisting accounts is June 2015, so the banks now are not supposed to report yet accounts existing after June 2014. 

And the deadline date for the agreement coming into full power would be January 2017?

Well, for one thing, it's quite clear when reading an agreement that there is detailed information of how the "foreign" banks must go about tracing US reportable accounts but nothing about the american banks doing their part.....


----------



## Ioli

Ok. The difference is between "preexisting" and "new" accounts who are also not reportable when under $50000

Could one actually sue a bank for demanding more information than the agreement defines? (Just curious, wouldn't dream about doing anything of the kind)


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## BBCWatcher

A bank can ask _lots_ of questions that aren't illegal. Practically every question a bank could ask is legal. "Would you like free luggage or a free iPod if you charge at least $1000 to this new credit card?" for example. Or "How are you doing today?"

Whether questions are in the bank's business interest is a separate question, but illegal? Almost never.


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## BBCWatcher

Ioli said:


> But does it have to sacrifice my privacy and my peace of mind?


To a reasonable degree, yes.

There is no _absolute_ right to privacy in all matters at all times, nor should there be. "Reasonable" is an important concept, though, and one that is and will be debated.

By the way, your Greek bank already reports _way_ more information about you and your financial affairs with them to the Greek government than the FATCA IGA will to the U.S. Treasury. That information -- all or practically all of it -- was/is already available upon specific request between the two governments if you are/were a "person of interest." None of that changes. The major change is now you're much more aware these governments share financial data, and you have a relately clear idea of the baseline, new data sharing that they'll be doing going forward. But if you want absolute (or nearer absolute) privacy, don't put your money in a bank, quite simply. Don't use credit cards, debit cards (even prepaid).... Don't use anything with an audit trail. Tough to do!


----------



## Verdande

To Loli - do not panic. The suggestions of Bev and BBC are reasonable. You must decide whether to get "compliant" or whether to try to "ignore" it. I personally choose to become compliant and then renounce (i was dual). I became compliant by filing the various tax forms and reporting accounts. I owed no tax. It was at first rather frightening, and certainly very time-consuming but I did get all the paperwork done. I did not know about the streamlined programme but that may be a possibility for you. As BBC Watcher mentions, there are possible advantages to having a US passport. Everyone's situation is different - if your financial situation is "straightforward" then you can probably do the forms by yourself. There is a lot of help available at this forum and also others. All the forms you need are online at the irs website. Good luck!


----------



## Ioli

Verdande said:


> To Loli - do not panic. The suggestions of Bev and BBC are reasonable. You must decide whether to get "compliant" or whether to try to "ignore" it. I personally choose to become compliant and then renounce (i was dual). I became compliant by filing the various tax forms and reporting accounts. I owed no tax. It was at first rather frightening, and certainly very time-consuming but I did get all the paperwork done. I did not know about the streamlined programme but that may be a possibility for you. As BBC Watcher mentions, there are possible advantages to having a US passport. Everyone's situation is different - if your financial situation is "straightforward" then you can probably do the forms by yourself. There is a lot of help available at this forum and also others. All the forms you need are online at the irs website. Good luck!


I am thinking about complying too, I am just scared that something might go wrong in the process. The fact that I don't have to fill a w-9 form just now (since a government official approval is still lacking and we still don't know what will happen on Sunday's elections) is buying me some time to organize things. I think that only by complying I'd be peaceful. I am glad to know that you complied and had no trouble in the process! I am meeting with a tax preparer next week. I don't trust myself to do it on my own since there are some things that might be complicated in my case.

It would be great to get some recommendation about a tax preparer here in Greece from any members who might help! There is always a risk if you just choose a name out of a list.


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## Bevdeforges

It's not quite an "either/or" situation. There are degrees of compliance - based on the "visibility" of various forms of income to the IRS. Obviously, your bank accounts and any interest they earn will be highly visible once you've submitted a W-9 and given your US SSN. 

Other sources of income may not be so visible - and for those, the IRS more or less depends on the "honor system" for how (and whether) you report them. Also, some sources of income may be subject to interpretation when it comes to if and how they are reportable to the IRS - government benefits received from your country of residence, for instance. Tax treaties may also affect what needs to be reported where (and whether or not the income is taxable by one side or the other at all).
Cheers,
Bev


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## jbr439

Others have mentioned there is no penalty for late filing if no tax is owed. This is mostly true. It falls down when you have accounts that are considered "foreign trusts". I don't know what would be considered a "foreign trust" in Greece, but in Canada it is *very* easy to have a "foreign trust" - RRSPs (similar to traditional IRAs) and TFSAs (similar to Roth IRAs) are very popular tax advantaged accounts in Canada, and they are considered to be "foreign trusts". I believe the UK's ISA is also a "foreign trust".

Penalties for late filing of forms 3520 and 3520A, which are associated with "foreign trust" reporting, start at $10 thousand and go up from there.

So, be aware that owing no tax does not necessarily mean no penalty. 
FWIW, becoming compliant via the Streamlined Program should result in any such penalties being waived.


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## Nononymous

Not that it's an ideal situation to be in if you cross the border, but remember that the US cannot collect penalties against Canadian citizens living in Canada (provided they have no US assets of course).


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## maz57

Hmmm. Are you are saying the IRS can assess a person who doesn't live in the US a $10,000+ penalty for failing to file a form reporting a benign account held at a non-US institution, even though that person owes no US tax or might not even have a filing obligation?

Makes that $2350 renunciation fee look cheap, doesn't it? No wonder the Consulate wait times are so long!


----------



## jbr439

maz57 said:


> Hmmm. Are you are saying the IRS can assess a person who doesn't live in the US a $10,000+ penalty for failing to file a form reporting a benign account held at a non-US institution, even though that person owes no US tax or might not even have a filing obligation?
> 
> Makes that $2350 renunciation fee look cheap, doesn't it? No wonder the Consulate wait times are so long!


Well, there's a filing obligation for the "foreign trust". But otherwise, I'm saying exactly that.


----------



## BBCWatcher

Jbr439, you make a good point about IRS Form 3520/3520-A. A couple points in reply:

1. The instructions for Forms 3520/3520-A (2014 edition) at least _seem_ to exempt Canadian tax-advantaged retirement account holders from filing. Is that not correct?

2. There is no requirement to file a tax return associated with Form 3520 or Form 3520-A as far as I can tell. These forms are quite similar to FinCEN Form 114 ("FBAR"), i.e. they are separate informational returns only and not tax returns.

So, fair point -- some people might have to file IRS Form 3520 or IRS Form 3520-A -- but just like FinCEN Form 114 that's as far as it goes. If someone genuinely, legally owes zero U.S. tax then there is no penalty for late or never filing a tax return (IRS Form 1040).


----------



## jbr439

BBCWatcher said:


> Jbr439, you make a good point about IRS Form 3520/3520-A. A couple points in reply:
> 
> 1. The instructions for Forms 3520/3520-A (2014 edition) at least _seem_ to exempt Canadian tax-advantaged retirement account holders from filing. Is that not correct?
> 
> 2. There is no requirement to file a tax return associated with Form 3520 or Form 3520-A as far as I can tell. These forms are quite similar to FinCEN Form 114 ("FBAR"), i.e. they are separate informational returns only and not tax returns.
> 
> So, fair point -- some people might have to file IRS Form 3520 or IRS Form 3520-A -- but just like FinCEN Form 114 that's as far as it goes. If someone genuinely, legally owes zero U.S. tax then there is no penalty for late or never filing a tax return (IRS Form 1040).


Re #1) it was only very recently (I believe in the last several weeks) that RRSPs no longer required 3520 and/or 3520A. So, yes, for tax year 2014, these forms are no longer required, I believe. However, these forms were required up until now. Also, as far as I know, TFSAs (and RDSPs) still are considered "foreign trusts" and require these forms to be filed.

Re #2) yes, I believe they are informational returns and independent of tax returns.

My point was that it was not necessarily correct to tell people that if they owe no taxes there are no penalties. You can be hit by penalties even if you owe no taxes. People should be aware of this. (At this point everybody knows about FBAR reporting; "foreign trust" reporting, not so much).


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## Nononymous

Is there any evidence to suggest that such penalties have ever been assessed, or collected (which is a separate matter)?


----------



## maz57

BBCWatcher said:


> 1. The instructions for Forms 3520/3520-A (2014 edition) at least _seem_ to exempt Canadian tax-advantaged retirement account holders from filing. Is that not correct?
> 
> 2. There is no requirement to file a tax return associated with Form 3520 or Form 3520-A as far as I can tell. These forms are quite similar to FinCEN Form 114 ("FBAR"), i.e. they are separate informational returns only and not tax returns.
> 
> So, fair point -- some people might have to file IRS Form 3520 or IRS Form 3520-A -- but just like FinCEN Form 114 that's as far as it goes. If someone genuinely, legally owes zero U.S. tax then there is no penalty for late or never filing a tax return (IRS Form 1040).


The Canadian retirement account you refer to is the RRSP (and probably also the RRIF which it morphs into once withdrawals become mandatory at age 71). These accounts were previously reported on the now defunct IRS Form 8891. Anything which was reported on 8891 didn't have to be duplicated on 8938 but, of course, still had to show up on FinCEN114/FBAR.

Things have now gotten kind of murky. While it's nice that RRSPs (and presumably RRIFs) apparently don't require 3520/3520a reporting, there are still a whole bunch of other Canadian registered accounts that do fall under the 3520/3520a regime. There are at least six that I can think of: TFSA, RESP, RPP, RDSP, PRPP, and DPSP. All of these accounts have zero potential for tax abuse because they all are created and encouraged by the Canadian government itself.

The curious thing is that the Canada/US IGA exempts all of them from FATCA reporting so none will come to the attention of the IRS unless the taxpayer volunteers the information. The existence of these exemptions to FATCA reporting shows that the IRS clearly recognized there was no potential for abuse. Why, then, would the IRS ask for a bunch of useless additional trust reporting on these accounts? I can only speculate that the IRS is so disorganized that they just didn't get around to it.

Because these accounts are so mundane, it can be very difficult to even get the sort of details asked for on 3520/3520a. One really has to wonder if the IRS is really encouraging (or at least tacitly allowing) "selective compliance". One thing is for sure; if these accounts are reported "by the book" the resulting US tax on them (not to mention accounting fees) totally defeats their purpose.


----------



## jbr439

Nononymous said:


> Is there any evidence to suggest that such penalties have ever been assessed, or collected (which is a separate matter)?


I know someone who was dinged for slightly late reporting of a TFSA. It took many months and getting a tax lawyer involved to fix it.


----------



## Nononymous

jbr439 said:


> I know someone who was dinged for slightly late reporting of a TFSA. It took many months and getting a tax lawyer involved to fix it.


Would they have been dinged if they had never reported the thing, I wonder?


----------



## maz57

How could the IRS penalize someone for late reporting on an account the IRS doesn't even know about? 

Back when I was still putting up with this crap I buried my TFSA in an umbrella account so it was combined with all the other taxable savings accounts. I reported the TFSA income with all the rest but never bothered with all the "foreign trust" reporting. Ditto with FBAR. Sometimes trying to get too technical or "correct" with this stuff creates more problems than it solves. I never heard anything from the IRS. 

Because all these accounts are exempt from FATCA reporting and therefore invisible to the IRS, they can only know what the taxpayer chooses to tell them.


----------



## Bevdeforges

Nononymous said:


> Would they have been dinged if they had never reported the thing, I wonder?


I believe that no one gets "dinged" on technical stuff like this unless they have a significant amount of other "questionable" stuff on their returns. The IRS tends to go after whatever they have when they have ambitions of collecting a significant amount in back taxes or serious evasion charges. 
Cheers,
Bev


----------



## jbr439

Bevdeforges said:


> I believe that no one gets "dinged" on technical stuff like this unless they have a significant amount of other "questionable" stuff on their returns. The IRS tends to go after whatever they have when they have ambitions of collecting a significant amount in back taxes or serious evasion charges.
> Cheers,
> Bev


The person I was referring did not have any questionable stuff going on, as far as I know.


----------



## Nononymous

jbr439 said:


> The person I was referring did not have any questionable stuff going on, as far as I know.


Next question - did he pay, or have US assets?

Either way, it's a good lesson - don't report something that won't turn up on FATCA, if even then.


----------



## jbr439

Nononymous said:


> Next question - did he pay, or have US assets?


Problem was eventually (many months) resolved with no penalty being applied.


----------



## diharv

maz57 said:


> How could the IRS penalize someone for late reporting on an account the IRS doesn't even know about?
> 
> Back when I was still putting up with this crap I buried my TFSA in an umbrella account so it was combined with all the other taxable savings accounts. I reported the TFSA income with all the rest but never bothered with all the "foreign trust" reporting. Ditto with FBAR. Sometimes trying to get too technical or "correct" with this stuff creates more problems than it solves. I never heard anything from the IRS.
> 
> Because all these accounts are exempt from FATCA reporting and therefore invisible to the IRS, they can only know what the taxpayer chooses to tell them.


Same with all that PFIC crap. It's a hell of alot easier and less painful to ignore the hornets nest that dive in and try and figure it out by ripping it apart.


----------



## BBCWatcher

maz57 said:


> While it's nice that RRSPs (and presumably RRIFs) apparently don't require 3520/3520a reporting, there are still a whole bunch of other Canadian registered accounts that do fall under the 3520/3520a regime. There are at least six that I can think of: TFSA, RESP, RPP, RDSP, PRPP, and DPSP.


Maz57, I don't read the instructions for IRS Form 3520/3520-A that way. In addition to explicitly listing RRSPs and RRIFs there's some "catch all" language in the instructions ("...or any other Canadian retirement plan that is within the meaning of section 3 of Rev. Proc. 2014-55. See Rev. Proc. 2014-55, 2014-44 I.R.B. 753...") that at least _seems_ to exempt a broad collection of Canadian tax-advantaged accounts. If you click on that link the information includes the following definition: "For purposes of this revenue procedure, the term 'Canadian retirement plan' means any trust, company, organization, or other arrangement that is within the scope of Article XVIII(7) of the Convention." One must give at least _some_ weight to these words, so the presumption has to be there is _something_ beyond RRSP and RRIF account types that the IRS (and the tax convention) had in mind.

What's your read?


----------



## jbr439

BBCWatcher said:


> Maz57, I don't read the instructions for IRS Form 3520/3520-A that way. In addition to explicitly listing RRSPs and RRIFs there's some "catch all" language in the instructions ("...or any other Canadian retirement plan that is within the meaning of section 3 of Rev. Proc. 2014-55. See Rev. Proc. 2014-55, 2014-44 I.R.B. 753...") that at least _seems_ to exempt a broad collection of Canadian tax-advantaged accounts. If you click on that link the information includes the following definition: "For purposes of this revenue procedure, the term 'Canadian retirement plan' means any trust, company, organization, or other arrangement that is within the scope of Article XVIII(7) of the Convention." One must give at least _some_ weight to these words, so the presumption has to be there is _something_ beyond RRSP and RRIF account types that the IRS (and the tax convention) had in mind.
> 
> What's your read?


That could be nothing more than traditional company retirement plans, no? I should also point out that the IRS never really considered RRSPs and TFSAs as true (qualified?) retirement plans because there is no penalty whatsoever for "early" withdrawal (for RRSPs, you just have to pay the taxes, as you would for non-"early" withdrawal).


----------



## maz57

BBCWatcher said:


> Maz57, I don't read the instructions for IRS Form 3520/3520-A that way. In addition to explicitly listing RRSPs and RRIFs there's some "catch all" language in the instructions ("...or any other Canadian retirement plan that is within the meaning of section 3 of Rev. Proc. 2014-55. See Rev. Proc. 2014-55, 2014-44 I.R.B. 753...") that at least _seems_ to exempt a broad collection of Canadian tax-advantaged accounts. If you click on that link the information includes the following definition: "For purposes of this revenue procedure, the term 'Canadian retirement plan' means any trust, company, organization, or other arrangement that is within the scope of Article XVIII(7) of the Convention." One must give at least _some_ weight to these words, so the presumption has to be there is _something_ beyond RRSP and RRIF account types that the IRS (and the tax convention) had in mind.
> 
> What's your read?


Yes, I agree, that does seem to be what Rev. Proc. 2014-55 is saying, even though they don't spell it out. It all hinges on that key little word "any". Of the six I mentioned earlier, only two are definitely retirement plans and another could possibly be considered such. The other three (four) are tax advantaged savings plans for other purposes and presumably not exempt from 3520/3520a.

Too bad the IRS can't just reference them all and make it crystal clear. However, most countries have their own tax-advantaged retirement savings plans and I can understand why the IRS can't keep track of them all. I can't keep track of them all and I live here. At least for us Canadians the IRS specifically mentioned RRSP/RRIF, probably the two most common ones.


----------



## BBCWatcher

maz57 said:


> Too bad the IRS can't just reference them all and make it crystal clear. However, most countries have their own tax-advantaged retirement savings plans and I can understand why the IRS can't keep track of them all.


Exactly. The treaty is also more stable than the other country's laws, laws that could change this afternoon.

Note that you should not interpret the word "retirement" in the colloquial sense here. The IRS tells you exactly how they define "Canadian retirement plan." If they say "orange" is the color referred to in Paragraph 38 of the tax treaty with Palau, and Paragraph 38 says "pink," then _IRS orange_ is pink.

If you look up paragraph 7 of Article XVIII of the U.S.-Canada Tax Convention (as amended) you find this:

_A natural person who is a citizen or resident of a Contracting State and a beneficiary of a trust, company, organization or other arrangement that is a resident of the other Contracting State, generally exempt from income taxation in that other State and operated exclusively to provide pension or employee benefits may elect to defer taxation in the first-mentioned State, subject to rules established by the competent authority of that State, with respect to any income accrued in the plan but not distributed by the plan, until such time as and to the extent that a distribution is made from the plan or any plan substituted therefor._

Emphasis mine. Remember, you must give at least _some_ weight to every word in ordinary statutory or regulatory interpretation. So does the IRS definition of "Canadian retirement plan" include non-"retirement" plans? Yes, it would appear so -- and thus, good news, you're probably off the hook for IRS Form 3520/3520-A.


----------



## Ioli

General Explanations
of the
Administration’s Fiscal Year 2016
Revenue Proposals

p. 282
PROVIDE RELIEF FOR CERTAIN ACCIDENTAL DUAL CITIZENS

...
Proposal
Under the proposal, an individual will not be subject to tax as a U.S. citizen and will not be a covered expatriate subject to the mark
-
to
-
market exit tax under section 877A if the individual
:
1.became at birth a citizen of the United States and a citizen ofanother country,
2.at all times, up to and including the individual’s expatriation date, has been a citizenof a country other than the United States,
3.has not been a resident of the United States (as defined in section 7701(b)) since attaining age 18½,
4.has never held a U.S. passport or has held a U.S. passport for the sole purpose of departing from the United States in compliance with 22 CFR §53.1,
5.relinquishes his or her U.S. citizenship within two years after the later of January 1,2016, or the date on which the individual learns that he or she is a U.S. citizen, and
6.certifies under penalty of perjury his or her compliance with all U.S. Federal tax
obligations that would have applied during the five years preceding the year of expatriation if the individual had been a nonresident alien during that period.
The proposal would be effective January 1, 2016.


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## Ioli

The streamlined procedure plus the tax filing for 2015 would cost here 1700 Euros I was told. Does anybody have a different experience from prices here in Greece?


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## Nononymous

Ioli said:


> General Explanations
> of the
> Administration’s Fiscal Year 2016
> Revenue Proposals
> 
> p. 282
> PROVIDE RELIEF FOR CERTAIN ACCIDENTAL DUAL CITIZENS
> 
> ...
> Proposal
> Under the proposal, an individual will not be subject to tax as a U.S. citizen and will not be a covered expatriate subject to the mark
> -
> to
> -
> market exit tax under section 877A if the individual
> :
> 1.became at birth a citizen of the United States and a citizen ofanother country,
> 2.at all times, up to and including the individual’s expatriation date, has been a citizenof a country other than the United States,
> 3.has not been a resident of the United States (as defined in section 7701(b)) since attaining age 18½,
> 4.has never held a U.S. passport or has held a U.S. passport for the sole purpose of departing from the United States in compliance with 22 CFR §53.1,
> 5.relinquishes his or her U.S. citizenship within two years after the later of January 1,2016, or the date on which the individual learns that he or she is a U.S. citizen, and
> 6.certifies under penalty of perjury his or her compliance with all U.S. Federal tax
> obligations that would have applied during the five years preceding the year of expatriation if the individual had been a nonresident alien during that period.
> The proposal would be effective January 1, 2016.


This is interesting. It is definitely a step in the right direction.


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## Bevdeforges

Nononymous said:


> This is interesting. It is definitely a step in the right direction.


My thoughts, exactly. Though it's still only a baby step in the right direction.
Cheers,
Bev


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## Bevdeforges

Ioli said:


> The streamlined procedure plus the tax filing for 2015 would cost here 1700 Euros I was told. Does anybody have a different experience from prices here in Greece?


Don't know about Greece, but the price sounds about right - figure that's 4 years of filings. (Honestly, the FBARs are easily done on your own - I think it's unethical to charge people to file those at all.)

However, if you take a look at one of the tax filing software sites, you may be able to file even the back years on your own (depending, of course, on how complicated your financial situation is). Depends on your sources of income and how easily they are excluded, exempted or credited for US tax purposes.
Cheers,
Bev


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## Nononymous

Bevdeforges said:


> My thoughts, exactly. Though it's still only a baby step in the right direction.
> Cheers,
> Bev


It doesn't do me any good, but it would certainly be useful for my daughter. The one part I don't quite understand the point of is condition 4 (has never held a U.S. passport or has held a U.S. passport for the sole purpose of departing from the United States in compliance with 22 CFR §53.1). Was this designed exclusively to annoy poor Boris Johnson? It seems like a silly condition for children whose parents registered their birth abroad and got them a baby passport in the process, which is what we did back in the day.

I also like that you can relinquish not renounce, so it saves you the extortionate fee.

It's such a good deal it will never get past Congress.


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## BBCWatcher

There's already a similar provision in the Expatriation Tax rules. This proposed rule is a slight expansion only.


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## Nononymous

If I read that correctly, it's pretty significant. (And that's certainly seems to be the reading it's getting elsewhere.) If this passed, an "accidental" meeting some fairly easy conditions - basically being dual and not having lived in the US - can relinquish without any tax filing at all. Is that not a major change?


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## Ioli

Sadly I don't know anything about us politics and the chances of this being voted. 
But it seems logical that the canadian lawsuit has something to do with this, doesn't it? I meen the whole canadian "resistence" must have pressed for this. 
I find it sad that countries with many dual citizens (though I haven't seen any numbers to be sure that this is accurate) like Greece and Italy keep a pathetic silence about the problem. Here is the first article in the greek newspapers giving information and practical advice, though it speaks of "Greek tax persons" and "US tax persons" without verbally saying that these coincide in many cases in Greece.

BUT if this what is being offered it leaves many other americans abroad out of the deal. Won't it be harder for them afterwards?


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## Ioli

I found the w-9 form in greek here. I don't know whether this is an official translation or not, but it might help. Especially in the cases where the bank employees advice us citizens to just sign the w-8 form (it has happened to some friends of mine and they didn't even realize it would be perjury...), I was also told I'd have to sign a w-8 form in a bank here if it would come to signing something.... Be careful what you do sign in the end.


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## Ioli

Bevdeforges said:


> Don't know about Greece, but the price sounds about right - figure that's 4 years of filings. (Honestly, the FBARs are easily done on your own - I think it's unethical to charge people to file those at all.)
> 
> However, if you take a look at one of the tax filing software sites, you may be able to file even the back years on your own (depending, of course, on how complicated your financial situation is). Depends on your sources of income and how easily they are excluded, exempted or credited for US tax purposes.
> Cheers,
> Bev


I suppose I could find out how to do it on my own in the following years, but I find it too difficult to do it now and to be sure not to commit any "fatal" error. But you are right about the FBARs...

The price is indeed for 4 years of tax returns and 7 years of FBARs


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## Bevdeforges

Nononymous said:


> It's such a good deal it will never get past Congress.


I think this about sums it up. The current mood of Congress is just plain ugly - so the President and the Democrats are throwing out all their long-withheld bright ideas to try and force a show-down in the run up to the 2016 presidential elections. 

And the "never held a passport" thing is definitely to limit the program to truly "accidental" Americans - those whose parents never registered them, or where the American parent didn't even realize they were able to pass on the nationality. It's definitely not intended for folks like Boris Johnson, who was born in the US and therefore is considered to be on the hook for Life. 

Daughter of a friend of mine is in the same situation - however doesn't have nearly Boris' wealth. She accompanied her US citizen mother (naturalized) on a trip back to the US just a year or so ago, and got hauled into "interrogation" on arrival when they spotted her US birthplace on her foreign passport.

Frankly, there are some expat organizations proposing far simpler legislation that would resolve many of the problems - most notably, excluding from reporting bank and investment accounts in your country of residence (tax residence, that is). Let your country of residence decide how they want to tax your bank accounts (or not).
Cheers,
Bev


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## BBCWatcher

Nononymous said:


> If I read that correctly, it's pretty significant.


It's not incredibly exciting, in my view. Yes, it appears those who qualify under that proposed legislation would avoid the $2350 fee, and that's not nothing. But there's already a provision in the tax code for escaping the Expatriation Tax if you've had another citizenship from birth and if you've resided in your other country of citizenship for most of the past 15 years. There's no restriction on possession of a U.S. passport, as in the new rule. Boris Johnson would qualify for the existing exception to the Expatriation Tax.

Let's back up a bit and consider the simple aspects of renunciation of U.S. citizenship. There are really only three potential obligations:

1. Filing some paperwork and appearing at a U.S. embassy or consulate to renounce.

2. Paying the $2350 fee.

3. Paying the Expatriation Tax if due.

A lot of people conflate #1 with tax filings, but it's just not true. The tax filings are separate issues. As always, if you don't owe any U.S. tax then the penalty for non-filing is zero. The new rule seems to _add_ a condition that doesn't exist in the current provisions, namely that the renunciation itself is dependent on signing a tax statement (under penalty of perjury). The new rule does, apparently, eliminate the fee. The new rule might apply to more people than the current exception with respect to the Expatriation Tax -- somebody who's a French citizen from birth who happens to be living and working in Portugal, for example -- so I guess that's something.

Anyway, unfortunately the current Republican-controlled Congress is likely to just stuff this proposal into their overflowing trash bin.


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## Ioli

I don't know why in the previous page "relinquishing" and not "renouncing" is mentioned (under _Current Law_).

_Section 877A imposes special rules on certain individuals who relinquish their U.S. citizenship or cease to be lawful permanent residents of the United States (“expatriates”). Expatriates who are “covered expatriates” generally are required to pay a mark -to- market exit tax on a deemed
disposition of their worldwide assets as of the day before their expatriation date_


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## Ioli

BBCWatcher said:


> Anyway, unfortunately the current Republican-controlled Congress is likely to just stuff this proposal into their overflowing trash bin.


I really don't know anything about politics or how things work in the states. Is it possible (technically) that the republicans propose something better (and then vote for it), or they don't get to propose anything at all?


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## BBCWatcher

The Republicans in Congress have the technical ability to propose something "better," yes. They have to get at least tacit approval from a few Democrats in the Senate plus the President's agreement.

Starting from January, 2017, that basic political reality might change. All members of the lower house (the House of Representatives) and one third of the upper house (the Senate), plus the President, are decided in the 2016 election.


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## Nononymous

So here are the two things that I think are significant:



> 5.relinquishes his or her U.S. citizenship within two years after the later of January 1,2016, or the date on which the individual learns that he or she is a U.S. citizen, and


Under this provision an accidental can relinquish, not renounce, and therefore save $2350.



> 6.certifies under penalty of perjury his or her compliance with all U.S. Federal tax
> obligations that would have applied during the five years preceding the year of expatriation if the individual had been a nonresident alien during that period.


What I understand here has nothing to do with exit tax. An accidental can relinquish without being become tax compliant (five years of returns and FBARs etc.) if they swear they would have had the same filing obligations as an NRA (a non-American not living the US) which is no filing obligations at all if they don't have any US-source income. So in other words, relinquish then check out of the US tax system by simply stating "I didn't need to file anything". Or am I completely wrong here?

The weird one is the passport, though. Obviously it's just a preliminary idea, if ever implemented there might be a change whereby a minor born outside the US could relinquish at 18 even if they'd had a US passport as a child. Or something like that.

All idle speculation. The cool thing is, this is potential movement towards reducing tax obligations and making it easier to shed US citizenship, which is a good thing.

The deals keep getting better.


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## maz57

While we are all speculating on something which almost certainly will never happen, here's how I read it:

1. The only means by which relinquishing that unwanted US citizenship could be accomplished would be the usual one, i.e. the person appears at the Consulate and swears the renunciation oath. That would cost the usual $2350; there is no mention of waiving that fee. By definition a dual from birth can't perform the other common relinquishing act; naturalizing as a citizen of another country. There might be a few who could claim foreign government employment or military service as their relinquishing act and thereby save the fee.

2. The reference to 22 CFR &53.1 (the rule that requires US citizens to use a US passport when entering or leaving the US) is probably an error or oversight because it would make no sense to exclude those who have also entered on a US passport. The only reason many accidentals even have a US passport is because they were forced by US Customs to get one in order to enter the US. Normally such persons would prefer to travel on their home country passport. I've never heard of someone who got a US passport only to leave the US; the country you are entering doesn't enforce US passport rules and the US doesn't check those who are leaving. 

3. I think we've got it right on the tax front. No US income means no US tax obligation for NRAs. Even if an NRA has US source income tax is usually withheld at source and the only reason to file a 1040 NR would be to get a refund. Most instead will simply claim a foreign tax credit on their home country return which accomplishes the same thing.

4. I take this as a hopeful sign that at least someone in Washington has noticed the mayhem being visited on US citizens outside the US. Even though there is virtually no chance of passage at least with this proposal they have acknowledged there is a problem.

5. I'm only going to get excited when there is a serious proposal to switch to RBT like the rest of the world which would fix all of these problems.


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## Nononymous

Perhaps I'm oversimplifying, but I thought that relinquish = free and renounce = $2350. Is this not the case?

I'm not excited for myself, but if something like this means that my daughter could more easily ditch her US citizenship, without a bunch of tax paperwork, then that is a good thing.

I am happy that it's another sign of creeping, incremental movement towards common sense - I hope.


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## maz57

I think it's simply a language problem. The US expatriation rules are pretty clear. In order to lose US citizenship you must perform one of the seven listed "expatriating acts". (Effectively five because two have to do with treason and are not relevant.)

If she's a dual from birth she can't naturalize with intent to lose US citizenship, therefore the only way would be to appear and swear the oath which presently costs $2350. (With the possible exceptions noted above.) Six out of the seven ways are presently free. All seven result in the "relinquishing" of US citizenship. 

I admit I may have it wrong but that's my read. Kind of a moot point because this proposal will never happen. I want to see something that fixes things now, not pie-in-the-sky.


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## jbr439

BBCWatcher said:


> It's not incredibly exciting, in my view.
> ...
> ...
> Let's back up a bit and consider the simple aspects of renunciation of U.S. citizenship. There are really only three potential obligations:
> 
> 1. Filing some paperwork and appearing at a U.S. embassy or consulate to renounce.
> 
> 2. Paying the $2350 fee.
> 
> 3. Paying the Expatriation Tax if due.
> 
> A lot of people conflate #1 with tax filings, but it's just not true. The tax filings are separate issues. As always, if you don't owe any U.S. tax then the penalty for non-filing is zero. The new rule seems to _add_ a condition that doesn't exist in the current provisions, namely that the renunciation itself is dependent on signing a tax statement (under penalty of perjury). The new rule does, apparently, eliminate the fee. The new rule might apply to more people than the current exception with respect to the Expatriation Tax -- somebody who's a French citizen from birth who happens to be living and working in Portugal, for example -- so I guess that's something.
> 
> Anyway, unfortunately the current Republican-controlled Congress is likely to just stuff this proposal into their overflowing trash bin.


Even if they don't owe any tax, USCs still have to file if they meet the threshold. And, USCs are still potentially on the hook for filing of reporting forms (3520A, 3520, FBARs, etc) regardless if the threshold is met or not. To renounce and to properly exit the US tax system, one must file 5 years of returns (including reporting forms) and 6 years of FBARs. Plus, due to the mismatch in tax systems, you can easily owe taxes (in Canada: PFICs (mutual funds), RESPs, TFSAs, principal residence sale). Due to complexities of filing for anything other than trivial financial situations, professionals are often hired who can charge up to a few thousand per year. Now, I read the proposal to say all of these filings magically go away. So, yes, if I'm reading it correctly, this is huge if you fit into this small group.

FWIW, I don't read the proposal as eliminating the renunciation fee if you can only relinquish by renouncing.


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## BBCWatcher

jbr439 said:


> To renounce


No.



> and to properly exit the US tax system, one must file 5 years of returns (including reporting forms) and 6 years of FBARs.


Yes...but not exactly. If you're not required to file then you don't have to file.

As I mentioned, a lot of people conflate these two processes. They are separate processes. Tax compliance is always a requirement, with or without renunciation. Renunciation is an irrevocable act, with or without tax compliance. If you renounce but don't tidy up your tax problems, you're an alien ex-citizen with tax problems.

If the proposed additional option makes tax compliance easier for those affected, OK, but who knows.


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## Ioli

*Finally!*

US citizens in Greece and US taxes: A word to the wise, and a seminar

Finally there is an informative article and a seminar about the (tax) situtation of US citizens in Greece... 

US expat tax seminar for Americans living abroad

Hosted by:

The American-Hellenic Chamber of Commerce

March 10, from 5-8 p.m.


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