If you think
residing in America is taxing, just talk to one of the many expatriates
who is contributing to a shocking statistic recently discovered:
across the globe, people are renouncing their US citizenship in
record numbers.

At least 1,788
Americans officially threw away their US citizenship in 2011, exceeding
the totals from 2007, 2008 and 2009 combined. The Internal Revenue
Service has been keeping a tally of US citizens driven to renouncing
that title since only 1998, but last yearÂ’s number has officially
raised the bar when it comes to calling America quits. WhatÂ’s
more, experts say, is that more and more Americans will soon be
saying ‘sayonara’ to Uncle Sam if the federal government keeps up
its trend of heavily taxing US citizens abroad.

Out of the
34 countries that belong to the Organization for Economic Cooperation
and Development, the United States is the only nation that taxes
its citizens no matter where they reside on Earth. As long as a
person maintains citizen status, they are expected to send the United
States government pennies on every dollar earned no matter where
they live, under current law. With the US enacting stricter guidelines
in recent years that demand wealthy Americans abroad paying the
IRS even more, citizens are voluntarily refusing the perks and protection
of the United States in numbers unmatched in recent memory.

“The complexity
of international tax law, combined with the administrative burden
placed on these taxpayers, creates an environment where taxpayers
who are trying their best to comply simply cannot,” explains
the IRS in a report published in 2011. “For some, this means
paying more US tax than is legally required, while others may be
subject to steep civil and criminal penalties. For some US taxpayers
abroad, the tax requirements are so confusing and the compliance
burden so great that they give up their US citizenship.”

Following
up on the trend, Reuters reveals that in recent years more and more
millionaires and billionaires have voluntarily removed themselves
from the American Empire in order to hold onto their earnings.

“Every
dollar you save, you lose to the US tax man,” tax lawyer Matthew
Ledvina explains to Bloomberg News. “That’s one reason
why people give up citizenship.”

The US attorney,
who now works for Anaford AG in Zurich, adds that more and more
non-US banks are being pressured by the government to give away
their clientsÂ’ cash. As a result, fewer banks are willing work
with US citizens, even if they have millions or billions to install
in their institutions.

“It started
with the fallout from UBS and non-US banks feeling itÂ’s too
risky to deal with Americans abroad,” he adds. “It will
increase because Fatca will require banks to track down people,
some of whom will make voluntary disclosures before renouncing their
citizenship.”

Facta, or the
Fair and Accurate Credit Transactions Act, was amended in 2010 with
harsher penalties for US citizens living abroad. Under that update,
banks are required to take 30 percent from “certain US-connected
payments” from those who don’t give the IRS enough information
about their income, no matter how or where they earn it.

“There
is incredible frustration at the audacity and imperial overreach
of this law,” David Kuenzi of Thun Financial Advisors in Madison,
Wisconsin tells Bloomberg of Facta. Brent Lipschultz, an accountant
at New YorkÂ’s EisnerAmper firm, adds that the whole thing is
very “big brother” of America.

This year alone,
around 6.3 million US citizens living abroad are expected to oblige
to AmericaÂ’s tricky tax laws, lest they want to risk heftier
penalties. Given the recent trend, however, that number is looking
to only shrink.

Reprinted
with permission from Russia
Today.

May
7, 2012

©
2012 Russia
Today