Hundreds Give Up U.S. Passports After New Tax Rules Start# Stock
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Hundreds Give Up U.S. Passports After New Tax Rules Start
By Zoe Schneeweiss and Richard Rubin Oct 25, 2014 11:01 PM CT
The stamps in a U.S. passport are displayed for a photograph in New York.
The number of Americans renouncing U.S. citizenship increased 39 percent in
the three months through September after rules that make it harder to hide
assets from tax authorities came into force.
People giving up their nationality at U.S. embassies increased to 776 in the
third quarter, from 560 in the year-earlier period, according to Federal
Register data published yesterday.
Tougher asset-disclosure rules that started July 1 under the Foreign Account
Tax Compliance Act, or Fatca, prompted more of the estimated 6 million
Americans living overseas to give up their passports. The appeal of U.S.
citizenship for expatriates faded further as more than 100 Swiss banks began
to turn over data on American clients to avoid prosecution for helping tax
evaders.
The U.S., the only Organization for Economic Cooperation and Development
nation that taxes citizens wherever they reside, stepped up the search for
tax dodgers after UBS AG (UBSN) paid a $780 million penalty in 2009 and
handed over data on about 4,700 accounts. Shunned by Swiss and German banks
and with Fatca starting, more than 9,000 Americans living overseas gave up
their passports over the past five years.
Fatca requires U.S. financial institutions to impose a 30 percent
withholding tax on payments made to foreign banks that don’t agree to
identify and provide information on U.S. account holders. It allows the U.S.
to scoop up data from more than 77,000 institutions and 80 governments
about its citizens’ overseas financial activities.
In establishing the 2010 Fatca law, Congress and President Barack Obama in
effect threatened to cut off banks and other companies from easy access to
the U.S. market if they didn’t pass along such information. It was
projected to generate $8.7 billion over 10 years, according to the
congressional Joint Committee on Taxation.
So far, 2,353 Americans have renounced their citizenship this year, close to
the all-time high of 2,369 in the first nine months of 2013.
By Zoe Schneeweiss and Richard Rubin Oct 25, 2014 11:01 PM CT
The stamps in a U.S. passport are displayed for a photograph in New York.
The number of Americans renouncing U.S. citizenship increased 39 percent in
the three months through September after rules that make it harder to hide
assets from tax authorities came into force.
People giving up their nationality at U.S. embassies increased to 776 in the
third quarter, from 560 in the year-earlier period, according to Federal
Register data published yesterday.
Tougher asset-disclosure rules that started July 1 under the Foreign Account
Tax Compliance Act, or Fatca, prompted more of the estimated 6 million
Americans living overseas to give up their passports. The appeal of U.S.
citizenship for expatriates faded further as more than 100 Swiss banks began
to turn over data on American clients to avoid prosecution for helping tax
evaders.
The U.S., the only Organization for Economic Cooperation and Development
nation that taxes citizens wherever they reside, stepped up the search for
tax dodgers after UBS AG (UBSN) paid a $780 million penalty in 2009 and
handed over data on about 4,700 accounts. Shunned by Swiss and German banks
and with Fatca starting, more than 9,000 Americans living overseas gave up
their passports over the past five years.
Fatca requires U.S. financial institutions to impose a 30 percent
withholding tax on payments made to foreign banks that don’t agree to
identify and provide information on U.S. account holders. It allows the U.S.
to scoop up data from more than 77,000 institutions and 80 governments
about its citizens’ overseas financial activities.
In establishing the 2010 Fatca law, Congress and President Barack Obama in
effect threatened to cut off banks and other companies from easy access to
the U.S. market if they didn’t pass along such information. It was
projected to generate $8.7 billion over 10 years, according to the
congressional Joint Committee on Taxation.
So far, 2,353 Americans have renounced their citizenship this year, close to
the all-time high of 2,369 in the first nine months of 2013.