FATCA blamed for one in five US expats planning to give up passport
One in five US citizens living abroad are on the verge of giving up their passports according to a survey published by US tax consultants Greenback.
The Greenback survey – which was conducted by more than 3,000 US expats – studies the expat community’s opinions on taxation, citizenship renunciation, and more. Among the questions, the survey asked for expat thoughts about giving up their US passports to the State Department.
In the first three months of 2019, 1,018 Americans renounced the citizenship with 250 of them blaming US taxes as the trigger for their action. Under the FATCA double taxation scheme American expats must report their worldwide income to the IRS with income, estate and gift tax returns.
The company said that this year’s survey demonstrates that US expatriates want change, but as for the changes currently looming, many expats are unsure how they will be affected. Indeed, on the most recent change relating to FATCA – The Tax Fairness for Americans Abroad Act introduced by US Congressman George Holding, in late 2018, the survey found that 74% of expats surveyed had never heard of the bill.
On tax reform, 54% of expats surveyed did not know if they would pay more or less in taxes post-reform. And, 58% were not confident in their understanding of how tax reform impacts them.
Other key findings include:
- 71% of US expatriates do not feel they should be required to file US taxes while living abroad, up 4% from 2018.
- 7% of expats did not file a tax return last year.
- 89% of expats believe that they are not fairly represented by the US government, rising 3% over 2018.
- The first thing on expat wish lists is the repeal of citizenship-based taxation. 49% of expats feel that this is the chief way the US government could help expats.
This year’s survey discovered that nearly half of expats were unaware of the Streamlined Filing Procedures, an IRS amnesty program that allows certain expats to become tax compliant minus the penalties. 20% of expats said they would like to use the procedures to get caught up. If you’re part of that 20%,
Greenback pointed to expats banding together and sharing their opinions has already started to have an impact. As reported, in France, Accidental Americans have taken legal action based on the discriminatory impact FATCA has had on expats.