On July 1, new rules came into effect under the Foreign Account Tax Compliance Act (Fatca). As a consequence, foreign banks such as those in Switzerland started turning over data on their American clients to the U.S. government. Foreign banks are now going back through their records as far as the 1990s to find any traces of American clients, including people with U.S. addresses or phone numbers, or even those who were schooled there. These new rules which are being introduced to stop tax evasion resulted in near record high Americans renouncing their U.S. citizenship.
Almost 9,000 Americans have given up their nationalities in the past five years, and in the first half of the year, 1,577 Americans gave up their nationalities at U.S. embassies across the world. As Fatca and the Swiss bank disclosure program intensify the search for U.S. nationals, expats who want to avoid paying higher, U.S. level taxes are considering the idea of giving up their passports more seriously.
Thus, although we usually recommend our clients who intend to live in the U.S. to apply for residency or citizenship as soon as they meet the qualifications, we realize that this is not the best option for everyone. If you are considering applying for residency or U.S. citizenship, we recommend consulting an experience accountant/ financial advisor to evaluate the taxation consequence before proceeding with your application.
For further information regarding this topic or to schedule a consultation, please contact our office at 954-843-3494
Schonberg & Timerman, P.L.