More are renouncing U.S. citizenship as IRS cracks down

[BlueMTexpat]

31. Sorry, but the great majority of US expats are not "doubly" taxed.

That's purely and simply a RW canard.

I should know. I am one and have been for the past 18 years.

Yes, I must file tax returns in both the US and in my country of residence - which happens to be Switzerland. I also file state income tax returns in the US because my husband and I have property in the US. The Swiss forms take into account all liability for federal, cantonal and communal taxes. They also take into account worldwide "wealth" which means the value of all property owned and all financial and/or brokerage accounts (excluding IRAs) and assess a tax on that.

The US and Switzerland have reciprocal tax treaties, which means that there is every attempt made not to "doubly" tax and if any income above the exclusion, which is quite a lot when one considers the average annual wage of the average American, is also taxed in Switzerland then one is able to deduct the value of the foreign taxes paid on that same income from the liability owing to the IRS.

I came here to work for international organizations many years ago and as a retiree was therefore eligible for a C permit, the Swiss equivalent of a US green card which I now have. Due to my long residence and close connections to this country, I am also eligible for dual US-Swiss citizenship. But I have not taken that final step.

Many US citizens living abroad, especially those who may never have lived in the US or previously filed returns with the IRS, simply do not understand how the US tax code works. They have always taken the privileges of their citizenship for granted, without understanding the commensurate responsibilities. If they bothered to inform themselves and 'fess up, they might actually be surprised.

Now those who have specifically tried to keep their financial holdings and dealings away from IRS attention may be understandably nervous. There are some few other US citizens, for various reasons, who have recently been asked to close their accounts from Swiss banks, generally the smaller cantonal banks, and I know personally of one case where a US citizen relinquished her US nationality because of that. But since I came initially as an international civil servant and my dealings have always been with one of the major banks, I have not been asked to close my account. At least, not yet, although there was a time early in 2009 when I had some difficulty in accessing that account for a short while. Since that time, all issues involving US nationals must be routed through that bank's central office in Zurich. So yes, there has been a tightening of controls.

I would suspect that most of those who fear IRS scrutiny and for cause generally vote Republican in any event.

But the overwhelming majority of us who have always followed the rules have nothing to fear. And FYI, the American Democrats Abroad chapter in Switzerland (ADACH) is one of the most active - and growing chapters - of US expats. We true Dems are not renouncing our citizenship!