By Schnarr, J.W. on April 27, 2017.
American citizens living abroad and looking for a way out from under the boot of the U.S. tax system are invited to a free seminar in Lethbridge today.
From 4 p.m. to 6 p.m. at the Coast Lethbridge Hotel and Conference Centre, Moodys Gartner Tax Law is holding a free seminar on major considerations U.S. citizens should make before renouncing U.S. citizenship. This includes the pros and cons of renouncing citizenship; avoiding the U.S. Exit Tax; how to avoid becoming barred from the U.S.; and the consequences of renouncing U.S. citizenship.
The event is presented by Alex Marino, an American tax lawyer who has been brought in by Moody’s to run the Ex-patriation Practice Group.
“It seems a little crazy to think that individuals are giving up their U.S. Citizenship, but they are, over the last half-decade, in record numbers,” he said.
“I’ve been lucky enough to represent more people renouncing on six different continents than anybody in the world.”
Understanding why U.S. citizens are renouncing and the need for these seminars lies with the way the U.S. taxes its citizens.
The U.S. is one of only two countries in the world that taxes on citizenship, as opposed to the regular practice of taxing on residency.
“That means no matter where you go – whether you’ve lived (in the U.S.) a day, or you never lived there, or you left at age five – everywhere you go as a U.S. citizen, you are taxed on your world-wide income by the I.R.S.
“It doesn’t matter if you are making loonies, or pesos, or Euros,” Marino said
The Foreign Account Tax Compliance Act was introduced in 2010 under Barack Obama and went into effect in Canada on July 1, 2014.
As a result, it is becoming more difficult for U.S. citizens to renounce their citizenship for the “right reasons” and avoid negative consequences.
If not done correctly, residents may be subject to the U.S. Exit Tax or barred from ever entering the U.S. again.
“(FATCA) is a snitching program,” Marino said. “One hundred and ninety-seven countries, including Canada, have signed on to turn over the names of their U.S. citizen depositors in their financial institutions.”
The first batch of roughly 55,000 names of Canadian-resident U.S. citizens was turned over to the I.R.S. in 2015.
The second batch of more than 350,000 citizens’ names took place in 2016.
Since 2010, the number of people renouncing has exploded, according to Marino.
“We’ve set annual records five years in a row, because all names of people renounced are published,” he said.
There are an estimated 1.2 million U.S.-born citizens living in Canada.
“We are overwhelmed not only in Canada, but worldwide,” said Marino.
“The world has gotten smaller.”
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