Warning for U.S. Citizens

[Dockhead]

Originally Posted by valhalla360

I like the Ireland approach where you go thru customs & immigration before leaving, so you are effectively a domestic flight when you land and can get out of the airport quickly.

But never had an issue coming back into the states. Usually joke around a bit when I offer to get my laptop out so I can pull up the spreadsheet with countries visited.

Agreed. I'm not sure where the previous poster encountered immigration officers who weren't friendly. I find such people to be friendly all over the world with hardly any exceptions. Some of the friendliest, oddly enough, are the Russian ones. I have entered Russia by air, by sea, by train, by road in cars, hundreds of times, and the story is always the same, 90% of the immigration officers are young ladies in their 20's and 30's, most of them quite pretty, and cheerful and friendly to a fault.

I remember the first time I went through Russian immigration and customs by yacht. It was in Vyborg, formerly Viipuri, what had been the second largest city in Finland before WWII when the Russians annexed it. I made a hash of the process -- first of all, I forgot the time difference and arrived after the customs and immigration offices closed (which is forbidden; technically I should have turned around and sailed back to Finland), and secondly I didn't bring the different declarations and crew lists in triplicate as required -- I missed that bit. I tied up to the customs pier and radioed the harbourmaster, who roused up the relevant officials from their homes. So that I wouldn't have to write all the forms over again to get them in triplicate, they opened up the closed customs office to let me use their copier. They stamped everything with a smile, then brought over a bottle. Well, they were off work, see. Welcome to Russia!


Hats off also to the Norwegian immigration officers. I arrived at one of the secondary Oslo airports last summer expecting to transit from a flight from Finland to a RyanAir flight to Spain. That was when the pandemic border restrictions were still in place. To enter Norway, I would have needed a fresh test despite being vaccinated, but transit passengers are exempt. Well, this airport has no transit zone, so I had no legal way to get my flight. I had to go through immigration and customs before re-entering the airport to get the flight out. The Norwegian immigration officer was exceptionally kind, understood my situation, and let me through against the rules, and with a smile.

[GordMay]

Originally Posted by Dockhead

...
Concerning mail forwarding -- I don't know a single long term expat without ties to the U.S. who uses a mail forwarding service. I'm not even sure that the IRS accepts that kind of address. I don't use that kind of service because I simply don't get physical mail, not anywhere. I am all electronic with everything. I also don't know anyone who obsessively changes or provides fresh addresses to the IRS. If you think you are keeping up with your filings and payments, you don't expect notices from them. It's probably a good idea to take steps to make sure that you are always reachable by physical mail -- sure. Does everyone do it? I bet less than half, I bet less than 10% of long term expats actually do, so this is a real risk for well-intentioned and law-abiding people...

The IRS doesn't initiate contact with taxpayers by email.
The IRS initiates most contacts with taxpayers through regular mail delivered by the U.S. Postal Service. However, there are special circumstances in which the IRS will call or come to a home or business, such as:
When a taxpayer has an overdue tax bill,
To secure a delinquent tax return or a delinquent employment tax payment, or
To tour a business, for example, as part of an audit or during criminal investigations.
Even then, taxpayers will generally first receive a letter or sometimes more than one letter, often called notices, from the IRS in the mail.

➥ https://www.irs.gov/privacy-disclosure/report-phishing

➥ https://www.irs.gov/newsroom/avoid-s...acts-taxpayers

However, if you do have an account, on a secure IRS online application, via IRS.gov the IRS may communicate by email. IDK if they will initiate notices, via secure email.
They will only send you general information via unsecure email.
➥ https://www.irs.gov/privacy-disclosu...-email-contact

[Dockhead]

Originally Posted by GordMay

The IRS doesn't initiate contact with taxpayers by email.
The IRS initiates most contacts with taxpayers through regular mail delivered by the U.S. Postal Service. However, there are special circumstances in which the IRS will call or come to a home or business, such as:
When a taxpayer has an overdue tax bill,
To secure a delinquent tax return or a delinquent employment tax payment, or
To tour a business, for example, as part of an audit or during criminal investigations.
Even then, taxpayers will generally first receive a letter or sometimes more than one letter, often called notices, from the IRS in the mail.

➥ https://www.irs.gov/privacy-disclosure/report-phishing

➥ https://www.irs.gov/newsroom/avoid-s...acts-taxpayers

However, if you do have an account, on a secure IRS online application, via IRS.gov the IRS may communicate by email. IDK if they will initiate notices, via secure email.
They will only send you general information via unsecure email.
➥ https://www.irs.gov/privacy-disclosu...-email-contact

Well, we know all of that.



The IRS is way behind the times. Even ex-Soviet republics like Estonia have comprehensive digital portals for citizens through which ALL communications with the government agencies of all kinds take place. They have secure encryption cards they use to access these portals. But we are stuck with snail mail like in the 19th century


My own solution to this is to be proactive. It is costly to the U.S. government, but I simply call them once a quarter since I don't have a reliable way to get mail from them. The IRS is surprisingly easy to reach by telephone, and you get through to agents who are generally friendly and knowledgeable.

[GordMay]

Originally Posted by Dockhead

... My own solution to this is to be proactive. It is costly to the U.S. government, but I simply call them once a quarter since I don't have a reliable way to get mail from them. The IRS is surprisingly easy to reach by telephone, and you get through to agents who are generally friendly and knowledgeable.

So, you don't use a secured email account?
I was hoping you could explain how that is done.

[goboatingnow]

Having lived in the US and setup a business there , it’s an extremely bureaucratic country. It’s also high tax country similar to many EU countries. The state /federal thing then complicates all of this to boot

The US has some very poor worldwide indices for starting business , property purchase , tax regulations. It’s good for credit and resolving insolvency !!!( perhaps a cause and effect issue )

Thankfully I “ reside “ in a country where almost everything can be done online. I can also phone real humans and the prevailing attitude is we just want to recover owned taxes in a manner you can pay them ( waving penalties and fees is common)

But again for most European using mailbox forwarding solutions is not an option as ( as dockhead pointed out) this is not your HOME address and that’s what you are asked to supply.

As I self employed Nov is my filing deadline , I’ll login , access a 90% prefilled form , compute my medical claims deductions plus a few miscellaneous items. , press a button , I’ll get a computed Income tax value ( in my case always a refund ) I’ll can elect to pay 90% of next years bill but don’t.

Any salary payed to me as a company owner has all tax remitted bi monthly so there’s really no surprises.

I make my company’s vat returns remotely and each January supply the companies office my annual filings and by March make an online corporation tax return

That’s it all done on the boat.

My wife as a ordinary PAYE ( pay as you go) has NO requirement to make ANY tax returns unless she has untaxed income as well. She uses a different portal

Simples, takes about 2 hours a year.

One of my friends is head of Audit for the Revenue services.

Revenue authorities target larger non compliant entities first , because the gains for the taxpayer for a given effort is greater. They tend to allow smaller non compliant entities more leeway , once you engage. They are particularly virulent with repeat offenders. That’s the worst case situation . Their computer system runs a “ scoring “ system and this triggers audits.

[Dockhead]

Originally Posted by GordMay

So, you don't use a secured email account?
I was hoping you could explain how that is done.

There isn't a separate "secured email account". You can sign up for "e-services" which allows you to access certain limited aspects of your account and carry out certain communications.


In order to have such an account, you must either have a U.S. based mobile phone account which is associated with your name (i.e., a monthly subscription, not PAYG account) OR be able to receive physical mail within expiration time of the code they send So it's not really possible for me at the moment. So for the time being I call them by telephone.

[Dockhead]

Originally Posted by goboatingnow

Having lived in the US and setup a business there , it’s an extremely bureaucratic country. It’s also high tax country similar to many EU countries. The state /federal thing then complicates all of this to boot

The US has some very poor worldwide indices for starting business , property purchase , tax regulations. It’s good for credit and resolving insolvency !!!( perhaps a cause and effect issue )

Thankfully I “ reside “ in a country where almost everything can be done online. I can also phone real humans and the prevailing attitude is we just want to recover owned taxes in a manner you can pay them ( waving penalties and fees is common)

But again for most European using mailbox forwarding solutions is not an option as ( as dockhead pointed out) this is not your HOME address and that’s what you are asked to supply.

This is sadly true.


It's not hard to set up a U.S. company, and the situation with bank accounts is much better in the U.S. than in Europe. Bank accounts are a sheer horror now -- threatening breakdown of the economy in my opinion -- with a combination of FATCA and OECD AML requirements. The U.S. started all this, but cynically declines to participate itself, so U.S. banks are able to accept new clients without the incredible proctological KYC process you have to go through in Europe.


But the U.S. is far behind Europe in digitalizing bureaucracy. Northern Europe is the world leader in this, with little Estonia the absolute world leader and pioneer, having totally digitalized government already years ago. European banks are also far ahead of American ones in digitalization. Bank transfers between European banks take seconds and cost pennies, even international transfers but within the EU. European bank accounts have a single number, the IBAN, and don't need routing numbers, SWIFT codes, bank addresses, or any of that carp.



Yet another reason why U.S. expats in Europe have trouble with communication with the IRS, is that in Europe MOST people have a physical mail-free existence, receiving and paying all their bills digitally, and doing all communication with bureaucracy digitally. More and more residential buildings don't even have mailboxes any more.

[goboatingnow]

Originally Posted by Dockhead

This is sadly true.


It's not hard to set up a U.S. company, and the situation with bank accounts is much better in the U.S. than in Europe. Bank accounts are a sheer horror now -- threatening breakdown of the economy in my opinion -- with a combination of FATCA and OECD AML requirements. The U.S. started all this, but cynically declines to participate itself, so U.S. banks are able to accept new clients without the incredible proctological KYC process you have to go through in Europe.


But the U.S. is far behind Europe in digitalizing bureaucracy. Northern Europe is the world leader in this, with little Estonia the absolute world leader and pioneer, having totally digitalized government already years ago. European banks are also far ahead of American ones in digitalization. Bank transfers between European banks take seconds and cost pennies, even international transfers but within the EU. European bank accounts have a single number, the IBAN, and don't need routing numbers, SWIFT codes, bank addresses, or any of that carp.



Yet another reason why U.S. expats in Europe have trouble with communication with the IRS, is that in Europe MOST people have a physical mail-free existence, receiving and paying all their bills digitally, and doing all communication with bureaucracy digitally. More and more residential buildings don't even have mailboxes any more.

True indeed , out of 280 pieces of Mail received in 6 months , only three needed to be forwarded to me. All related to my various gun licences !! ( which is still partly paper based )

I opened an account in a new EU country recently. Not very problematic , passport , proof of resident address ( marina contract ), a form filled out. No particular issues.

What is awkward is non resident accounts in the EU.

[Adelie]

Originally Posted by goboatingnow

My point is a removal of passport should only happen by a court decision after fair process. Anything else smacks of totalitarianism .

If it is an administrative decision to grant a passport in the first place, why shouldn’t it be an administrative one to revoke it?

It seems to me the courts are a venue to argue about whether an administrative decision was in error not a venue for making the decision in the first place.

[Dockhead]

Originally Posted by Adelie

If it is an administrative decision to grant a passport in the first place, why shouldn’t it be an administrative one to revoke it?

It seems to me the courts are a venue to argue about whether an administrative decision was in error not a venue for making the decision in the first place.

If we took seriously the human right embodied in Section 13 of the UNUDHR, then revocation of a passport would not be an administrative decision. I would be all in favor of implementing this right, but it would probably require a Constitutional amendment.


The Nordic countries do recognize in law the right of citizens to leave the country freely, and to return freely. This is why even during the worst of the coronavirus pandemic, Nordic citizens were never restricted from travelling. It was not considered constitutional to restrict the right of citizens to travel. I find this highly civilized.


"Section 9 - Freedom of movement

"Finnish citizens and foreigners legally resident in Finland have the right to freely move within the country and to choose their place of residence.

"Everyone has the right to leave the country. Limitations on this right may be provided by an Act, if they are necessary for the purpose of safeguarding legal proceedings or for the enforcement of penalties or for the fulfilment of the duty of national defence."

-- Constitution of Finland


Note this provision also prevents the government from restricting citizens' movement within the country. This was considered to make it constitutionally impermissable for the government to issue a stay at home order during the pandemic, aka lockdown. Again, highly civilized.

[garyfdl]

Originally Posted by Pelagic

For some reason, Canada has recently adopted that same policy.

No idea why this law is being enforced, but probably Tax related

I would guess it is more of a terrorism issue/trying to keep track of who's who and where they're from.

[valhalla360]

Originally Posted by Dockhead

I am all for paying your own way, so no disagreement there. I am fundametnally against freeloading. But one more time -- very few U.S. expats pay any tax at all. You have to BOTH earn more than $108 700 AND live in a country with lower taxes than ours, before you pay tax.

Then we are in agreement that the rules are a bit onerous. Doesn't change the fact that not bothering to follow them is going to lead to problems.

The entire world does not tax based on citizenship -- it taxes based on SOURCE of income. What's wrong with that? A U.S. citizen with interests of any kind in the U.S. will have some kind of U.S. source income, will pay property taxes on any property there, will pay according to connection. What is the point of setting up this monstrosity of a system with this incredibly burdensome filing which doesn't collect any revenue? This is just bureaucratic metastasis.

At one time the world criminalized same sex relations. Doesn't make it right.

You can thank criminals for the monster that is our overseas tax code. The law of unintended consequences and all that. Again, doesn't mean you don't have a responsibility to at least attempt to follow up.

Passport services are already pay as you go, as they should be.


Embassies and consulates don't exist because of U.S. expats with no ties to the U.S. Consular services are pay as you go.

Some are but not entirely. If you look at the cost of operating those offices, the fees come no where close. I'd be willing to be passport issuing is a money loser also.

March 2020, we got evacuated back to the states and had lots of back and forth with the staff and the staff set up a whole process. We only had to pay for the charter flight.

The whole rest of the world is fine with taxing based on source of income.

It's fine if the rest of the world wants to do it differently. As pretty much everyone's mom used to say...if your friends all jumped off a bridge, would you?

While I agree, simplification of the reporting/filing systems would be nice, taxing with a big exemption to account for reduced services an expat is likely to receive, seems pretty reasonable for 99% of expats.

[Adelie]

Originally Posted by valhalla360

It's fine if the rest of the world wants to do it differently. As pretty much everyone's mom used to say...if your friends all jumped off a bridge, would you?

While I agree, simplification of the reporting/filing systems would be nice, taxing with a big exemption to account for reduced services an expat is likely to receive, seems pretty reasonable for 99% of expats.

So expats should only be taxes for the services they use while overseas?

If they return home for retirement should they be denied old age benefits?

[Jammer]

Originally Posted by Dockhead

The entire world does not tax based on citizenship -- it taxes based on SOURCE of income. What's wrong with that? A U.S. citizen with interests of any kind in the U.S. will have some kind of U.S. source income, will pay property taxes on any property there, will pay according to connection. What is the point of setting up this monstrosity of a system with this incredibly burdensome filing which doesn't collect any revenue? This is just bureaucratic metastasis.

It was put in place as a mechanism for dealing with wealthy individuals living in the USA who would keep funds in offshore accounts where it would earn interest or other investment returns, then fail to report the income. Under U.S. law such income is taxable and has been for decades. Prior to the reporting requirement and confiscatory fines there was no effective deterrent in place.

Originally Posted by Adelie

So expats should only be taxes for the services they use while overseas?

If they return home for retirement should they be denied old age benefits?

Under U.S. law you only receive old age benefits (Social Security) if you have worked and paid taxes on wages in the United States for at least 20 quarters (five years). Benefits are based on lifetime earnings, so the situation you describe, in essence, already exists.

[goboatingnow]

Originally Posted by valhalla360

It's fine if the rest of the world wants to do it differently. As pretty much everyone's mom used to say...if your friends all jumped off a bridge, would you?

While I agree, simplification of the reporting/filing systems would be nice, taxing with a big exemption to account for reduced services an expat is likely to receive, seems pretty reasonable for 99% of expats.

No In this case it’s the US jumping of the bridge , it’s tax code on non resident foreign earning is frankly nonsense