Expat campaign groups highlight plight of ‘accidental Americans’

Published:  23 Jan at 6 PM
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Tagged: USA, Canada, Citizenship, Euro
Last week, European lawmakers stepped into the fight by a US expat campaign group against the hated FATCA law which forces them to be taxed as US residents as well as in their chosen countries of residence.

Founded in Canada by Fabien Lehagre, the Association des Americains Accidentels along with several other protest groups aim to force the US government to allow renunciation of their unwanted American citizenship more cheaply and more easily than is legally possible at present. Accidental Americans include dual-nationals who’ve spent the majority of their lives overseas and don’t consider themselves as US citizens, along with many who only recently discovered they’d been born in the USA and later taken back to their parents’ home countries. Unfortunately, the US taxman has the right to tax their earnings even although they’d no idea until recently that they were US citizens. Worse still, they must pay US tax on earnings which aren’t taxed in their home countries.

The signing into law of FATCA in 2010 resulted in the IRS being able to locate a high number of accidental Americans, dragging them into the US’s tax net and causing financial hardship as well as rejection by a good number of foreign banks afraid of becoming liable for swingeing penalties from the IRS. Until now, all efforts by those affected to interest foreign governments in their plight has come to nothing, but recent developments indicate this may change. In 2011,

Canada’s finance minister recently publicised the problems faced by accidental Americans living in the country, stating ‘Canada is not a tax haven’ and adding expats don’t arrive just to avoid paying taxes. However, other Canadian lawmakers shrugged off his call, leaving up to a million accidentals to their fate. A recent lawsuit against the Canadian government launched by two expat accidentals initially failed, but its instigators aren’t giving up, and the recently-formed Alliance for the Defeat of Citizen-based Taxation is now gaining ground.

Some 400,000 Americans, green card holders and accidentals included, live in Israel, with another group urging the government to take their side in this crucial issue. In 2016, the country’s High Court of Justice allowed a temporary injunction against FATCA, but was forced to reverse its decision. Another ruling was given earlier this month, rejecting a petition challenging the legality of FATCA as being against the Israeli constitution. Subsequently, a Republicans Overseas spokesperson said lobbying in Washington would continue and is aimed at forcing the USA to change its citizen-based taxation system.
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