One of these is not like the others – is someone able to legally avoid US taxes from selling cryptocurrency by holding another citizenship?
To renounce, you first have to meet several criteria:
• You must hold citizenship of another country, so you don’t become stateless.
• You have to be up-to-date with your U.S. tax filing, with the past five years submitted.
• You have to attend an exit interview at your nearest U.S. consulate or embassy.
• You have to pay a $2,350 renunciation fee.
• If you have financial assets worth over $2 million, you may have to pay a one-off exit tax calculated as a capital gains tax as if you sold all of your assets on the day you renounced.
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At least two of those points seem to be pretty prohibitive, if your goal is to avoid taxes on money already earned...
Enforcement on that appears to be about zero.
A fair amount of the increase this article is discussing is likely cryptobros inspired by Roger Ver's success-- he renounced US citizenship while owning >40k bitcoin (potentially much more than 40k, that is just what was in his publicly identified wallet) at a near zero cost basis worth over $20 million at the time while paying only about $200k in exit taxes (he tweeted a picture of the exit taxes check), presumably for his non-bitcoin properties.
He even setup a company to help other people get st. kitts passports that promoted evading US taxes as a top level feature.
This is not actually true for the US. The United States will let you renounce your citizenship even if it leaves you stateless.
I wonder if this opens up pathways to citizenship that aren't available otherwise. The "passports for sale" are mostly either extremely expensive or for tiny island nations like St. Kitts. But maybe there are additional countries that offer citizenship to stateless people out of compassion?
> Stateless people, when officially registered as 'stateless', can apply for naturalisation after three years' legal stay, which is reduced from the standard five years. They are also exempt from providing a passport, but they do need to provide a birth certificate.
Absolutely fucking not.
But if you really, really, I mean, really want to stateless yourself and end up in a situation where you can’t even get a travel document, you can.
Not that anyone ever should.
> Perhaps there are countries that will grant citizenship to stateless people out of compassion, or for a fee?
Not that I’m aware of.
> Persons intending to renounce U.S. citizenship should be aware that, unless they already possess a foreign nationality, they may be rendered stateless and, thus, lack the protection of any government. They may also have difficulty traveling as they may not be entitled to a passport from any country.
This guy did it in 2008.
> If you have financial assets worth over $2 million, you may have to pay a one-off exit tax calculated as a capital gains tax as if you sold all of your assets on the day you renounced.
Do you have to pay capital gains taxes on anything over $2 million or wholesale all capital gain?
> You have to attend an exit interview at your nearest U.S. consulate or embassy.
Can they reject your exit?
I'm sure they can reject your exit if you haven't finished paying taxes owed or you seem under duress or mental impairment. But absent that (or maybe similar reasons you wouldn't let someone sign a contract) I don't think they can.
In most high-income countries with that income, you either won’t pay anything, or the difference will be marginal.
There will be very few people in the world for whom renouncing the US citizenship would be worth it long-term.
Unless you go full tax-haven, which is also fine.
Such as? All of them stem from FATCA, and we’re back to taxes.
And in a lot of situations not even renouncing the US citizenship will help you there, as you’ll be scrutinized for having a US birthplace.
I understand that FATCA's reporting requirements are onerous enough for banks that they reject US account holders. Then, the inability to get a local bank account may cause problems.
This is where I ask, "can't you just use a US bank account, then? One with good international support? (No fees, etc.)" I suspect this is feasible in many countries?
I do know, however, that in India, many activities require an Indian credit card (regular Visa &etc cards work fine for many things, but for others -- particularly if they touch the government in any way -- they are rejected). And the way to get an Indian credit card is to have an Indian bank account. You see where this is going. So e.g., you end up unable to buy train tickets without bugging an Indian citizen to do it for you.
I would also suspect that, the minute you need to deal with an account with any kind of special government classification -- say, a retirement account -- then you need that account to be at an institution that knows about those laws, which again would require a local bank.
There’s only one benefit from renouncing the US citizenship. You’re no longer a tax resident.
There’s also a $112k+inflation/year exemption for foreign earned income for non-residents. https://www.irs.gov/individuals/international-taxpayers/fore...
So if you’re renouncing your citizenship for tax reasons, it’s very unlikely that it’s going to be worth it, if you’ve got under $2m in assets.
Not to mention that if you decide to return to the US, not only have to go through the US immigation system, but you also won’t clear a background check, because people who renounce their US citizenship are entered into the NICS system.
Not unless they renounce their US citizenship and pay the exit tax.
I wouldn't bet on Europe; the Atlantic currents are near a tipping point where they shut down. That'll cover most of Western Europe in a glacier if it happens. (Go look up European cities' latitudes; the fossil record also backs up this concern.)
Moving to avoid covid policies seems secondary vs. what the Supreme Court is likely to do in the next decade (especially after more justices are appointed by minority-elected presidents and senates).