As our days cool, darken and shorten, our thoughts will often turn to warmer places where the sun is bright and hot. Places where Americans tired of winters not only vacation, but sometimes take up residence.
One such place is Puerto Rico, where a newspaper notes that there are 9 million American expatriates living around the world. The paper notes that the expats are now pariahs in the sense that foreign banks incur higher than normal service costs on their bank accounts.
That is because of the requirements imposed on banks by FATCA (the Foreign Account Tax Compliance Act). The banks are forced to communicate with the Internal Revenue Service about American account holders and the expats are forced to file an annual Report of Foreign Bank and Financial Accounts (FBAR).
It means Americans living in foreign nations are taxed not only where they live and reside, but also by the IRS. Put it all together, the Tico Times says, and you have a significant number of Americans rethinking their U.S. citizenship.
Some expats make the decision to work with a tax law attorney to file an FBAR, negotiate with the IRS and become compliant. Many take advantage of the Offshore Voluntary Disclosure Program and other procedures that can enable expats to come into compliance, the Times states.
Others have decided that for them it makes more sense to remain non-compliant. And for some of them, it might make the most sense to renounce their citizenship, though "the process is costly, cumbersome and lengthy."
For those wishing to come into tax compliance, the first step can be a confidential conversation with an IRS tax attorney who understands the process and paperwork involved. A skilled tax lawyer at Robert J. Fedor, Esq., LLC, can help you today.