Saturday, June 7, 2014

The long arm of the United States Internal Revenue Service (IRS)-2

It is said that the U.S. is only one of the few countries in the world that subject its citizen and permanent residents' income anywhere they earn it. I personally think it is unfair since it subjects the people to two taxation, one of your citizenship and one where you are living but this law can only be done by act of Congress, which is already as it is divided is in no mood to do anything about it but in the meanwhile the crackdown against foreign accounts continues. The IRS went first after Swiss bank accounts since it was famously said that they have the best kept secrets if you want nobody to know where you hid your dirty or untaxed money. But after much pressure, the Swiss are relenting and have started to cooperate with the IRS in handing over to them information about U.S. citizens accounts held with them. The downside of all this is that many international banks are starting to take the money of the U.S. citizens since they don’t either want to bother with reporting to the IRS or they want to be shut out of the U.S. financial system if they don’t and the other thing is that it is a trickle but many ultra rich Americans are starting to renounce their citizens and taking up residency in less taxed countries. Although I know that it is up to each individual how to make your own decisions but it is really unfair that to save some money you will renounce the citizen of your country. But for most of the rich people, they will have no choice but to pay their fair share of tax whether they have account here in the U.S. or abroad. And what is the fair share is a complex which will be dealt later on in my blog.

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