I'm an "accidental American" who has navigated this issue and it's incredibly easy. Just don't file. Every professional that writes blogs about this has a professional duty to give legal advice but the practical advice is just don't file. Look into what exactly triggers data to be sent to the IRS under your tax treaty and the policies of your financial institutions. Being "accidental" is the key here. If you tell your bank you aren't an American and you have a non-American birthplace and birth certificate they have absolutely zero way of knowing and your information will not be sent. If you have an American birthplace you can lie and say you renounced, but this carries some risk as the IRS maliciously publishes lists of renouncers so it's possible they could guess you lied. FATCA and FBAR are egregious violations of your rights. Not even the NSA has the right to spy on Americans abroad, but the IRS can do dragnet surveillance on American financial data from foreign countries with no probable cause and no warrants. You have a duty not to comply.
If you're making income in America, you owe US tax taxes.
If you are a permanent resident of the United States, you owe US taxes.
Whether the IRS is using mafia tactics or not, what you are describing is tax evasion. There are legal ways to minimize your tax burden, but this is horrible advise.
In my case as an accidental American I was not born in the US, I have never lived in the US, I have never worked in the US, I receive no benefits from the US, I was ineligible for the covid stimulus, I am unable to vote in US elections. It's comical to categorize my refusal to participate in this scam as tax evasion. I don't live in the US, I live in a supposedly sovereign nation. Just as Americans pointed out the absurdity of China's new laws that target foreign HK dissidents extraterritorial overreach should always be seen as the joke that it is.
I agree that you are ethically in the right, but it is still legally "tax evasion", and therefore probably not the best advice to be given to others. I say this as someone who has personal experience with the "accidental American" status. Depending on where you are, the IRS may discover your "American" status, and the penalties could be worse. For example, Canadian banks share information with the IRS under FATCA.
Legally? You'd be breaking the law in North Korea, so technically yes, but that's not really the point here. Does North Korea have the ability to realistically threaten my assets, livelihood or freedoms? If so, then the proper legal advice here would be to pay it. We are not discussing ethics here, we're discussing whether or not following the "just ignore it" advice is a good idea or not.
In the case of the US, they have the capacity to make legitimate threats against me regardless of where I live, with zero defense provided by my sovereign nation. So what's the right move?
If ethics are not a concern then the right move is whatever you can get away with. As other posters pointed out, if you don't disclose your US citizenship to foreign banks then that information is not going to make its way back to the IRS. Canada is probably the only country where you wouldn't want to try this.
> U.S. law also states that a child born outside of the U.S to a U.S. citizen parent who previously spent sufficient time in the U.S. is a U.S. citizen at birth, regardless of whether the child also has the citizenship of the country of birth or another citizenship. U.S. citizens married to fellow U.S. citizens can transmit U.S. citizenship to their children if either parent has ever had a residence in the United States (without any minimum time limitation on how long they held that residence.) However, for U.S. citizens married to non-U.S. citizens, the required period of residence is longer; under the Nationality Act of 1940 and the Immigration and Nationality Act of 1952, the required period of residence was set to ten years, five of which had to be after the age of 14. The Immigration and Nationality Act Amendments of 1986 reduced this to five years, two of which had to be after the age of 14.
So you're automatically a citizen if you're born in the USA, if both of your parents are citizens (and at least one has resided in the USA), or if either of your parents is a citizen and lived in the USA for 5 years (2 of which after the age of 14).
As someone who meets the third condition (one parent a US citizen and lived there for more than 5 years), it was really hard to convince the US that I was a US citizen. Every one I talked to told me to go to a country I hadn't been in since I was 5 and apply for citizenship through family sponsorship. This was more than 20 years ago and no one threatened to deport me.
After trying to get citizenship without leaving the country for about a year, I went to the post office and applied for a passport again, with every document that could possibly be relevant. The post office person looked through my pile of documents, declared my mother's passport good enough, stuffed it in the envelope, and a passport came in the mail for me. I think you may have explained to me how that worked out.
Oh sorry, I meant this person specifically (they seemed really angry about it and/or surprised). I don’t find any of the rules surprising, so I’m genuinely curious which one is so offensive!
I'm a US expat living in Canada, and a parent of Canadian children. They are eligible for US citizenship, but don't become US citizens unless I go through a procedure to register them as such.
That's not true; they are in fact citizens under US law. They may not have an SSN or a passport, but neither is a condition for citizenship.
Also, at least from a tax perspective, if you plan on remaining a US citizen, you might benefit from getting SSNs for your kids so you can claim the child tax credit and stimulus payments for 2021.
And if they don't want to be citizens, renouncing citizenship in the 6 months immediately after they turn 18 can avoid tax complications.
This comment isn't about somebody living in America. This is about somebody who doesn't live in america, has never lived there, doesn't have a passport, but are considered "american" by the IRS - somebody born in the USA to non-citizen parents while traveling for example.
Actually it is just the IRS. The US government (by way of USCIS/DHS) has a very different definition of citizenship and residency. Most long term visa holders are considered residents by the IRS for tax purposes, for example.
Not a tax accountant, but while just failing to file is a misdemeanor, if you actually owed money and it can be shown that you willfully attempted to evade paying taxes owed, that's a felony (I.R.C. § 7201).
Now, chances are they don't find out, or if they do you can play innocent and pay a fine. Personally, if I were in this situation I would either file, renounce, or never set foot on US soil.
Not that I think it's good advice but it is very rare for connecting flights to go through the US, since it requires everybody to go through immigration even if they're not staying in the US.
