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“Disclosing joint accounts I hold with my wife and anyone I ever want to do business with - that’s just too much,” said Peter Dunn, a dual US-Canadian citizen currently residing in Canada, quoted by Reuters on Monday.|
Americans living and working abroad are, according to the Foreign Account Tax Compliance Act, not only forced to pay taxes to the Internal Revenue Service (IRS), the US agency responsible for collecting taxes, but also obligated to report all their bank accounts and retirement funds to the agency.
Failure to report these details to the IRS means breaking US law, for which the penalty is up to USD 50,000 or 50 percent of any undeclared accounts held overseas.
“My wife’s account is none of their business,” said Dunn, who is married to a Canadian.
Dunn, who had earlier in the month renounced his US citizenship, said that the policies of the IRS were “driving us away.”
Marylouise Serrato, head of American Citizens Abroad, a Swiss-based organization, has also reported that many Americans are being pushed away from their citizenship due to the act.
“Americans abroad are terrified. We’ve had people pay tens of thousands of dollars in fines,” Serrato said.
“Up to this point, we never heard of anyone renouncing, or if they did, they didn’t talk about it,” said Serrato, adding that “Now, we’re seeing a lot of people speak openly about it and comes to us for information.”
The IRS had in 2011 recorded as many as 1,788 Americans renouncing their US citizenships. The number is a record high since the IRS began publishing such data in 1998. Overall, the IRS records some 1,100 renunciations a year.
An estimate of 6.3 million US citizens live abroad.