US Exit Tax Wrapup in Forbes

[Duncan Frissell]

The current Forbes has a good short article wrapping up the status of the
"taxpatriate" control movement in Congress.

The Health Care Bill that passed in August didn't include an Exit Tax as
previously reported.  What it did contain was a provision that states that
taxpatriates with a net worth of more than $500K who renounce their
citizenship will still be on the hook for ten years for income taxes on
their US source income.  This provision is easily dodged however by tax
planning techniques that assure that the individual involved has no US
source income.  Borrowing and trusts can be substituted for an income stream.

The second provision was in the immigration bill.  It subjects all those
who renounce their US citizenship (for any reason) to a visa requirement
for entry to the US.  State can then deny visas in cases where the expat is
a taxpat.  This applies to new citizens of those OECD countries that have
visa-free entry to the US.  How State will filter recent expats out of the
flow for special treatment is unclear, however.  Nation of birth is shown
on passports, so that might be able to be used.  This gimmick is also
easily dodged by entry into Canada or Mexico with a low profile border
crossing into the US.

Gee, I wish I had enough assets to become a taxpatriate.

DCF

"Vote for the only Swiss Citizen in the Presidential race -- Harry Browne."