I cam upon a news article today that could have implications for Filipino Americans, particularly people who have dual citizenship. It is about how the IRS is handling Dual Citizens. Could this affect you?
Filipino-Americans are now finding out much to their chagrin that maintaining American citizenship is becoming more complicated and expensive. In 2010, more than 1,500 people gave up their US citizenships, and those suspected of doing so for the sole purpose of avoiding taxes are barred from re-entering the US under a little known provision in immigration reform called the “Reed Amendment,” which was enacted in 1996. Not surprisingly, the new taxation program has generated a lot of controversy, not to mention fear, from American expats who have become naturalized citizens in their adopted countries. They resist what they call “double taxation” because they have been paying taxes in their adopted countries and so over the years, have not been filing US federal income tax returns. Even people who were born elsewhere, have never set foot and have never worked anywhere in the US – are considered American citizens simply because one of their parents happens to be a US citizen, and are therefore subject to the tax provisions of the IRS and required to file US taxes and disclosures. The US has income tax treaties with more than 42 countries – and the IRS can ferret out information on US citizens living in those countries and get a list of persons who have not been filing their income tax returns. Tax delinquents who returned to the US after living abroad for so many years found themselves not only swamped by tax assessments and penalties – they also had to pay fees far exceeding the original taxes they owed with their properties seized.
It is said that in this world, only two things are certain: death and taxation. For US citizens, the latter is turning out to be a nightmare. Worse for some people, they feel it is better to die than go to jail for tax evasion.
Will this affect you?