The Empire Strikes Back
by Mark Nestmann: Who’s
Protecting Your Privacy Online? No One… Except You!
Since the United
States taxes its citizens, no matter where they live, the only way
for a U.S. citizen to eliminate U.S. tax liability is to give up
U.S. citizenship. The only way for U.S. permanent residents to achieve
this goal is to give up their green card. This process is called
expatriation. For a primer on expatriation basics, click here.
If you expatriate,
the agency youll need to deal with is the Department of State.
The process is relatively simple. You make an appointment at the
consular section of whatever embassy youve chosen. At the
appointed time, you show up, sign some forms, turn in your passport,
and depart. Once you receive your certificate of loss of U.S.
nationality (CLN), youre done.
the procedure is often much more convoluted than this. To begin
with, each consulate has its own rules for expatriation. Some consulates
require as many as three visits, up to one month apart, in order
for you to complete the expatriation process. One consular official
told me this is required, so the prospective renunciant can
reflect on the profound consequences of giving up U.S. citizenship
me! Anyone with the balls to show up for an appointment at the consulate
with the intention of giving up their U.S. citizenship surely understands
the consequences of the act. I can understand a one-day cooling
off period, as imposed by one consulate to which we often
refer clients. But to extend the process over a two month period
Department initiative is charge a $450 fee to process your expatriation.
This began last year, to help defray a portion of the total
cost to the U.S. Government of documenting the renunciation of citizenship.
The State Department says this fee represents less than 25% of the
actual cost of providing this very costly service. That
may be true, but a great deal of those costs are self-imposed by
the State Department. Simply streamlining the procedure so that
only a single brief visit is necessary would cut costs considerably.
of pushback from the State Department has come in increasingly
long waiting periods to obtain a CLN. In most cases, you need this
document in order to obtain a visa to re-enter the United States
on your non-U.S. passport. (If you have a passport from a visa-waiver
country, you wont need to apply for a visa to re-enter the
United States. Without a CLN on file, though, you may need to present
proof that youve started the expatriation process.)
are now advising us that our clients should be prepared to wait
up to six months before receiving their CLN. In practice, it doesnt
take as long; one client got their CLN after only a three-week wait.
I had hoped (in vain, it turns out) that new fees might be used
to accelerate the process of issuing CLNs. But the State Department
is, in effect a monopoly. It has no competition in the business
of expatriating U.S. citizens. And so it has zero incentive to improve
for you? The decision to give up U.S. citizenship is a serious one.
You should take this step only after consulting with your family
and professional advisors. But its the only way that U.S.
citizens and long-term residents can eliminate U.S. tax liability
on their non-U.S. income, wherever they live. And its a tax
avoidance option that may eventually be foreclosed by Congress.
with permission from The Sovereign
Mark Nestmann is a journalist with more than 20
years of investigative experience and is a charter member of The
Sovereign Society’s Council of Experts. He has authored over a dozen
books and many additional reports on wealth preservation, privacy
and offshore investing. Mark serves as president of his own international
consulting firm, The Nestmann Group, Ltd. The Nestmann Group provides
international wealth preservation services for high-net worth individuals.
Mark is an Associate Member of the American Bar Association (member
of subcommittee on Foreign Activities of U.S. Taxpayers, Committee
on Taxation) and member of the Society of Professional Journalists.
In 2005, he was awarded a Masters of Laws (LL.M) degree in international
tax law at the Vienna (Austria) University of Economics and Business
© 2011 Mark
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