| IRS Loses
Bid - To Track Overseas Tax-Dodgers |
| Second
Passport & Economic Citizenship |
| The Internal
Revenue Service recently decided to be clever. Their theory was to
check an expatriates' tax status when the expat went into a U.S. embassy
to renew his or her U.S. passport. However, unbeknownst to the IRS,
the expats are no longer renewing their U.S. passports. What the
expatriates are now doing is getting second passports from another nation
before their U.S. passport expires.
Thus far the
IRS has decided to target expatriates in the UK, Canada, Mexico, Germany,
Italy, Hong Kong, Australia, Israel and Switzerland. According to census
data and estimates of unfiled tax returns and unpaid tax, more tax is being
avoided by Americans living in those countries than elsewhere. |
|
|
|
|
|
| Some 200,000
US expatriates live in London alone, making the UK home to one of the largest
American communities outside the US. The US and Libya are the only
countries brutal enough to try to tax their citizens wherever they live
on the planet. Despite this lowly practice and the decidedly bad
company they are keeping, the IRS knows that it isn't able to confiscate
the several billion dollars a year in avoided tax from the millions of
fleeing Americans worldwide who are no longer willing to file their US
income tax returns.
US citizens
have to provide their social security number when renewing their passports,
making cross-checks with tax returns relatively easy. With a second
passport from a tax haven country, renewal of the U.S. passport becomes
unnecessary. There is no record of Americans abroad because there is no
way to track them unless they apply for a passport renewal. There
is no law against having dual citizenship and there is no law against traveling
on another passport. One can remain living as an expatriate in most countries
indefinitely by using their second passport as their travel document.
One expatriate
we talked to is living in the Dominican Republic and running a cigar company
along with a tobacco plantation. |
|
|
| He has a passport
from Grenada, which is a tax haven nation that does not tax on foreign
source income.
His plantation
and cigar company are registered as a Panamanian Offshore Corporation.
He has dropped off of the radar. He travels to Europe and the rest
of the Caribbean on his second passport and lives a life many of us would
envy. "Why should I renounce my U.S. citizenship?" he asked. "I would
just draw attention to myself. The Dominicanos are happy with the
Grenada passport, and they are happy with me. I provide jobs for
over two dozen locals. If I ever wanted to slip back inside of the U.S.
I could do so through Canada or Mexico without a problem."
He is just
one of a number of Americans who are seeking to escape the increasingly
intolerable conditions inside the United States. Those escaping want to
go where there is a ‘better quality of life’ and where there is
‘much less government intervention’ into their lives. |
|
|
Offshore
Resources Gallery
|
|
|
| America, for
many people has become intolerable. The taxes burdensome, the crime overwhelming,
the violence rife, the ambiance impoverished and the future bleak. It is
becoming a has-been nation with an increasingly warlike condition in it's
streets. When expatriates are asked why they are leaving they cite social
unrest, fear of violence, racial tensions, and the decline of moral standards
in America as reasons for interest in settling elsewhere.
But there
is also another factor: opportunity. For the first time in America's
history it is easier to make more money outside of America than it is to
make money inside of America. The new expatriates are going to smaller
economies, that are moving faster. They are also going to peaceful pristine
nations where real estate is still a bargain.
In America
most people now feel there is no longer any hope of ever staying financially
even, let alone getting financially ahead. However, more than any other
reason for those who are going, is the simplest yet most enigmatic reason
of all; people now want to have a life. Something that is becoming less
and less possible in America. Sane Americans want out and it is apparent
that they are getting out in record numbers. |
|
|
| Is the
U.S. government going to shut the doors locking Americans in? Write legislation
that could prevent Americans from leaving? Make American a prison?
It would be a very bad policy and to try to do so would cause a panic that
could inspire a stampede. Nonetheless expatriates and those considering
becoming expatriates are advised not to delay in taking the precaution
of getting a second passport. Don't wait for the last minute rush.
If things turn bad they could turn bad overnight.
While the U.S.
may not yet be prepared to go as far as preventing Americans from leaving
there is little doubt that they do want to confiscate your money before
you manage to flee. Although estimates of the level of avoided tax vary
considerably, the IRS had recently conducted a study based on information
from 1,000 overseas U.S. passport renewals. Of the 1,000 people contacted,
600 replied, and only 83 of the 600 had filed a tax return. More
and more Americans are moving abroad and opening businesses abroad. The
U.S. embassies have no way to know of their whereabouts unless they make
their whereabouts known by contacting the U.S. embassy for a passport renewal.
Once a fleeing American has a foreign passport they drop off of the radar
screen. The 1,000 people contacted by the IRS only represented individuals
who had made their existence known by trying to renew a U.S. passport or
by registering in some way with a U.S. agency abroad. Bad idea.
It is doubtful
that any government agency can keep track of every American who chooses
to escape. Keeping a low profile is the key to living well for the
long term. One can live indefinitely in a score of countries with a second
passport. Getting a second passport is something that should not be delayed
until there is a moment of crisis. It is probable that there will be a
moment of crisis. One has only to read their newspaper to feel the pulse
of conditions inside the United States. Things are going to turn ugly.
Getting a second passport in a moment of crisis is many time more difficult
than getting one in a calm organized fashion. If you go about it
the right way, a second passport is as easy to acquire as a bank account.
Everyone should insure their long term survival with a second passport.
In an uncertain world a second passport should be part of everyone's survival
portfolio Don't leave home without one and don't wait for the last
minute rush. |
|
Article
Index ~ Expat Taxes
Articles Index ~ |
