Escaping the US

A few weeks ago, the IRS published its quarterly “name and shame” list in the Federal Register. That’s the list federal law requires the agency to maintain of individuals who give up their US citizenship. The official name is “Quarterly Publication of Individuals, Who Have Chosen to Expatriate.”

Whatever you call it, getting on this list makes you an enemy of the state – in an instant, you are blacklisted.

The image of former US citizens living tax-free in some tropical paradise is an irresistible populist target. Rep. Sam Gibbons (D-FL), referring to expatriates, spoke of “the despicable act of renouncing allegiance to the United States.” Rep. Martin Frost (D-TX) supported an “exit tax,” which is now in effect, under President Clinton on the basis of “basic patriotism and basic fairness.” Congressman Neil

Thus, the approximately nine million Americans living overseas often feel like they’re under siege from their own government. But if they expatriate, they become enemies of the state. Not only are they subject to hate-mongering by ignorant politicians, but wealthy expatriates like Eduardo Saverin also face the onerous exit tax.

Don’t Come Back!

Then there’s the matter of being readmitted to the US to visit family, friends, and business associates. Some expatriated Americans can’t obtain visas to the US, even for brief visits. One of our insider sources says this policy stems from “the highest levels” of the Obama administration – perhaps from Obama himself.

But just to make sure expatriates know “who’s the boss,” in 2012, Senators Schumer and Bob Casey (D-PA) introduced legislation to retroactively punish them. The “Expatriation Prevention by Abolishing Tax-Related Incentives for Offshore Tenancy Act,” or Ex-PATRIOT Act, would punish wealthy expatriates by forbidding them from ever reentering the US. The proposal would apply to anyone with a net worth of $2 million or more at the time of expatriation. It would also be retroactive for the 10-year period prior to enactment of the statute.

The Ex-PATRIOT Act didn’t pass in 2012, or in 2013 when Schumer reintroduced it as an amendment to another act. But I wouldn’t be at all surprised if it reappears in 2017. It’s hard to see how someone like Donald Trump, who bashes everything non-US, could oppose this bill. And Hillary Clinton has long slammed corporations that move their base of operations from the US to save on corporate taxes. It’s not a huge jump to conclude that if elected, she’d sign the Schumer-Casey proposal into law.

Think of it this way: If you were in Congress and wanted to get reelected, would you dare to vote against the bill?

The bottom line is, if you expatriate from the United States, you should be mentally prepared never to return. Current policy merely makes it difficult to qualify for a visitor’s visa, but the Ex-PATRIOT Act could make you a permanent exile.

Reprinted with permission from Nestmann.com.

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