Alex Manasuev featured in Advo​cateDai​ly​.com — Decision to renounce U.S. citizenship should not be tax-based

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Author(s): Advo​cateDai​ly​.com staff
The fol­low­ing arti­cle first appeared in Advo​cateDai​ly​.com,  Novem­ber 22, 2018.For Amer­i­can cit­i­zens and Green card hold­ers liv­ing in Cana­da, the over­whelm­ing nature of com­ply­ing with tax fil­ing require­ments may lead some to con­sid­er the step of renounc­ing their cit­i­zen­ship — but, as Oakville-based U.S. tax attor­ney (NY, DC) Alex­ey Man­a­suev tells Advo​cateDai​ly​.com, this deci­sion should not be based sole­ly on tax con­cerns.

As Man­a­suev, prin­ci­pal of U.S. Tax IQ explains, although the require­ment for expats to file a U.S. tax return has exist­ed for years, the changes brought by recent Amer­i­can tax reform, includ­ing the For­eign Account Tax Com­pli­ance Act (FATCA) imple­ment­ed in 2014 and the Tax Cuts and Jobs Act, enact­ed in Decem­ber 2017, have com­pli­cat­ed the sit­u­a­tion for many indi­vid­u­als.

“There has been a much high­er aware­ness as to the U.S. tax fil­ing and report­ing and dis­clo­sure oblig­a­tions that Amer­i­can expats have while they live out­side of the Unit­ed States. The IRS and the U.S. gov­ern­ment are enforc­ing the laws that have been in exis­tence for a long time. The new law does not make it eas­i­er. This may have caught many peo­ple by sur­prise. And there has been a huge com­pli­ance ini­tia­tive — peo­ple were using the off­shore vol­un­tary dis­clo­sure pro­gram until its recent clo­sure, and the still exist­ing IRS amnesty pro­grams, to become com­pli­ant,” he says.

Even in sit­u­a­tions where there may be no addi­tion­al tax to pay, Man­a­suev says all U.S. cit­i­zens or Green card hold­ers may be required to file a U.S. tax return.

“That return is required to include all income from any sources, that means world­wide income, and not only lim­it­ed to U.S. source income. Once you report that income, the for­eign tax cred­it usu­al­ly takes care of dou­ble tax­a­tion, and there is rarely any tax owed.”

In addi­tion, says Man­a­suev, any Amer­i­can, whether they live in the Unit­ed States or else­where, is required to dis­close their for­eign bank accounts .…To request full arti­cle please con­tact us Con­tact Us

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