The Peck Group, LC - Tax Law
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Is leaving the country a solution to tax problems?

| Jun 2, 2016 | Corporate & Business Tax |

No one enjoys paying taxes. In fact, it can be upsetting and frustrating to see so much of your money taken away and given to the U.S. government. But does it make you mad enough to want to leave the country?

An increasing amount of people are reportedly saying yes to this question and giving up their citizenship to live in other countries. According to this report in the Washington Post, the number of U.S. expatriates has recently increased sharply and sources have reason to believe the spike is a result of changes to tax laws and penalties.

In recent years, tax laws have changed in some critical ways. For instance, options for avoiding taxes through offshore bank accounts have been shut down thanks to regulations that require foreign banks to submit reports noting which of their clients are U.S. citizens. Banks that do not do this face a hefty penalty.

Further, taxpayers are also being required to complete new forms if they have money in other countries. Failure to do this can lead to a whopping $10,000 fine. If the failure is intentional, the government can make a person either pay a $100,000 fine or hand over half of the amount in the foreign bank account.

The fact that there has been an increase in the number of people renouncing U.S. citizenship that appears to coincide with these drastic tax law changes is certainly interesting. However, it is also noted that simply leaving the country won’t automatically end a person’s tax obligations. People still have to pay taxes on money in the U.S. even when they live abroad, and leaving the country can leave people exposed to exit taxes.

Leaving the country to avoid taxes can be a pretty drastic decision. Rather than pack up and move, you can work to minimize your tax obligations and penalties in other ways. For instance, you can work through tax planning strategies with an attorney to maximize your savings. Discussing these options with a lawyer can help you protect yourself, your money and your rights as a U.S. taxpayer.

We insist that your taxpayer rights are protected and your options are known.

Our services are confidential and are protected under the attorney-client privilege as allowed by law.