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A local lemon.
09/09/2023

A local lemon.

09/09/2023
12/12/2020

A Letter From 9 Million U.S. Expats to Janet Yellen
The next Treasury secretary could make the lives of millions of Americans easier at no cost at all.
By Andreas Kluth
December 11, 2020, 6:00 AM EST

Dear Janet Yellen: Congratulations! You’re probably the next Treasury secretary of the U.S. That’ll throw you into daunting policy cauldrons — from financing America’s massive deficits to managing China and taming the tax code. With so much in your inbox, we urge you not to forget about one large group of Americans: us.

We’re U.S. expats, and there are 9 million of us. If we were a state, we’d be the eleventh-largest. And we’re suffering from a problem that you can fix.

We ended up abroad because we got a job in Canada, married someone in France or retired in New Zealand. For others among us, “abroad” is actually home, because we’re “accidental Americans” — we were born in the U.S. but never lived there.

No matter how we ended up with U.S. passports, all of us are subject to American taxation, as well as annual bank and asset reporting requirements so onerous and complex that many experts don’t fully understand them. And that’s just the start of our troubles, as we’ve tried to explain before.

The U.S. is the only country in the world that practices citizenship-based taxation. All other nations tax individuals based on their residence. OK, Eritrea also taxes its diaspora, but that’s not exactly the same thing.

We certainly don’t live abroad to avoid taxes. After all, we already pay tax in our countries of residence, which tend to have higher rates than the U.S. We can take these foreign taxes as a credit on our U.S. returns, so most of us never owe anything to the Internal Revenue Service. But that makes the huge compliance burdens, and the Draconian penalties for innocent mistakes, all the more unnecessary.

Many of us can’t lead normal financial lives because we’re snared in two incompatible tax systems simultaneously. We can’t invest or save for retirement like our neighbors or other Americans because either the U.S. or our country of residence won’t recognize the other nation’s financial products and rules. We can’t even open bank or brokerage accounts, because financial institutions won’t take us.

Many of us escape by renouncing our U.S. citizenship. But the U.S. has been making that more expensive and difficult in recent years. And most of us would hate to give up our nationality anyway.

If we had representation in Congress as a bloc, this problem would have been solved long ago. But we don’t. Instead, we vote in the U.S. state where we lived most recently. And our representatives and senators don’t think listening to our concerns can help them get re-elected. So while a legislative fix is our preferred option, we’re not holding our breaths.

That’s where you come in. As Treasury secretary, you will oversee the two bureaus to which we expats must file reports, the IRS and the Financial Crimes Enforcement Network (doesn’t that name say it all).

There are simple tweaks you could make that would cost the U.S. nothing in lost revenue, save you a packet in enforcement expense and make our lives easier. The options are laid out in an essay I commend to everyone on your staff: “A Simple Regulatory Fix for Citizenship Taxation,” by John Richardson, Karen Alpert and Laura Snyder.

One option is to change the rules on particular compliance nightmares that have become obsolete. Here’s just one example.

In the 1980s, the U.S. adopted harsh rules to discourage Americans from deferring income in overseas finance vehicles (called passive foreign investment companies) that weren’t required to distribute income and gains as they accrued. But that was before the international boom in mutual funds, which are also considered PFICs. Nowadays, U.S. expats often end up owning these without even knowing it — for example, if they’re automatically enrolled in a retirement scheme by their overseas employer.

The U.S. taxation of such PFICs — that is, plain-vanilla but foreign mutual funds — is ruinous. Moreover, the reporting requirements are so Kafkaesque that many professional accountants refuse to take clients who own even one. And yet, in most developed countries, mutual funds are regulated almost exactly like their U.S. analogs and must also distribute all income and gains.

At a stroke, your Treasury could change the regulations to exempt an entire category of funds from PFIC reporting, starting with these run-of-the-mill retail investments. In the same way, you could tweak dozens of other nonsensical rules.

But there’s an even simpler step you could take. Contrary to lore, there’s no U.S. statute that ties U.S. nationality to tax liability. Instead, the Treasury established that link in past regulations. This means you, Dr. Yellen, can break the link again.

Our proposal — as laid out in detail by Richardson, Alpert and Snyder — is that you introduce a new category of taxpayers, in addition to the many you already have. It could be called “qualified nonresidents,” and would include U.S. citizens who live permanently in another country and pay taxes there as though they were its nationals.

These qualified nonresidents would be exempt from filing returns to the IRS and FinCEN, and from paying taxes on any income that’s not sourced in the U.S. They already don’t owe anything, so the revenue loss would be close to zero. Moreover, the IRS could divert its own resources from this complex and unprofitable enforcement area to others that are more worthwhile.

This change would align American taxation of individuals with the systems of all other developed countries. It would free us expats to live, earn, save and invest as other people do. And whenever any of us move back to the U.S., we’re yours again. Never would it have cost so little to help so many with such negligible fuss. Please consider it.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Andreas Kluth at [email protected]

To contact the editor responsible for this story:
James Boxell at [email protected]

16/11/2020

Quite long but full of info:
Opening Question

What should be on my Must Do Before I Leave List? I mean other than the obvious like pack, get rid of possessions, etc. Assuming you are at the T minus 30 day or maybe the T minus 2 week point.
1. "Port" my phone number something something (no idea what this is but need to figure it out). Also get phone "unlocked" (not sure what this means either) for some reason.
2. Open Schwab account or commit to banking procedure. Consolidate/cancel all other bank accounts, credit cards, etc?
3. Arrange to cancel my staggeringly expensive US health insurance for the day I leave. YAY!
4. Get signed up for a VPN? Maybe? My apartment comes with wifi and utilities included so not sure how the VPN works.
5...?

Comments


consider getting an iPlum international phone no. (US number, answer anywhere in the world on your mobile phone through the app. Get a US Global Mail US mailing address and switch all of your US addresses.
• Reply • • 15m

A library card for every household member. Not only access to ebooks but also shows, TV and movies.
• Reply • • 2h

Don't get rid of your credit cards. Always good to have back up from different countries, plus reasons to use it like buying flights etc.. and hopefully you have a good one earning you some rewards. Credit cards with rewards like the US don't exist here, well they exist but you just cannot compare the "rewards" 🤣.
• Reply • • 2h • Edited

Register as an overseas voter.
• Reply • • 2h

1. You will probably need to use texting for some US accounts, so you port your phone to something lower cost. Many people use Google Voice, I find iPlum to be a better choice although it costs €5/month. If you can make all your calls with WhatsApp, you don't need something with voice but you will still require something with texting for banks, etc. To unlock your phone, contact your mobile provider and find out what the process is for your phone. You will need to have any contract on the device fully paid.
2. You don't need a new bank account, although Schwab has some benefits. You will want a US address for any bank accounts and credit cards. Keep your credit cards if you will use them, credit cards are different.
3. Don't cancel your health insurance until you are in Portugal. Given the current state of flux regarding travel, it's best to wait and pay an extra month, if necessary, to make sure you are covered until you leave.
4. A VPN can be useful. Don't get a free one. There are discounts from a lot of sites for the major providers.
• Reply • • 3h • Edited

please can you explain why you found iPlum to be better?
• Reply • • 3h

If you can "lose" your drivers license, get a replacement so you can give one to the people here and have one if you visit back home.
• Reply • • 2h

Exactly
• Reply • • 2h

Oh, thank you!!!
• Reply • • 1h

Take a back and front screen shot of your passport, bank cards, ID and any other important papers and email them to yourself and a trusted family member/friend so in case they get lost or stolen you will have access to the numbers.
• Reply • • 1h

good suggestion! I set up an album in my Picture folder with all of our travel and legal documents. I also scanned all documents as PDFs and have them in the cloud and on my phone.
• Reply • • 1h

Before cancelling health insurance be certain to have a plan in place for coverage when you visit U.S., unless you don’t plan to ever visit. As you know, one mishap and hospitalization in U.S. uninsured would be a financial nightmare.
• Reply • • 2h

would travel insurance be the best option for visiting USA?
• Reply • • 2h

Travel insurance that includes the U.S. is extremely expensive. It is nothing like travel insurance for traveling from U.S. to other countries. Most travel policies from Europe exclude U.S., you can add U.S. and triple or quadruple the c… See More
• Reply • • 1h

Make a copy of your medical record, test results, medications just in case.
• Reply • • 3h

- yes! Bring certificate of coverage and documentation of continuous prior US coverage - so when you sign up for private insurance (req for SEF) they will waive things like waiting periods and cover pre-existing conditions. Very important!
• Reply • • 3h

Smile all the way to the airport.
• Reply • • 3h

Medical records
• Reply • • 1h

Drivers License - if you plan to drive in PT, you'll need to eventually exchange your DL (or take the class/test in PT if you wait too long). To do this, it requires documentation from the US, so do this before you go. (Plenty of info in the files ab… See More
• Reply • • 2h

Regarding VPNs, as has some have mentioned you can find types that you can install on different devices. I went a different route where I installed it on a wireless router. Then it applies to all of my devices (phone, iPad, AppleTV, etc). However you can’t install it on the router your internet provider has for you so to get around this I bought my own router, installed Express VPN on it and connected it to an output port on the providers router. So I now have two wireless routers, one with VPN and one without so I can choose which to connect to based on my needs.
• Reply • • 17m

I don't think you need a VPN - are you hiding out from someone?
• Reply • • 11m
Write a reply...


A six month supply of any prescription meds.
• Reply • • 57m

We set up Traveling Mailbox in the US so we could get mail and have a US Address.
We set up the VPN in Portugal.
• Reply • • 1h

Allison - what Jeff said! Re #4 - you can buy a VPN anytime. It’s basically software that disguises where you are connecting from. So that you can access US media content from Portugal - which otherwise would be blocked. You might also want to order an… See More
• Reply • • 3h


Make sure all your accounts are going to send you online bills. There will be a few stragglers, so find a way to deal with mail. Be sure to give travel advisories to the bank and credit cards, sometimes they only think of trips for 30 or 90 days, that can be a PITA unless you can find a way to "train" them.
• Reply • • 21m

Many (some) investments want a US address - they will close any foreign address accounts
• Reply • • 10m
Write a reply...


Arrange mail service or arrange Traveling Mailbox and get medical records. Bring enough medications and supplements for a few months.
• Reply • • 27m • Edited

On the VPN side, I like to look things up on the internet and with the VPN I can access the US based hits rather than trawling through the Portuguese language sites. Even adding 'english' at the end of my key word search doesn't really get me where I want to be without the VPN. Btw, using the Google search engine/app you can translate websites from Portuguese to English.
Prior to my departure, I loaded my Firestick with the VPN and a variety of streaming apps, my own and those to which family and friends had given me access. I also installed it on a few other devices as the VPN I chose, ExpressVPN, allows for 5 devices. Include in my collection is an old iphone 6 that will be a portable mini computer if I use the WiFi at a cafe or such.
I purchased an inexpensive unlocked dual SIM Android from Amazon prior to departure, but still have it on airplane mode until I figure out a local carrier and learn how to use the dual SIM function 😄. Be warned, some US phone carriers will terminate your US phone number after a period of time, this has been covered in other threads here.
Between WhatsApp and the FB Messenger video function I'm in touch with friends and family.
• Reply • • 38m

Make sure that your house in PT have the electricity, water, gas and internet connected. 🙂
• Reply • • 45m

Do NOT port your phone number.
Get a Google Voice number, but do NOT port it to your cell.
You will be able to receive texts and voicemails via your computer from anywhere in the world.
• Reply • • 57m

Google Voice US phone number. Get on the wait list for Revolut and order their debit card (assuming they still have a wait list) if you're planning to use it. Also Venmo if you or your friends use it back home since you can use it here but can't get it here...
• Reply • • 2h • Edited

i have a newbie question about google voice. Can I have google voice number and a number attached to a sim on the same phone?
• Reply • • 1h

I don't believe the GV number is tied to your sim in any way, it's basically an app (like WhatsApp, that you should also download BTW) that allows you to receive texts and calls. But you have to be in the US to sign up...same with Venmo which I just added to my first reply.
• Reply • • 1h • Edited

ok so I can have a google voice number and a regular number (tied to a sim) on the same phone
• Reply • • 1h

yes. They are totally separate numbers. It doesn't work for everything (it isn't recognized by all websites for security reasons) but most, and it's free with super cheap long distance rates. Definitely great for the unavailable calls or texts back to the US or other countries if you have a good Wifi signal! Boa sorte!
• Reply • • 1h
Write a reply...


Get a credit card with no foreign transaction fees like a Capital One card.
• Reply • • 2h

Do not cancel your health insurance until you are set with private insurance here so you can avoid paying for pre-existing conditions. Most companies offer continuous coverage with no exclusions if you show coverage.
• Reply • • 2h

For my phone, I have t-Mobile which is great internationally. I am going to buy the iPhone SE which has 2 sim slots (one card, one electronic) — meaning 1 phone with capacity for 2 different numbers. Sure beats walking around with 2 phones (which I have done before).
I still don’t know how I am going to have my mail handled / forwarded. Seems that’s very important in the exit process.
I have the TransferWise app and may stick with that for the ease of transferring $ to € . I thought about the Charles Schwab account but I am reluctant to complicate my financial life; maybe I need to hear its benefits again.
• Reply • • 2h

I signed us up for Traveling Mailbox (search this group for discussion about this kind of thing.) I’m glad Ididn’t wait because you must fill out a form and have it notarized. I also got a copy of my drivers license notarized in order to apply for a PT DL.
• Reply • • 2h • Edited

I use Charles Schwab for everything in the US . Don't tell them you're moving away to overseas,
give them your physical address. I don't think funds are guaranteed with transferwise when you transfer dollars to Euros. I'll be buying a house and will need to send a large amount period I cannot trust the transferwise even though I do use them regularly for smaller amounts.
Be absolutely certain your new phone is unlocked. unlocked.
• Reply • • 2h

You should personally contact Transferwise for large transfers. I've heard people do this quite successfully and they are likely to give a better rate than any bank(s). Some PT banks charge incoming funds fees, which are obviated by using Transferwise's technology
• Reply • • 1m
Write a reply...


Here is a good review on VPNs. I first went with Nord but it didn’t work for me so I am going to give SurfShark a try.
https://www.cnet.com/.../best-vpn-service-of-2020.../
• Reply • • 3h • Edited

google chrome offers a fee VPN extension.
I wouldn’t cancel my medical insurance until you are signed up for private insurance over here… See More
• Reply • • 3h

I use Surfshark and am happy with it.
• Reply • • 2h

Unlocking your phone means that it will be open to be used with other providers. Now you might only be able to use it with your provider. But if you call the customer service they will be able to help you.
A VPN is only needed if you want to stream f… See More
• Reply • • 3h

- also extra level
of security when doing online banking and other sensitive transactions...
• Reply • • 3h

Many banks block every VPN server they can find, or require extra security provisions. I have trouble with Wells Fargo and Bank of America, haven't tried it with Schwab or Capitol One yet.
• Reply • • 2h

02/08/2020

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13/07/2020

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