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Posted by Harlan Lunsford on June 4, 2006, 12:54 am
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Andy wrote:
>> Moderator:
>> Harlan, mi amigo, it has been the law for many years. The
>> IRS gets him/her if and when he/she returns to the United
>> States. While they are waiting, they freeze any assets
>> they can find.
> Andy writes:
>
> I found this layman's explanation at a googled website and
> thought it might add clarity here.
>
> ************** START OF CUT AND PASTE ***********************
>
> A 1996 anti-expatriation law inspired by the Forbes article
> asserts limited U.S. tax jurisdiction for a period of 10
> years over persons who renounce their U.S. citizenship "with
> the principal purpose of avoiding U.S. taxes." Also covered
> by this law are permanent resident aliens ("green card"
> holders) or anyone else who has resided in the United States
> for any eight of the preceding 15 years.
>
> For the purposes of this law, tax avoidance is presumed to
> be the true purpose if, at the time of expatriation, an
> expatriate's net worth exceeds US$552,000 or he or she pays
> an annual tax bill exceeding US$110,000, figures that are
> indexed for inflation annually. However, with proper
> planning, it is relatively easy to avoid U.S. taxes during
> this 10-year period.
>
> The lengths to which politicians will go to penalize
> expatriates is demonstrated by a never-enforced provision of
> U.S. law, also enacted in 1996, that permits the Attorney
> General to bar from returning to the United States anyone
> who renounces their U.S. citizenship to avoid U.S. taxes.
> In this manner, Congress lumped individuals exercising their
> legal right to avoid taxes with narcotics traffickers and
> terrorists.
>
> *****************END OF CUT AND PASTE ******************************
>
> Andy comments:
>
> So, if a lot of Mexican green card holders work in the US
> for 8 years and goes back to Mexico, our tax law says they
> have to pay US taxes for the next 10 years..... I wonder if
> anybody realizes that, or is it just another law that the US
> will forget about to accomodate our Mexican neighbors ......
>
> Also, note that the 1996 law put a NUMBER on the net worth .
> If your net worth when you leave is less than $552,000 then
> you do NOT have to pay US taxes after you renounce your
> citizenship.....
Whew! thanks for that, Andy. At least I was right as to
the 10 year rule applying to the majority of people. Like
me. IF I ever decided to emigrate over to the Land of Light
where the streams flow clear and the whiskey if the best.
ChEAr$,
Harlan Lunsford, EA n LA
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