I wouldn’t normally rely on the BBC to report on such matters, but this is actually a pretty good article on the absurdity of the US tax system and how it affects expatriates – and even those who aren’t American:
Many foreign banks are taking no chances either. They are closing down accounts of anyone who might be an “accidental American”. This could be anyone with an American parent but born outside the US, or people of other nationalities born in the US – like Fabien.
“I live in France, I work in France, my life is in France. I have no link to the United States. My life as a Frenchman is in France,” Fabien tells me through an interpreter. “I don’t even speak English!”
His French father brought him to Europe when he was 18 months’ old – but because he was born in California he is a US citizen and thus subject to Fatca.
His bank demanded he either provide proof he had renounced his US citizenship, or his social security number. He had neither. Renouncing his “accidental” US citizenship is no mean feat, either.
“We have to enter into the American system at the risk of substantial penalties. I have to submit the last five years’ tax returns, but then also the next two years in order to renounce,” he says.
“We’re in a situation where it’s unknown what will happen when we start. I have to have money to be able to pay the expenses to enter into the system, and then I have to pay to renounce.”
To think, popular history would have it that slavery was abolished in the USA in 1865.