75.2 F
Thursday, October 28, 2021

Opinion: IRS automatically treats expats like tax cheats

Latest headlines

New law bans tampon tax in Mexico

The new legislation is being also being called a major victory by several feminist organizations

No new timeline given as Mérida’s paso deprimido is delayed yet again

For the fourth time now, Mérida’s city hall has announced delays in the reopening of Paseo de Montejo’s paso deprimido underpass. 

The story of one of archaeology’s greatest trailblazers, Tatiana Proskouriakoff

Tatiana Proskouriakoff is remembered for laying the foundation for understanding Mayan historical texts and reconstructing the political history of Mayan city-states.

Cocktail party fundraiser for children at Caimede shelter

A cocktail party fundraiser to benefit children under the care of Yucatán's Caimede shelter is being organized...
Yucatán Magazine
Sign up to get our top headlines delivered to your inbox twice a week.
Photo: Getty

The U.S. is one of only two countries in the world (the other is Eritrea) that taxes its citizens regardless of where they live.

That creates a “tax nightmare” for an estimated 9 million American citizens living outside the U.S., a Bloomberg editorial states. Moreover, the U.S. tax system “stinks,” the posting asserts.

American expats don’t necessarily owe the U.S. any tax: They can deduct taxes paid to host countries, which are often higher, or take an exemption. But they have to file returns and disclosures regardless, at a significant cost in accounting fees, nuisance and needless anxiety, writes Andreas Kluth.

“The U.S. proceeds as though any citizen with a foreign bank account were a likely tax evader or money launderer. Citizens with foreign assets must disclose them not only to the IRS but also to the Financial Crimes Enforcement Network,” he writes.

Adding to a “Kafkaesque” and “draconian” tax situation, the Obama-era Foreign Account Tax Compliance Act — intended to fight money laundering and offshore accounts — made things worse for ordinary Americans, encouraging foreign banks from any association with expats. President Trump’s 2017 tax reform made it worse. Inadvertently, the IRS now treats the American owner of a lemonade stand in Belgium like Google, according to the editorial.

At a minimum, the U.S. should simplify the rules for its expats and raise the balance thresholds so middle-income filers are exempt. But the best solution would be even simpler: Follow the example set by almost every other economy (did I mention Eritrea?) and base the personal income tax on residency, not citizenship,” writes Kluth.

Read the entire story here.

- Advertisement -
- Advertisement -

More articles

Mexican hotel chain Grupo Posadas files for bankruptcy in US

The measure comes after a failed attempt by Grupo Posadas to restructure the debt it has accumulated over the past year and a half due to the COVID-19 pandemic. 

Giant alebrijes to parade through Mérida this weekend

Alebrijes are brightly colored Mexican folk art sculptures of fantastical mythical creatures. Though originally made only of paper-mâché, wooden variations have also become popular since the 1940s. 

Mérida’s 1st drive-in movie theater promises lots of surprises

Cine To Go and the Forever Circus group will bring the beloved drive-in movie concept to Mérida...

Mayan Train expected to cost over 60 billion more: sources say two new museums are in the talks

The Tren Maya has been part of many controversies, including around 25 appeals against the project. Yet Jiménez Pons Gómez told senators that, according to an UN-Habitat study, the Tren Maya will have a positive impact on the population of the South-Southeast region of the country.

A walk through the Minaret — Moorish and French-style highlight the glamour of the Henequen era

The splendor and flare of the mansions became a symbol of the economic success brought to the state by the “green gold era” — the henequén times, which coincided with the Porfiriato. 

Yucatán’s tourism industry looks to recover lost ground

Authorities in Yucatán are hoping that Mérida's upcoming Tianguis Turístico will help the battered tourism industry get back on its feet. 

Mérida to get a new hospital to replace the 115-year-old O’Horán

Mérida’s Augusto O’Horán hospital is one of Yucatán's largest and most important public medical facilities. Photo: Courtesy Mérida...

The ambition, power, and downfall of the great Calakmul

Calakmul is an ancient Mayan city found deep in the jungle of the southeastern Mexican state of Campeche, near the border with Guatemala.

Recoveries improve as daily COVID cases drop below 100

SSY doctors deliver Sunday's coronavirus briefing. Photo: Facebook / Yucatán government Daily coronavirus infections and hospital admissions dropped...

Yucatán COVID cases plunge 33% as officials hint at green light

The head of the Yucatán health ministry said the state is on a path to a green light on the coronavirus alert...