American Nightmare: Trapped by Citizenship-Based Taxation
"I have filed as expected every year since 2011 and the accounting fees for reporting are in the thousands every year - just to prove I do not owe US tax!"
- Suzanne Herman
Dear Congress,
I was born in Florida to two immigrant parents. My parents then divorced and when I was 12 years old my mother brought me and my two siblings to Canada, where I live today.
My “OMG” moment came in 2011 after living in Canada for nearly 50 years, and since childhood. Many refer to the realization that emigrating from the US does not mean the end of their US tax obligations as their “OMG” moment. I panicked and talked to a US tax lawyer. Of course he had to tell me that I must comply or the IRS may come knocking and take away everything I had saved for over my entire adult life.
It’s hard to write this as coming to terms with being a US taxpayer with no US income was and continues to be devastating both emotionally and financially. I had always been proud of my US citizenship—little did I know it would cause me such harm, and continue to do so to this day. No other country does this to its emigrant citizens. This is not the “freedom” the United States champions when its tax code prevents its citizens from truly thriving if they leave the United States. To think I would owe tax and have to report to the United States like an overseas tax evader is absolutely outrageous and terrifying.
Not wanting to be forever looking over my shoulder waiting for the IRS to pounce, I entered an IRS amnesty program designed for willful tax evaders as it was really the only program available at the time. The IRS has since recognized that one might not know to file because no other free country taxes its non-resident citizens on income where they live and work! The accounting fees and tax associated with this initial filing was well over CD$100,000. This tax was primarily on the sale of a home I sold in 2008, exempt in Canada but not the US! But my nightmare did not end there when the 2017 Tax Cuts and Jobs Act retroactively taxed my small, solely Canadian-operated company, resulting in triple taxation by the US and Canadian governments. These taxes have severely cut into my retirement savings. I have reached out to my Member of Congress and he was only interested in hearing my story if it would help him repeal the Foreign Account Tax Compliance Act that Congress passed in 2010.
I have filed every year since 2011 and the accounting fees for this reporting are in the thousands every year - just to prove I do not owe US tax! That does not include the loss in potential retirement savings when I am forced to avoid Canadian retirement savings plans that result in US tax.
Citizenship-Based Taxation is severely hurting normal people who for love, family and career choose to live in other countries. It must end for Americans to feel truly free to pursue their dreams and live normal lives anywhere they choose to make home. You are squandering your best ambassadors when we are forced to say goodbye to America because of unjust tax laws that should be in the dustbin of history. Please do the right thing for your citizens and end Citizenship-Based Taxation and the fiscal prison it creates.
Sincerely,
Suzanne Herman
