An American social worker is afraid to live a normal life in New Zealand because of U.S. tax rules

The entire situation is so stressful and confusing that I have often thought about  renouncing my citizenship. That seems like the most straightforward solution to lead a normal life abroad. I could save and invest and plan for my future like any other citizen. But I have deep emotional ties to the USA. I'm proud to be an American citizen. I worry for the future as an only child what would happen to my parents, who live in the United States, if I were to renounce my citizenship and they needed me to come home to care for them. It seems unfair that none of my expatriate friends from other nations have to worry about things like this.

— Tiffani Ruffle

Dear Congress, 

I was born and raised in New York. I moved to New Zealand in my 20s on a working holiday visa. I had never intended on staying. However, I met and fell in love with a kiwi man and have slowly been building a life here over several years. 

I am not by any means wealthy. I work in social services helping injured women in the NZ hospital system. The complex U.S. tax laws constantly make me fearful of doing things abroad that I would not have thought twice about at home. If I marry my partner will I drag him into the U.S. tax system? What happens if we buy a home together?

Afraid to save for retirement

I'm fearful of putting funds into the pension here in New Zealand because I have been told this the IRS considers it a PFIC (passive foreign investment company) and will tax it accordingly. This means I have little to no retirement set aside outside of my own savings account because I'm too fearful of what it will mean if I invest in something like a 401k that I would have been able to complete at home without a second thought. 

I make so little money that there has yet to be a point that I need to file an FBAR (a U.S. report of foreign bank and financial accounts). At home I would not have to let the IRS know what I had in my account. I don't understand why I have to do that abroad. 

The entire situation is so stressful and confusing that I have often thought about  renouncing my citizenship. That seems like the most straightforward solution to lead a normal life abroad. I could save and invest and plan for my future like any other citizen. But I have deep emotional ties to the USA. I'm proud to be an American citizen. I worry for the future as an only child what would happen to my parents, who live in the United States, if I were to renounce my citizenship and they needed me to come home to care for them. It seems unfair that none of my expatriate friends from other nations have to worry about things like this. The U.S. system of basic tax obligations on citizenship rather than residence and source is a constant stressor in the back of my mind.

Please end this unfair and unnecessary stress on Americans abroad! Please move the United States to the kind of residence-based taxation already used by every other civilized country in the world. 

Sincerely, 

Tiffani Ruffle