From Dreams of Foreign Service to the Dilemma of Dual Taxation

“I once dreamed of serving in the U.S. Foreign Service, but now I'm considering renouncing my citizenship in order to be able to live a normal life abroad."

-Anna from Massachusetts and Sweden

Dear Congress, 

I am originally from - and vote in - Massachusetts. I accidentally emigrated to Sweden 15 years ago in my quest to gain the knowledge and experience to achieve my dream of becoming a Foreign Service Officer. Today, I have a new dream: to invest my income like a local, and to run an international non-profit based in Sweden. 

I can't invest locally in tax-advantaged accounts because the banks won't let me. Even if they did, it would mean extensive and expensive reporting requirements to the IRS. The same applies with purchasing funds in regular brokerage accounts. My only option would be the risky approach of single stocks in a regular brokerage account. Bonus: the tax treaty between the US and Sweden does not recognise each other's modern tax advantaged accounts as being opaque vs transparent, so investing in the US doesn't solve this issue - assuming you find a broker where you can invest in USD who is fine with you living abroad (there aren’t many). Plus it would introduce a new downside due to exchange fees and rate fluctuation. Not ideal when you live your life in a different currency. 

I can't run my non-profit due to the high tax reporting compliance costs and the risks of enormous penalties if it's not done correctly. The IRS expects this paperwork to take 40+ hours to complete for someone who knows what they are doing. Even top experts can't agree on how to complete it. As a non-profit, we by definition do not have money to throw at this problem. 

Despite the fact that I once longed to serve in the US Foreign Service, I'm increasingly convinced my only option to live a normal financial and professional life is to renounce my American citizenship. The idea gets less heart-wrenching with every passing year. 

You managed to get rid of the Windfall Protection for social security. Now please end double taxation and the other esoteric reporting requirements that come with citizenship-based taxation! Stop penalizing Americans who choose to live abroad!  

Sincerely,

Anna from Massachusetts and Sweden