Dual Citizenship with USA - Nasty Surprise!

USADualCitizen

New Member
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3
I'm Irish, born in Ireland, to Irish parents and have lived in Ireland all my my 33 years and am obviously Irish domiciled, resident and ordinarily resident.

I recently found my US passport in my mothers house which was issued when I was a few months old!

My parents had worked in New York for a number of years and had become US citizens before returning to Ireland and having me.

They made me a US citizen so I have dual citizenship with Ireland & USA.

I have spent all of two weeks on holiday in America.

I have become aware of a nasty surprise that America taxes all of its citizens on all worldwide income regardless of their situation.

Further I am supposed to have been filing annual tax returns apparently despite having no American assets or income apparently and may be have to pay thousands to a country that I really have had no connection to.

I am struggling to get a full picture of what my situation is and how to proceed as I haven't been able to find a good tax lawyer/accountant here that is knowledgeable about this.

Would you have any advice of where I can get more reliable information before I decide how to proceed with this?

Thanks.
 

Palerider

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1,349
Is your US passport current, I don't see this as an issue for you, you are domiciled in Ireland and tax resident here, yes uncle Sam does tax its citizens on worldwide income but cannot see how this relates to you.

The time you went there... I bet you went on your Irish passport as well.

You could reach out as they say to a US based accountant for advice.
 

SBarrett

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3,010
Richard Dunn can help you with your taxes. You can email him at
info@taxamerican.com

Being a US citizen and living here is a pain. Your pension tax free lump sum is taxable in the US. You won't be able to open an investment account as brokers won't touch you due to reporting obligations. You have to submit a tax return to the IRS every year. If you are PAYE worker, you shouldn't have any tax due on your income.

Lots of people ignore it too. It's not as if all Americans living over there file tax returns.


Steven
www.bluewaterfp.ie
 

SBarrett

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3,010
Is your US passport current, I don't see this as an issue for you, you are domiciled in Ireland and tax resident here, yes uncle Sam does tax its citizens on worldwide income but cannot see how this relates to you.

The time you went there... I bet you went on your Irish passport as well.

You could reach out as they say to a US based accountant for advice.

Depends on how compliant he wants to be. If he's wants to be by the book, it's annual tax returns to the IRS and ticking that box on investment forms when they ask if you are a US citizen....which will probably mean your investment being rejected in Ireland.
 

NoRegretsCoyote

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465
I believe there can be CGT issues as well, but only if you make a very large gain.


It's a pain, but on the other hand you have the unlimited right to travel, work and settle in the USA.

On balance, I could live with the inconvenience.
 

USADualCitizen

New Member
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3
When I went to America I went as a child and assume I went as my American passport would have been valid at that time which was about 28 years ago.

Due to career and family I am extremely unlikely to ever live in America and apparently it's not allowable for American citizens to enter America with an Irish passport and a tourist visa which I intend to do in 2020/21.

At the moment with the way things are I can plead ignorance if anything arises but it's the potential tax liabilities that may arise in the future or difficulties arising the day I try to get a tourist visa and they somehow link my details to my US citizenship.

The fact that they could potentially tax my future tax free lump sum pension is reason enough to consider renouncing my citizenship while there are potential capital gains liabilities.

I am looking to get a full understanding of the pros and cons before starting the renouncement process (and tipping my hand), which will cost approximately $3,000 I believe.
 

Bronte

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13,248
........ lose it again!

Like Manuel in Fawlty Towers ... you know naaaaaaaaaaawthing.
This is clearly the solution here. There is no way the Americans can trace someone born there 33 years ago to you. Nor would they want to, never mind be looking for you.
 

Gordon Gekko

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3,531
There is a trade-off. There are advantages to having a US passport, although even that sentiment is a bit of a throwback to a time when Ireland was a basket-case and one might be forced to pursue the American Dream.

As an aside, brokers will take Irish resident US citizens on board.

Generally there’ll be little or no US income tax payable, but there is a compliance cost. And there are other taxes to be concerned about. A non-compliant individual can regularise the position by completing the Streamlined Process; this essentially involves submitting 3 years of returns and then remaining compliant.

Personally, I would give up a US passport if I had one. The negatives outweigh the positives. We no longer live in the Ireland of Far & Away or The Field!
 

hippy1975

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Messages
271
Agree with the last post re: negatives outweighing positives if you don't intend to live there. And I wouldn't be so sure of it never being traced, there is more and more automatic exchange of information between tax authorities all the time, and it's moving beyond reporting only non-compliant people/entities into compliant ones as well. While I wouldn't lose sleep over it, I can see why you might want it sorted. Has made me think of someone I know who I should make aware of this too, born in the states to irish parents and has lived here since a baby and I am certain she won't be aware of this, so thanks for the heads up OP.
 

jpd

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1,626
Renouncing your US passport & nationality is not free! I believe it can cost a few thousand euro, even before counting any back taxes that may be due and accountant's fees for compiling returns. US tax returns are fiendishly complicated
 

EmmDee

Registered User
Messages
75
Generally there’ll be little or no US income tax payable, but there is a compliance cost. And there are other taxes to be concerned about. A non-compliant individual can regularise the position by completing the Streamlined Process; this essentially involves submitting 3 years of returns and then remaining compliant.
US citizens pay tax on their worldwide earnings. So income in Ireland would be subject to US tax. This could be offset against Irish tax under the tax treaty but in effect you'll pay the higher of the two. There could also be penalties for not declaring previously

On the plus side - you get to vote in the next general election :)
 

Gordon Gekko

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3,531
US citizens pay tax on their worldwide earnings. So income in Ireland would be subject to US tax. This could be offset against Irish tax under the tax treaty but in effect you'll pay the higher of the two. There could also be penalties for not declaring previously

On the plus side - you get to vote in the next general election :)
And nearly always the Irish tax is higher so it’s the relevant piece.
 

Setanta12

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1,060
US citizens pay tax on their worldwide earnings. So income in Ireland would be subject to US tax. This could be offset against Irish tax under the tax treaty but in effect you'll pay the higher of the two.
Don't you mean that the Irish tax is offset against the US liability - Irish taxman gets first bite of the cherry here!
 

Fergal19

Registered User
Messages
19
its generally down to the DTA's between the countries. Here the DTA's will more than likely give primary taxing rights to Ireland. Also DTA's generally give taxing rights to the country where the income is sourced. Good aul Ireland with its high rates generally mean no incremental tax in the other jurisdiction.

Still have all the compliance issues though!
 
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