Citizenship and Residency

‘Accidental Americans’ ask Trump for independence


By added on 04/07/2018

(Politico) -- President Trump: Let your people go! That’s the message behind a growing campaign led by a group of Americans abroad who call themselves “accidentals,” or people who happened to be born in the United States, and now want to be rid of all obligations tied to the passport.

There is no precise count of how many Americans are “accidental,” which the U.S. State Department does not recognize as an official citizenship status.

But Fabien Lehagre, a Frenchman who heads an advocacy group representing accidentals across Europe, estimates that several million Americans around the world fit into the category. That includes not just people who want to be freed of tax-filing obligations, he says, but also those who want to abandon their passports, but find current costs and bureaucracy attached to the process prohibitive.

Another rallying cry, which is pushing ever more accidental Americans toward the door: The Foreign Accounts Tax Compliance Act (FATCA), a far-reaching law passed by former President Barack Obama that forces foreign banks to disclose all American accounts to U.S. authorities, and subjects Americans abroad to a wide range of restrictions on banking activities.

Lehagre says his aim is nothing less than to convince Trump to ease restrictions on Americans who want to keep the passport, and set free those who want to leave at a minimal cost. Most of the people represented by his group — which counts 570 card-carrying members and has affiliates in Ireland, Italy and Belgium — have minimal, or accidental, ties to the United States.

“The average person in my group is 47 years old and left the U.S. before turning 3,” said Lehagre, leader of the Accidental American Association, which has attracted 570 members since its founding last year. “The great majority of us do not even speak English,” he added.

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So far he’s gotten as far as the European Parliament, where this month a petitions committee will examine a plea for the European Commission, the bloc’s executive arm, to raise the issue with the U.S. government. The French Senate has adopted a resolution supporting Lehagre’s calls. And in April, he convinced French Finance Minister Bruno Le Maire to raise the plight of accidental Americans with U.S. Secretary of State Steve Mnuchin during a trip to the United States.

None of that has so far caught Trump’s attention.

But Lehagre believes he has an angle.

Since FATCA is an Obama-era regulation, he argues, the U.S. president may relish repealing it as he has many other of his predecessor’s laws.

“To the extent that Trump tends to destroy everything Obama did, there could be hope for us,” said Lehagre.

No thanks for the memories

Of the two main issues drawing accidentals together, one goes back centuries, the other is recent. Unlike most countries, the United States requires citizens everywhere to file annual tax returns to the Internal Revenue Service. This grates with the accidentals, who got their citizenship inadvertently through marriage, lineage or birth on U.S. soil, without ever living in America in their adult life.

Many already hire accountants to help with tax returns. But since 2010, they face increasing restrictions on their banking activities, as FATCA threatens foreign banks with hefty fines if they fail to disclose American accounts. That has made Americans abroad persona non grata. According to a 2014 survey by Democrats Abroad, one in six U.S. expats has faced involuntary closure of a bank account.

As a result, accidentals are heading for the exits — and discovering that abandoning a U.S. passport isn’t cheap or easy. Anne, a 57-year-old Belgian who asked for her surname to be withheld, racked up fees of about $50,000 over two years before she could renounce her citizenship formally in December 2016.

Lehagre is undeterred. The accidentals’ resolution heads to the European Parliament on July 4.

“Today, I still do not understand why I had to pay such a large sum,” said Anne, who was born in the United States during a family trip.

The costs included: $26,000 in fees to a New York law firm, $21,000 in back taxes, a $2,350 processing fee to the U.S. Embassy, and other charges for paperwork and travel.

“These are not pleasant memories,” she added.

Deliverance

She’s not the only one trying to leave. In May, U.S. tax authorities announced that another 1,099 citizens had left, in line with increasing departures since FATCA was announced.

The accidentals’ cause could fit into larger negotiations between Europe and the U.S. over tax cooperation. One hundred and three countries have agreed to the Common Reporting Standard (CRS), an OECD-led tool for the automatic exchange of tax information between countries, which could reduce the need for FATCA-type rules.

But the U.S. did not sign on to the Common Reporting Standard, and experts say Washington is unlikely to join.

Lehagre is undeterred. The accidentals’ resolution heads to the European Parliament on July 4, with a floor vote on the petition set for July 5. If the petition is adopted by a strong majority, Lehagre believes Parliament could convince the Commission to lobby the United States.

He’s circled July 4 — the United States Independence Day — on his calendar as a symbolic day of deliverance.