The 8 million Americans living overseas should “ensure their financial affairs are in order and compliant” before the New Year, or face having their passports revoked, warns the boss of one of the world’s largest independent financial advisory organizations.
Nigel Green, founder and CEO of deVere Group, which has 80,000 mainly expatriate clients globally, is speaking out after it has been reported that Congress is preparing to bring in a law to take passports from Americans who owe tax. It is likely to pass into law in December and come into effect on January 1.
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The measure, which is partly to raise funds for the proposed highway project, would allow the federal government to revoke a passport, or deny an application for one, if the individual concerned has more than $50,000 of unpaid federal taxes that the IRS is seeking to collect.
Mr Green comments: “Whilst this law is aimed at all Americans, it is likely that the 8 million U.S. citizens who live overseas will be disproportionately affected.
“This is because, due to the cross border element, their financial affairs are, typically, far more complex than their counterparts ‘back home’.
Overseas Americans’ might lose their passports
“In addition, the Foreign Account Tax Compliance Act, or FATCA, has added extra layers of complexity – meaning mistakes can be made more easily – and, since September 30, the would-be private financial information of Americans living overseas who have more than $50,000 in accounts is now being sent automatically to the IRS.
“Also, expats are far more reliant on their passports for their work and their everyday lives than those who reside in the U.S.”
He continues: “This move underscores the lengths the U.S. government is prepared to go on this issue of ‘tax recovery.’
“I would urge U.S. citizens abroad – the ones who, due to complexities, could more easily fall foul of the regulations and who are perhaps more reliant on their passports – to ensure that their financial affairs are in order and compliant by the New Year.
“Due to their expat status, it is recommended that U.S. citizens residing overseas seek specialist advice from financial advisers with cross-border expertise.”
About deVere Group
deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients. It has a network of more than 70 offices across the world, over 80,000 clients and $10bn under advisement.