A fugitive people within a nation is tyranny.

Posts tagged ‘nation’

The American Expatriot Primer

indigent in AmericaA growing number of Americans are frustrated with the way in which their economy has been managed and are becoming increasingly concerned about future measures the government may take to keep its coffers full.

A question that is arising with increasing frequency is: does expatraition offer a viable protection to those concerned about a more financially-intrusive US system?

The answer is ‘yes’, it does offer a completely legal solution for ending your obligation to pay US income, capital gains, and gift taxes on your worldwide income. But it is certainly not for everyone and should only be pursued after lengthy and diligent consideration.

And before you begin dreaming of a tax-free future, you should realize that the United States imposes taxes on a broader basis than any other country. The United States is one of two countries, and is the only major country, that imposes significant income, capital gains, gift, and estate taxes on its non-resident citizens.

In virtually all other countries, individuals end their liability to pay income tax after a sustained period of non-residence, generally one year or longer. But to legally and permanently end U.S. tax liability on their worldwide income, U.S. citizens must also give up their U.S. citizenship and passport. This process is called “expatriation.”

Yes, it’s a radical step. However, if you’re a U.S. citizen, you can make nearly all of the preparations for a possible future expatriation without permanently leaving the United States. This is a four-step process:

Phase 1. Relocate your assets from the United States to other jurisdictions, preferably where the assets won’t be taxed.
Phase 2. Identify foreign countries where you would consider living,
Phase 3. Obtain a suitable second passport
Phase 4. Expatriate – give up your U.S. citizenship and passport

Once you’ve accomplished the first three phases, summarized here in Part I of this report, the final step – expatriation – is much easier than if you’re starting from scratch. Part II of this report describes the expatriation process.

Are you a good candidate for expatriation? You are, if:

You are comfortable living outside the United States, or are already doing so-
Your spouse and children are comfortable living outside the United States, or are already doing so; and
You have already or are capable of shifting the majority of your income and assets outside the United States.

Phase 1: Relocate Your Assets Outside the United States

decisions about wealth and lifestyleWith a few exceptions, the IRC imposes taxes on both U.S. source income and foreign source income of U.S. citizens. Non-resident, non-U.S. citizens (also known as “non-resident aliens”) pay tax only on U.S. source income, although some U.S. sources of income (e.g., most capital gains) are tax-free.

To prepare for this more favorable tax treatment in anticipation of expatriation, begin moving liquid assets outside the United States to more tax-friendly jurisdictions. Begin selling assets that can’t be relocated (e.g., real estate) so that you may reinvest the proceeds overseas.

Invest only in countries and investments with which you are comfortable. If you are accustomed to buying and selling U.S. securities, consider using offshore bank or brokerage accounts to target non-U.S. securities. If you are an experienced real estate investor, investigate real estate purchases outside the United States. Keep in mind that a targeted investment or real estate purchase may also qualify you for legal residence in some countries (Phase 2) or even a second passport (Phase 3). If you have substantial domestic investments in precious metals, consider moving the metals offshore.

The vast majority of foreign banks and brokerages now refuse to accept new U.S. citizen clients, especially U.S. citizens resident in the United States. However, banks and brokerages in a handful of countries still accept new U.S. citizen and resident clients and allow them to purchase non-U.S. securities. A few banks in Austria, the Bahamas, Hong Kong, Liechtenstein, Singapore, and Switzerland are suitable for this purpose. The minimum deposits in these banks start at $100,000. Minimum deposits in offshore brokerages start around $5,000. Fees are much higher for banking services and securities trading than in the United States.

Both the accounts you hold offshore and the income derived from them must be reported to U.S. authorities. The penalties for failing to make these disclosures are draconian. Consult with an expert familiar with the tax and reporting rules for international investments when you file your annual tax return.

Offshore real estate is a non-reportable asset for U.S. investors if owned individually or jointly with your spouse or other individuals. Income or gain from foreign real estate investment is reportable and taxable. Countries offering first-world infrastructure and where real estate is relatively affordable include Argentina, Australia, Canada, Chile, Ireland, Mexico, New Zealand, Panama, Spain, and Uruguay.

Numerous potential “land mines” exist in offshore real estate investments. Among them are the lack of a multiple listing service in many countries, difficulty in establishing good title, and legal provisions giving squatters the right to live on your property. Retain a knowledgeable real estate attorney in the country in which you purchase real estate to avoid problems.

You may transport precious metals you own in the United States to another country and store the metals in a safety deposit box, bank vault, or private vault. One option for doing so is to use a secure shipping service. Make certain the service not only promises secure transport but also assists with completing non-U.S. customs and tax declarations. Another option to transport precious metals out of the United States is a like-kind exchange under Sec. 1031 of the IRC. If you move the metals yourself, the best option can be to hire an import agent in the country to which you’re taking them to handle the import formalities. You will generally post a bond through the agent covering taxes due (if any) plus the agent’s fee.

Phase 2: Identify Foreign Countries Where You Would Consider Living

big life decisionsOnce you give up U.S. citizenship and passport, you no longer have the right to live in the United States. You may generally make brief visits, but in most cases, you won’t be able to stay more than approximately four months annually without becoming subject to U.S. tax on your worldwide income based on the IRC’s “deemed residence” rules discussed in Part II of this report. Finding another country to live in is therefore an essential part of any expatriation exit strategy.

Even if you have no plan currently to leave the United States permanently, finding a country that you may wish to relocate to in the future is a prudent safeguard. If economic or political conditions deteriorate in the United States and reach your personal breaking point, having legal residence in a suitable offshore jurisdiction provides a valuable “insurance policy.”

If you merely want the right to live in another country in the form of a residence permit, but don’t necessary want to be physically resident there, a number of countries can accommodate your needs. These include Belize, Costa Rica, Malta, Mexico, the Dutch Caribbean territories, and Panama. In most cases, you can qualify for residence (although not the right to work in the country) by either making an investment or demonstrating a minimum guaranteed pension payment. Residence rights may be purchased in some countries by making an investment of $80,000 or more in real estate or other assets. A guaranteed pension payment of $1,000 or more may also qualify you for residence. In other countries, you may need to qualify on a points system. Some countries have multiple programs to consider.

Phase 3: Obtain a Suitable Second Passport

To end your responsibility to comply with U.S. tax and reporting obligations, you must give up your U.S. citizenship and passport. Without a second nationality in place and passport in hand, however, giving up your U.S. passport would render you a “stateless person.” Avoid this status, as it makes it difficult or impossible to legally live or travel internationally.

A second passport also conveys numerous other benefits:

It gives you the right to reside in the country that issued the passport, and possibly other countries. For instance, a passport from a member of the European Union conveys the right to live and work in any other EU country.
It gives you a way to travel internationally if your primary passport is lost or stolen, or if the issuing government confiscates or refuses to renew it.
It provides you with the opportunity to travel to countries blacklisted by the government that issued your primary passport. For U.S. citizens, this includes countries such as Cuba, North Korea, etc.
It avoids disclosing your primary nationality, should you ever need to keep that a secret. This can be useful if you’re ever confronted by militants who oppose the government that issued your primary passport.

You may qualify for a second citizenship and passport by ancestry, marriage, religion, or extended residence in another country. If not, a handful of countries offer “instant” citizenship in return for an investment or contribution. The Commonwealth of Dominica and the Federation of St. Kitts & Nevis are the only countries with an official, legally mandated, economic citizenship. (Note: Dominica and the Dominican Republic are different countries.)

Dominica is the least expensive option. The nationality law of Dominica authorizes the government to waive the normal requirement of seven years of legal residence to acquire citizenship in exchange for a cash contribution. Total costs including all fees for a single applicant come to about $105,000. Add $25,000 for your spouse and up to two children under 18. The Dominican passport holders can travel without a visa, or obtain a visa upon entry, to nearly 90 countries and territories.

The Federation of St. Kitts & Nevis offers two options to obtain economic citizenship. One option is to make a direct contribution to a charitable foundation set up to support displaced sugar workers: the Sugar Industry Diversification Foundation (SIDF). Total costs including all fees for a single applicant under this option come to about $285,000 or $335,000 for an applicant with up to three dependents.

The second option is to purchase “qualifying property” with a minimum investment of $400,000. Fees and closing costs add a minimum of $100,000. Total costs for a single applicant come to at least $500,000 and close to $600,000 for a family of four. The St. Kitts & Nevis passport provides visa-free entry, or visa upon entry, to more than 120 countries, including nearly all of the 27 member countries of the European Union.

In all cases, applicants must pass a strict vetting process that includes a comprehensive criminal background check.

Bogus second citizenship offerings abound. In recent years, I have received offers to purchase passports from Costa Rica, Nicaragua, the Dominican Republic, Ireland, and Lithuania, among other countries. Some of these offers are outright scams. Others involve illegally purchased or stolen documents. Even if you succeed in obtaining a passport on this basis, it may be revoked at any time and you could be subject to arrest and/or deportation.

Conclusion

Once you’ve completed Phases 1, 2, and 3 of your four-step plan to disconnect from the United States, you’re ready for Phase 4: expatriation. While you may never take the final step of giving up your U.S. citizenship and passport, taking the preparations summarized so far at least gives you that option.

Mark Nestmann is a journalist with more than 20 years of investigative experience and is a charter member of The Sovereign Society’s Council of Experts. He has authored over a dozen books and many additional reports on wealth preservation, privacy and offshore investing. Mark serves as president of his own international consulting firm, The Nestmann Group, Ltd. The Nestmann Group provides international wealth preservation services for high-net worth individuals. Mark is an Associate Member of the American Bar Association (member of subcommittee on Foreign Activities of U.S. Taxpayers, Committee on Taxation) and member of the Society of Professional Journalists. In 2005, he was awarded a Masters of Laws (LL.M) degree in international tax law at the Vienna (Austria) University of Economics and Business Administration.

Copyright © 2012 Chris Martenson

Advertisements

Government Invasion of your Parental Rights

“For the first time in American history, the majority of the Supreme Court no longer treats a parent’s right to control and direct the upbringing of their child as a fundamental liberty,”  former U.S. magistrate judge William Wagner. “We now have a new situation where government itself becomes the standard and whoever’s in power gets to say what your liberty is.” That is, after all, what legal precedence says.

This warrants concern for former Michigan congressman Peter Hoesktra: “There are people each and every day who are scheming to take away parental rights to start to destroy the family structure,” he said. “What we’ve seen over the last 40 to 50 years is continual legislative and judicial overreach going into areas that we never thought they would reach into.”

This overstepping of the states’ role can be traced to oppressive European regimes of the not-so-distant past.

Bill Clinton“Karl Marx said that in order to establish a perfect socialist state, you have to destroy the family,” said family psychologist and author John Rosemond. “You have to substitute the government and its authority for parental authority in the rearing of children.”

One of the vehicles to usher in socialist policies over children is an international treaty known as the United Nations Convention of the Rights of the Child, or the UNCRC. Adopted by the UN in 1989, this essentially says that anytime there is a conflict or dispute between a child and a parent, a government bureaucrat gets to decide what is in the best interest of the child instead of the parent deciding what is in the best interest of the child. Do you see how the Bradley Amendment plays into the UNCRC?

The Supremacy Clause says that a treaty becomes a part of the supreme law of the land, which overrides state laws and overrides state constitutions. Almost all of American law of parenting kids is state law, so this treaty becomes supreme over virtually all American law of parents and children. Bill Clinton approved the treaty during his administration, so all it takes is two-thirds of the U.S. Senate to approve it in order for it to become a part of the supreme law of the land. Your child, as evidenced by law on all sides is that your child, as property, is important political capital.

American parents are losing their rights and don’t even know it. Featuring 3 reenactments based on real cases, “Overruled” (see below) is a 35-minute docudrama that exposes how the rights of parents in America are being eroded.  The fact is that legal precedence has continually eroded the rights of all Americans based on judicial decisions. This has been ongoing since the 1930’s. Surprise. Now, if the state wants this responsibility, then certainly, they are responsible for dissolving the human family as we know it, whether it is understood or not. Also, if this is the case, parents are no longer responsible for the children that they ‘sire.’ They have become tools for state endorsed ‘breeding.’ Your responsibility in the matter, in the eyes of the state, is increasingly dubious at best, and they would rather you have little to say on the matter.

Notice: This article is not legal counsel.
You will need an attorney and your own wits
to supply you with the details of your case.

Creative Commons License
Government Invasion of your Parental Rights by E.J. Manning is licensed under a Creative Commons Attribution 3.0 Unported License.
Permissions beyond the scope of this license may be available at http://bradleyamendment.wordpress.com.

War Is Hell: Child Support Doesn't Have to Be

Is this really child support for a free nation? When soldiers return home after fighting, they are met with incarceration when they arrive on American soil for child support payments that they were unable to make while abroad. Is this justice? You be the judge!

Constitutional Violations and the Patriotic Man

Bradley Law Unfairly Punishes Soldiers

Unemployment: The Plight of Non-Custodial Parents

Arguing About Unemployment and Child Support

Unemployment: Child Support Time Bomb

Tag Cloud