Americans abroad: Foreign Account Tax Compliance Act

[aelle]

The Attack on Accidental Americans - Wendy McElroy - Mises Daily

So I already knew the US was one of the few countries in the world to impose double taxation on its citizens (if you are an American citizen, all the money you earn is taxable by the IRS, no matter where on Earth you live and whether you have already paid income taxes in your country of residence).

The IRS is looking into enforcing this law more virulently. Their plan involves strong-arming sovereign nations and foreign, private businesses into turning in data on US citizens (on what is after all a strictly domestic matter), putting the burden of proof of non US citizenship on the targeted foreign citizens (suspected of dual citizenship), and labeling any non reported account held abroad (checking and saving included) as "illegal offshore account".
The penalty for not reporting is USD 10,000 per year.

I understand that the idea of the law is to target large offshore accounts used for tax evasion purposes, but the letter of the law sounds quite problematic and prone to abuses.

America, love it or... well, if you leave it you're screwed anyway? Has anyone heard of this plan before?

[MysteryX]

Scary. I'm glad to not be American.

Or are these extreme measures going to accelerate the culture shift by waking people up?

Bush did us a great service. How many people did he woke up?

[NoJobRob]

If someone wants to renounce their U.S. citizenship then they won't be double taxed. All you have to do is sign an oath of renunciation at the U.S. embassy in the country you are living/working in. I'm considering doing that if/when I move to another country. Chances are I won't want to come back to the U.S. very often, so I can just use a passport like everyone else who visits the U.S. No big deal...

[SnerpGoodWord]

I'm not familiar with this new enforcement effort specifically, but don't most industrialized countries have tax treaties with the US that prevent the double taxation situation at the expense of complicated accounting? I thought it was only tax havens and various 3rd world places that don't have a treaty where you'd be on the hook.