US tax rules sour life for Americans abroad: expats

US tax rules sour life for Americans abroad: expats

GENEVA - Scott Schmith is a patriot and a US military veteran but he is no longer a US citizen: Sick of complex tax rules making his life in Switzerland miserable he recently handed back his passport.

"It was a pretty big decision and there was a bit of anxiety," said the 50-year-old photographer who served in the 1990-91 Gulf war and has been living in Switzerland since 1993.

But once he received his Swiss passport and handed back his US one last September, "it was like a load of weight off my shoulders."

Schmith is one of a growing number of American expats who are opting to give up their citizenship rather than deal with the increasing difficulties imposed on them by US tax authorities, observers say.

John, a 60-year-old business strategy specialist who asked that his last name not be used, told AFP he had decided to give up his US passport after losing sleep for years over the intricate tax filing requirements Washington places on all US citizens, regardless of where they live in the world and where they make their money.

When the United States recently began pushing through regulations aimed at fighting offshore tax evasion, the implications for him - a "squeaky-clean" law-abiding citizen - became too overwhelming, he said.

"I just got more and more anxious about my ability to protect myself and my family from the administrative overhead of the US government," said John, who has been based in Switzerland since 2002.

Six European countries, including Switzerland, have recently agreed to comply with the 2010 US Foreign Account Tax Compliance Act (FATCA), requiring banks to report all holdings by their US clients to the Internal Revenue Service.

"Offshore tax evasion costs the US jobs and billions of dollars each year, and it puts an unfair burden on the average American taxpayer to make up the difference," Senator Max Baucus, who chairs the Senate Finance Committee and sponsored the legislation, told the New York Times last year to explain why FATCA was needed.

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