It may not surprise readers to learn that celebrity examples have the potential for starting trends. Often, such innovations come in the fashion industry or arts. However, today’s story demonstrates that celebrities may even hold influence in tax planning.
The celebrity is Tina Turner, who voluntary relinquished her United States citizenship, apparently to avoid filing tax returns in multiple countries. For nearly 15 years, Turner has lived in Switzerland with her romantic partner, a German record executive.
A tax attorney knows that the process of Americans claiming foreign tax credits for time spent abroad can quickly become a complicated matter. In addition, errors on tax forms required by the Foreign Account Tax Compliance Act may subject a filer to civil and/or criminal liability. To avoid the administrative hassle and potential liability under FACTA, Ms. Turner may have considered it easiest to simply become a citizen of Switzerland.
Tina Turner is not the only American expatriate to draw attention, however. When Eduardo Saverin, the co-founder of Facebook, relinquished his citizenship and moved to Singapore, some lawmakers questioned whether the exit tax should be increased to 30 percent. They apparently felt it was unjust for an American who earned his riches in this country to abandon it to avoid paying American taxes.
Although Atlanta taxpayers may not be facing a decision to move out of the country, today’s post does illustrate that tax laws are both evolving and may come with consequences, in the event of non-compliance. Unfortunately, accident or lack of intent may not always be an excuse in the eyes of government collection officials. For individuals that are facing liens, levies or even seizures from the Internal Revenue Service, a tax law attorney might have advice regarding the latest strategies.
Source: forbes.com, “U.S. Citizens Renouncing Skyrocket—The Tina Turner Effect,” Robert W. Wood, Nov. 15, 2013