Taxes! This post is about taxes. If that statement makes you feel queasy or if your eyes started to glaze over while reading that last sentence then I will understand if you want to click away and read something more pleasant. If you are willing to hang on and see where I am going with this then great; just don’t forget I warned you.
But first, am I the only one who wells up a bit when I cross the border into my home country (mine being Canada) and the customs official says, ‘welcome home’? It affirms for me who I am and where I belong. It reminds me of how proud I am to belong to Canada. That sense of belonging has gone double for my husband who is lucky enough to have dual citizenship. He was raised in Canada and I think of him as primarily Canadian but I will never forget how surprised I was when we went through customs in his home country and he puffed up with pride when the customs official said, ‘welcome home.’ Mr. Flapper Pie is proud of where he came from. He looks for opportunities to talk about where he was born. He is quick to defend his birth country’s people and its government.
This must all be told so that you can understand that it has been a very hard week in our household as my husband has come to terms with the realization that he will likely have to renounce his citizenship of birth.
And this is where the taxes come into the equation. We found out this week that my husband is required to file tax documents that he was unaware of. These are not your run of the mill tax documents; they are extra documents to do with foreign income. Because he had not filed them in the past he will be forced to pay very hefty penalties. As well, these documents are proving to be very complicated and in order for my husband to avoid more major penalties we will likely need to hire a tax lawyer. Needless to say the bills are mounting. To be clear, Mr. Flapper Pie has lived in Canada since he was six months old. He is an honest tax-paying citizen in Canada. These taxes are not from Canada but from his country of birth where he has never worked or earned income nor holds any assets. He has never even lived there outside of the first few months of his life. And yet, the tax man cometh. There are other major tax implications that have recently come to our attention that involve our ability to save for retirement and the taxes that might be due at my husband’s death. These long term tax issues are for weightier then the filing of some overlooked tax documents but these are issues that are far too complicated to get into here. Simply put, because my husband was born in one of only two countries in the world to tax world-wide income my family is facing an inordinately large tax burden.
I am sure many of you will have figured out that my husband was born in the United States. Many of you are probably familiar with the major tax problems faced by US citizens living abroad. My husband’s tax problems are small compared to many Americans living all over the world. This is a very big issue for US expats. The web is full of the stories of expats who have had major issues with the IRS not because they were trying to avoid taxes but because they really didn’t know and understand the tax code and its implications for foreign based citizens.
My husband will pay the penalties and will make sure he is in good standing with the IRS but because of the way the US taxes its foreign based citizens my husband will likely have to renounce his citizenship of the United States. As things stand right now, the only way for our family to have a reasonable hope of financial stability in the future is for Mr. Flapper Pie to abandon a major piece of his identity and to renounce.
I watched my husband grieve this week. I stood by and watched my husband who seemed so sad at first become so angry. The country that he loved and thought he was part of turned its back on him. There is really no choice for him to make. If he maintains his citizenship he is jeopardizing not only his own but also my ability to retire at any point in the future. Under other circumstances, he wouldn’t consider giving up a privilege that so many other people would give so much to have. He feels bullied into making this choice.
I find myself wondering what it would be like to have to give up citizenship. I know that I would be devastated if I could no longer be Canadian. Yet, people all over the world do give up the nationality of their birth. They do so happily and yet maintain their dual identities. Unlike many refugees, my husband can go to the US to visit his parents even if he does renounce his citizenship. He can still claim to be born in the US. He will always have that piece. But maybe it is a bit like a marriage certificate. Having the paper, being official, is different than just living together. Never again will the border guard welcome him home when we cross into the United States.
We here at MotherSugar (both contributors and readers) are an international bunch. Amongst us there must be many people who had to give up one citizenship for another. Many of you are American expats. Several of you are foreign nationals working in the US. Some of you are probably facing similar US tax issues. What do you think? How was it to give up your citizenship? Were you sad or indifferent? How much of your identity is connected to where you are from and is that dependent on being a citizen?