Tina Turner No Longer American. What’s Taxing Got to Do With It?
Soul singer Tina Turner has voluntarily relinquished her U.S. citizenship. She reportedly signed the papers at the U.S Embassy in Bern, Switzerland, late last month. It probably didn’t come as a major surprise. She had announced her plans to do so back in January.
Why did she do it? On the face of things it would seem that love’s got a lot to do with it. She has been a long-time resident of Switzerland. She moved there in 1995 and in July married Erin Bach, her partner of 27 years. But there are those who suggest that a desire to avoid the legal headaches due to complex U.S. tax rules might have something to do with it, too.
As tax experts observe, having to file returns in multiple countries and having to jump through hoops to claim foreign tax credits in the U.S. isn’t easy. Tax disputes aren’t uncommon. An attorney’s help is always advised to deal with them.
There is the annual Foreign Bank and Financial Accounts Report (FBAR) form that must be filed as part of the annual tax return. Also, FATCA, the Foreign Account Tax Compliance Act, is ratcheting up around the globe. The provisions require foreign banks to disclose Americans who have accounts with them.
Simply relinquishing one’s citizenship isn’t always a surefire way to avoid the tax collector, however. U.S. tax law does impose an exit tax on individuals giving up their citizenship.
But The Washington Post reports Turner’s action draws a fine legal distinction in that the document she signed did not formally renounce her citizenship. According to an unnamed source, the paperwork simply announced she has taken Swiss citizenship with the “intent to lose her U.S. citizenship.” The source notes there are no tax or other penalties under this scenario.
Source:Forbes.com, “Tina Turner Gives Up U.S. Citizenship—Big FATCA Wheel Keep On Turnin’,” Robert W. Wood, Nov. 13, 2013
