Australian citizens and residents who are also taxable by the US are subject to double taxation that is not prevented by the Australia/US Tax treaty. In fact, the treaty guarantees unfair taxation by the US of some Australian source income, including superannuation. While the cause of this double taxation is the US practice of taxing based on citizenship rather than residence, the effect on Australian citizens and residents can be mitigated by updating the current tax treaty.

Double taxation stems from the mis-match between Australian tax law and the 74,000+ pages of US tax law and regulations. Those subject to both sets of tax law will pay the higher of the two tax rates on each type of income. To make things worse, US tax law treats many “foreign” investments as suspect and deserving of punitive taxation; for a US Person living in Australia, all of their local investments are “foreign” to the US.

The US has taxed based on citizenship rather than residence since the Civil War. However, until recently this was neither well communicated to US expatriates nor enforced. In 2014, Australia signed an inter-governmental agreement with the US, the FATCA IGA. Under this agreement, Australian banks must now hunt out US Persons and report their financial information to the ATO for transmission to the IRS.

The Australian government is one of two parties to both the Tax Treaty and the FATCA IGA. Those impacted by the inadequate coverage of these agreements are Australians living in Australia. The Australian government has an obligation to protect its citizens. In particular, the following areas need attention:

  • Superannuation: Australia legislated mandatory retirement savings for employees with the Superannuation Guarantee (Administration) Act (1992) and the Superannuation Industry (Supervision) Act (1993). Unfortunately, the US does not recognise superannuation as a qualified tax-deferred retirement plan. While the US tax rules in this area are complex, the US will generally tax contributions and either current income inside super or a portion of withdrawals from super. The 2016 US Model Tax Treaty includes provisions under which the US will respect the tax deferral in super for Australian residents as well as for US residents who previously accumulated superannuation in Australia.
  • Saving Clause: All US tax treaties include a “saving clause” that allows the US to tax US citizens as if the treaty did not exist (with the exception of a limited number of treaty provisions). The problems with this clause are discussed in this post by John Richardson at
  • PFICs (Passive Foreign Investment Companies): Australian managed funds, listed investment companies (LICs), real estate investment companies (A-REITs), and exchange traded funds (ETFs) are all treated as PFICs for US taxpayers. PFIC treatment results in punitive taxation of these investment vehicles. Part of the rationale behind this punitive treatment is to prevent US taxpayers from using “foreign” investments to defer taxable income. But, any of these investments that is registered for sale to retail investors will be required by Australian law to distribute all income and realised gains currently, just like the American equivalent. The treaty should include a clause that states that Australian investment structures that are sold to retail investors are not to be considered “foreign corporations” under the PFIC rules.
  • NIIT (Net Investment Income Tax): Enacted as part of Obamacare, NIIT is a flat 3.8% tax on investment income for US taxpayers whose income exceeds a threshold determined by filing status. NIIT applies to all investment income, regardless of source, and cannot be offset by foreign tax credits. For those affected, this is a clear case of double taxation.

The end result of these deficiencies in the current treaty is that any Australian citizen or resident that is also taxed by the US (as a citizen or green-card holder) will end up paying tax to the US on their Australian superannuation, and will also find it difficult to effectively invest outside of super. These problems will affect middle class Australians more than high net worth Australians because a) the most effective investment vehicles for small savers are exactly those classified as PFICs and b) they are less able to afford the tax advice and compliance services needed to effectively plan for living under two very different tax regimes.

See “Investing with One Hand Tied Behind Your Back – An Australian Perspective on US Tax Rules for Non-resident Citizens” by Karen Alpert for more detail.

FATCA IGA: Under the IGA, the US agreed to provide reciprocal information. Article 10 of the IGA states that the parties will consult on the progress toward implementation of the IGA prior to 31 December 2016. This deadline in the IGA provides the Australian government a window of opportunity to re-examine the agreement to ascertain whether the US is actually providing the data promised in Article 6. Towards this end, the Australian government should disclose more information about the data sent TO the IRS in September 2015 and information about what NEW data has been received FROM the IRS under the FATCA IGA.

Citizenship Based Taxation: While the focus of this site is on actions the Australian government can take to protect its sovereignty and tax base, see the US Action page for updates on the fight against Citizenship Based Taxation in the US.

95 thoughts on “Problem”

  1. Great effort, Karen, on putting this site together and showing leadership to organise an effort to bring about positive change on behalf of the ~100,000 people of American origin that now live within Australia and are caught up in double taxation and numerous tax traps between the US and Australian systems.

    I’m a naturalised Australian citizen. I’ve worked and saved toward a self funded retirement in Australia for approaching three decades yet my journey towards being self funded (as opposed to taking a taxpayer supported government pension) is continually frustrated. Some examples:

    • my Superannuation does not enjoy the same tax advantages as other Australians;

    • I’m prohibited from investing in legitimate investment funds within Australia under threat of confiscatory tax by the US (PFICs) and now recently, through Australia’s enabling of FATCA through the inter-government agreement (IGA) have been denied financial services offered to other Australians;

    • I will not receive the full Australian tax concessions on a recent redundancy payment I received from a company that I had worked for the past 20 years as the US does not recognise the Australian tax policy and treats the redundancy as general income to be taxed as my marginal rate basically allowing the US to siphon off this much needed tax savings;

    • I’m effectively denied the use of many legitimate legal instruments such as trusts, SMSFs, corporations, etc. through excessive, complex and costly US tax rules and compliance reporting;

    • I’m double taxed in numerous ways despit the current tax treaty which one would think has the purpose to prevent this injustice; this is a major irony given Australia is a higher tax country, yet all the tax I pay within my country of residence is not fully recognised by the US;

    • I face ongoing complex and costly compliance requirements to a country that I have not lived in for decades.

    • I cannot afford to renounce my US citizenship due to the imposition of a financially material exit tax that keeps me hostage to another country’s tax policy.

    This leads to the unfair situation where all Australian citizens are not treated equally and Australian domestic policies are undermined through actions of foreign governments. Why should my citizenship be second class to other Australians? Australians should be outraged at this discrimination and that funds which legitimately should remain within the Australian economy are being extracted by a foreign government.

    Many, including some Australian politicians, say US law taxes their citizens on a worldwide basis so this issue is something to be taken up by the dual citizen with the US government. I disagree. The impact of foreign laws within Australia violates Australia sovereignty and undermines Australian domestic policy. By analogy, do US gun laws allow me to arm myself within Australia?

    This clear discrimination between Australians is something that needs to be addressed here in Australia through democratic processes and our elected government representatives. Australia is my home; it is right that we work to bring about change within the country we work, pay taxes and live.

    So I commend Karen for taking the first step to organise Australians to bring about much needed change. This effort will only be successful if affected stakeholders work together to bring about much needed change.

    Don’t forget we also have a Facebook group. Please join and get involved!!

    1. Thanks for sharing your story, Carl.

      I was in a similar situation, but was fortunate to learn of the exit tax before I had saved enough to be subject to it. I renounced in June 2016 so that I could enjoy the same savings vehicles and tax benefits as other Australians.

      Dual Australian/US citizens are truly second-class Australians.

      1. Carl, I left the US at the age of 5 and became an Australian citizen when I was 12 YO.
        I’ve just become aware of this ridiculous rort in the oast 3 months.
        I didn’t even know I was a US citizen until I applied for a VISA to visit.
        I’m now going through a renouncement process which is costing me $11,000 in tax attorney fees, $10,000+ in US accounting fees and $3500 to the US Consulate for the privelage. An absolute travesty and drain of my valuable energy and time.

    2. My Australian-born, Australian-resident, Australian citizen daughter received a Christmas letter from her Australian bank to say she would now have to pay American tax. She is still a student, working part-time to support her studies and still hoping to get a job paying enough to start repaying her Australian HECS debt. Unfortunately for her, I registered her to have duel citizenship when she was born. What a horrible nightmare. Any wonder she is sobbing, and sees her life as completely changed.
      I, on the other hand, am still working in my own small business (after 45 years working in Australia, as a duel citizen) at age 68. I have resisted going onto the Australian pension, even though my taxable income this year was only $14,000. I can live on that, UNLESS the American government makes me pay them tax, or even if they force me to spend valuable work time filling out lengthy forms. What an astonishing situation, unfair to all.

      1. Hi Joyce. Take a deep breath. Take some time to do your research before rushing in to file US taxes. There’s a list of resources on this page: Before you even contact a tax professional, make sure that filing US taxes is really what you want to do. Once you enter the IRS system, the only way out is by renouncing.

        A bit of good news – under the current treaty the Age Pension can only be taxed by Australia. If you’re eligible for US Social Security, that can only be taxed by the US.

        And, yes, the situation is totally unfair.

        1. I realise this post is quite old now, but I’ll respond anyway. I’ve seen this post shared a number of times, and I’m not really sure that it provides me with any amount of comfort. I’m in the same situation as Joyce’s daughter (I didn’t realise until recently that I was supposed to be filing) and at this point I’m looking to become compliant so that I can renounce. Renouncing isn’t something I really want to do, as it feels like I’m dishonoring my family’s history, but the amount of work (and fees) it will take just to keep up with the requirements is bewildering and oppressive – and that’s for someone who will owe no tax to the US.
          I just don’t feel that doing nothing is something I can do – I will constantly be looking over my shoulder. I’ve been reading so many horror stories over the past few days and it’s terrifying. However, I feel like I’m missing something – almost all of the posts I’ve read are from former US residents, some born there and moved away as children (<5 years old) while others moved after school. Where are the other overseas-born dual citizens who inherited US citizenship from their parent(s)? Why are there not more of us crying "unfair" at having a foreign government dictate our lives (and financial planning freedom) in our country of birth and lifetime residence? Have I missed a clause that the tax doesn't apply to us? I thought there'd be more, for sure.

          1. Unfortunately, having researched this extensively, I’ve discovered it does apply to chikdren of US citizens as week as those who left the US at the age of 5yo and whose parents weren’t US citizens.
            I’m going through the renouncement process now and It’s costing me $25,000+

        2. Hi Karen,

          I have dual citizenship (Australia and US) and have lived in the US for 30 years. I am retired and receiving both Social Security benefit and Pension. I have filed both US and Australia tax returns every year. I have also reported to IRS all the dividends and bank interests in Australia.

          I am planning to move back to Australia in the coming years. From the above post you have mentined that US social security can only be taxed by the US. If my understanding is correct, it means I do not need to report to ATO my social security payment as it will not be taxed in Australia due to the Tax Treaty. Please confirm if it is correct. If so, what about the pension that I am receiving from my former employer which do not require any contribution from the employees?

          I am praying and hoping that the above is true as the double taxation has made me rethink my decision if it is worthwhile to move back. I have learnt from filing the Foreign Tax Credit which is totally useless to offset any tax in the US and believe the outcome will be the same in Australia.

          Your input is greatly appreciated!

          1. Hi Syd,
            Yes, you will not have to report US Social Security to the ATO. However, your US pension will be taxable in Australia. Take a look at this post ( for an overview. If you’re a US citizen, you will be reporting your US pension on a US tax return, but you should get a credit for taxes paid to Australia. As the basis for computing the tax is different, the net result is dependent on your personal facts and circumstances. It is well worth engaging a professional to do a pre-move check of your finances so that you can arrange your affairs to minimise the problems.

      2. Joyce Sanders… there may be no need for your daughter’s sobbing. Sounds to me as if she may be able to possibly expatriate w/o undue US tax problems if she can attain 5 yrs of US tax compliance. As a student and w the possible Streamlined option she may be able to do this w/o tears. Read my US tax blog post here let me know if my firm can assist you. We have successfully handled many expatriation cases. Good luck.

      3. Joyce, if she’s 18 1/2, she can renounce. Renounce first before entering the IRS system, otherwise she will have to pay dual taxes. And BTW, you have to lodge tax returns in the USA even if you reside and work in Australia. Look up FATCA and also the ATO’s website.
        Just spent 3 months in this nightmare, having left the US as a child of 4 then getting the same letter as your daughter. I’ve engaged a US Tax Attorney and US Tax Accountant for $21,000 to help me through the process of renouncement. Then the US Consulate wants another $3500 just to interview me.
        Start writing letters to ministers, shadow ministers and newspapers (not Murdoch Press). 200,000 Australian citizens have been thus far thrown to the wolves by our government.

    3. I am surprised that no one has mentioned the imposition of US Capital Gains tax on Australian homes when they are sold – own homes are exempt in Australia but not in the US.

      1. Originally decades ago the US did not recognise dual nationals. People did not revoke their US dual national status for this reason. Was there a warning by our Government to the victims, to revoke US dual citizenship before the document was signed? Perhaps giving people informed consent to keep dual nationality status, since the Government knew that some people would be severely disadvantaged by the agreement they knew they were entering? Was any warning given that the document would cost SOME people 30% of their homes payable to a foreign government? That SOME people would wake up with their private residences having a great deal of foreign ownership that they had previously believed they owned? The spouses of these people may have wanted to protect the home of their children. It is hard enough to pay off your home for security for your children, without having it taken out from under you and your family and given to someone overseas. If the family home is sold to move to another job and 30% or more is owed EACH MOVE even in the past, present or future, isn’t that is a lot of food taken out of Aussie children’s mouths? Just SOME children, not most others. Not other immigrants, they and their families have the same rights as everyone else.

        1. I totally agree with you. Our government had a duty of care to Australian citizens. I was 4 when I came to this country and have always considered myself an Aussie citizen. Didn’t know I was a dual citizen, until I applied for a visa to visit my mother’s sister after Mum died. Wanted to renounce then, but was intimidated by the US Consulate General into keeping it on the grounds that I wouldn’t be able to travel to the USA.
          Anyway, now found I also have to pay tax to a country tht is going to pass my hard earn savings onto Trump, Bezos, Zuckerberg and other corporate who have been given $onetrillion in tax cuts.

  2. Am very glad to have found this site. Was put in touch with Karen by Julie Power after reading her article. I am a dual citizen that has been here for 25 years and recently had the experience of having the IRS tax Centrelink benefits I had received, which I found outrageous and made me concerned whether that would happen when I started drawing on my Superannuation. That’s when I read Julie’s article which lead me here.

    1. I’m glad you found us, Brian. The US taxation of Centrelink benefits (other than the Age Pension) is absolutely outrageous! I will add that to our list of changes that need to be made to the treaty.

      1. Hi Karen, I just discovered your site Thank you! The US tax system is a nightmare for our expat family to negotiate.

        I am a bit concerned about the above comments re US taxation of Centrelink benefits and was wondering if you can clarify further?

        I am in receipt of Family Tax Benefits and having checked with the IRS plus two tax agents in Australia with extensive US specific experience (recommended by the US Consulate), I was advised that Family Tax Benefits were definitely not taxable in the US. One of these tax agents actually has an ad on their website specifically referencing FTB as not taxable in the US! Perhaps unsurprisingly, the IRS and the two tax agents gave me a total of 3 separate reasons for this, one of which was actually based on the current treaty, so I am a somewhat confused now given your statement about US taxation of Centrelink benefits.

        I look forward to reading your response. Thanks again for the great work you are doing on behalf of us expats!


        1. Hi Bill,
          Thanks for your comments. I’m not familiar with Family Tax Benefit A or B, as they never applied to us (kids are long gone now). If your tax agent says they’re not taxable in the US, then that’s probably correct. Unemployment/NewStart benefits are, I believe, taxable by the US. Plus, the fact that this is not clearly spelled out anywhere is a real problem – the uncertainty drives people to pay exorbitant costs for tax preparation.

          1. Thanks for the reply, Karen. As you suggested, I will stick with the existing advice re this from the tax agents (and IRS). I agree that the lack of certainty is a major issue! All the best with your endeavours and I will keep an eye on your site to see how we can stay involved.

        2. Hi Bill,

          I am wondering if you can provide/post here more detail regarding FTB and (did you have information about CCB too?) that i can pass on to my tax agent so that he doesnt include this in my income? where to look etc?


        3. Hi Bill,

          I’d like to get in touch with the tax agents in Australia that are U.S tax experts. Can I get their details please?

          1. Question? What can one realistic expect if they are a dual citizenship of USA and Australia and they are a non resident of both and has no plans to ever return to Australia and owe Centrelink a refund for over payment due to not reporting 401K withdrawals. How long and legal is the arm of Crntrelink

  3. If I try to renounce my U.S. citizenship, but don’t have the money to pay to do it, I suppose either I can’t do it, or……….will they put me in prison, extradited from Australia, for not paying American tax? Would the U.S./Australian Tax Treaty allow for extradition from Australia for non-payment of tax? And if they didn’t extradite me, would they just ban me from ever coming to the U.S. to see my first grandchild due to be born in the U.S. in April of my dual citizenship daughter currently working in America? What an amazing evil they have set up in this tax law.

    1. If all of your income and assets are in Australia, the IRS will have a very hard time collecting any tax from you. And, you will not be extradited simply for failure to pay US tax. Every case I’ve seen of someone being extradited from Australia to the US has involved fraud or some other serious crime. If you’re tax compliant in Australia and all of your income is from Australia, then the ATO will not assist the IRS in collecting US tax from you.

      The IRS is not able to share information with other US agencies unless there’s a specific law requiring it. The IRS will tell the Department of State if you have a tax debt of more than USD50,000, and your US passport will be cancelled. Before it gets to that point, however, the IRS will have gone through it’s procedures to assess the tax, finalise the amount, and attempt collection. You would receive a letter from the IRS at each step of the way. If you haven’t been contacted by the IRS, then you almost certainly don’t have a finalised tax debt that the IRS would report. So, if the IRS has not contacted you, then you shouldn’t be denied entry into the US.

      As for renouncing your US citizenship – the cost of a certificate of loss of nationality is US$2,350. The consulate will not process a renunciation until you pay this fee. Take a look at these pages on the Isaac Brock website:

      and read through the information at

      Feel free to post questions here or on the Isaac Brock website (more people will answer your questions on Isaac Brock as their audience is worldwide).

      1. So can we just not pay then? Why pay? What’s the benefit or the point? I’m a dual citizen from birth born in Australia and lived in the USA 20 years until recently. Back in Australia now and can’t believe what I’m reading.

  4. Thank you for creating this website – this is a cause which I strongly support. I’m an Australian citizen living in the US and am dismayed at the abusive treatment of Australian superannuation funds under US tax policy in comparison to other foreign retirement funds. I’m not particularly knowledgeable on taxation laws or international treaties but am more than willing to help push this forward in any way possible.

  5. i have no idea if the issues listed herein are relevant to me, but i found this searching online for a IRS problem. I’m an Australian Citizen with an investment in the US (LLC – pass-through entity – currently taking no income) I have filed form 8843 twice – both times citing tax treaty article 21 as reason for no tax liability in the US. I just got a letter from the IRS demanding $20,000! Reason given was ‘we can’t allow your tax treaty exemption’ I’m so confused – what has changed between 2015 and 2016 tax years!?

    1. Hi eoin,
      Glad you found us. It sounds like you need professional advice. I’m not aware of any changes to the treaty or its interpretation between 2015 and 2016. You’re an Australian citizen, but are you also a US tax-resident (resident, citizen or green card holder)? I’m not sure how Article 21 applies in the circumstances you’ve outlined, but Article 21 cannot be used by US tax-residents due to the Saving Clause.

  6. Thank you Karen for explaining the complications of the treaty and beyond in clear, easy to understand language. This website will help all of us caught in this tax nightmare. Reading the comments also sheds light on previously unknown aspects of these draconian tax laws.

    1. P Gorman,
      Glad you find the site useful and educational. Please let us know if you have questions or if anything is unclear.

  7. HI,
    I was following up on the original article in the Sydney Morning Herald which states the US is “Other than Eritrea, it is the only country in the world that taxes non-resident citizens – and even holders of a Green Card (alien resident permit) who are also living outside the USA – on their worldwide income, regardless of where it is earned or where they live.”
    Not so – Your home Country, Australia is even worse, as the marginal tax rates for similar income (top rate) is an additional ~>10% (39% vs 49%) for Australian citizens on worldwide income. Hence – it is more advantageous for dual residents to renounce their Australian citizenship than their US, (somewhat depending on where their “Super ” lies).
    Additionally, the ATO specifically excludes US-funded IRA’s and 401K’s from being treated as “SFS”, hence incurring the additional top-up tax.

    1. This is a common misperception. Many countries, including Australia, tax the worldwide income of residents. The US is the only country to tax the worldwide income of NONresidents using the same rules and tax schedules that apply to resident taxpayers. If you move away from Australia, then you no longer need to worry about Australian tax rules except for Australian source income (including any accumulated super).

      Australian citizens living in the US with no Australian source income have no Australian tax filing requirement. US citizens living in Australia with no US source income must still file US tax returns, and must limit how they invest in Australia to avoid PFICs and CFCs, and other arcane US tax provisions.

      1. Hi Karen,
        Thanks for your response, as I was not aware of this.
        If I am an Australian citizen and resident overseas (US), and I have Australian income (e.g.rental or super drawdown), do I have to include all worldwide income on Australian tax return?

        1. If you are not an Australian resident, then only Australian source income is taxable in Australia (citizenship is irrelevant). There has been a recent move to make the criteria for Australian tax residence a bit less subjective. If there’s any question about tax residence, or if you’re in the process of moving out of Australia, be sure to consult an Australian tax expert to make sure you’ve considered all the tax implications.

  8. Dear Karen
    I married a US citizen and got my GC about 4 years ago. An international tax expert advised us that as I had significant assets in Australia, it was better for me to give my GC earlier than later. That earlier for me is by end of 2017.
    We have the complexity of having to work out how our marriage is going to function with two partners living in 2 different countries and our time together. Part of it is being realistic and deciding if that is a viable option.
    I wanted to send you this link which is well documented by this young American who lives in Japan and the herculean gymnastics that he has to endure to try and fulfil his US tax obligations. It is truly heart wrenching and brings to crystal clarity what your group is working at so diligently. Bestest Wishes.
    [PDF]The tax issues for Americans living outside the US are many, varied …
    at an American university that was then operating a campus here for one school … again as a foreign exchange student at Meiji University for one calendar year.

    1. Thanks for the link. The compliance nightmare caused by US taxation of bona fide residents of other countries cannot be under estimated. I hope you’re able to come up with a solution that works for you.

  9. Hi Karen
    I hold dual Australian-US citizenship (born in USA). I have lived continuously in Australia since 1973 and became an Australian citizen in July 1994. My wife is Australian citizen by birth. I am a self-funded retire drawing on an allocated pension.
    HSBC Bank has approached me for information for FATCA.
    Having read some of the information on your pages I am getting quite stressed about the possible impact of US tax laws on myself and family.
    I am in Perth and wonder if you could suggest a way forward or recommend anyone who could help me here in Perth

    1. Hi Jim,
      I’m glad you found our site. If you’re on Facebook, join our FB group. It’s a closed group, so only members can see posts there. When you ask to join there will be three simple questions to answer – these help us limit membership to those with a personal interest in the topic.

      While the worst case scenario is very scary, you should carefully consider your options. Read the material linked here: For those with little or no remaining ties to the US, the risks might not be as bad as you think. Every situation is different, so it is important that you educate yourself so that you can make the best decisions for your own situation.

  10. I have found these posts quite interesting. The ones I have read are mainly from the IRS taxing Super Funds. We have just had the opposite – the ATO has taxed my husband on a withdrawal from his 401K which he contributed to while living in the US. So he was taxed by both IRS and ATO.

    1. Hi Kelly, my husband and I also own IRA accounts but we have not made any withdrawal yet. We are looking for an accountant to find out if we need to include any dividend and any capital gain/loss in our tax return to the ATO.
      Just wondering, did you have to pay a minimal tax to IRS like 30% and the difference to ATO?

        1. Hi Rasterisk,
          Under current Australian law, IRAs will be taxable when withdrawn (there were old foreign trust rules that taxed income, but those have been gone for years now). Australia does not differentiate between traditional IRAs and Roth IRAs. The taxable amount in Australia does not include your original contribution, but only the appreciation afterwards.

          1. Hi Karen,

            My IRA consists of both employer’s and employee’s contribution. I have retired over 10 years and have no idea where to retrieve the original contribution amounts from my working years.

            Also, if I only withdraw a small amount, how should I report to ATO exactly how much is my original contribution not to mention the employer’s contribution and how much is the appreciation?

  11. I was born in Australia to a US citizen mother. I’ve never been to the USA, but recently learned I qualify for US citizenship, having automatically acquired it at birth. I was keen to pursue that, until I came across this site today!

    I thought the US citizenship would be a nice thing to have, but would it? Would it be more trouble than it’s worth?

    Thanks for any thoughts.

    1. Welcome Mike – Like anything, the answer is “it depends”. Do you want to try to work in the US? Citizenship will allow you to move to the states without worrying about immigration issues. However, if you’re not actively using the benefits of citizenship, then it’s probably more hassle than it’s worth, especially if you have already established a financial life here in Australia. Your super and any managed fund investments could be a problem under current tax rules.

  12. Hi Karen,
    I hope that your group will undertake to lobby the Australian & US governments to fix the tax treaty both ways. I am an Australian with permanent residence in the US who plans to return to Australia when I retire.

    Here is my difficulty. I have built up a sizeable Roth IRA (individual retirement account) to use as an income source when I retire. Roth’s are special; because you fund them with after tax money, any capital gains and later, withdrawals/distributions in retirement, are tax free. Kind of like super.

    However, the Australian government doesn’t recognize these IRAs as similar to super funds, and I would be taxed on my withdrawals, as well as any capital gain my fund accumulates, after I return to Australia. Similar to the US government situation with Australian superannuation funds, but in reverse. I belive my Social Security retirement income would also be subject to taxation by the ATO.

    I implore you to add to your cause, this side of the equation, which is the Australian government’s (and hence the ATO’s) unfair policies towards US retirement accounts and Social Security income for Australian citizens who spent some of their working years in the US, and tgen return home. In retirement they are/will be subject to similar unfair taxation by the Australian govt on their US retirement accounts if they have returned to Australia to reside. Reforming the tax treaty should apply to both sides of the equation. Please help Australian citizens in this situation.

    1. Hi Margaret,
      Yes, the treaty definitely needs to be fixed to allow international mobility both of those in the labour force and retirees. Roth IRAs are a particular problem under the current treaty. Even if the US fixes the problem of taxing nonresident citizens, the treaty must be revised to account for portability of retirement savings between the two countries (in both directions).

      The good news for you is that the current treaty reserves taxing rights on Social Security (or Age Pension) to the source country. Only the US can tax US Social Security and only Australia can tax the Age Pension (and disability pensions). Under current rules, if you’re a US citizen and therefore remain a US tax resident after returning to Australia, your Social Security will be taxed at progressive rates under the same rules as apply to those living in the US. If you’re no longer a US citizen or US tax resident when you collect Social Security, the US will withhold tax at a flat rate of 25.5% and there will be no need to file a US tax return. If the rules remain as they are currently, you may end up paying less tax as a US citizen than as a nonresident alien.

      1. Hi Karen,
        That is another problem for me. The flat amount withheld from social security is now 3% I believe and I will need that money to afford to retire here. Do you know if I get that refunded back to me if I file a tax return with the IRS each year? It seems unfair because if I become a US citizen before coming back they will not withold anything from my social security retirement, nor will they if I retire in Ireland or the UK instead without becoming one. But they will withold 30% if I don’t become a US citizen and return to Australia.
        Also, if I don’t become a citizen, I will have to give them a proportion of my assets when I leave permanently, and then the Australian government will tax my Roth IRA disbursements which would be tax free in the US, and is essentially my superannuation. At the moment it seems advantageous to become a citizen in my case, so nothing is witheld from my social security retirement income and I don’t have to surrender some of my assets when I relocate back home to Australia. What do you think? Do you have any advice on who I could consult?
        Thank you,

          1. Hi Margaret,
            The 30% tax rate on social security benefits is applied to only 85% of your benefit for a net tax rate of 25.5%. This is a final tax liability if you’re not a US citizen – you are not able to file a tax return and get any refund. Under the tax treaty with Australia, the US has sole taxing rights for US social security (Australia cannot tax it too). Other countries have treaties that give the taxing right on social security to the resident country – in those countries you would not face the US withholding, but you would face progressive tax rates in your country of residence.

            For those whose retirement is mainly funded by US retirement savings (including social security), US citizenship and citizenship based taxation may actually result in a lower tax bill than being a nonresident alien.

            As for the Roth IRA – these are a problem for Australian residents for the reasons you mention. It may be worthwhile to withdraw the entire balance before becoming an Australian resident. Of course, you would need to run the numbers and consult a financial planner who is conversant in US and Australian tax and the interaction between them.

  13. Hi Karen, i just want to say what a great things you’ve done here. It is rare in this day n age for anyone to go above and help try to help other people. Well done.

  14. Hi Team, Is there any progress we are expecting from both the governments to fix the superannuation treatment by IRS?

    Seems there are many Australians confused and scared that how their retirement savings will be taxed by the IRS, While a lot of other countries have clear rules and exemptions from IRS when it
    comes to the foreign retirement funds.

    Have we as a group approached the Aussie government to understand the hardship we are facing and approach their US counterparts? Or is there anything in progress?


    1. Hi Bill,
      Several of us have individually approached our MPs, and several of those MPs have written letters to the Treasurer (over a number of years). The response we get is always the same. Australia will wait until the US wants to renegotiate the treaty. The current problem is one for the US to fix and the US has a right to tax whomever it wants. (OK, I’m exaggerating a bit here, but Treasury has show little sympathy or empathy on this issue).

      Reading between the lines, I think there have been approaches to the US generally and the IRS in particular – but to no avail.

      Given the current election cycle, we’re thinking that it would be best to wait until after the election as nothing will be done beforehand.

      If you have specific ideas, or want to pitch in, we’re always looking for volunteers. See the latest Strategy Document.


      1. Check Scott Morrisons official reply. Boils down to American problem. He did not reach out to us as Ozzie to help.

  15. Hi Karen

    Great forum, I don’t believe I’ve seen a situation similar to mine. I am an Australian Citizen living and residing in Australia, I am about to be employed by a US based company that is based in the US with no office in Australia. I will be looking after clients in APAC. The question I have is there a form where I advise that I’m not a US citizen etc whereby I’m exempt from paying Tax in the US and will only pay here?

    1. I haven’t seen that situation before. Your income is not US source because the services you’re performing are done outside the US. It’s possible that your employer will accept a W8BEN as proof that you’re not a US taxpayer – you’ll have to ask them. Usually a W8BEN is used for US source income to claim a treaty exemption or lower rate.

      1. As a nonresident alien, Chas will only be subject to US taxation on US source income. If he spends all of his time working outside the US he will have no US source income, so will not pay US taxes. Even if he spends a few weeks a year working in the US he will be exempt from US tax provided he spends less than 183 days in the US and the costs for his compensation are not borne by a US entity. He will also be exempt from US social security withholding.

        The real issue is how will the employer comply with Australian tax withholding and superannuation requirements. They could also run into corporate tax problems in Australia by having an employee based there.

  16. Hi guys,

    My wife is US and Aus dual citizen. She was a US citizen first. Now living in Australia permanently. She has no ties in US, no property, no savings etc… she got a letter from the bank today advising she needs to report tax obligation etc.. as she is a US citizen. We are so confused 🤷‍♂️. Please help. Does she has to pay income tax to US now ? Eventhough she works and earn in Aus.


    1. Hi team,

      Can someone please shed some light on my above question. Where can i get some honest professional advice on this ? I dont want to go to any accountant and ask them as they will take you for a ride. Please kindly help.


      1. Hi Kc,

        Your wife should take a look at our OMG page.

        Most likely, what the bank wants is a certification of her citizenship or tax residence status. If she tells them she is a US citizen (and Australian law does require customers to tell their banks when asked), then the bank will want a social security number. The bank is obligated to report the account data of all US citizens to the ATO under FATCA. There are hundreds of thousands of accounts reported to the IRS from Australia each year. Being reported under FATCA is not the same as filing US tax returns.

        Under US law, all US citizens, regardless of where they live, are obligated to file a US tax return if they meet the income thresholds which depend on filing status (from US$12,000 for single taxpayers to $5 for married filing separate). The compliance costs of filing will likely exceed the US tax due, unless you fall into one of the pitfalls described in this post.

        US tax filing requirements are US law. If you contact a US tax preparer they are required to advise you to file if you meet the filing requirements. On the other hand, the IRS is not actively looking for nonresident citizens – and they have not yet figured out how to use all that data they are getting from FATCA. Furthermore, the IRS is unable to collect from Australian assets while you are outside of the US.

        I am not a lawyer, and this site is for educational purposes only. The team consists of volunteers, and our main purpose is to advocate for change rather than provide individual advice. We have an active Facebook group with more than 750 members – if you’re looking for peer advice, please join us there. Alternatively, the Isaac Brock Society is another active website with a worldwide following; try posting a question there.


  17. Hi All.
    I recently elected a cash payout for my (USA listed) fox 21st century stock, after it was bought out by Disney. When the cheque came in the mail, i noticed that 15% witholding tax had been taken on the full amount.

    I’ve called the issuer numerous times, but not getting anywhere (my w8- ben forms are registered.) They say that 15% is the rate in the current treaty. Is that correct? Can they take 15% of the Sale amount? Surely it should be a % of the capital gain rather than sale price.

    1. Hi Ron,
      The appropriate tax rate will depend on whether the distribution is classified as a dividend or return of capital. Apparently there’s some controversy in this case. (

      If it is a return of capital then you can get a refund of the tax withheld by filing form 1040NR. Depending on the amounts involved, it might be worthwhile to hire a US tax professional to prepare or review your filing.

  18. Wow. Can’t believe how much I’ve accidentally uncovered!! Who knew?! (Definitely not me.) This page is excellent. So much useful info.

    I am an American Citizen/Aussie permanent resident…but after reading through all this, I’m thinking it’s time to file for divorce! Do you need to be caught up and compliant with the IRS before renouncing?? Will the US serve you with a back-dated tax bill before letting you walk away? Is it a matter of choosing to play/pay catch up OR renounce…or do the two go hand in hand in the end anyway?

    1. Glad you found us, Mrs Smith.

      I would agree with everything Pacifica has said (with the minor correction that the due date of your last US tax return will be on 15 June of the year after you renounce,n ot 30 June). Thank you, Pacifica, for your contribution.

      When you show up at the consulate to renounce they will not ask you about your US tax compliance – though they will tell you that you have an obligation to comply and provide links to the IRS website. Your US tax status will have no bearing on the approval of your certificate of loss of nationality.

      The decision on whether to become US tax compliant is highly personal. It will depend on whether you have US assets or income and your level of comfort with the potential risks. I highly commend the information on the Isaac Brock Society website linked by Pacifica. Read as much as you can and ask questions (here or there) so you can determine the course of action that you are most comfortable with.

  19. Hi Mrs Smith,

    You can renounce if you have not filed taxes.

    There’s two US govt departments involved in renunciation, State and Internal Revenue.

    Re DoS: Dept of State basically doesn’t care about one’s tax status as the citizenship itself (and the issuance of the CLN) is not dependent on one being tax compliant. So, the CLN is issued regardless of a person’s status as a tax-filer and remains valid whether the person ever files or not.

    Re IRS: You are supposed to file for the 5 years prior to renunciation (if you haven’t yet) and renunciation year and the expatriation tax form (8854) by 30 June of the year *following* renunciation. However, some do this and some don’t. So far, no renunciant who has not filed these after renouncing has reported any problems (or any contact at all from IRS) to the Isaac Brock Society since it’s inception in 2012. If a person has no income or assets in the US, it’s an option to consider — it’s often the best option for one with no involvement (or no recent involvement) with the IRS to just stay out of it.

    However, if one wishes to “exit the US tax system cleanly,” one has up to 30 June of the year following renunciation to file for one’s final year as a US citizen and the five previous years and the exit tax form (8854).

    In any event, one does not have to be tax compliant at the time of renunciation, since regarding the citizenship itself, it has no impact.

    I go into a lot more detail about this, with source links, at this info sheet, “Renunciation/Relinquishment: Interactions between Department of State and the Internal Revenue Service”

  20. Thank you Karen and others for this most important information. I had my OMG moment when I retired in late 2017 yet only recently found this website.

    I am a dual Aus/US citizen. Australian born and US naturalization in 2003. I have had simple term deposit assets in Australia, but now due to inheritance more recently have a property that I am renting. This has raised the red taxation flag again. I plan to return to Australia to live within next few years and need to clarify as much of this as I can.
    My retirement savings are from the US. A retirement annuity that I have not drawn down on yet, and Social Security. I think at this time, I have two questions
    1) When you say that US Social Security will not be taxable in Australia when I return to live there, does that mean it will not be counted in my worldwide income for Aus. taxation purposes? I understand that it will be for my future US taxation purposes, but am I understanding it correctly that Aus. will not count it as part of worldwide income? And, if this is true, is this something that is well understood by Aus. tax accountants or is it something only specialists in international taxation would know?
    2) The property that I have inherited is a duplex and I have always hoped to buy the other half and rent as part of my retirement income when I am living there. After reading some of the posts here thought I am not so sure. Would there be an excessive US tax on that Australian rental income when I am a nonresident US tax payer?
    3) If I were to renounce US citizenship, I understand US would tax my Social Security at 25% of 85%. Would they tax my retirement annuity funds any higher than they would otherwise be taxed as a resident US tax payer?

    Thank you for any assistance

    1. Welcome Ann.

      1) US Social Security is not included in your Australian taxable income. I’m not sure whether you have to report it, then exclude it as tax free under the treaty or whether you can just leave it off of your Australian income tax return entirely. Social Security is considered in the income test by Centrelink when determining whether you are eligible for the Age Pension. I don’t know how widely known the treatment of US Social Security is among Australian tax professionals, but I would expect that any mid-level firm would be able to handle it correctly.

      2) If you remain a US taxpayer, the rental income from Australian property will be taxed by the US. The rules on computing taxable income from rentals are broadly similar in the two jurisdictions, especially when you have net income rather than a net loss (the rules on negative gearing in Australia are a bit more generous in allowing losses to offset other income). There will be exchange rate fluctuations which could affect the net income computed in USD rather than AUD – but that could go either way.

      3) How the US taxes retirement annuities owned by a nonresident alien will depend on whether they are treated as deferred compensation or investment income. You may need an opinion from a US tax specialist based on the exact form of your annuity. If treated as deferred compensation or a pension, they could be exempt from US taxation under the treaty (Article 18 para. 1). If investment income, then the US payer will withhold 30% tax. For your social security, the withholding is 30% of 85% of your payment or 25.5%.

      The above answers are general in nature and you should engage a professional adviser to assist with complicated tax compliance issues. It is very important to approach these professionals with some idea of what might be possible. Thus, the mission of this website is to educate taxpayers on the broad outlines of a very complex area.


      1. Thank you Karen. I appreciate very much you response. I have been thinking it all over again, and again.

        Not having US Social Security taxable when resident in Aus. IS good news. I am still swallowing, however, that Non Resident US citizen tax is tougher than Resident US tax. I hope there aren’t too many more surprises ahead.

        I would like to follow up a bit on 3) above if I may? Are you saying that even if I do not renounce and remain a US citizen, then, when Resident in Australia, my Social Security would be taxed 25.5% by US and not progressively? And if I remain a US citizen but become a non resident, the annuity?

        With regard the Australian rental property. Australia now takes out 30% because I am a non resident and from what I have been reading, the US will take the same amount when I’m a resident of Australia unless I have more than “passive” involvement, so there’s a glimmer of hope there perhaps.

        It’s an absolute maze to navigate and I will need more specialized tax services when my circumstances change. Can you recommend somewhere where I can search for tax specialists in Australia?

        And one last question again if I may and please forgive my ignorance but does the US send to the ATO all the same bank reporting that the ATO is obliged to send the IRS under FATCA?

  21. I am another person having an OMG moment. I’m a dual national (think I might qualify for a third as well) by birth and have been living overseas on my non-US nationality for around 30 years. I have been living and working in Australia for over 20 on my non-US nationality paying taxes here – however – have been keeping my US passport up to date and going in and out on it (as required) to visit my elderly parents. They are now beginning to reach a point where the end is very much in sight for my mother and I want to move my father here to be with the rest of the family (yes I know all the various hurdles Australia puts in place for family members to come over and can manage it). I am feeling sick – as like many I have a house, superannuation and all those items to allow me and my partner to be self funded retirees here – which I now understand may be assets that can be claimed by the IRS. To be frank – I’m not sure the US knows I live here – as I enter and exit on two different passports, but, regardless I’m now worried if I renew my passport – that might be the trigger that brings me into view.

    When I left the US – you didn’t have to file a return if you made under a certain amount – and then once I started earning I was living and paying taxes in other countries.

    I’m just confused as to what to do next. I don’t have all my tax returns as they go back many years – and my experience with lawyers has left me a bit unsettled – as you are responsible regardless if they give you incorrect advice.

  22. I am an Australian citizen living in USA. and have a green card for work purposes. There was a period when I did not have work in USA and completed some contract work with my ABN. Where can I get advice re income earned as a contractor whilst resident in USA and tax liability. I have an Australian ABN and provided invoices to an Australian Company with whom I completed contract work. Do I complete an Australian or USA tax return?

  23. Hi. I have dual citizenship, and was born in Australia. I am about to divorce a dual citizen, who was born in the USA. We both live in Australia. I need to understand the ATO tax consequences of IRAs for the financial settlement and the IRS tax consequence of selling the family home. Are there any Australian accountants versed in US tax law who you would recommend? Thank you.

    1. We have discussed the Australian tax consequences of IRAs in the Facebook group. This will be the subject of an upcoming post on this blog. As for selling the family home, the US allows an exemption of the first US$250,000 of gain providing you have lived in the house long enough. Besides the gain on the house itself, you have to consider whether there is a foreign currency gain when you repay the mortgage. In the Facebook group we have a pinned thread with tax preparer recommendations.

  24. I’m feeling overwhelmed and not sure what my next step should be as I travel through seemingly conflicting information.
    I’m a US & Australian citizen (born in Greece) to an American-born mother but was raised almost entirely in Australia and have lived, worked and paid my Australia taxes here all my life.
    I do have a US social security number from when I worked in the USA for just 2 months in 1996 as a waitress earning too little in that time to file taxes.
    So I’ve never paid US taxes. I want to do the right thing, be compliant, and perhaps use the streamline online process to do so.
    But I’m petrified for the ramifications for doing so, or not doing so.
    My husband and I have a family trust, set up, a small P/L company, one house that we don’t live in yet, and little kids. We’ve had some considerable Australian taxes to pay recently and and I so scared we couldn’t possibly afford to pay hefty US taxes also.
    I don’t know what the best course of action is for me and my family.
    On top of that, I will inherit part of some properties in Greece in the coming years and I don’t know how that impacts things as a US citizen.
    Any advice is greatly appreciated. Karen, thank you for this feed, so much value here you offer.

    1. Hi Helena,
      Take a deep breath – the more you learn before you act, the better. If you can exit the US tax system with little damage, then it may be worth the cost of coming into compliance. See my post on the new relief procedures for dual citizens – if this applies to you it could mean up to US$25,000 of US tax being forgiven. If you don’t qualify because of your net worth, then it sounds like you might qualify for the dual citizen exemption to the exit tax. On the other hand, your family trust and small company could be costly in terms of US tax compliance. If you have no US source income or assets, then the IRS isn’t looking for you. There’s plenty of time to consider your options and choose a course of action that will allow you to sleep at night. If you decide that action is better than inaction, then there are enough complications in your situation that you should be consulting with a paid advisor.

  25. Hi Karen, I am a dual citizen (Australian first, U.S. in 2019) who has lived in the U.S. for 18 years, and am married to a U.S. born citizen who recently got granted a spousal visa for permanent residency in Australia – we are both 40 and have no kids. We are moving to Australia at the end of this year (Dec 2021) to be closer to my family. We currently own nothing in both countries, however one day I will inherit property in the U.S. that my parents own (we currently reside in) if they choose not to sell, and will also inherit properties in Australia. I will come back to that when I cross that bridge in the future. However do we need to seek professional advice from a tax specialist in the U.S. or Australia? Or both? We do not want to pay U.S. taxes while residing and working in Australia especially since we don’t own anything. Renouncing U.S. citizenship is not an option for either of us as we have family ties in both countries and may even come back to live in the U.S. someday. I came across your website and am shocked that we are faced with having to pay U.S. taxes as future non U.S. residents. Thanks for any direction you can give.

  26. Hi, I am an Aus citizen moved to US in Nov 2020 after getting a Green Card in April 2020. I am married to a US Citizen. This would be my first tax submission to the IRS for tax year 2020. I lost my job in Aug 2020 and found a new job in Nov 2020. Does it mean I have to declare my Australian job income from Apr 2020 – Aug 2020 as foreign income, will I also have to pay tax on it? After reading all the comments here, it seems like I have signed up for a very difficult gig with effects going to last forever. Sometimes you make choices to live close to the family without knowing the after effects. I don’t expect any good from politicians on this treaty from both side of the fence simply because its not in their interest at all. They all care about their on $$$’s.

  27. Hi Karen,

    It seems you know so much in the subject and its so hard to get around and understand!
    I was born in the US to a Chilean mother and an Italian father and left the US at 5 years old.
    So I have triple nationality and entered Australia with my Italian passport 5 years ago. I am a permanent resident in Australia and have worked here just under 5 years.
    I read something about 5 years being a benchmark? So, I am not sure if I should do something about it before this happens.
    I just discovered I had to file taxes when I tried to open a bank account recently in ING.
    Don’t have much saved up yet given I have worked only 5 years but I am worried for the future. I am willing to pay the renounce if its straight forward so I forget this but reading the comments it seems everyone that has tried to do this has had to pay lawyers, and much more! I haven’t been contacted my the IRS and my passport has being expired for a few years now because I haven’t even visited the US since 2008. Was wondering if you could give me any advice? I am still very confused, this is very unfair!

    1. I’m not sure what five year benchmark you’re talking about. The best advice is to read up on the subject as much as you can before contacting professionals. If you’ve been flying under the radar, think very carefully before sticking your head up to be noticed.

  28. What has not been mentioned in any of the posts I read is that while you might be required to file a US tax return, you do get credit for the taxes paid in Australia. So for many people, this is not a financial hardship. If the taxes are paid in Australia, your tax rate is higher than any in the US right now and even with the currency conversion rates, few of the expats that I work with have any US tax obligation. Typically it is only for the US investment earnings.

    1. The real problems arise when income is taxed at a different time under the two systems (such as with superannuation or ROTH IRAs) or when the US imposes punitive rates on “foreign” income (such as with PFICs).

  29. Hi Karen,
    Im a dual australian and us citizen from birth due to my father having us citizenship.
    Im going through a very difficult time and hope you may be able to give advice.
    I have recently been told by my bank that all my bank accounts are going to be frozen because I dont have a ITIN or us tax file number. They gave me 2 weeks notice to comply. I have since learned that I may have to apply for a social security number. I had a US passport and visited the US a few years ago for 3 weeks holiday. I have never worked in the US. I have recently moved house and seem to have lost my us passport. I am just managing to make ends meet at the moment and am terrified at the prospect of losing more of my income to us tax requirements. Im 50, I havent been doing us tax returns ever and it now seems like I have to apply for a social security number and give legal evidence as to my residency from the age of 12 and my fathers time in the usa. My father died when I was 12. My mother has dementia. I have no contact with usa relatives who would know anything. I have misplaced my us
    passport. I have no records from my fathers past or my mothers other than being tax compliant with australia for many years. I am in despair about how to get a social security number or how to renounce my us citizenship. My bank accounts are soon going to be closed and I have no idea how I will cope without a bank account. I really need some help, I dont have time to manage the complexities of applying for a social security number and no idea how I am going to get the paperwork together that the US social security office will accept. Can you recommend anyone who can help me? How can I renounce my US citizenship?

  30. Hello Karen,

    I need advice on the prospects of moving to the US for work in the coming year as a dual citizen. I have both Aus/US dual citizenship, mother is American but I was born in Australia and have lived here my whole life (except in 2006, I lived in the US as a child for six months). I have never filed my taxes with the IRS and am 22 years old working my first graduate job since May, after only earning cashier and Centrelink income prior to this since I was 18. If I move to the US now for work will I have owed taxes from all those years passed despite not living there and potentially blowing up any plans to work and use my citizenship in the US? If so, is there any action I can take to remedy this tax debt now before attempting the move? Moreoever, if I move back to Australia to permanently reside after working in the US for a few years, will I most likely start being chased by the IRS for the rest of my life? Is any of it worth it…

    1. Hi Taylor,
      Taxes should not stop you from pursuing opportunities. Most likely you won’t owe any US tax for years you were living/working in Australia. If you move back to Australia permanently after residing in the US you can either structure your financial affairs to avoid extra US tax or renounce your US citizenship – but worry about that later, when you’re ready to make a decision about returning to Australia. Who knows what the future will bring.

  31. Hi Karen

    Congratulations of a very informative page!

    We have a child who was born in the US whilst we working there in 2018. My wife and I are Australian and Korean respectively and our son lived in the US for 3 months and has a US passport and SSN.

    My questions are
    – at what point does he need to submit any tax filing to the IRS?
    – whould he be considered as a covered expatriate if he never lives in the US?
    – if we die will a testmentary trust protect him from from the $2 million asset test?

    1. Hi Peter,

      • He would be subject to the same income tax filing thresholds as any American citizen. See the IRS tool at He would also be required to file an FBAR if he has more than US$10,000 in financial accounts.
      • Whether he would be a covered expatriate would depend on whether he was a dual(or triple) citizen from birth, his net worth when renouncing (if not dual from birth) and whether he’s up to date on his US tax filings.
      • The $2million asset test won’t apply if he was a dual citizen from birth. As for the testamentary trust, that’s beyond my ability to answer. If it’s going to be an issue, get some good professional cross-border estate planning advice.
  32. Hi Karen

    I’m an Accidental American, my father was an officer in the Royal Australian Navy and I had the misfortune to be born in Bethesda Naval Hospital in 1965.

    I recently had to relinquish a directorship of my wife’s business because I couldn’t provide an ITIN and thus couldn’t open a bank account. I’ve never held a US SSN or passport, the house is in my wife’s name and I’ve never earned over $80k AUD. My father is 85 and quite wealthy, so I’m going to rescind my US citizenship to avoid their inheritance tax. I’ve been put through to the free legal foreign advice line of the IRS, but been cut off after being on hold for 30-40 minutes.

    I will not give the US fascist state that masquerades as a democracy one cent of my hard earned income and my Super account only has $3500 in it after being self employed most of my life.

    Apparently I need an ITIN to rescind and the rescindment fee is currently $3750 AUD. I’m hoping to keep it at that because I simply can’t afford any more.

    Your thoughts…?

    Best Regards


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