Brickbacon is correct. It’s a facts and circumstances test which wil result in his paying taxes. By the way, I deal with mark-to-market issues on a daily basis so happy to discuss in detail.
Renouncing citizenship is sort of like dying as far as the IRS is concerned. They will get their cut before he leaves.
Personally, if you offered me a million dollars to renounce my American citizenship, I’d turn you down. I love this country more than I love money (and I like money).
Eduardo Saverin obviously has a different opinion. Okay, that’s his right (or at least it was his right when he was an American - I don’t know if he still has that right as a Singaporean). But I don’t see anything particularly brilliant about it. He just made a moral choice.
What if tens of millions were at stake? A million is small change compared to what he saved.
I’m with Nemo, I’d be cutting a check to the IRS as I’m running out the door to enjoy my billions. Hell I might even tip.
No, he’s exactly right. The exit tax treats the shares as if they were sold. Before the IPO, their value, according to the Facebook’s restrictive repurchase agreement is $0.01 per share.
They are wrong because they don’t seem to be aware of the restrictive repurchase agreement of Facebook’s that values pre-IPO shares at $0.01. If you can point me to anything contradicting this, (like someone selling his Facebook shares back to Facebook for more than $0.01 per share), please do.
Or, they are aware of it, and recognize it doesn’t apply. Why would the IRS care what Facebook values their own shares at when there clear independent evidence of their worth? Not to mention that Facebook doesn’t even seem to fit the definition of a company that would be subject to those rules. Since I have already explained why I don’t think it will apply, and linked to several experts verifying my understanding of the matter, why don’t you back your assertion with some evidence.
Put your money where your mouth is. How much do you want to bet this guy will still have a huge tax bill?
I don’t know. I’ve always joked that I can be bought, just not cheaply enough that most people can afford me.
Ten million dollars? No, probably not. A hundred million? Five hundred million? A billion? Well, maybe at some point I might start thinking that Canada is a very nice country.
But that’s only in my current middle-class situation. If I already had a few million, there’s no way I’d give up my American citizenship for more money to pile on top of it. In Severin’s situation where he’s giving up his citizenship so he can have four billion dollars instead of three billion dollars? That’s incomprehensible to me.
Yeah, maybe for Canada. But Singapore? No fucking way. (And I don’t think I’d give up my citizenship for Canada either, at least not for money.)
You guys have a very strange attachment to citizenship. But I guess if you’re life plan is to never ever leave the US under any circumstances than I could see your point. I’ve got both Canadian and Irish citizenship and could have US citizenship next year if I wanted. But I don’t want it because the IRS will haunt me for the rest of my life, regardless of where I reside. Neither Canada nor Ireland do that. So if I ever plan to live somewhere else than US citizenship is a huge burden.
No, he’s giving up citizenship because he’s living in Singapore and doesn’t want to ALSO pay taxes to the US. No one else in Singapore has to, why should he?
Did you know that last year the IRS saw a record number of people renounce their citizenship?
Last year, almost 1,800 people followed Superman’s lead, renouncing their U.S. citizenship or handing in their Green Cards. That’s a record number since the Internal Revenue Service began publishing a list of those who renounced in 1998. It’s also almost eight times more than the number of citizens who renounced in 2008, and more than the total for 2007, 2008 and 2009 combined.
But not everyone’s motivations are as lofty as Superman’s. Many say they parted ways with America for tax reasons.
The United States is one of the only countries to tax its citizens on income earned while they’re living abroad.
http://www.reuters.com/article/2012/04/16/us-usa-citizen-renounce-idUSBRE83F0UF20120416
He’s not living here, why does he owe anyone anything?
Because patriots died to protect the laws that allowed him to become wealthy. Without patent law, and intellectual property law, and a million other laws that create the environment to be successful, he would just be another code drone. That is why he enjoys the privilege of being an American taxpayer.
Nonsense. Many of the wealthiest people in the world are not American.
I doubt if he actually “lives” in Singapore. As I remember, Singaporean residents taxes are calculated on earned income in Singapore and based on the number of days per year you live their. Eg, no global income taxation and prorated. Singapore is also a global off shore banking tax haven of choice.
Renouncing citizenship no long means you automatically have no US tax liability. IIRC the IRS can go after someone for 7 years on global income after their US citizenship is renounced.
To clarify, if he is trying to reduce his taxes in the future while still complying with US tax law, then I don’t have an issue with that.
And Mr. Saverin is not an oil sheik.
Just so we’re clear, should everyone that makes use of patent law pay the same amount as him?
Should everyone in the world pay into the US tax system if they in some way benefit from US patent law? If a Canadian writes a song that makes it big in the US, how much should that Canadian pay into the US income tax system?
Saverin paid taxes in the US while he was a resident, after he stops being a resident why should he keep paying?
What if he simply moved from the high-tax-state of California to Texas. Should California be able to continue to go after him for the next 7 years?
Or have you simply not bothered to think this through and continue to hold a grudge against anyone that makes money?
No. I support a progressive income tax.
Yep. You caught me. I hate anyone who makes money. Feel better?
I didn’t say I never wanted to leave the US ever, no matter what. I’m not adverse to travelling, or even living elsewhere if need be. Nor would I be opposed to dual citizenship But I was born an American. What’s wrong with being patriotic?
He got rich from the American system, here in the U.S., and now he claims he doesn’t want to pay taxes? Well, fine. Screw him – don’t let the door hit him on the way out.
I’ve had my issues with my country – oh, do I ever – but I’m still an American. And yeah, I’ll pay taxes – because that’s part of being a grown-up. Whining and crying about not wanting to pay taxes is just being childish. We all have to do it – suck it up.
And no, if he renounces his citizen, there’s no WAY he should still be allowed to live here. Let him live in Singapore. He likes the benefits of this place, but doesn’t want to pay for it? Fuck him.
Then say that. You don’t need to make up bullshit about how one person made more use of a patent system than someone else. That sort of rationalization isn’t necessary, because all it does it shows that:
That sentiment is obvious in everything you write regarding this issue. You have a deep seated resentment to anyone earning above the mean/median/mode and it comes across every time you try to rationalize a way to punish them for their success–or should we say crimes against the poor?
Do you realize how few countries continue to tax their citizens the way the US does? And not just the rich, they go after everyone.
I only want what the Founders wanted when they gave Congress the power to tax. Anyone who tries to avoid that responsibility by renouncing their citizenship should be barred from ever entering the country again.
Nothing really, it’s just a bit silly. You didn’t choose to be American, you were born that way. It’s also a little outdated and wreaks of tribalism.
No, what you wrote is being childish. He payed taxes as a resident of the US, once he leaves why should he continue? You don’t pay taxes to Singapore, or a different state, or a different county.
Like I asked Fear Itself, if this dude had moved from California to Texas, does he continue to owe something to California? How long after he’s left should they continue to get their pound of flesh? Pretty simple question that quickly eats away at your beef with the Facebook guy.
Bitter much? If he came back to live here, he’d have to pay taxes as a resident. You know, as person getting the benefits and all that. So I’ll ask again, if he had moved from California to Texas, should get be allowed to go back to California?