The term for people who fall into this category is ‘accidental Americans’ and they are those who have US citizenship but do not live there, with many of them having little or no connection to the country at all.
Despite this they often find that they are eligible to pay tax on their global income in America because US tax eligibility is based on citizenship and not residency (as it is in most countries).
That means that many are finding themselves slapped with huge tax bills from a country they are unfamiliar with that they can little afford to pay.
One of the big problems for those living in France and elsewhere is the Foreign Account Tax Compliance Act (FATCA).
This act, signed in 2010, was created to stop tax evasion by Americans with financial assets abroad after a financial scandal revealed that US taxpayers were hiding millions of dollars overseas.
Once the FATCA was signed by most countries in the world, foreign banks were required to comply with the law by asking people to provide their US tax identification number and information about financial accounts held by US citizens to the Internal Revenue Service (IRS) in the United States.
Another problem is that it’s not just a simple case of rescinding their citizenship for the ‘accidental Americans’, explains Lehagre because that costs more than $3,000 on top of the legal and accounting fees to start the procedure.
But after being swept up by the effects of this Act, the ‘accidental Americans’ are fighting back.
The ‘Association des Americains Accidentels’ (Association of Accidental Americans) launched in 2017 devotes itself to “representing and defending French-American dual citizens who live outside the United States from the adverse effects of certain American extraterritorial laws.”
The organisation, run by its president Fabien Lehagre, 33, a commercial manager in France who has dual French-American citizenship himself, has a membership of 550 and this figure continues to grow.
In Lehagre’s situation, his French bank contacted him asking for his US tax identification number in 2014 but, believing it to be a mistake, he ignored the request despite repeated warnings.
But after doing some research he realised it wasn’t a mistake at all and that he was also an “accidental American”.
Lehagre, who only lived in the United States for a short time as a toddler and whose mother is a Singaporean-American, said he was being “forced into the administrative system that obliges [him] to fill out forms, pay a lawyer and have [his] bank accounts scrutinized.”
In response to his situation, he created a collective in 2015 and that blossomed into the Association of Accidental Americans and now news of their plight has reached the ears of the European Union.
On Wednesday July 4th, the European Parliament in Strasbourg will debate a resolution that could have a significant impact on the tax plight of “accidental Americans” and a vote will be held on Thursday.
“This is a very important day,” Lehagre, who left the US when he was two, told The Local. “If the EU backs the resolution, it will show that they back us and then we might have a chance of becoming an exception to the tax laws.”