WDR: US tax authority has Germans in its sights

By 23 December 2019News

WDR TV: In Germany, people are receiving letters from their German banks. Introducing Catherina Stauch, a physician and native of Düsseldorf. Out of the blue, the bank demanded that Ms. Stauch inform them of her Social Security Number under threat of closing her account. She then also found out every US citizen is subject to worldwide taxation.

And now, a story from WDR television on the “Hard to believe” column. Introducing Catherina Stauch, a physician and native of Düsseldorf. Out of the blue, her bank has asked her for her SSN number otherwise they will close her bankaccount.

While Ms. Stauch was indeed born in the US, she only lived there for one month following her birth. Her parents had been in the United States in connection with their profession.

Ms. Stauch has lived in Germany ever since, and is dumbfounded by the tax requirement. She’s not the only person facing this problem. Ms. Stauch and her fellow sufferers call themselves “accidental Americans”.

Catherina would rather spend her time just taking care of her patients. But besides worrying about their hearts, kidneys and thyroid glands, the nuclear medicine specialist has spent the past several months pondering US tax law. In particular, a law known as FATCA (Foreign Account Tax Compliance Act).

Professionally, she has nothing to do with the United States, and has no money invested in the US. But Catherina is still required to pay taxes there.

Stauch: “At first, you’re speechless. You don’t believe it, because you work and pay taxes in Germany where you use the infrastructure, and have nothing to do with the US. I don’t use any of the infrastructure there, and can’t imagine – or couldn’t imagine – that I’m liable to pay taxes there.”

Ms. Stauch was born in Knoxville, Tennessee. Her parents returned to Germany when she was five weeks old, and Catherina has lived in Germany ever since.

She seldom travels to the US as a tourist, nevertheless she is considered to be a US citizen and is therefore required to disclose her finances to the IRS.

Stauch: “It feels like an existential threat. There’s a feeling of helplessness and anger at the thought that I find it very difficult to help myself. How am I, a lone citizen who works 50-60 hours per week or more and takes care of a few hundred patients per calendar quarter and who has enough trouble complying with German tax law — how am I supposed to understand the American system on top of that, get to the bottom of it and do things right.”

It sounds absurd, but it’s legal

In 2013, Germany’s Bundestag passed a law intended to help the US find tax evaders. FATCA requires German banks to track down American dual nationals and to report their account balances, against which they have no recourse.

Catherina Stauch is no isolated case. There may be as many as 100,000 accidental Americans in Germany, and several hundred thousand in Europe.

Dutch citizen Daan Durlacher is the founder of the internet self-help group Americans Overseas. He knows numerous individuals who now have problems with their banks.

Durlacher: “There have been lots of cases in Germany where accounts have been closed or letters have gone out stating that they’ll be closed or blocked, canceled. And it’s nearly impossible to open a new bank account if you were born in the US.”

Catherina Stauch feels as if she’s been left high and dry by Germany’s politicians. She’s written numerous letters, but to date only the European Parliament has shown any interest in the accidental Americans’ plight.

In November, Stauch attended a hearing in Brussels. The parliament members wanted to check whether FATCA is compatible with data protection legislation.

That’s little help to Catherina Stauch in the short term.

Stauch: “I’ll do everything I can to meet this tax liability. In the long term, I’d like to give back my citizenship. In parallel to that, the political work has to be done to weaken this law or to revoke it.”

The law might have had good intentions, but it makes life difficult for people who have nothing at all to do with it.

Americans Overseas helps European Americans

We, the founders of Americans Overseas, were born in the Netherlands and obtained our American nationality through our (American) mother.

When we heard about the American tax system for the first time around 2013, we were in total disbelief (it can’t be true!), anger (how can they do this?), fear (am I going to get fines or pick up other problems?), and panic (what should I do?). It is (unfortunately) true that there is an additional American tax levy. But there’s no information from local government, and when approached, the consulate referred us to the IRS, and the IRS was impenetrable.

That’s why we started this initiative to help people from all over the world by providing proper information about the American tax system to avoid unnecessary panic, and offering help free of obligation and free of charge. If needed, we have a network of affordable professionals (accountants) who can help you with your tax obligations.

If you have more questions about the American tax system you can contact us at Americans Overseas.

Contact us for more information

 

Source: WDR Fernsehen