Who are France's 'accidental Americans' and why are French MPs talking about them?
'Accidental Americans' are the subject of a proposed amendment to France's new cost-of-living bill, but who are these people trapped in an Orwellian tax nightmare?
These are French citizens who also have American citizenship - often without even knowing it. They have come together to fight against the ways they are harmed from American legislation reaching outside its borders, namely in regard to taxation and access to banking.
Most recently, 'Accidental Americans' have come back into the forefront after an amendment to the second purchasing power bill passed through France's Assemblé Nationale.
The amendment calls for the reciprocal application of the Fatca (explained below) between the United States of America and France and seeks to draw the Government's attention to the situation of French citizens known as "accidental Americans."
While it is unlikely the amendment will have any day-to-day impacts on 'Accidental Americans' and Americans living in France, if passed by the Senate and put into law, it could put pressure on French banks. This might in turn encourage the French government to pay attention to the situation of 'Accidental Americans' and the safety of data transfers from French banks to the United States.
Ultimately, the amendment is a "strong sign" after "many years of efforts" according to Fabien Lehagre, the President of Accidental Americans.
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Who are the ‘accidental Americans’?
There are thousands of ‘accidental Americans’ spread around France, all they have in common is the fact that they are entitled to American citizenship. Some of them had left America in the days after being born in an American hospital. Some of them didn’t even know they were technically American. Some of them don’t even speak English.
There are estimates that there may actually be as many as 40,000 ‘accidental Americans’ in France, thousands of whom still do not know that they technically have American citizenship, and up to 300,000 across Europe. While formally giving up US citizenship is an option, it can be long and costly.
What does the ‘accidental Americans’ Association (AAA) do?
AAA began in November 2014 when a Paris-based sales manager Fabien Lehagre received a letter from his bank asking him for his American tax identification number (TIN). Lehagre had been born in the United States in 1984, but he arrived in France at the age of just two with his French father. He has never lived in America since then. Having no idea that he was legally a US taxpayer, Lehagre first thought there had been a mistake. But he then discovered that he had acquired American citizenship at birth and consequently was supposed to declare all his revenues to the US Internal Revenue Service (IRS).
Lehagre then decided to fight the principle of Citizen Based Taxation (CBT), which applies only in the US and Eritrea. And, in August 2015, he set up the ‘accidental Americans Association’.
How did this situation arise?
In 2010, American President Barack Obama signed Fatca, or the Foreign Account Tax Compliance Act, into law.
This was a measure to force banks worldwide to scour client lists and report anyone who could be a US citizen, or face being barred from operating in the US. Fatca was passed in the aftermath of scandals involving Swiss banks helping wealthy Americans avoid taxes, but has ensnared millions of US citizens of modest means.
It was intended to target multinationals skimming their tax bills. But some individuals have become collateral damage as they were suddenly revealed to be technically American citizens living abroad. They only realised their involvement when the IRS started sending out bills for overdue taxes.
Applied in France since 2014, Fatca requires French banks to disclose to the US tax authorities personal data, assets exceeding $50,000 (approximately €40,000) and transactions of all their US clients. French banks are threatened with a hefty 30 per cent tax on all their American transfers if they do not give all this financial data.
This has a knock-on effect on US nationals who move to France, since many French banks are reluctant to open accounts for American clients because of the extra reporting requirements.
What is France doing to help its citizens avoid double taxation?
The AAA has sought out political support for their campaign to end double taxation. French President Emmanuel Macron has been vocal in his support of the efforts of these ‘accidental Americans’ to loosen their ties to the United States. Macron even wrote about this situation to Richard Ferrand, who was the parliamentary leader of the president's La République En Marche party.
"I am well aware of the preoccupations that you wished to inform me of," Macron wrote. He added that France had sent a delegation to the U.S. in May to address the issue. "The dialogue continues, and believe me, I remain attentive to it," Macron concluded in the letter, which was passed onto Lehagre. It is unclear, though, if Macron has followed through on his promise to raise the issue with US President Trump.
What is the latest?
The AAA mounted something of a sting operation by getting lots of its members to try to open new bank accounts online. They were shocked by the results, saying that the banks did not want them because they were technically also American citizens.
They then filed a discrimination lawsuit against several banks.
The group is also pressing a case before the European courts, based on the fact that Fatca is not compliant with European data laws.
It continues its political efforts, such as calling for the French government to take up the issue at a higher level.
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These are French citizens who also have American citizenship - often without even knowing it. They have come together to fight against the ways they are harmed from American legislation reaching outside its borders, namely in regard to taxation and access to banking.
Most recently, 'Accidental Americans' have come back into the forefront after an amendment to the second purchasing power bill passed through France's Assemblé Nationale.
The amendment calls for the reciprocal application of the Fatca (explained below) between the United States of America and France and seeks to draw the Government's attention to the situation of French citizens known as "accidental Americans."
While it is unlikely the amendment will have any day-to-day impacts on 'Accidental Americans' and Americans living in France, if passed by the Senate and put into law, it could put pressure on French banks. This might in turn encourage the French government to pay attention to the situation of 'Accidental Americans' and the safety of data transfers from French banks to the United States.
Ultimately, the amendment is a "strong sign" after "many years of efforts" according to Fabien Lehagre, the President of Accidental Americans.
READ ALSO
Who are the ‘accidental Americans’?
There are thousands of ‘accidental Americans’ spread around France, all they have in common is the fact that they are entitled to American citizenship. Some of them had left America in the days after being born in an American hospital. Some of them didn’t even know they were technically American. Some of them don’t even speak English.
There are estimates that there may actually be as many as 40,000 ‘accidental Americans’ in France, thousands of whom still do not know that they technically have American citizenship, and up to 300,000 across Europe. While formally giving up US citizenship is an option, it can be long and costly.
What does the ‘accidental Americans’ Association (AAA) do?
AAA began in November 2014 when a Paris-based sales manager Fabien Lehagre received a letter from his bank asking him for his American tax identification number (TIN). Lehagre had been born in the United States in 1984, but he arrived in France at the age of just two with his French father. He has never lived in America since then. Having no idea that he was legally a US taxpayer, Lehagre first thought there had been a mistake. But he then discovered that he had acquired American citizenship at birth and consequently was supposed to declare all his revenues to the US Internal Revenue Service (IRS).
Lehagre then decided to fight the principle of Citizen Based Taxation (CBT), which applies only in the US and Eritrea. And, in August 2015, he set up the ‘accidental Americans Association’.
How did this situation arise?
In 2010, American President Barack Obama signed Fatca, or the Foreign Account Tax Compliance Act, into law.
This was a measure to force banks worldwide to scour client lists and report anyone who could be a US citizen, or face being barred from operating in the US. Fatca was passed in the aftermath of scandals involving Swiss banks helping wealthy Americans avoid taxes, but has ensnared millions of US citizens of modest means.
It was intended to target multinationals skimming their tax bills. But some individuals have become collateral damage as they were suddenly revealed to be technically American citizens living abroad. They only realised their involvement when the IRS started sending out bills for overdue taxes.
Applied in France since 2014, Fatca requires French banks to disclose to the US tax authorities personal data, assets exceeding $50,000 (approximately €40,000) and transactions of all their US clients. French banks are threatened with a hefty 30 per cent tax on all their American transfers if they do not give all this financial data.
This has a knock-on effect on US nationals who move to France, since many French banks are reluctant to open accounts for American clients because of the extra reporting requirements.
What is France doing to help its citizens avoid double taxation?
The AAA has sought out political support for their campaign to end double taxation. French President Emmanuel Macron has been vocal in his support of the efforts of these ‘accidental Americans’ to loosen their ties to the United States. Macron even wrote about this situation to Richard Ferrand, who was the parliamentary leader of the president's La République En Marche party.
"I am well aware of the preoccupations that you wished to inform me of," Macron wrote. He added that France had sent a delegation to the U.S. in May to address the issue. "The dialogue continues, and believe me, I remain attentive to it," Macron concluded in the letter, which was passed onto Lehagre. It is unclear, though, if Macron has followed through on his promise to raise the issue with US President Trump.
What is the latest?
The AAA mounted something of a sting operation by getting lots of its members to try to open new bank accounts online. They were shocked by the results, saying that the banks did not want them because they were technically also American citizens.
They then filed a discrimination lawsuit against several banks.
The group is also pressing a case before the European courts, based on the fact that Fatca is not compliant with European data laws.
It continues its political efforts, such as calling for the French government to take up the issue at a higher level.
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