For some, though, there is no question of turning away an extended family and all its business just because one family member happened, in a weak moment, to take a Yankee for his or her spouse, or because a wee sprog ended up getting born in the USA.
While such advisers are to be admired for their bravery, they are also to be urged to learn the American tax rules sooner rather than later – and to brush up on them, if for example, they don’t know what an FBAR (Report of Foreign Bank and Financial Accounts) is.
Likewise, any adviser who is surprised to learn that in addition to filing US tax returns, all Americans not resident in the US must also report to the IRS about every non-US bank account they have, may wish to consider taking some professional advice himself.
Advising Americans has never been easy, of course. But with the Commissioner of the IRS in the US talking publicly about “ferreting out” Americans overseas, and threatening clients with financial penalties equal to 50% of any financial assets, it is easy to see why fewer and fewer advisers are keen to talk to Americans.
Nor is the pressure going to do anything but intensify. From January 2013, the IRS will be conscripting the help of every bank and financial institution around the globe to become a tax collector for the IRS. These notorious "FATCA" rules will increase the compliance burden on every one of us, whether we are American or not.
Another way to look at all of this, however, is as an opportunity for the well-prepared adviser to stay ahead of the game and manage risk by understanding US tax laws thoroughly, even as one’s scaredy-cats rivals withdraw from the market.
