This is a follow-up article to the original posted on May 23, 2009.When The White House announced the latest of US tax initiatives called ‘Leveling the Playing Field: Curbing Tax Havens and Removing Tax Incentives For Shifting Jobs Overseas’ on May 4, 2009, I wondered how these proposed enhanced compliance and enforcement regulations would affect the more than six million non-military ordinary US citizens, including dual-citizens and those within multinational families, who reside permanently abroad, all over the globe.Now, three years later, we are finding out. The highest number of Americans — 1,781 — according to Andrew Mitchel, International Tax blogger, renounced their US citizenship last year, 2011.The theoretical value of the “Level the Playing Field” initiative, and others legislated in later years, such as the Hire Act (Hiring Incentives to Restore Employment), and FATCA (the Foreign Account Tax Compliance Act), was the exposure of "wealthy Americans", tax cheats and tax evaders all who have hidden assets in overseas or offshore banks.Tax evaders purportedly can funnel the untaxed earnings abroad back into the US via numerous methods: foreign credit/debit cards, investments into sham (or fronted) companies, loans from foreign banks, foreign trusts, foundations and charitable organisations that are implemented with only charity toward the owner as a mission, investments in artwork, and the more ludicrous, diamonds in toothpaste, according to newspaper reports on one suspect, or simply use the money when travelling abroad. And, where do these tax cheats/evaders live? In the US, not offshore!Turns out that the practical reality is that there is no level playing field. Americans bearing the full brunt of these compliance initiatives live outside the United States.Guess what they need to live their every-day lives? They own foreign debit/credit cards (issued in the country they live in) to pay their bills; they earn foreign pensions, purchase foreign life insurance, own foreign property, operate foreign incorporated businesses, custody their savings in foreign banks, and buy foreign investments and real estate.These are normal ordinary financial events, the same type of situations that domestic US citizens experience with US financial entities, but US citizens abroad are scrutinised more, and have significantly more complex tax compliance reporting, filing, and liabilities than their domestic counterparts. Americans living abroad, generally, cannot open US accounts in the United States because they do not have a US legal address.Millions of US citizens, dual-citizens with the US, and multinational families live outside the ‘American Way’. This is how life happens: global companies launch subsidiaries overseas; students seek global learning and career opportunities; mature professionals semi-retire in a sunny southern hemisphere, children and grandchildren follow; he meets a girl on a travel junket; she meets a guy in the US and takes him abroad to meet her family where he is promptly offered a job with father-in-law.Every nuanced situation imaginable!However, migratory people they have all become; the most significant elements of their life are juxtaposed with their previous lives back home. It isn’t just US citizens that migrate; we are becoming a globally mobile society almost as quickly as the world-class information circulates exponentially.So how do these more than six million US citizens abroad manage their finances? We don’t know, but can we conjecture from demographic statistics that most of them live their lives like the rest of us ordinary people: go to work, marry, raise families, save, invest, put children through college, vote, and file annual tax returns.Living outside the United States, they were already required to provide additional reporting and ‘Know Your Client’ compliance documentation compared to their contemporaries “back home” by their foreign banks in their families’ jurisdiction.For instance, the request to open a US account "onshore USA” with full annual reporting to US Internal Revenue Service is almost impossible because US financial institutions are concerned about their out-of-the United States location. They are subject to taxation in both countries to fulfill complex reporting standards and to satisfy double tax obligations — tax situations that do not routinely occur with domestic resident US citizens.While in the current global economic environment, more countries than just the US are seeking to ensure that all citizens pay their fair tax share, US citizens abroad are bearing the brunt of currently enhanced US tax legislation. Foreign financial institutions (with their own complex reporting required by the US government) across the globe are shedding any client that is US citizen, married to a US citizen, or has US connections such as a business investment by cutting off their access to bank and investment accounts, pensions, debit/credit cards, mortgages, insurance, investments, in companies, estate and trust planning, and partnerships.These individuals and their families are losing their ability to choose where to live because of these unprecedented constraints.US citizens who live abroad may feel the reporting, and tax demands of more than one government has become a hurdle with ever increasing scope. Eliminating US citizenship will simplify their lives.Is expatriation an easy option? Numbers are easy: add up the pros, subtract the cons and the decision tree is clear-cut. Life planning involving financial decisions, emotions, memories, loyalties, and family comfort can generate an overwhelming bias against a numerically accurate decision.But, how do you calculate the emotional effects of expatriating from your mother country — the place for Americans that is the epitome of independent thought, freedom of speech, life, liberty, the pursuit of happiness, the land of the free and the home of the brave?The answer is with great difficulty, and much serious thought. No one makes this type of life-altering decision lightly. Look beyond the public face of these Americans residing permanently abroad, and you will find individuals (and their families) who are backed into a financial corner — with no way out.Next, we focus on the complex tax reporting for US citizens (green card holders abroad) and the current US legislative initiative to take away the foreign earned income exclusion.Martha Myron is an international Certified Financial Planner™ providing Financial Counsel for Cross Border Living™ on international tax, estate, and retirement strategies for Bermuda residents with US connections, and US citizens living and working abroad. Member of the American Citizens Abroad Tax Advisory Council. www.americansabroad.org Contact mmyron@patterson-partners.com or 296 3528 at Patterson Partners Ltd.