[splat]

Unfortunately that solution doesn't work so well in practice. The United States is one of the few countries in the world to tax income earned by US citizens in other countries. (The only other ones of which I am aware are North Korea and, while it was in existence, the Soviet Union.)

Furthermore, any US citizen who decides to renounce his or her citizenship is assumed to have expatriated for tax reasons if the tax liability is over $127,000 or the individual's net worth is at least $2 million. (Though those, of course, are not the only reasons that an individual will be assumed to have expatriated for tax purposes.) An individual who has expatriated for tax reasons must pay US taxes on all US-derived income for 10 years and if the individual returns to the US for 30 days in those ten years, all income earned abroad is taxable by the US government. If such an individual has the misfortune of dying during any year in which he or she spent at least 30 days in the US, the entire estate is taxable by the US government.

I'm not sure Stack's tax liability was $127,000, but given his problems with the IRS, I wouldn't be surprised if the IRS would have declared him expatriated for tax reasons had he tried to leave the country. Escaping the long arm of the IRS can be easier said than done.

[tlb]

An individual who has expatriated for tax reasons must pay US taxes on all US-derived income. True, and they're fairly effective at collecting it too by withholding at the source. So if you don't want the IRS in your life, you can't get paid by US companies. Billions of people manage to do so.

[DenisM]

10-year rule was replaced in 2008 with "exit tax" - you have to pay taxes on all gains (realized and unrealized) and then you can go about your own business. Realizing gains to pay tax is a pain, but it only gets unbearable if your assets are illiquid.

[mattm]

Not being American, this is incredible for me to hear, especially since the Boston Tea Party was staged over a tax of just 2%.