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Legality of US Citizen using US address from abroad Finance, Investments

Discussion in 'Banking, Finance, Investments' started by jsv1985, Mar 7, 2021.

  1. jsv1985

    jsv1985 Law Topic Starter New Member

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    Hello!

    I am a US citizen living in Norway with permanent residence. Due to citizenship-based taxation, it’s advised for US citizens not to invest with non-US banks/companies because of PFICs and instead to invest through US-based companies. Here lies the problem: US-based companies almost exclusively accept only US residents.

    I think the most clear way to ask my question is with an example situation:

    I want to open an account with Titan. They only accept US Citizens with a US residential address. Therefore, I open the account using my parents’ address, the same address I used before I moved abroad.

    Question: Is this legal? Or would it be considered fraud?

    The language varies a little between providers. Titan says “with a residential address” whereas Wealthfront says they only accept “US residents.”

    Some websites (like Thun Financial) say it’s well within my right to maintain a US address for opening accounts and receiving mail.



    For info, yes I understand Norway will tax my global income/assets regardless of the address on the account.

    To be a bit more clear about the differing language examples, Titan says "US citizens with a valid residential address". In contrast, Fundrise says "Any US Citizen or permanent-resident currently residing in the US."

    I've scoured forums and some people claim it is perfectly legal. Some people saying its legal have experience doing it. Others are skeptical and question the legality. Some websites say it is the way to go. Others question it.
     
  2. Tax Counsel

    Tax Counsel Well-Known Member

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    Here's the problem: a lot of U.S. financial firms now make it a requirement as part of their account agreement that you must be a U.S. resident to have an account with them. They are doing that because of increasing enforcement of various rules both in the US and abroad that impose greater burdens for them when the client is a US citizen living abroad. So where you live does have an impact on what they do and what compliance rules they have to meet. Because of that, they state that in their applications they are asking for your residential address — not your mailing address. Your residential address is where you live. Telling them you live at your parent's address in the US when in fact you live in Norway opens up the potential for fraud charges and other legal problems later. Among those other legal problems can be a failure for the company to do something (or not do something) for you that that law requires when you are a US person living abroad. So the problem is not just violating the account agreement. Don't lead the company into thinking you live some place other than you really do. It really does matter.
     
    yuriymoshes likes this.
  3. adjusterjack

    adjusterjack Super Moderator

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    Doesn't matter who's done what. It's lying. In the insurance industry when a person lies on an insurance application we are allowed deny claims and rescind policies. This can create serious financial consequences to an insured.

    Pick a company that expressly allows you to use a US mailing address and make sure you show the mailing address and the residential location so there is no doubt that you are being truthful.
     
  4. jsv1985

    jsv1985 Law Topic Starter New Member

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    Thanks for the replies!

    The primary issue with finding a company that expressly allows foreign residential addresses is that there is practically no company which allows this with US citizens. The only ones are:

    Schwab - accepts only a few countries

    Interactive Brokers - requires “pro” monthly payment account plus minimum $20k (yea even for cash account). If I went further into the application process I very well might be denied for having that foreign address, like Tastyworks below.

    Tastyworks actually accepts Norwegian residents but not US Citizens with Norwegian residential addresses.

    It seems as though right now, if I can’t use my parents’ address, my only options are just sitting money in a savings account with almost no growth or going into PFICs.

     
  5. adjusterjack

    adjusterjack Super Moderator

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    Have you checked with TDAmeritrade?
     
  6. jsv1985

    jsv1985 Law Topic Starter New Member

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    I can't seem to find any information regarding this situation on their website. They have an article for non-US residents, but clearly state "if you are a non-US taxpayer, this article is for you!" I may have to call to find out. I saw they joined with Schwab though, so that doesn't help my hopes.

    There are two other potentials I thought of.

    1. Registering an LLC and investing using it

    2. Saving in funds with a local "Betterment/robo-advisor" (PFIC investments have a reporting threshold of $25k), liquidate before it reaches threshold and move over to Interactive Brokers (if they accept me)
     
  7. adjusterjack

    adjusterjack Super Moderator

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    TD Ameritrade International Cust Svc: 800-368-3668

    That's not a solution either. Every state where you could form an LLC will want your location address and the information becomes public record, easy for anybody you do business with to look up.
     
    yuriymoshes likes this.

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