Is there any way around this? I would like to open an account in my other country. Do you have to show your blue passport? Can you get by if you just show the other one?
You may be able to get by, however, you are still a US citizen. Besides being required to file US tax returns every year even though you live overseas { if you were required to file if you lived in the US } , you also have to file an annual FBAR form with the IRS if you have a total of more than $10,000 in foreign bank accounts. Failure to do so results in a $10,000 fine and a possible 5 year prison term for each year the form isn't filed. This is even if you don't owe one penny in taxes.