Taxpayers Renouncing U.S. Citizenship in Record Numbers

Monday, 10 Feb 2014 11:57 AM

By Lisa Barron

  Comment  |
   Contact  |
  Print   |
    A   A  
  Copy Shortlink
A record number of people renounced their American citizenship or terminated their long-term U.S. residency last year, according to new data.

The Treasury Department listed 630 individuals who became expatriates in the fourth quarter of 2013, bringing the total number of published expatriates for the year to 2,999.
That figure shatters the previous record high of 1,781 set in 2011 and is a 221 percent increase over the 2012 total of 932, Andrew Mitchel reports on his International Tax Blog.

"We believe that there are likely three principal reasons for the recent increases in the number of expatriations," he said, citing "increased awareness of the obligation to file U.S. tax returns by U.S. citizens and U.S. tax residents living outside the U.S.; the ever-increasing burden of complying with U.S. tax laws; and the fear generated by the potentially bankrupting penalties for failure to file U.S. tax returns when an individual holds substantial non-U.S. assets."

Indeed, according to Forbes tax columnist Robert Wood, taxes can be a major factor in the decision to expatriate.

"Some go so far as to say that the U.S. tax and disclosure laws are downright oppressive," he said, stressing the impact on U.S. citizens and tax residents living outside the country.

"No group is more severely impacted than U.S. persons living abroad. For those living and working in foreign countries, it is almost a given that they must report and pay tax where they live. But they must also continue to file taxes in the U.S. What’s more, U.S. reporting is based on their worldwide income, even though they are paying taxes in the country where they live," Wood explained.

"These rules have long been in effect, but enforcement was historically less of a concern with expats. Today, enforcement fears are palpable," he added.

Then there is what Wood calls the "coup de grace," the Foreign Account Tax Compliant Act, passed in 2010, which requires financial institutions overseas to provide the Internal Revenue Service with annual reports on their U.S. account holders.

Still, leaving the country and citizenship behind comes with a price tag of its own in the form of an exit tax, Wood notes.

"The theory of the exit tax is that is the last chance the U.S. has of taxing you," he said.

Related Stories:





© 2014 Newsmax. All rights reserved.

  Comment  |
   Contact  |
  Print   |
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Protesters Shut Down Part of Mall of America in Minnesota

Saturday, 20 Dec 2014 22:25 PM

More than 1,500 protesters against police violence shut down part of the Mall of America in Minnesota on Saturday, resul . . .

Protesters: 'It's Not the Time' for More Cuba Ties

Saturday, 20 Dec 2014 19:44 PM

Cuban opposition leaders from the island joined Cuban American politicians and activists on Saturday, pledging to oppose . . .

RNC to Theaters: 'We Cannot Be Bullied,' Show 'Interview'

Saturday, 20 Dec 2014 19:20 PM

The Republican National Committee is urging theater owners to play the The Interview following Sony's decision to pull . . .

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved