Tags: expatriates | taxes | citizenship | laws

Americans Dump US Citizenship at Record Rates

By    |   Thursday, 14 November 2013 03:09 PM

Americans are giving up their citizenship at a record rate and experts are pointing to the tougher enforcement of tax laws as the likely reason.

Data trackers expect citizens leaving the country in 2013 to increase by 33 percent over 2011, which was last highest year of expatriations, The Wall Street Journal reported

"Nothing has changed in immigration law that would make people want to renounce," said Freddi Weintraub, an immigration specialist and partner at the New York-based law firm Fragomen Worldwide. "Current or anticipated changes in tax law and enforcement are driving this increase."

The news comes just a day after it was revealed that soul legend Tina Turner is one of those who has given up her U.S. citizenship. She now lives in Switzerland.

According to Andrew Mitchell, a Connecticut tax lawyer who tracks expatriation data, 2,369 individuals have either renounced their citizenship or were long-term foreign residents who turned in their green cards.

The Treasury Department published 560 names of those who left in the third quarter of 2013. In 2011, the total number was 1,781; in 2008, just 235 individuals renounced citizenship or gave up green cards.

However, the Journal notes, there may be a gap in the numbers since the Treasury Department names don't include the dates when people left. There also is no distinction made between those who turn in their passports versus those who give up their green cards.

Expatriates are not required to state a reason for the change in their citizenship, but experts are pointing to changes in tax law as the possible reason.

People who left in 2012 had to pay an exit tax, but that may have been a lot less than the increase on income taxes, estates taxes and long-term capital-gains that went up in 2013.

"Renunciation can be expensive, but it may be easier than staying in compliance with U.S. tax laws that can be onerous for citizens of other countries," said Fran Obeid, a New York attorney who specializes in offshore-account issues.

In addition, the Foreign Account Tax Compliance Act will go into effect in 2014, requiring financial institutions outside of the United States to report information about U.S. account holders to the Internal Revenue Service. This law applies to both U.S. citizens and green-card holders whether they live in the country or reside elsewhere.

Americans began choosing to give up their citizenship following the UBS scandal that led the government to begin cracking down on those who used offshore accounts to evade taxes.

U.S. citizens living abroad and permanent green-card holders can be required to pay taxes in the United States.

There are harsh penalties for failing to report assets that could reach 50 percent on a person's account balance in one year.

Related Stories:

© 2019 Newsmax. All rights reserved.

1Like our page
Americans are giving up their citizenship at at a record rate and experts are pointing to the tougher enforcement of tax laws as the likely reason.
Thursday, 14 November 2013 03:09 PM
Newsmax Media, Inc.

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.

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