Skip to comments.The number of Americans who renounced their citizenship in 2013 just shattered 2011's record
Posted on 02/10/2014 7:21:01 PM PST by SeekAndFind
There are any number of reasons a person might consider giving up their U.S. citizenship, ranging from the familial to the professional to the financial, but for me at least, it would take a heck of a lot for me to even think about it. And by “a heck of a lot,” I mean that I have difficulty fathoming a situation in which I would actually want to give up my citizenship and/or live anywhere permanently other than the United States, because from where I’m sitting, the mere suggestion sounds pretty ghastly — which is precisely why our spiking expatriation rates of the past few years are so troubling. Via Andrew Mitchell at his International Tax Blog:
Today the Treasury Department published the names of individuals who renounced their U.S. citizenship or terminated their long-term U.S. residency (expatriated) during the fourth quarter of 2013.
The number of published expatriates for the quarter was 630, bringing the total number of published expatriates in 2013 to 2,999. The total for the year shatters the previous record high of 1,781 set in 2011 and is a 221% increase over the 2012 total of 932.
We do not believe that the primary reason for the increase in expatriations is for political purposes or for individuals to reduce taxes. Instead, we believe that there are likely three principal reasons for the recent increases in the number of expatriations:
1. 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.;
2. The ever-increasing burden of complying with U.S. tax laws; and
3. 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.
Sure, the total expatriation numbers are a relatively miniscule phenomenon, but the pace at which they are increasing probably says a lot about the direction in which the federal government is taking our tax code. Hint: They aren’t making it easier or more attractive for people working out in the global market to maintain their citizenship, as Robert Wood at Forbes explains:
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. Whats more, U.S. reporting is based on their worldwide income, even though they are paying taxes in the country where they live.
Many can claim a foreign tax credit on their U.S. returns, but it generally does not eliminate all double taxes. These rules have long been in effect, but enforcement was historically less of a concern with expats. Today, enforcement fears are palpable.
Moreover, the annual foreign bank account reports known as FBAR forms carry civil and criminal penalties all out of proportion to tax violations. The penalties for failure to file these forms, civil and criminal, are severe. Even civil penalties can quickly consume the balance of an account.
The coup de grace is FATCA, which is ramping up now worldwide. It requires an annual Form 8938 to be filed with income tax returns for foreign assets meeting a threshold. And foreign banks are sufficiently worried about keeping the IRS happy that many simply do not want American account holders. Americans abroad can be pariahs shunned by banks for daily banking activities.
In other words, foreign financial institutions are required to certify that U.S. taxpayers aren’t “hiding” money with them as a condition for being allowed to do business with the U.S. I seriously doubt that many of these newfound expatriates were really gunning to give up their citizenship, but the federal government incorrigibly continues to make it more and more worth people’s while to investigate the option.
What I’d like to know is — What Citizenship did these Americans acquire prior to renouncing American citizenship?
Hope & Change, baby!
When they start putting up fences to keep people in, you know it’s past time. This is a strong step in that direction.
“What Id like to know is What Citizenship did these Americans acquire prior to renouncing American citizenship?”
Varies widely. Many live overseas and already had dual citizenship. FATCA and other ridiculous compliance has made them realize keeping US citizenship has few advantages. It is foolish on the part of our country to persecute our citizens.
They are probably ‘citizens’ with stolen identities.
My first guess is “aging population.” Weird drop off from ‘06 through ‘09 though.
Maybe this is when we'll finally get a fence along the Mexican border. The razor wire on the top will be on our side.
The article says: We do not believe that the primary reason for the increase in expatriations is for political purposes or for individuals to reduce taxes.
Then it says they’re doing it because of taxes.
I have to admit I’d do it if I could. This ain’t my America.
he Land Of The Free ain’t what it used to be.....
The minute Texas secedes, you’ll see that number quintuple.
You’ll find me at the front of the line.
I’m guessing a lot of people held off in 2012 to vote against Obama, then jumped ship when that fell through.
I no longer think of myself as just an ‘American’ because USA citizens are being hoodwinked into accepting any person in the ‘Americas’ equivalent to a USA citizen. I think it is time the use of ‘American’ not be identical to a USA citizen. My Constitution is titled ‘The Constitution of the United States’.
2004 was the last time that I was in America, and I have no plans to return, but I can not imagine giving up my citizenship, not to mention, it is the only passport that I have.
A lot of renouncers are ‘accidental’ Americans. They were born here only lived here a short while and moved back to their parents native country. Now they are getting letters from IRS or learning that they are responsible for some taxes. They have little or no connection to the USA. This not only affects citizens but green card holders as well.
The IRS can now also do an audit on your foreign spouse to see if your hiding money with them. I believe that was the big reason Tina Turner renounced her US citizenship as she has a very wealthy Swiss husband.
This pretty much sums up about all of the reasons I have heard from ex-pats with whom I've spoken with on this topic.
Except for two (2) full blown loonies, the I.R.S. has been the root of their decision.
And none, except for the loonies, took the matter lightly.
RE: 2004 was the last time that I was in America
Don’t you have any contingency plans in case the next super typhoon hits your area? :)
“Dont you have any contingency plans in case the next super typhoon hits your area? :)”
Hahahaha, that would be the least of my worries.
Typhoons are not tornadoes, as I had back in Tennessee.
I had one of those hit my plastics factory one night, with no warning.
Typhoons are the south Pacific version of hurricanes. Unlike tornadoes, We have many days of tracking and warning.
In the five years here, we have taken only one precautionary move to a hotel that is only a few blocks from my beach house. We did that only because of our three year old boy. That was quite recently. As it was, there was no damage to our house. Electricity was out only for a few hours.
If we do want to evacuate to very high ground, 3000 foot elevation is in our same municipality.
Well, I’m glad you have everything planned out.
I was in the Philippines over 20 years ago, but never went to the Visayas. I stayed there for 3 years working with an American semiconductor company to keep it up and running ( even learned to speak some Tagalog on the way ).
But I had to file taxes on my earnings IN MANILA to the US government.
So, living in the Philippines for 10 years, do you have income there? If so, you are required to file US income taxes on your income BY LAW or else.... well, let’s just say the IRS deems you a tax criminal.
I know the whole thing is ridiculous, but then, it’s been like that since we abandoned the original intent of our constitution.
One other solution is probably to apply for Philippine citizenship ( I think they recognize DUAL citizenships ).
I’d give anything to see this stupid, unconstitutional, tyrannical law abolished.
“So, living in the Philippines for 10 years, do you have income there?”
Well, I have been here only five years, and no, I have no income other then my social security. I have no contact with the IRS. I receive only the notices from SS as to what they paid me and my child.
I know of no reason to apply for Philippine citizenship, and I do not know any expats that have.
My child, however, is an American and Philippine citizen, as he was born here.
I see that some Americans are renouncing their citizenship.
(not in the Philippines) I do not know the point, unless they are sitting on a gazillion dollars. My US citizenship, as well as my child’s is sacred.