221% Increase of US Expatriation

A record number of United States taxpayers renounced their citizenship or green cards in 2013, according to new data.

Each quarter the U.S. Treasury publishes the names of the Americans who officially expatriated during that period. In the last quarter of 2013, 630 people renounced their citizenship or relinquished their green cards, added to the previous 2013 quarters (2,369 people), bringing the total for 2013 to 2,999.

On Monday, May 14, 2012 we posted Facebook’s Co-Founder Just Defriended America, regarding Face book’s Co-Founder Mr. Saverin’s renouncing his U.S. citizenship ahead of the company’s IPO.

On Friday, August 9, 2013, we posted Americans Renouncing U.S. Citizenship Increased 6X so far in 2013!, regarding Americans renouncing U.S. citizenship increased 6X in the second quarter from a year earlier as the government prepares to introduce tougher asset-disclosure rules.

On Thursday, November 14, 2013 we posted Tina Turner – By Adopting Foreign Citizenship are you Still Subject to the US Exit Tax? regarding long-time Swiss resident Tina Turner” Relinquishment of U.S. Citizenship. and then

On Thursday, September 12, 2013 we posted New Worries for Those Thinking of Renouncing US Citizenship!

According to the International Tax Blog, the 2,999 amount represented a 221% increase over the 932 total in 201 and “shatters” the previous record of 1,781 set in 2011. The International Tax Blog points to three possible reasons for the increase in expatriations last year.

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.,” he writes.

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.

The increase in expatriations may also be partly due to a 2008 change in the expatriation rules.

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According to Forbes tax columnist Robert Wood, while many expatriations are likely motivated by convenience or family matters, taxes can “help sway a decision.” Most expatriations are probably motivated primarily by factors such as family and convenience. Many people like Ms. Turner have built a life somewhere else and may not plan to need a U.S. passport.

William McBride at the Tax Foundation further notes that the last four years have seen more people renounce their U.S. citizenship and green cards (7,246) in 2013 than the total number in the twelve years prior (5,775).

“Should I Stay or Should I Go”?

In accordance with Circular 230 Disclosure

Mr. Marini concentrates his practice in Representation before the IRS and All Other Tax Authorities, IRS Collections, Offers in Compromise, Installment Payment Plans, Appeals, Sales Tax Audits, International and Tax Law, Asset Protection and Estate Planning.

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  1. Just Me says:

    Forget ObamaCare. This, will be the lasting legacy of Obama’s FATCA which he launched it in the White House 2009. It wasn’t called that then, but this was the origin of the amendment slipped into the Hire Act. This ‘launch and forget’ mission is now reaping its results.

    Below is the video of him laying out his plans. In the middle he talks about a simple 1099 process for foreign banks, and the Legislators he mentioned (Baucas, Rangel, Doggett and Levin) ran with it and created a statue of 3,362 words. Then the FATCAnatics in Treasury blew out to a “ A leviathan that breaths fire.” of 544 pages, 3 revisions, and many IGAs with a dizzying array of exemptions and ‘deemed compliant’ loopholes. Its complexity combined with Citizenship based Taxation, assures that NO FFI or country can possibly ever be compliant!

  2. Serge says:

    In my experience the clients that state they are considering expatriation are doing so because of the current activities of the IRS.
    1.They find themselves over-burdened, logistically and financially, in having to file yearly FBARs and 1040s (which beleive me are quite costly).
    2.They are scared of the broad threats of excessive and punitive penalties associated with the FBAR process.
    3.They want to ensure that the IRS doesn’t get any of their estate.
    4.And they also want to try to avoid burdening their foreign born offspring from also having to report to the IRS and be subjected to this same persecution. Yes, I called it persecution!

  3. Guest says:

    I’m surprised that you don’t also hear about “US persons” everywhere outside the USA who are being denied banking services, business partnerships and job opportunities because of the USA/IRS. I suspect you’ll start to hear those reasons from your clients as well very soon.