Are you concerned about the costs involved in renouncing your US citizenship or becoming tax-compliant? We have great news that can make this process more affordable. In this blog, we will explore the remarkable opportunity presented by unclaimed stimulus checks issued by the IRS during the COVID-19 pandemic. Learn how these checks have significantly alleviated the financial burden for many, making renunciation and compliance more accessible than ever before.

At our firm, we have witnessed firsthand the positive impact of unclaimed stimulus checks. Many individuals who were initially worried about the costs found relief when they discovered that they were eligible to claim up to $3,200 through these checks.

UNDERSTANDING THE EXPENSES OF RENOUNCING US CITIZENSHIP

A. GOVERNMENT RENUNCIATION FEE

Renouncing US citizenship comes with a government fee of $2,350, making it one of the most expensive renunciations among other countries. The fee includes administrative costs and the review process conducted by lawyers in Washington, DC. The US government considers the fee necessary for proper case review and approval. There have been discussions about potentially lowering the fee to $400, but it seems unlikely to happen in the near future.

B. COMPLIANCE COSTS
Before renouncing their citizenship, expats must become tax-compliant. This means meeting certain requirements, including filing tax returns for the prior 5 years and 6 years of Foreign Bank Account Reports (FBARs). Achieving tax compliance is crucial, and failure to do so may result in penalties or other consequences.

Related: Being an Accidental American: A Tax Perspective

Our firm offers a comprehensive renunciation package designed to assist expats in becoming tax-compliant. For those who have failed to file tax returns due to a lack of awareness, we recommend taking advantage of the Streamlined Foreign Offshore Program. This amnesty program offered by the IRS waives penalties for those who were unaware of their tax obligations to the US.

THE WINDOW OF OPPORTUNITY: CLAIMING STIMULUS CHECKS
Stimulus checks, issued by the IRS during the COVID-19 pandemic, have provided essential economic relief. Every American has the right to claim these checks, which can be done as a recovery rebate credit on their 2020 and 2021 tax returns. It’s important to note that the amount you receive is subject to limitations, particularly for high-income earners who may receive a partial amount.
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