US Expatriation Increase At A Record Pace In 2014!

We previously posted US Expatriation Increase At a Record Pace in 2014! where we discussed that the number of Americans renouncing U.S. citizenship stayed near an all-time high in the first half of the year before rules that make it harder to hide assets from tax authorities came into force (FATCA – Effective Date July 1, 2014).

A record 3,415 individuals renounced their U.S. citizenship or long-term residency in 2014, according to a list released by the Treasury Department on Tuesday. Each quarter the U.S. Treasury publishes the names of the Americans who officially expatriated during that period.

3,415 Americans Renounced their Citizenship in 2014.  Eclipsing the Previous All-Time High Set in 2013. This 3,415 people expatriating into 2014 is a 114% increase over the 2,999 people who expatriated in 2013. The 2013amount of 2,999 represented a 221% increase over the 932 total in 2012 and “shatters” the previous record of 1,781 set in 2011.

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The number of Americans renouncing U.S. citizenship increased in 2014 after rules that make it harder to hide assets from tax authorities came into force.
Tougher asset-disclosure rules that started July 1 under the Foreign Account Tax Compliance Act, or FATCA, prompted more of the estimated 6 million Americans living overseas to give up their passports. The appeal of U.S. citizenship for expatriates faded further as more than 100 Swiss banks began to turn over data on American clients to avoid prosecution for helping tax evaders.

The U.S., the only Organization for Economic Cooperation and Development nation that taxes citizens wherever they reside, stepped up the search for tax dodgers after UBS AG paid a $780 million penalty in 2009 and handed over data on about 4,700 accounts. Shunned by Swiss and German banks and with FATCA starting, more than 9,000 Americans living overseas gave up their passports over the past five years.

FATCA requires U.S. financial institutions to impose a 30 percent withholding tax on payments made to foreign banks that don’t agree to identify and provide information on U.S. account holders. It allows the U.S. to scoop up data from more than 77,000 institutions and 80 governments about its citizens’ overseas financial activities.

Furthermore, according to a new survey by deVere Group, 73% of Americans living abroad consider giving up their US citizenship in the wake of FATCA.

There are an estimated 7.6 million Americans living overseas. At 73%, that’s approximately 5,548,000 Americans considering to hand back their US passports.

If all those considering renouncing followed through, it would be the biggest spike ever in renunciations. Already, Federal Register data reveals renunciations spiked by 39% shortly after FATCA-the Foreign Account Tax Compliance Act-came into effect. FATCA is the culprit, says the survey, which is based on 400 expatriates.

“Should I Stay or Should I Go”? Need Advise on Expatriation… Let’s Meet at TaxConnections.

Original Post By:  Ronald Marini

Sources:  US Treasury, Wall Street Journal – subscription required, deVere Group


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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2 thoughts on “US Expatriation Increase At A Record Pace In 2014!

  1. SwissTechie says:

    If America had residency-based taxation, then President Obamaa wouldn’t have been a bigot when he wrongly generalized against all Americans living abroad as being “overseas tax cheat” and FATCA wouldn’t have caused national origin discrimination, a US federal crime, against expats. Each renunciation is the fault of the US government and its horribly flawed policy.

  2. Vince Gambino, EA says:

    The article makes it sound like the only reason US citizens are giving up their citizenship is because they have something to hide. This has not been my experience helping a number of US citizens and greencard holders give up citizenship or relinquish their greencard. The primary reason is simply, STRESS. Stress of trying to comply with the complex tax laws affecting US citizens residing abroad, STRESS of not even being able to own a mutual fund in the foreign country of residence, STRESS for having to pay high tax preparation fees, STRESS in trying to cope with ever changing tax laws and regulations affecting US persons abroad. I have clients who come to me absolutely terrorized. On top of all this the ridiculous threshold of reporting foreign bank accounts when the aggregate value exceeds $10,000, a limit that was set 40 years ago and has never been changed. Most of the individuals giving up their US ties are just sick and tired of the IRS. I suppose even the bureaucrats have to make a living.

    Vince Gambino, EA Rome, Italy

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