1,800 people renounced U.S. citizenship last year, many for tax reasons
Last year, almost 1,800 people followed Superman’s lead, renouncing their U.S. citizenship or handing in their Green Cards. That’s a record number since the Internal Revenue Service began publishing a list of those who renounced in 1998. It’s also almost eight times more than the number of citizens who renounced in 2008, and more than the total for 2007, 2008 and 2009 combined.
But not everyone’s motivations are as lofty as Superman’s. Many say they parted ways with America for tax reasons.
The United States is one of the only countries to tax its citizens on income earned while they’re living abroad. And just as Americans stateside must file tax returns each April – this year, the deadline is Tuesday – an estimated 6.3 million U.S. citizens living abroad brace for what they describe as an even tougher process of reporting their income and foreign accounts to the IRS. For them, the deadline is June…
For those wishing to legally escape the filing requirements, the only way is to formally renounce their U.S. citizenship. Last year, IRS records show that at least 1,788 people did, and that’s likely an underestimate.
Blowback
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Tax revenue, lost forever.
“Tax the rich, feed the poor, til there are no, rich no more.”
Rebar on April 17, 2012 at 12:16 PM
Superman renounced his citizenship????
Blake on April 17, 2012 at 12:19 PM
Yeah, it was a big to do about six months ago.
I don’t know if I could ever do something like this just for tax purposes. You know, I love being an American too much.
Red Cloud on April 17, 2012 at 12:23 PM
Get better tax attorneys.
IR-MN on April 17, 2012 at 12:24 PM
Yup, disgusting.
Rebar on April 17, 2012 at 12:24 PM
And yet Democrats can’t understand that tax revenues go down when rates go up…
I’m not sure which party wears the crown of stupid anymore.
gravityman on April 17, 2012 at 12:25 PM
It does seem a little extreme, like moving to Canadia. Eh?
CorporatePiggy on April 17, 2012 at 12:25 PM
Lost his ability to fly a while later.
Coincidence? I think not.
lorien1973 on April 17, 2012 at 12:26 PM
If you become illegal, you get tons of free stuff!
lorien1973 on April 17, 2012 at 12:26 PM
Don’t forget the bill that’s passed the senate revoking your passport if the IRS says you owe back taxes. It doesn’t matter if you’re in process proving your innocence, all they have to do is accuse you of owing. As someone who has been a victim of a clerical error by the IRS and knowing how long it can take to clear these things up (13 years and counting) this law frightens me since both my husband and I do business overseas. It might pass our GOP congress.
Ann NY on April 17, 2012 at 12:28 PM
I have dual citizenship, and I have made sure my kids received dual citizenship as well. The way the US is heading, it might become a necessity to renounce our US citizenship at some point.
Sure, most of Europe is worse, but places like Norway & Switzerland are very finacially sound with higher standard of living.
Norwegian on April 17, 2012 at 12:29 PM
And probably amnesty.
Cindy Munford on April 17, 2012 at 12:30 PM
Just don’t send your kids to commie camp because the police are only hours away…
Blake on April 17, 2012 at 12:32 PM
I renounce Superman!
Blake on April 17, 2012 at 12:33 PM
Imagine if millions of citizens did this all at once in protest and then clogged the illegal alien industry to demand free stuff. Where they going to deport you…to America?
Christien on April 17, 2012 at 12:34 PM
This is why The Regime is pushing for a “global minimum” tax. They want there to be no place in the world you can go to escape confiscatory taxation.
Communists always seek to wall people in so they can’t escape their “paradise”. It’s the only way to prevent it. Those with wealth right now can basically take it and go anywhere. Liberals don’t like that.
wildcat72 on April 17, 2012 at 12:38 PM
Oh they know that. They don’t care about revenues. It’s all about “fair” for them as Obama admitted in 2008.
rhombus on April 17, 2012 at 12:39 PM
Years ago, some radical writer married a Guatemalan commie and renounced her US citizenship. He subsequently died and she wanted back in. The gov. wouldn’t let her. She was doing the talk circuit but I can’t remember her name to see what ultimately happened.
Blake on April 17, 2012 at 12:45 PM
Yep, I’ve two kids living in Europe who have to deal with that even though they have no US income, and one of them will likely never live here again.
It’s insane.
Bob's Kid on April 17, 2012 at 12:47 PM
Even when it, on average, almost doubles the person’s total tax liability?
Steve Eggleston on April 17, 2012 at 12:47 PM
It’s even more cynical than that. Liberals need a “Demon” to distract the masses from the devastation their policies creates. Since the super wealthy will always be a small minority they are the safest group to demonize.
This despite the fact that most super wealthy are libs. Notice that Obama never demonizes what an actor makes vs, say, a “key grip” in Hollywood?
wildcat72 on April 17, 2012 at 12:49 PM
Not exactly.
According to the progressives, you can only “succeed” by taking away from someone else. Thus their tax policy is about punishing success by taking your “ill-got” wealth and giving it “back” to those who didn’t earn it – rewarding failure.
Punishing success, rewarding failure – and they wonder why the successful want out of their crazy world view.
Rebar on April 17, 2012 at 12:50 PM
The U.S. Tax system is tyranny on steroids, that’s why people renounce, I don’t blame them at all.
Axion on April 17, 2012 at 12:55 PM
Many of the people were probably born and raised outside the U.S. and don’t have a strong affinity for the country.
There was an article last year about Canadian’s with duel citizenship that were (for the first time in their lives) getting letters from the IRS about back taxes owed.
Apparently giving up their citizenship would stop the taxes from accruing but the back taxes would still be owed. There’s not much the U.S. can do to them in Canada, but, they were either going to have to clear it up or never set foot in the U.S. again.
JadeNYU on April 17, 2012 at 1:03 PM
What does this mean? Is the US the only country? If so, why not write that?
Blake on April 17, 2012 at 1:07 PM
If we didn’t tax people living abroad, Warren Buffett would move to China and b:tch about the “loophole.”
MeatHeadinCA on April 17, 2012 at 1:09 PM
Romney should jump in this stat and make it a part of his stump speeches.
crosspatch on April 17, 2012 at 1:12 PM
Remember when Ron Paul was called a kook for suggesting that the Federal government would use heightened border security as a means to keep people in? I guess this is but the first step to what he was referring to.
antifederalist on April 17, 2012 at 1:15 PM
Total out-of-control craziness by the US government.
Soon people will be afraid to leave the US on vacation or business…not only will there be a TSA agent at the gate to pat you down, there will also be an IRS agent patting down your bank accounts and past tax returns.
albill on April 17, 2012 at 1:16 PM
The U.S. isn’t the only country.
The Netherlands does it as well.
There are a few other countries that do it too.
JadeNYU on April 17, 2012 at 1:19 PM
They already limit how much of your own money you may carry with you as you leave the country.
Christien on April 17, 2012 at 1:23 PM
And then when you get to the other country they have a limit from how much cash one can bring in.
Governments assume we are all drug couriers carrying bundles of illicit cash on us.
Story on TV the other night about people flying into the EU.
Two Russians in their mid-50s fly into Germany and have cash on them to buy two cars in Germany and drive them back home.
The EU has a rule that one can only bring in less than 10,000 Euros per person.
Each of them had 20,000 Euros to pick up their cars – they even had the bill from the German guy selling the cars. (All together they had 47,000 Euros.)
Customs took an immediate 25% penalty of cash from them, plus most likely would end up paying a fine equaling at least 50% of the cash. And maybe even arrested.
Government around the world is out of control.
albill on April 17, 2012 at 1:33 PM
The US government doesn’t care, because they haven’t driven away enough big players and citizens with highly valuable, specialized knowledge and skills. So long as the numbers renouncing remain low and are mostly small-time nobodies, I don’t expect positive developments.
Also, isn’t it true that up to half of a deceased citizen’s estate can be confiscated by the government, if the spouse is not a U.S. citizen? If so, what’s up with that?
Christien on April 17, 2012 at 1:34 PM
Writing on the book was taken over by a non American, I read.
As I have said many times, those with mobility and money will flee to greener pastures.
Physical cash yes. In reality they can’t control the movement of assets. It’s just an illusion. Like the TSA.
dogsoldier on April 17, 2012 at 1:36 PM
20 years ago that would have been an utterly laughable remark.
Now? Totally believable.
And we got here in a totally bi-partisan manner which really is food for thought.
CorporatePiggy on April 17, 2012 at 1:38 PM
I only have one question about renouncing US citizenship: If I move to Argentina should I learn to speak Spanish or do people care if I only speak English?
Crusty on April 17, 2012 at 1:40 PM
Wanna bet? I’m pretty certain I saw something about how they’re going to monitor every electronic money transfer from here on out.
If they can’t control the movement of assets yet, they’re working on it.
Dack Thrombosis on April 17, 2012 at 1:43 PM
I think the reuters dude meant to write “few” instead of “only.”
Blake on April 17, 2012 at 1:50 PM
Foreign banks, according to the article, are increasingly refusing to open accounts for Americans, as a result of the reporting requirement headaches. Sure sounds like movement of assets are already being controlled. Must be great as an expat knowing that criminals are aware that banks are turning them away and increasingly into the cash economy.
Christien on April 17, 2012 at 1:50 PM
Bolded the important bit for emphasis. We’re not very far away from turning into Venezuela/Argentina.
Doomberg on April 17, 2012 at 1:54 PM
According to this site, only the US and Eritrea tax citizens abroad for life.
A few other nations tax their citizens for brief periods (6 months to a year) until the citizens have established residency somewhere else. Those nations include the UK, France, and — as mentioned above — the Netherlands.
The emerging US tax policy clearly isn’t about “fairness,” it’s about gouging revenue out of a group of people who have no political influence inside the country. It’s cheap and easy for the federal government to change the rules, life-lopping for the citizens affected.
I sympathize with them, and I hope they never have to regret doing it.
J.E. Dyer on April 17, 2012 at 2:22 PM
And before that, for pointing out that the ‘Patriot’ Acts could be dangerous as all hell when the left wing had their turn running the show. “Durrr, yew support them thar’ turrists!”
And what do you know, now conservatives are all but publicly put on “Wanted” posters as anti-government insurgents.
MelonCollie on April 17, 2012 at 2:26 PM
What is the point of naming and shaming them in the Federal Register, besides intimidating other citizens from following their lead?
Christien on April 17, 2012 at 2:39 PM