April 20, 2012 § Leave a comment
According to the Federal Register around 1,800 people renounced their US citizenship and Green Cards in 2012 mainly due to the costly and timely tax requirement. It is a known fact that America is one of the few countries in the world that requires its citizens working abroad to file taxes at home. Though US expatriates are exempt from paying tax for the first $95,100 of income earned overseas provided they fill in the Foreign Income Exclusion form and prove they pay taxes to the country they currently reside in, the process is complicated.
According to the Reuters, Americans expatriates also have to adhere to another regulation that requires them to disclose information on foreign bank accounts with a minimum of $10,000. Banks have to furnish information on those clients and their funds to the American government. Per the TIME magazine, when compared to the estimated 3 to 6 million US citizens residing abroad, a number less than 2,000 persons relinquishing US citizenship is not a bigger number. But this number indicates a rising trend of persons renouncing US citizenship considering that only 502 citizens did so in 2009.
But relinquishing one’s U.S. citizenship isn’t as simple as one might imagine. Persons who wish to renounce their US Citizenship have to do so voluntarily and have to appear in person before a US consular or diplomatic officer. Note that this has to happen in a foreign country (normally at a US Embassy or Consulate). Such persons have to sign an oath of renunciation. For persons not adhering to the regulations mentioned above, Renunciations have no effect legally. Remember that US citizens cannot effectively renounce their citizenship by mail, through an agent, or even while being in US. In fact, US courts have held certain attempts to renounce American citizenship to be ineffective on a variety of grounds. The person must also prove they have no intention to return to live in the United States and in most cases have another citizenship secured.