A recent survey shows that nearly one in three US expats plan to renounce their citizenship or are seriously considering it. Read their reasons why.

A combination of complex tax requirements and greater dissatisfaction with governmental policies is pushing more US expats towards renouncing their US citizenship. Recent surveys highlight the significant burden and challenges posed by the US tax system, particularly the requirements to report income and bank accounts in their home country under laws like the Foreign Account Tax Compliance Act (FATCA) and the Foreign Bank Account Report (FBAR).

One of the top reasons driving the decision to renounce US citizenship includes the onerous and costly tax-filing obligations that apply regardless of where expats live in the world. According to the survey, a significant percentage of expats say they are exhausted from the complexity of managing dual tax obligations and feel the US government does not provide enough tax relief to lessen the impact of double taxation. This has led to feelings of being unfairly treated compared to stateside Americans, with a considerable percentage of the expat community feeling their concerns are less likely to be addressed by the US government.

Furthermore, cultural and personal integration into their new countries has encouraged some expats to consider renouncing their US citizenship. Stronger ties to their new homes and a desire for more straightforward financial dealings without US tax compliance hurdles make renouncing citizenship much more appealing.

As expats keep an eye on US politics from afar, there’s growing anxiety about new government proposals that could mean shelling out more in taxes. In March, the Biden Administration’s Fiscal Year 2025 Revenue Proposals, or “Greenbook,” outlined a framework to “ensure the wealthy and large corporations pay their fair share, lowering costs for hard-working families, and further reducing the deficit.” The proposals would increase the U.S. corporate income tax rate from 21% to 28%, and the top individual ordinary income tax rate from 37% to 39.6%. That could translate to tens of thousands of dollars out of your pocket!

In another recent story that flew under the radar more than most expats, the Supreme Court upheld Donald Trump’s 2017 tax provision aimed at preventing “off-shore tax dodges.” This provision, initially aimed at encouraging major corporations like Apple to repatriate their overseas assets, has significant implications. It was challenged by a couple who were hit with a one-time $15,000 tax bill on their investment in India, which had ballooned from $40,000 to over $500,000. Unfortunately, this tax law also impacts any expats owning at least a 10% stake in a foreign company that is over 50% American-owned, broadening its reach beyond big just corporate entities. This means expats would still be on the hook for the 15.5% repatriation tax on retained earnings (going back to 1986). Yet another hit to your bottom line!

Overall, while the decision to renounce citizenship is significant and requires careful consideration, the combination of high compliance costs, tax policy changes, complex bureaucratic processes, and a perceived lack of representation at the governmental level is pushing more US expats toward cutting ties with Uncle Sam.

If you are considering renouncing your US citizenship, it is crucial to do it the right way to avoid costly pitfalls. In our webinars, we emphasize the importance of proper renunciation. The US has a host of tricks and traps you’ll need to avoid (including the exit tax, inheritance tax, travel issues, loss of benefits, and the threat of being barred from the US for life) during the process. By being informed and prepared, you can navigate this process with confidence.

Our team of experienced US lawyers represents between 800 and 1200 US citizens and green card holders who decide to renounce their US status correctly every year on six continents – more than any other firm in the world. We can also help expedite your renunciation process by identifying US embassies and consulates with shorter wait times.

If you or a family member is a US citizen or green card holder considering renunciation, we invite you to visit our dedicated webpage for more information. This page contains links to register for our upcoming renunciation webinars. You can find one tailored to your geographic location in our events listings.

These webinars thoroughly review everything you need to know about the US citizenship renunciation process and available options should you decide to take the next steps.