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Renunciation of US citizenship is on the rise
On May 7th, 2015, the US Treasury Department published its first quarter 2015 list of individuals who have chosen to expatriate and it was yet again an eye opening number. The 1,335 published names is the highest quarterly figure ever reported in the Federal Register. The number of individuals voluntarily choosing to renounce their US citizenship continues to grow at a record pace, presumably in response to measures put in place by Congress and the Treasury to crackdown on offshore tax evasion and noncompliance. The primary driver for this continued rush for the exit (at least in our estimation) is the Foreign Account Tax Compliance Act (FATCA), which will provide the IRS with a wealth of information regarding foreign accounts held by United States persons (that is, US citizens or those deemed residents of the United States under the Internal Revenue Code).
Virtually all of the world’s largest economic powers have signed up to exchange information with the United States under FATCA. Given the pending exchange of information, it is no surprise that individuals are scrambling to get beyond the long-arm of the IRS sooner rather than later. Once the FATCA engine fires up, the IRS will presumably be poised to pounce on the unwary in an unprecedented fashion.
As the graph below indicates, the numbers included in the most recent Treasury Department list are greater than they have ever been before:
Even these lofty numbers fail to tell the whole story, however. Under Code section 6039G, the US Treasury is required to publish the name of each individual losing their US citizenship with respect to whom [the Treasury] receives information … during such quarter. As the Code section implies, the tally relates to the volume of information the Treasury receives that quarter, not the number of individuals that expatriate during that quarter. In short, it is believed there are even more individuals renouncing their US citizenship than the list suggests.
More information regarding renunciation of US citizenship is available at the links below.
- Alexander Marino, Renouncing your US citizenship: Is divorcing Uncle Sam right for you?, available at https://www.moodysgartner.com/renouncing-your-u-s-citizenship-is-divorcing-uncle-sam-right-for-you/.
- Alexander Marino, Renouncing your US citizenship: Failed amendment may signal that now is the time to get out!, available at https://www.moodysgartner.com/renouncing-your-us-citizenship-new-law-may-keep-you-out-forever/.