Blog + News
Setting The Record Straight on Scheduling an Interview To Renounce Your US Citizenship During the Pandemic
Several of my clients and colleagues have brought to my attention an article titled “Americans seeking to renounce their citizenship are stuck with it” written by Ed Pilkington in The Guardian.
I would like to address several points in the article that may give readers a misleading representation of the current state of renouncing one’s US citizenship. As director of US Tax and head of our renunciation practice, I have assisted with more renunciation files than any lawyer in the world over the past decade and would like to emphasize the fact that “hope is not lost.”
Firstly, the article describes “Michael” (not his real name) and his desire to renounce his US citizenship on primarily political grounds. While some US expats do indeed renounce for political reasons, the vast majority decide to do it for financial reasons. They are tired of the expensive annual filing obligations (not to mention the stress that comes with it), the double-tax risks of owing Uncle Sam, and the risk of law changes that always seem to leave US expats with the short end of the stick (regardless of political affiliation). They are also tired of being subject to the US estate tax regime in death. Renouncing one’s US citizenship properly alleviates all these issues and removes the heavy US tax burden that expats carry on themselves and their families.
Secondly, the article states that “most US consular missions around the world have suspended their expatriation services for those wishing to give up US citizenship.” This is not entirely true. Yes, waiting periods have grown because of COVID protocols, and some are only handling emergency services (which renunciation is not), but the process has not ground to a halt as the article suggests. Our firm helps renounce between 600 and 900 people a year on six continents during “normal times.” There are currently dozens of Consulates and Embassies offering renunciation appointments all over the world. One needs only to keep aware of the current situation abroad and, in many cases, be willing to travel. The article specifically mentions the US Embassy in London as being currently closed to this service (and it is), but the story fails to mention alternate locations where expats can renounce in the region. Under current conditions, I can (and do) have a UK resident renounced in six to ten weeks if they are willing to jump on a flight and travel for a day. The same situation applies to US expats living throughout Europe.
In short, if you’re a US expat, you simply need to know where to renounce, which has been a moving target during the pandemic. It’s important to keep abreast of the ever-changing location openings/closings, COVID restrictions on travel, and wait times to service citizens when open. It is a constant game of “whack-a-mole” depending on the COVID numbers across the world at any given time. Don’t give up so easily! Contact people who know these answers and can help (hint: Moodys Tax Law).
Lastly, the article fails to address the importance of expats renouncing their US citizenship the right way. Renouncing one’s citizenship does not have to signal the end of a relationship to a country that many expats still have ties to. If the renunciation process is handled correctly, expats can still travel to the US without the fear of being “hassled” by US Customs officers. Expats can still own US real estate, be “snowbirds” there, and even collect Social Security if eligible under the program.
One must renounce properly to prevent the US Exit Tax and avoid being barred from the US for life under the Reed Amendment. Expats can continue to enjoy their former homeland after renouncing, just as they did before handing in their US passport. I and my renunciation team help more people accomplish this goal than any other firm in the world.
Renouncing one’s US citizenship is a very important and personal matter for US expats and their families, and the implications must be carefully discussed before any decision is made. Our firm fully understands the importance of renouncing our client’s US citizenship the right way.
If you or a family member is a US citizen considering renunciation, we invite you to visit our dedicated webpage for more information. This page also contains links to register for our upcoming renunciation webinars. You can find one that is tailored to your geographic location in our events listings. These webinars provide a thorough review of everything you need to know about the US citizenship renunciation process, and available options should you decide to take the next steps.