Recent News Article Focuses on Reporting of US Expats Renouncing US Citizenship
Greenback Expat Tax Services was featured in a Yahoo! News item discussing recent media coverage about expats renouncing US citizenship. A high-profile entrepreneur’s decision to give up his citizenship prior to the Facebook IPO made headlines and members of Congress responded by introducing the Ex-PATRIOT Act to discourage others from doing the same, leading to substantial media coverage of a new “trend” of renouncing US citizenship to avoid expat taxes and reporting obligations.
“Anecdotally, it would appear that the rate of people renouncing US citizenship is tied to increased government efforts to enforce US tax regulations on US citizens living abroad,” says Greenback President David McKeegan. “That is to say, increased awareness of the need to file US taxes and Foreign Bank Account Reports seems to have an impact on people’s decision to renounce citizenship, as the major increases have come after the 2009 voluntary disclosure program.”
But, as the Greenback article points out, the fact that eight times as many Americans renounced their US citizenship in 2011 as in 2008 is a notably dramatic statistic. However, the actual number of US citizens doing so is also notably small: 1,780 total in 2011 out of the estimated 3 to 6 million US citizens who live abroad. And while there are potential benefits for expats who choose not to retain their US citizenship, there are substantial drawbacks to consider as well. The drawbacks will likely increase if the Ex-PATRIOT Act is passed in Congress.
On the plus side, it could potentially eliminate double taxation on income earned in a foreign country, reduce the stress and cost of preparing tax returns, and avoid the banking reporting requirements. On the negative side, there is a loss of all rights and privileges afforded to US citizens, travel in the US requires a tourist visa, and current taxes will still be owed, including an additional exit tax for “covered expatriates” who have a high income. It’s also important to note that the decision is irrevocable, so renouncing US citizenship means you will never again be able to be an American citizen.
To learn more about renouncing US citizenship, view this article on the Greenback Expat Tax Services blog.
To view the article in Yahoo! News, follow this link: http://news.yahoo.com/us-expat-taxes-news-recent-media-coverage-exaggerates-212210652.html This article was also linked to USA Today‘s online coverage of Eduardo Saverin, the co-founder of Facebook.