TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Thursday, February 9, 2017

Number Of Americans Renouncing Their U.S. Citizenship Hit All-Time High In 2016 (Up 26% From 2015)

International Tax Blog, 2016 Fourth Quarter Published Expatriates — New Annual Record:

Today the Treasury Department published the names of individuals who renounced their U.S. citizenship or terminated their long-term U.S. residency (“expatriated”) during the fourth quarter of 2016. The number of published expatriates for the quarter was 2,365, bringing the total number of published expatriates in 2016 to 5,411.  The total for the year breaks last year’s record number of 4,279 published expatriates.  The number of expatriates for 2016 is a 26% increase over 2015 and a 58% increase over 2014 (2,999).

Expats

The graph below shows data going back to 1962 by incorporating State Department data.

https://taxprof.typepad.com/taxprof_blog/2017/02/number-of-americans-renouncing-their-us-citizenship-hit-all-time-high-in-2016-up-26-from-2015.html

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Comments

Oh no! Last year 0.002% of Americans renounced their citizenship, some possibly for tax reasons. Whatever shall we do? (Now that Mr. Trump is President, expect this number to go up, notwithstanding that he promises to cut taxes for the very richest.)

Posted by: Theodore Seto | Feb 9, 2017 5:05:58 AM

This is not what it seems. In 2008 (?) the US Govt implemented a new requirement that anyone who changed citizenship must formally "renounce" their citizenship or be subject to US income tax. This was made retro-active. Previously, relinquishing was all it took. Now, a person must go through a consulate and make a sworn renunciation. This process takes several years and costs thousands of dollars. I have a friend mired in this process now--he moved to Canada 20 years ago and relinquished his US citizenship at the time, but now must do it all again to meet the new requirements. These "increasing" and "record numbers" of people renouncing US Citizenship merely reflect this changed posture of the US Govt., and expats catching up with the system.

Posted by: Randall | Feb 9, 2017 7:07:20 AM

As always, it would be very interesting to see how many of these were PE/VC types repatriating to a country that has zero or effectively zero capital gains tax rates, in the vein of Facebook co-founder Eduardo Saverin (whose parents claimed refugee status in the US from Brazil bc they were afraid of kidnappings) renouncing his citizenship in favor of Singapore the year Facebook when public.

Posted by: Unemployed Northeastern | Feb 9, 2017 9:55:14 AM

@randall

I am afraid you are badly misinformed about the law of loss of US citizenship, its history, context, procedure and terminology. If you would like some facts that might help you better understand these things and possibly help your friend understand it, visit the following site: http://www.citizenshipsolutions.ca/2015/03/03/renunciation-is-one-form-of-relinquishment-its-not-the-form-of-relinquishment-but-the-time-of-relinquishment/

Posted by: TodundSteuer | Feb 10, 2017 1:29:59 AM

Tod,
Thank you for that link. I am aware of the history of citizenship changes. And, I am not misinformed. I have friends caught in this bureaucratic trap. Unfortunately, as is currently being enforced, the relinquish date is not relevant to the US Govt. If a person relinquished their citizenship prior to 2004, the govt is still requiring a current "renunciation."

Posted by: Randall | Feb 10, 2017 2:28:16 PM

@Randall - your comment includes

"Unfortunately, as is currently being enforced, the relinquish date is not relevant to the US Govt. If a person relinquished their citizenship prior to 2004, the govt is still requiring a current "renunciation.""

I am the author of the post to which @Todundsteur referred. You really need to research this issue further. There is no authority from any source, saying that those who relinquished U.S. citizenship prior to 2004, are required to have a CLN or "renounce" in present day time. (The fact that some tax professionals "may" make this claim does NOT make it true.)

Posted by: John Richardson | Feb 11, 2017 5:11:30 AM