A record 4,279 people renounced their U.S. citizenship or long-term residency in 2015, according to…
Citizenship renunciation fee increases as American expatriates flee FATCA
US government fees charged to Americans for renouncing their citizenship will rocket from $450 to $2,350 on September 12, 2014.
The fivefold increase is probably related to the recent dramatic rise in renunciations triggered by the US Foreign Account Tax Compliance Act. FATCA forces foreign banks and other institutions to report their US clients’ financial doings to the Internal Revenue Service as from April 2015, after which it will become much more difficult for US expatriates to remain below the US tax radar.
Last year 3,000 US persons applied to renounce, more than treble the previous year’s figure, and ten times that of 2008. The 2014 numbers are expected to break that record. About three-quarters of applicants are in Switzerland (where rock star Tina Turner was perhaps the most famous of recent years), the UK, and Canada.
The US State Department justifies the increase by claiming that documenting a renunciation is very costly, since it requires at least two personal interviews between the applicant and the local American consul. It acknowledges, though, that the rapid rise in demand is one of the reasons for the increase, since these interviews are now ‘consuming far more consular time and resources’. Waiting times for expatriation interviews have soared from a few weeks to six months in some jurisdictions.
However, renunciation is not necessarily an easy panacea for US expatriates. They may not be granted the privilege unless they can prove tax compliance, and in any case, the IRS will impose an exit tax in the form of a capital gains charge on assets declared. It is also legally impossible to renounce citizenship while retaining the right of residence in the USA.
Our firm presented an informational webinar on the new Streamlined Filing Compliance Procedures available to many expats. Materials from the webinar can be downloaded here: Game Changer Streamline. While the streamlined program offers a welcome option for many taxpayers with undeclared accounts, other ways to address past noncompliance remain viable, including the OVDP program and Delinquent FBAR Submission Procedures and Delinquent International Information Return Submission Procedures.
Sources
Patel Law Offices offers a free strategy session to discuss how to resolve your legal problem. Conveniently schedule online today...
For foreign asset problems complete our questionnaire and online scheduler.
For other tax problems complete our questionnaire and online scheduler.
For estate planning complete our questionnaire and online scheduler.
For probate/estate administration complete our questionnaire and online scheduler.
For other legal problems visit our website and online scheduler.Related Posts
- Becoming Un-American: Record number of US citizens renounce their US citizenship
- FATCA Repeal Fails
Last month US Senator Roger Wicker (R-Miss.) introduced a budget amendment SA 621 to repeal…
- Vatican Signs FATCA Agreement
Praying may not be enough for non-compliant taxpayers (or evaders) under the Foreign Account Tax…
Search
Categories
Recent Posts
- New Webinar: An Introduction to the Taxation of Passive Foreign Investment Companies April 28, 2022
- New Webinar: Resolving International Tax Compliance Disputes: FBAR Controversy, Penalties, Appeals, Form 3520/3520-A, Form 5471 April 28, 2022
- How to Benefit from Tax Treaties April 25, 2022
- FBAR compared to Form 8938: Differences, Which to File, When to File, etc. April 10, 2022
- An exception to PFICs in Foreign Pension Plan Accounts April 8, 2022
- Passive Foreign Investment Company Tax & Mark-to-Market (MTM) election April 5, 2022
- IRS Releases New IRS 2022 FBAR Fact Sheet April 2, 2022
- US Tax Treatment of a UK Self-invested personal pension (SIPP) April 1, 2022
- Payment Apps like Venmo and Paypal Now Subject to Tax Reporting March 21, 2022
- IRS announces an update to its Voluntary Disclosure Practice Preclearance Request and Application March 10, 2022
- Upcoming live video webinar: “FBAR and U.S. Tax Reporting: Compliance Requirements for Foreign Assets” January 30, 2022
- Small PFIC Exception to Filing Form 8621 January 30, 2022