Excessive taxation blamed -

The National Center for Policy Analysis is reporting today that the number of U.S. expatriates turning in their U.S. Passports is rising dramatically. According to U.S. government records, 502 expatriates renounced their U.S. citizenship (or permanent residency) in the fourth quarter of 2009. This is more than double the number of expatriates renouncing U.S. citizenship in all of 2008.

It is also estimated that hundreds, or perhaps thousands, of other expats have filed applications to renounce their citizenship. Those applications are now waiting to be processed by various U.S. consulates and embassies all over the word.

The main reason cited by these expats for their willingness to give up their U.S. citizenship is over-taxation. The report says, “While a small number of Americans hand in their passports each year for political reasons, the new surge in permanent expatriations is mainly because of taxes.”

The U.S. is the only industrialized nation on the planet that taxes its overseas citizens. The result is that these expats are subject to taxation in both their country of residence and in the U.S. In addition the U.S. government has now implemented more stringent rules requiring expats to report any foreign bank accounts they have which exceed $10,000. Stiffer penalties for non-compliance have been implemented, as well. These measures were adopted to prevent Americans from keeping undeclared assets in offshore banks. The reports adds, “They (the new measures) also make life increasingly difficult for millions of law-abiding expatriates.”

“And because the U.S. government requires other countries to abide by its banking and financial rules when dealing with expatriates, Americans living abroad are often denied services because of the increasingly complex legalities and logistics involved in serving U.S. customers,” reports Time.

“Many U.S. expats report being turned away by banks and other institutions in their countries of residence only because they are American, according to American Citizens Abroad (ACA), a Geneva-based worldwide advocacy group for expatriate U.S. citizens.”

Renouncing U.S. citizenship is a drastic measure which cannot be revoked. Once citizenship has been renounced that individual cannot become a U.S. citizen again without going through the same process that a foreign born person must go through in order to obtain citizenship.

Source: National Center for Policy Analysis report: http://www.ncpa.org/sub/dpd/index.php?Article_ID=19263&utm_source=newsletter&utm_medium=email&utm_campaign=DPD

U.S. State Department Info: http://travel.state.gov/law/citizenship/citizenship_776.html