Record Number of Americans Renounce US Citizenship

The number of Americans renouncing their US citizenship has leaped by 58 percent since 2014, to at least 5,411. The reason is money.

WPost: “The United States is one of the only countries in the world that requires its citizens and permanent residents to file taxes even when they live abroad. Eritrea is the only other country to have a similar policy. This unusual policy a relic of the Civil War and the Revenue Act of 1862, which called for the taxing of U.S. citizens abroad — in part to punish men who fled the country to avoid joining the Union army.

“This is no new policy — Americans abroad have always been covered by federal tax laws. However, things changed in 2010, when the Foreign Account Tax Compliance Act (FATCA) was enacted. This law essentially requires foreign financial institutions to check whether an account holder is a U.S. citizen or permanent resident. In some cases, Dunn said, they would ask for proof that the account holder is not a U.S. citizen.

“The end result here is that whereas in the past a U.S. citizen abroad might be able to get away with not filing their U.S. taxes, that has become vastly less likely under these new circumstances. In some cases, this can be extremely costly…”

DRILL DEEPER:

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