Renouncing US citizenship is generally not about U.S. Worldwide Taxation!
The previous record was in the first quarter of this year, which saw a total of 1,335. The second quarter saw just 460 citizens relinquish their passports or green cards.
The acceleration in the number of individuals giving up their citizenship has coincided with increased actions by the US Treasury and Internal Revenue Service to trace American undeclared assets and income held abroad, particularly by enforcing the Foreign Account Tax Compliance Act (FATCA) and the requirement to file a Report of Foreign Bank and Financial Accounts.
According to representative bodies, Americans living abroad are becoming increasingly aware of their US tax reporting obligations. In particular, US citizens are finding it increasingly more difficult to bank and therefore live and earn a living in a non-U.S. country as a result of FATCA. Among just a few of the seemingly overwhelming obstacles of living and working outside of the U.S. is that ordinary Americans are being denied routine bank accounts and having mortgages called in prematurely – simply because American living and working overseas have become toxic to banks for having a US connection. How do you function day to day with no bank account is the question plaguing Americans trying to compete internationally with other countries for overseas’ jobs and executive positions when you can not locate a bank in your neighbourhood or job area for your daily banking activities of receiving your pay-check, writing checks for daily living expenses, getting a bank credit or deposit card or getting a home loan or line of credit on your business needs. Non-Americans are able to have these bank accounts unrestricted and an marked advantage over Americans who are trying to retain their jobs and maintain family while working in a foreign location.
So far this year, the US Treasury Department has said 3,221 taxpayers have relinquished their citizenship – just below the 3,415 that did so in the full year 2014.
The Treasury is required by statute to publish a quarterly list including the name of each individual who has lost or renounced US citizenship during the period. For the purposes of this listing, long-term residents or green card holders are treated as if they were citizens of the US who lost citizenship. Please see the Federal Register of people who have lost or given up their U.S. citizenship for the three months of July, August and September 2015:
Yes, there are almost endless article on why Americans and Green Card Holders are giving up there citizenship or status based on taxation, but that is more for the academic audience rather than for real American families who have lived overseas for years and/or American executives working hard to make a decent living by being allowed to work for American and international companies while being required to live outside of the U.S. for a period of time.
This will be my lead article of more related article on the everyday obstacles of moving overseas and continuing to live overseas with practical suggestions for banking, bank accounts, reporting, double filing costs for double filing tax returns in two countries, non-double tax relief between the U.S. and other countries and the effects of foreign income on your long-term retirement prospects from Social Security.
All my best to you out there tonight,
Michael B. Nelson, Esq.