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The fee for individuals to renounce U.S. citizenship is jumping to $2,350 as of Sept. 12—more than five times the current charge of $450.
The U.S. State Department, in its explanation for the increase, said that documenting a renunciation is “extremely costly” and requires a minimum of two intensive interviews with the applicant as well as other procedures.
The fees charged for a number of other services, such as “fiance(e) visas” and employment-based visa applications, increased far less than those for renunciation and in some cases declined.
The large increase in the renunciation fee comes at a time when record numbers of Americans living abroad are cutting ties with the U.S. Last year, 2,999 U.S. citizens and green-card holders renounced their allegiance to the U.S., a record number, and renunciations in 2014 are on track to exceed that. The State Department estimates that 7.6 million Americans live abroad.
In its explanation of the fee increase, the State Department referred to the growth in renunciations, noting that since 2010 the demand has “increased dramatically, consuming far more consular time and resources.” It also referred to a 2010 statement saying that the $450 fee was substantially less than what it cost to provide the service, adding that “there is no public benefit or other reason for setting this fee below cost.”
According to a State Department spokesman, the wait time for an expatriation interview has increased to as much as six months in some areas, while it is as short as two to four weeks in others. He added that three-quarters of all renunciations are processed by consular offices in Canada, the U.K. and Switzerland.
Advocates for U.S. expatriates reacted angrily to news of the increase. “I’m so disappointed and insulted by the continuing punitive actions of the U.S. in trying to prevent persons and companies from leaving,” said Carol Tapanila, who was born in New York state but has lived in Canada for more than 40 years. She renounced her citizenship in 2012.
“The cost of U.S. tax lawyers, accountants and immigration lawyers made a good dent in our retirement savings. With these new fees, we would have had to take out a loan,” she added.
Helping boost the exodus of U.S. citizens, say experts, is a five-year old campaign by U.S. authorities to track down tax evasion by Americans hiding money abroad. While the campaign has collected more than $6 billion in taxes, interest and penalties from 43,000 U.S. taxpayers, it has also swept up many middle-income Americans living abroad who pay taxes in their host country and say they weren’t trying to dodge U.S. taxes.
Scrutiny of these Americans by U.S. authorities is intensifying under the Foreign Account Tax Compliance Act, known as Fatca, which Congress passed in 2010. The law’s main provisions took effect in July and require foreign financial firms to report income and account balances above certain thresholds to the Internal Revenue Service.
The heightened enforcement is prompting many to renounce their citizenship. While a renunciation doesn’t free them of taxes due for past years, these people don’t want to risk large tax bills for themselves and their children in the future.
From the perspective the process of renouncing your U.S. Citizenship is what I would describe as “quick and easy”. At most there are 3 forms to fill out, and a short Oath to read. There really isn’t an interview, just the collection of some basic information on the forms. There is nothing “intensive” involved.
Of course, I cannot speak for the Consulates with respect to what they do in the background, however, I believe the governmental issues with the process are in Washington and the increase fee is not likely to have an impact there.
For those complaining about the US tax issues, or the cost of complying with US tax issues, the increased price is probably a significant savings over continued participation as a U.S. Citizen.
I think the main thing is if you are planning to renounce, drop all the anger and renounce. You’ll be out of that system and able to get on with your life.
Land of the greed, home of the slave
Apparently, even states like Sudan, North Korea, Iran and Zimbabwe practice residence-based taxation like the rest of the civilised world. Quasi-communist China, too. If the Islamic State caliphate is established in Iraq, will the Treasury send a delegation to negotiate another IGA? (Obvious outcome.) I bet they will end up practicing residence-based taxation like the rest. The USA is getting more ridiculous and desperate by the day…
My friend and his wife just expatriated this past week, with the Consul in Jamaica. They now live in Grand Cayman. The ONE interview lasted 15 minutes explaining to my friends what they would be giving up.
Then they were given a 24 hour ‘cooling off’ period and came back to the consulate. The lady there asked them if they still wanted to expatriate, they said, “Yes.” And, that was it.
They flew to Jamaica to renounce their citizenship to beat the ‘fee increase’ deadline. It saved them about
$4,000.
This article says TWO intense interviews is a lie. Like I said my friends had ONE interview for 15 minutes. The US Govt is experiencing unprecedented numbers of expatriations.
So , this 422% fee increase to expatriate is a ‘punishment’ to those who would ‘dare’ to reject the U.S. The excuse of administrative cost increases of that proportion is also an outright lie—just like Obama telling us—you can keep your Doctor.
The main reason for all these folks giving up their citizenship– FATCA–the Foreign Account Tax Compliance Act. Too much to go into here…but that’s the number 1 reason given to my friends by the Consul in Jamaica.
The biggest mistake I ever made was becoming a US citizen. I have no desire to vote, the only “benefit” you really get, everything else is a negative in my opinion. To get out of the BS of filing two tax returns when I leave or having Uncle Sam loot my estate in my foreign country of residence I will now have to pay extortion money in exchange for liberty. It’s hard to believe it’s constitutional but then, the constitution isn’t worth very much unless you’re an overlord.