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/video here >>> http://www.wsj.com/articles/record-number-gave-up-u-s-citizenship-or-long-term-residency-1423582726
By Laura Saunders
Feb. 10, 2015 5:38 a.m. ET 148 COMMENTS
A record 3,415 individuals renounced their U.S. citizenship or long-term residency in 2014, according to a list released by the Treasury Department on Tuesday.
The 2014 number was up 14% from 2,999 individuals in 2013, which was also a record.
“Many Americans abroad are finding that retaining their ties is not worth the cost and hassle of complying with the U.S. tax laws,” says Andrew Mitchel, a lawyer in Centerbrook, Conn., who tallies the lists of names released quarterly by the Treasury Department.
He links the growing number of renunciations by U.S. citizens and permanent residents to a five-year enforcement campaign against U.S. taxpayers who have undeclared offshore accounts.
The campaign began after Swiss banking giant UBS admitted in 2009 that it had systematically encouraged U.S. taxpayers to hide assets in secret Swiss accounts. Since then, more than 45,000 U.S. taxpayers have confessed to hiding money abroad and paid more than 6.5 billion in taxes, interest, and penalties.
But the campaign also complicated the financial lives of an estimated 7.6 million American citizens living abroad, leading growing numbers of them to give up their U.S. ties. By contrast, over the five years through 2008, fewer than 500 individuals a year on average renounced their citizenship or long-term residency.
Unlike many nations, the U.S. taxes nonresident citizens on income earned anywhere in the world, and U.S. tax liabilities can also apply to children born to Americans abroad. There are only partial offsets for double taxation for people who owe taxes both to the U.S. and a foreign country, and the reporting rules are onerous, experts say.
For decades these laws were rarely enforced, but scrutiny of Americans abroad is intensifying because of the Foreign Account Tax Compliance Act, or Fatca, which Congress passed in 2010. The law’s main provisions, which took effect last July, require foreign financial institutions to report income of their U.S. customers to the Internal Revenue Service. More than 140,000 banks and other firms have signed up to comply with Fatca.
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By Laura Saunders
Feb. 10, 2015 5:38 a.m. ET 148 COMMENTS
A record 3,415 individuals renounced their U.S. citizenship or long-term residency in 2014, according to a list released by the Treasury Department on Tuesday.
The 2014 number was up 14% from 2,999 individuals in 2013, which was also a record.
“Many Americans abroad are finding that retaining their ties is not worth the cost and hassle of complying with the U.S. tax laws,” says Andrew Mitchel, a lawyer in Centerbrook, Conn., who tallies the lists of names released quarterly by the Treasury Department.
He links the growing number of renunciations by U.S. citizens and permanent residents to a five-year enforcement campaign against U.S. taxpayers who have undeclared offshore accounts.
The campaign began after Swiss banking giant UBS admitted in 2009 that it had systematically encouraged U.S. taxpayers to hide assets in secret Swiss accounts. Since then, more than 45,000 U.S. taxpayers have confessed to hiding money abroad and paid more than 6.5 billion in taxes, interest, and penalties.
But the campaign also complicated the financial lives of an estimated 7.6 million American citizens living abroad, leading growing numbers of them to give up their U.S. ties. By contrast, over the five years through 2008, fewer than 500 individuals a year on average renounced their citizenship or long-term residency.
Unlike many nations, the U.S. taxes nonresident citizens on income earned anywhere in the world, and U.S. tax liabilities can also apply to children born to Americans abroad. There are only partial offsets for double taxation for people who owe taxes both to the U.S. and a foreign country, and the reporting rules are onerous, experts say.
For decades these laws were rarely enforced, but scrutiny of Americans abroad is intensifying because of the Foreign Account Tax Compliance Act, or Fatca, which Congress passed in 2010. The law’s main provisions, which took effect last July, require foreign financial institutions to report income of their U.S. customers to the Internal Revenue Service. More than 140,000 banks and other firms have signed up to comply with Fatca.
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