Americans renouncing citizenship on the rise: 2014 on pace to set record

Americans renouncing citizenship on the rise: 2014 on pace to set record

Significant numbers of people are continuing to renounce their U.S. citizenship or end their long-term U.S. residency.

There are 776 names on the Treasury Department list published Friday for the third quarter of 2014.

That’s the third highest quarterly figure ever, according to Andrew Mitchel, an international tax lawyer in Centerbrook, Conn., who tracks the data. The total number of published renouncers so far in 2014 is 2,353, putting this year on pace to exceed last year’s record total of 2,999, adds Mr. Mitchel. …

Experts say that the growing number of renunciations by U.S. citizens and permanent residents is linked 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. …

Unlike other developed nations, the U.S. taxes citizens on income they earn anywhere in the world. The rule dates to the Civil War. U.S. tax liabilities can also cover children born to Americans abroad, extending the reach of the Internal Revenue Service across generations as well as oceans.  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. Now, scrutiny of Americans abroad is intensifying because of the Foreign Account Tax Compliance Act, or Fatca, which Congress passed in 2010.

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