Number of U.S. Expatriations Reaches Record High in 2013
The Wall Street Journal reports that the tax burden in the United States is becoming so burdensome that the percentage of U.S. citizens becoming expatriates has skyrocketed at least 33% since 2011 to an all-time high.
According to Andrew Mitchel, a tax lawyer in Centerbrook, Conn., in 2013, 2,369 Americans have either given up their citizenship or turned in their green cards, as compared to all of 2011, when there were 1,781 expatriates.
Freddi Weintraub, an immigration specialist, said the only reason people would willingly become expatriates was the tax burden: "Nothing has changed in immigration law that would make people want to renounce. Current or anticipated changes in tax law and enforcement are driving this increase."
Higher taxes on income and estates that were implemented in 2013 may have been the catalyst to exit America for some citizens.
Fran Obeid, who specializes in offshore-account issues, explained, "The fact that renunciations have increased sharply is not surprising, given increased U.S. scrutiny in this area. Renunciation can be expensive, but it may be easier than staying in compliance with U.S. tax laws that can be onerous for citizens of other countries."
Another factor stimulating the renunciation of citizenship may be the Foreign Account Tax Compliance Act that will arrive next year; it requires financial institutions abroad to inform the U.S. of the contents of American taxpayers’ accounts overseas. Failure to report assets can be punishable up to 50% of an account balance a year.
The Internal Revenue Service declined to comment to the Journal.