To bring the subject of one of Eric’s posts back to the forefront, State Department to hike renunciation fees to US$2,350; says “no public benefit” in respecting human right to change nationality, I add another article, today, from the U.S. — Wall Street Journal, Laura Saunders, August 30th: U.S. Fee to Drop Citizenship Is Raised Fivefold. Commenting is open and comments have started.
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,”
Also from the U.S., which complements the articles on higher fees for renunciation, one from the U.S. Chamber of Commerce, highlighted this morning by badger: Exit Strategy: FATCA Tax Law Keeps Pushing Americans To Give Up Citizenship. Growth opportunity — the HIRE Act continues to give.
Here’s a hot tip for accountants and tax attorneys: now is a good time to develop specialized expertise in advising clients who may be seeking to expatriate from the United States. That demographic looks more and more like a real growth opportunity.
Some firms have already figured this out!
Pictured in the article is a US passport, perhaps, the US Government should put the word “FATCA” below the biometric symbol along with a pair of handcuffs as an update.
The decision to increase cost of renouncing US citizenship +400% is a risky gambit.
It’s a blatant slap in the face to the Finance Canada FATCA negotiators and Harper’s Cons. After coercing Canada into enshrining a requirement for a Certificate of Loss of US nationality into Canadian law, the US quadruples its CLN price LESS THAN 3 MONTHS after FATCA becomes law in Canada! This destroys any remaining shred of credibility regarding the value of Canada negotiating “favorable terms” with the US.
Also, if renunciations continue to increase despite the vast cost increase, what does it say about value of US citizenship if people are willing to pay four times as much to dispose of it?
Defending corporate inversions is risky, but I’m glad you did. Let the reader figure out where the similarities and differences between people and corporations end. Funny enough, those who would lump us together as evil are most likely those who scream that corporations aren’t people.
I’m just hoping that someone like Jon Stewart or John Oliver picks up the story and runs with it. Someone like that has the gravitas to a) make the situation clear to the average American, and b) maybe shame the powers that be into some sort of action.
It’s a done deal, apparently, as of Sept. 12. What I hate about any of these types of things is that the government controls both ends. It’s like a conflict of interest to me. First they set up this overly long, drawn-out process and then they say it is terribly expensive and taxpayers shouldn’t have to foot the bill. Why not just simplify? Duh!
To me, one should simply be able to send a notarized letter saying, “take me off your list, permanently, I’m a Canadian”. I’m just thankful I got out for $450, I was pissed for a day but glad it was a small price to pay for my freedom ever since.
Just my luck. In July I was given my appointment for 1 October.
I love a couple of exerpts from this article:
“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.”
and
“He added that three-quarters of all renunciations are processed by consular offices in Canada, the U.K. and Switzerland.”
So numbers are still going up and we’re the people that are driving it. Good for us! Glad I got my CLN last year.
@Medea, me too! I’m so relieved to have my CLN from last year….
@Medea Fleecestealer – the English speaking world is only talking about FATCA and indeed it’s only picking up attention in the UK/Ireland at present.
Expect the jump ship mentality to spread to other countries as people wake up to the post-FATCA world.
I have one word for this fee hike. The word is “theft”.
USD 2,350 is a desperate attempt to stem the flow of renunciations, which makes the Obama administration look bad, and rightfully so.
But will it work? My guess is no. When people want out, they want out and do whatever it takes to make it happen.
If anything, the USD 2,350 will be just one more reminder of the abuses that have been levied upon them.
The rise in renunciation fees will increase the number of renunciants. After all the higher the fee, the more valuable it will seem.
The CLN is already the most sought after document in the world.
The Obama Legacy: A CLN from the U.S.A. is worth considerably more than a U.S. passport.
Now, that’s “Change we can believe in.”
This will just make more people want to hurry up and get in line anticipating even more difficulties to renounce than there aleady are in place. It’s proof positive that it’s not going to get easier or stay the same.
$2350 is the new price of freedom. Many have paid more, some with their blood. It’s all relative.
I agree renunciations will rise. Though it was “slow” to develop, what we expected nearly 3 years ago has arrived, it is getting more expensive, longer waits and there is no reason to expect it will get anything but worse. There is NO trusting the US govt.
Remember RenounceUSCitizenship’s slogan “Renounce and be free”!
I posted on the WSJ blog and it looks there is no editing or proof of being a human being is needed. On a another note, I went to Chelan, WA the last couple of days and the rental car had this satellite radio. On the way back there was a CNN talk show about the 1960’s. It started out about TV but when I had to leave the car it was on the cold war topic. The Berlin wall was erected when 1-2K people per day left Eastern Germany for the West. Renunciations are not as common as people leaving East Germany in 1961 or so, but the issues are essentially the same. I got freedom by renouncing last year as a few above have too. I will donate the difference to IBS legal fund.
When you compare the $2350 to the $2k+ you would likely pay to have your taxes done abroad it still looks cheap. If your paying any state side taxes (say NIIT because it’s outside the tax treaty credit) then it’s going to pay for itself in one year.
Hell is somebody said to me that if I paid 2k then I could avoid filling FinCen 114 and 8938 from now on I might go for it. I am becoming a citizen through rather than shedding it but that’s a different tax problem.
@Don, yes I agree. We already have more queries from people living in places like Australia and New Zealand about renunciation/relinquishment. But there were also reports two/three years back that in places like South Korea and Thailand people were already dumping their US citizenship/Green Cards so they may have already peaked as far as US departures go.
@Neill, too true. I paid just over that amount to file 7 years of FBAR’s, the Streamlined Questionnaire and the 8854 form I needed to become compliant so I imagine others who also have to do proper tax returns every year could be paying as much or more than the new fee to stay compliant. As so many others have said, it’s not necessarily the cost, although that’s onerous enough, but the fact the system gets more and more complicated with more and more forms to fill in all the time. You now have the IRS’s 8938 form as well as FBAR if you meet the criteria for that one too.
@Medea, indeed; my five years of tax returns came to just under 1000 pages with one year alone at almost 300 pages!!! My accountant warned me that if I retained my US citizenship, that she would have have to declare my new pension plan and ISA as foreign trusts which would have increased my annual fee from $2500 to more like $4000-$5000.
Apparently the foreign trust forms 3520 and 300 are very complex and expensive to have prepared. My total annual tax bill to the IRS would have been no more than $500
and possibly $0. My God.
And this is with a total annual income of under $30,000. The second foreign trust forms is 3520A. Apparently they’re getting a lot stricter in what they deem a foreign grantor trust. It’s a grey area because one can claim protection from the treaty for pension contributions and growth but there are risks that the IRS might disagree and deem it as PFIC taxation, etc.
I’m just so relieved to be out.
Sorry, I got automatically edited; my annual accountant fees would have jumped from the already burdensome $2000 to possibly up to $5000.
And, of course with the resultant saving, will continue to donate when I can. 🙂
This unfounded increase in an expatriation exit fee is actually a gift from angels looking down upon us.
It shows the sheer hypocricy in violation of the Usa expatriation act 1868 and puts our plight in black and white
They have endorsed the British position of the war of 1812 as such the hypocricy goes
@Kermitzii and @monalisa, Thanks for your thoughts on donations.
@George, I agree that the increase in renunciation fee might well backfire on U.S. Congress.
Yes, @Stephen,@KermitziI, and @George; I agree that it’s starting to look so hypocritical that I’m growing more optimistic that it will backfire and hopefully force them to reform the system.
I realise that most on here would be too bitter to want to ever return but still hope that Congress will offer to restore citizenship to those of us who essentially felt forced to renounce in order to be able to lead a normal life.