Interesting article that accurately explains WHY people are renouncing US citizenship – AKA #citizide: "COMMENTARY: U.S. citizenship is not as coveted as it once was – National" | https://t.co/r5V8GeCTh7 https://t.co/WRVgZ3ZijC
— U.S. Citizen Abroad (@USCitizenAbroad) September 12, 2020
The above tweet references the article written by Brett Goodin. Although not entirely free of technical errors (let’s not point out the errors in the comments to this post), the article debunks the absurd suggestions that individuals are renouncing for political reasons or because of the coronavirus.
Mr. Goodin writes that:
While many liberal Americans threatened to move abroad after Trump’s election in 2016, rising renunciations are not directly attributable to any particular election result. The trend began in 2013, mid-way through the Obama administration. That year about 3,000 Americans suddenly gave up their passports – three times more than usual.
Nor are people fleeing the U.S. because of the coronavirus. The paperwork for the 5,315 renunciations completed so far this year began long before COVID-19 ravaged the country and made Americans global pariahs.
In fact, most Americans giving up their U.S. passport already live abroad and hold another citizenship. In surveys and testimonials, these people say they’re dropping their U.S. citizenship because American anti-money laundering and counter-terrorism regulations make it too onerous and expensive to keep.
In 2010, Congress passed the Foreign Account Tax Compliance Act, which requires foreign financial institutions to report assets held abroad by U.S. citizens and green card holders. The law, intended to identify the non-U.S. assets of all taxpayers, also ended up strengthening a 1970 anti-money laundering law, the Foreign Bank Account Report, which requires citizens to declare all foreign assets to the U.S. Treasury Department.
Together, these two regulations represent a major burden for low-income and middle-income expatriates. Until 2010, they could basically ignore or remain ignorant of the Foreign Bank Account Report because there was little chance the U.S. government would discover their non-compliance.
They weren’t avoiding taxes. Of the roughly 9 million U.S. citizens living abroad, most don’t earn enough to owe Uncle Sam a dollar. Only expatriates who make over $107,600 in foreign income are required to pay U.S. taxes.
Thanks for posting. Comments are open.
“…most Americans giving up their U.S. passport already live abroad and hold another citizenship”
Arguably all save for a handful, but why quibble.
Otherwise I will do my usual polite clarification email to the author concerning the usual minor inaccuracies.
Okay, an earlier version (original) version of this article is at the Conversation:
There are a number of comments. I would say that the a majority of the commenters do understand parts of the issue. I strongly suggest commenting both on the Global article and at the original article (link above). Also, suggest that the comments be of a general nature in order to get the point across and increase the general level of understanding.
Why don’t you thank him for the article and leave it at that. There are no inaccuracies that obscure the main point of the article.
Two not insignificant inaccuracies:
1. He’s projecting 10,000 renunciations this year. A straight linear extrapolation doesn’t make much sense when the consulates remain closed. (The figures are a misleading mess in general, but that’s another issue.)
2. He makes the common mistake of claiming that tax compliance is necessary to renounce. It’s always worth correcting this one, since it frequently leads the unwary into the clutches of accountants.
Read in context, he means the demand and desire to renounce. In any case, he may be right. You don’t know what the consulates may or may not do. Maybe they will open. Maybe they will solve the backlog and find an easier way to do this. What he writes is NOT inaccurate. It’s simply extrapolating from the numbers (as you point out). Your point is that you don’t like the inference he is making. That does not make his claim inaccurate.
(Yes, this is possible isn’t it? He isn’t saying that compliance is required to renounce.)
He is clearly saying that you unbecome an American (renounce) without a reference to a requirement of tax compliance. There is no wrong statement to correct. The second sentence “After that, your ties to the U.S. government are severed” is referring to a statutory obligation that is post-renunciation. He is NOT saying that it affects the validity of the renunciation or that it is a condition of the renunciation. (He is simply not saying what you claim he is saying.)
Is it really so difficult to simply compliment a person, who is a clear ally, without trying to find fault with what he has written?
I copied the two above comments to the Tax Compliance (or not) Discussion thread and moved reply comments dealing with compliance there.
I agree that this is a good article, one of several recently that are finally addressing our issues without prejudice. I especially appreciate his calling attention to the fact that 27% of overseas Americans are modestly-paid educators, not conniving billionaires.
I also agree that picking on the author over trivialities that are unrelated to the theme and intention of the piece is unnecessary: it discourages such journalists and adds ammunition to the “don’t let the door slap yer ass on the way out” brigade. Why do some people always insist on having the last word?
By the by, the author replied to my e-mail with “many thanks for reaching out with this thoughtful message and really interesting information” and a promise to follow up for more details when time permits him to look at this issue again.
Does anyone know the date that US citizenship renunciation appointments were halted at US Consulates in Canada?
If you have any evidence for this date, could you please post it here or send me an email at firstname.lastname@example.org ?
It appears to be March 23rd for Canada. US Citizen Abroad made a post about it on March 19th, in which he links to Twitter, quoting what appears to be an e-mail from the US Embassy, “In response to the global COVID-19 pandemic . . . the US Embassy and all Consulates General in Canada are suspending all routine American Citizen Services from March 23 through April 30. You are receiving this email because we have cancelled your scheduled service.”
I just read the article and I realize that it is a little late in the game, but I thought that it was interesting that there was a link back to Issac Brock Society within the article. In the article is it under the link “other wealthy countries”
“Becoming American” is a favorite topic in U.S. literature, popular history, and the media. There are entire sections of university libraries devoted to books and studies on the topic. My first book, about how ordinary American citizens shaped early American national identity, will soon be among them.
However, there is very little written about the reverse: unbecoming American.
Renouncing U.S. citizenship is pretty complicated and costly. It involves one or two interviews with a consular officer, a $2,350 administrative fee – very expensive compared to other wealthy countries – and potential audit of the citizen’s last five years of U.S. tax returns.”
The potential audit of the tax returns is a pretty hollow threat – particularly for anyone who hasn’t bothered to file. From the TIGTA report we know that the IRS barely looks at those expatriate.
On a related note, increasingly good odds of another US stimulus benefit soon, though probably more like $600 than $1200. Even that reduces the cost of renunciation from $2350 to $550 for those who are willing and able to procure the subsidy; the cost could be further reduced if Congress decides to cut a bigger cheque, or issue more in the future.