Number of Americans who #RenounceCitizenship Surged in 2nd Quarter http://t.co/I84MIgTFbN – Will encourage #americansabroad to renounce!
— U.S. Citizen Abroad (@USCitizenAbroad) August 10, 2013
This is a rather disappointing article from an author who has written on this issue before. Why disappointing? The general tone seems to equate Americans Abroad with tax evaders and terrorists (whatever those are). That said, it’s one more article reporting the increasing numbers renouncing U.S. citizenship.
The U.S. launched the tax crackdown after the terrorist attacks of Sept. 11, 2001, and ratcheted up its efforts after 2009, amid evidence that UBS AG UBSN.VX 0.00% and other foreign institutions helped U.S. taxpayers hide assets.
Some taxpayers have applied for IRS limited-amnesty programs, in which they pay stiff penalties for past noncompliance but avoid prosecution.
Tax lawyers say the crackdown has ensnared smaller violators who weren’t intentionally evading U.S. taxes.
In addition, a law enacted in 2010, the Foreign Account Tax Compliance Act, or Fatca, requires foreign financial institutions to certify they aren’t hiding U.S. taxpayer assets, which lawyers say is leading some to reject U.S. customers.
Taxpayer penalties for failing to report assets can be severe, including up to 50% of an account balance for each year.