Author Archives: overseasexile

Eric has been doing a great job of finding information about the real number of Americans giving up their citizenship, so much so that in my last Overseas Exile post on this topic, I was amused to discover that he had (as usual) already found the information I was researching and posted it here with much more analysis than I had the time to do. So my apologies if this has already been posted here.

Interestingly, though, expatami posted a link to this FATCA discussion (pdf) posted by an investment firm in Switzerland. Near the top of page five is the following:

Of the almost 40,000 US citizens who are estimated to live in Switzerland, [Minus the over 900 of whom have renounced their US citizenship in 2012 alone according to Ambassador Beyer]

Can anyone help to verify those numbers? If true, that implies that over 2% of Americans living in Switzerland are giving up their US citizenship. If you consider that it takes 12 years of residency to get Swiss citizenship and renunciants are unlikely to renounce without another citizenship, than we have some shockingly high numbers here.

With those numbers correct (I’m suspicious) and were the renunciation rate constant around the world (a bad and, I assume, incorrect assumption), we would have had over 141,000 Americans abroad renouncing last year (assuming a 6.3 million world population of Americans abroad). I don’t think we’re anywhere close to that number, but if the above quoted numbers are correct, the Swiss would have to be renouncing at a rate of 150 times greater than the rest of Americans abroad were the 932 number to be correct.

There is a now well-known newspaper report stating that over 400 Americans renounced in Switzerland in the first 9 months of 2012.

I describe this in more detail at the Overseas Exile blog, but here’s the issue in a nutshell.

For the first three quarters of this year the Federal Register has reported a little over 1,000 renunciations. However, one Swiss site reports that the US embassy in Switzerland has processed 411 US renunciations. This would mean that Switzerland, with somewhere between 2 to 5% of the world’s US expats, is reporting over 40% of the US renunciations. Perhaps the US expats in Switzerland have more wealth, but that 40% seems ridiculous.

However, Fox News has a story where unnamed “immigration officials” report a projected 8,000 US renunciations this year. If true, Switzerland will have approximately 5% of the world’s renunciations, a figure which makes much more sense.

So, how do we find out who these immigration officials are? Where did they get their numbers? Why is every indicator suggesting that US renunciations are increasing but the Federal Register reports that they’re way decreasing?

Over on the International Tax Blog, it was reported that 1997 had more Americans renouncing their citizenship than in 2011 (1,812 versus 1,781). I was very skeptical of this number and it was Tim who finally gave me the information needed to solve this riddle. He linked to a GOA report that mentioned in passing what happened. First, the IRS keeps a CLN (Certificate of Loss of Nationality) database. (that would be an interesting FOI request). 1994 was the last year the IRS was tracking CLNs by year. By the time they were required to track this again (the 1996 HIPAA law), they couldn’t distinguish the data from 1995, 1996 and 1997. The GAO report states that they reported these renunciations in a group.

Thus, each of those three years had, on average, 604 renunciations, making 2011 the largest number of American renunciations in history. As you can see from the graph below, the numbers now look “correct” and there is, indeed, a sharp upswing in the number of Americans renouncing their citizenship.

I have expanded a bit on this explanation at the Overseas Exile blog.