Number of Wealthy Americans Who Renounced Citizenship in 2020 Hits Record High
By Staff, Agencies
The number of wealthy Americans renouncing their citizenship in favor of a foreign country reached 6,707 in 2020, which is an all-time high, a report by the US Internal Revenue Service [IRS] has revealed.
The agency's quarterly survey listed Americans with more than $2 million in assets, "who have chosen to expatriate" or give up their green cards.
According to the report, last year's figure is a 237-percent increase as compared to 2019.
Approximately nine million Americans currently live overseas, with renunciations of US citizenship increasing sharply in the past decade.
The Wall Street Journal cited information compiled from the US Federal Register as saying that close to 37,000 Americans have renounced their citizenship since 2010.
The newspaper noted that a major driving force behind all this could be the enactment of the Foreign Account Tax Compliance Act [FATCA], a law passed in 2010 with the intention of frustrating both tax evasion and the financing of terrorist groups.
The law requires non-American financial institutions to identify their American customers to the IRS, the agency responsible for managing taxation.
The news outlet Axios quoted Andrew Mitchel, an international tax lawyer based in Connecticut, as claiming that FATCA "kind of flushed people out of the bushes".
He asserted that the law "effectively deputized all the banks around the world to tattletale on US citizens", adding, "it's not as if the latest quarter names that have come out are indicative of the current political environment or anything like that".
Earlier this year, a survey conducted by the US company Greenback Expat Tax Services revealed that 4% of American respondents are "planning to renounce" their citizenship, while another 18% said they were "seriously considering it". Some 42% of those polled also stated that they "wouldn't rule it out".
Roughly 36% of respondents indicated that they "would never consider" giving up their American citizenship.
Although 85% of polled expats acknowledged they were considering renouncing their citizenship because they felt unfairly represented by the US government, the top-listed reason [42%] stemmed from America's tax-filing requirements.
Other factors pertained to marriage to a non-US citizen [12%], concerns over the political climate [11%], and frustration over the US government's policies [10%].
Approximately 7% of respondents also noted that their interest in renouncing their citizenship was due to "difficulties" they encountered when working with foreign banks as an American citizen.