Huge Surge in Americans Renouncing U.S. Citizenship with Trump Rise

The Resistance News

February 14, 2017

The final months of 2016, during which time Donald Trump was elected president, saw a 50 percent increase in individuals renouncing their U.S. citizenship, compared to the same period last year.

More than 2,300 people choose to give up their U.S. citizenship in the final quarter of the presidential election year. That figure comprises about half of the total (5,411) for the entire year, which is more than the number who renounced citizenship in 2015, according to data published by the IRS.

The government data does not include additional information as to why these individuals are giving up their citizenship. Historically, most renunciations of American citizenship have had to do with ex pats fleeing U.S. taxes; famous renouncers in recent years include Facebook co-founder Eduardo Saverin, who lives in Singapore, and Tina Turner, who lives in Switzerland. But the timing of this year’s massive surge in renunciations suggests that the presidential election, not taxes, is the big reason.

The following is from wikipedia

(source)

United States law requires that an individual appear in person before a consular officer at a U.S. embassy or consulate outside the United States and sign an oath or affirmation that the individual intends to renounce U.S. citizenship. Exceptions to this rule are permitted in times of war and under special circumstances.[22][23] During the expatriation procedure, the individual must complete several documents and demonstrate in an interview with a consular officer that the renunciation is voluntary and intentional. Depending on the embassy or consulate, the individual is often required to appear in person two times and conduct two separate interviews with consular officers over the course of several months.[24]

There were 235 renunciants in 2008,[25] between 731 and 743 in 2009, and about 1485 in 2010;[26][27] In 2011, there were 1781 renunciants.[28] A total of 2,999 Americans renounced their citizenship in 2013;[29] in 2014, 3415 have renounced their USA citizenship or long term residency.[30] The State Department estimates 5986 renunciants and 559 relinquishers during FY2015.[31]

Since 1998, the Federal Bureau of Investigation has also maintained its own list of people who have renounced citizenship under 8 U.S.C. § 1481(a)(5). This is one of the categories of people who are prohibited from purchasing firearms under the Gun Control Act of 1968, and whose names must be entered in the National Instant Criminal Background Check System (NICS) under the Brady Handgun Violence Prevention Act of 1993.[32][33] The names are not made public, but each month the FBI issues a report on the number of entries added in each category. NICS covers a different population than the Federal Register expatriate list: the former includes only those who renounce U.S. citizenship, while the latter should include those who voluntarily lose citizenship by any means, and possibly certain former permanent residents as well.[34][35]

In 2012, the FBI added 4,652 records to the NICS “renounced U.S. citizenship” category in 2012, which is a much larger number than the number of names published in the Federal Register expatriate lists during the same period.[36] About 2,900 of those names were added to NICS in one large batch in October 2012. FBI spokesman Stephen G. Fischer attributed this jump to State Department efforts to clear a backlog of earlier renunciant names that had not been provided to the FBI previously.[37] However, in 2013, the number of records of renunciants added to NICS again exceeded the number of names published in the Federal Register expatriate list, with 3,128 renunciants in the former against only 3,000 losing citizenship or permanent residence by any means in the latter.[35]

In fiscal year 2015, the State Department estimated there were 5,986 applications for renunciation of nationality, and forecast an additional 559 citizenship relinquishments. The discrepancy between this total of 6,545 compared to the 4,279 announced by the Treasury Department is speculated to be at least partly due to different counting of long-term green card holders, but no department of the government has released an official explanation.[38]

In 2016, the Treasury Department published 1,151 names of people who expatriated in Q1 FY2016.[39] For all of the year 2016, the published number of renunciants was 5,411, a 26% increase from 4,279 in 2015.[40]

A summary of the difference between the NICS database of renunciants and the Federal Register of the mentioned renunciants and relinquishers of long-term residence status is summarized below.[41]

Certificate of Loss of Nationality

Formal confirmation of the loss of U.S. citizenship is provided by the Certificate of Loss of Nationality (CLN) and is received by the renunciant a number of months later.

As recently as November 2014, individuals renouncing US citizenship waited up to 6 months for the official certificate of renunciation, while many renunciants, particularly those who renounced in consulates not located in the most common European cities such as London and Zurich, were never provided with a CLN and were told that the statement signed at the oath of renunciation is the only form given. Unofficial statements by the US State Department ascribe the problems to the fact that before 2010, the system was not efficiently designed and consular officers often improvised their own procedures based on the rough guidelines in their instructions. Since the passage of FATCA, the large increase in renunciations led the Department of State to re-organize the process so it is clear and follows the same steps in all consulates, although as of 2016, a backlog of several months still exists in many consulates.[42]

Statelessness

Although many countries require citizenship of another nation before allowing renunciation, the United States does not, and an individual may legally renounce U.S. citizenship and become stateless. Nonetheless, the United States Department of State warns renunciants that, unless they already possess a foreign nationality or are assured of acquiring another nationality shortly after completing their renunciation, they would become stateless and without the protection of any government.[43][44]

In one case, Vincent Cate, an encryption expert living in Anguilla, chose to renounce his US citizenship to avoid the possibility of violating US laws that may have prohibited US citizens from “exporting” encryption software.[45]

Renunciation fee

Renunciation of U.S. citizenship was free until July 2010, at which time a fee of $450 was established.[46] An increase to $2,350, effective September 12, 2014, was justified as “reflective of the true cost” of processing.[47][48] This followed a fee increase of approximately 220% in 2013.[49] The increase took effect in January 2015.[50]

On October 26, 2015 Forbes reported that during 2014, American dual citizens in Canada who were trying to renounce their U.S. citizenship created a backlog at the U.S. Consulate in Toronto.[51]

Taxation

In 1996, the United States changed its tax law to include a provision to “name and shame” renunciants. The Department of the Treasury became obligated to publish, in the Federal Register, a quarterly list of the names of those citizens who renounce their citizenship.[52][53] Only the names are published, but by counting the number of names in each list, media organizations are able to infer the number of renunciants each quarter. The 1996 law, known as the Reed Amendment, included a provision to bar entry to any individual “who officially renounces United States citizenship and who is determined by the Attorney General to have renounced United States citizenship for the purpose of avoiding taxation by the United States”.[52]

In 2008, Congress enacted the Heroes Earnings Assistance and Relief Act. The law imposes a penalty—an “exit tax” or expatriation tax—on certain people who give up their U.S. citizenship or long-term permanent residence.[54] Effective June 2008, U.S. citizens who renounce their citizenship are subject under certain circumstances to an expatriation tax, which is meant to extract, from the expatriate, taxes that would have been paid had he or she remained a citizen. All property of a covered expatriate is deemed sold for its fair market value on the day before the expatriation date, which usually results in a capital gain, which is taxable income.[55] Eduardo Saverin, a Brazilian-born co-founder of Facebook, renounced his U.S. citizenship just before the company’s expected initial public offering. The timing prompted media speculation that the act was motivated by potential U.S. tax obligations.[28]

In 2015, the Mayor of London, Boris Johnson, threatened to renounced his U.S. citizenship after the IRS asserted that he owed tax on the gain on the sale of his house in London. (Of course, he had threatened to do so in 2006 as well.) [56] Since the enactment of the Foreign Account Tax Compliance Act (FATCA) of 2010, the numbers of people renouncing U.S. citizenship have tripled from about 1,000 per year to 3,415 in 2014.[57] The numbers have spiked in the third quarter of 2015 at 1,426. The increase surpassed the previous record of 1,335 for the first three months of 2015[58]

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