Record number renounce U.S. to avoid income tax
Would you renounce your U.S. citizenship if it meant you didn’t have to pay an income tax?
More Americans than ever are saying “yes” to that proposition, according to the Internal Revenue Service.
A Reuters article says 1,800 people either renounced their citizenship or relinquished their ‘Green Card’ in 2011, the highest number since the IRS began publishing a list of those who’ve quit Team U.S.A.
The number that walked away in 2011 is eight times larger than those who renounced their citizenship in 2008, Reuters reports, and more than 2007, 2008 and 2009 combined.
Why are people doing it? Probably taxes.
The United States is one of the few countries to tax citizens living abroad. An estimated 6.3 million Americans living overseas have until June to file income taxes, but some apparently find the liability is greater than the benefit.
Longstanding federal law requires U.S. citizens to list offshore bank accounts, but a new law — 2010’s Foreign Account Tax Compliance Act — asks foreign banking institutions to provide the IRS with financial information that some Americans may have “forgotten” to provide. This new law likely explains the 2011 spike.
The IRS publishes the names of those who’ve decided not to pay up, a practice referred to as “name and shame” by lawyers representing the expatriates.
There’s an “exit tax” for the very rich who choose to leave. Reuters says Ted Arison, the late founder of Carnival Cruises, and Michael Dingman, a former Ford Motor Co. director, both paid to no longer be considered American.
Tell us what you think about the site
Customer Care »
Vacation stops, manage subscriptions and more
AJC Services
Sections
Other Editions
Visitor Agreement | Privacy Statement
© 2013 The Atlanta Journal-Constitution
106 comments Add your comment
DD
April 18th, 2012
10:51 am
@ Wendell…you’re blaming Obama for what you say …that 50% of the people in this country pay no taxes? And that those are the ones that receive 99% of benefit? You really believe that? If so, you have a lot of reading to do. Even if this WERE true – and it’s not – it wouldn’t be Obama’s “fault”. For a quickie version of “Taxes 101″, see here:http://economix.blogs.nytimes.com/2011/06/28/who-doesnt-pay-federal-income-taxes-legally/#. And note who wrote this…a Reagan/Bush Republican.
charles
April 18th, 2012
10:54 am
The US is one of the few countries to tax offshore income. The person first pays the tax where they live and work and then has to file a US return that is confusing and super expensive to pay no tax. The new laws also require non US spouses to turn over financial information to the IRS that has nothing to do with the US – When I lived in the UK, my UK tax return was three pages and my US was over 70 pages. It cost around $1,000 and I never owed any tax. The current US tax code is a huge mess, no one understands it. It needs to be reformed and is down to both parties. Forget the Buffett Rule that is a political side show. Get rid of the massive tax loopholes, simplify the code and lower the marginal rates – that is how to get the so called rich to pay more. Of course the special interest love a super complicated tax code as it supports a whole army of lawyers, CPAs and advisors – oh yes – it also distorts the economy and decision making. Most of these folks have massive problems staying in compliance with a system that is crazy to begin with and makes no sense to any other developed country away from the US.
wendell
April 18th, 2012
10:54 am
In 2012, spending will account for about 24 percent of GDP and taxes will total about 16 percent.
For all of you left wing fanatical MSNBC clones, this is a recipe for national Bankruptcy (SEE Greece/ EU Financial Crisis).
Expatriate Tax
April 18th, 2012
10:57 am
Expatriate Tax is a new solution. This is the answer for a few Americans that feel foreign bank accounts should be protected and remain private. The rich don’t need to be US citizens. Think about it. If you have 50 million in the bank what Gov’t benefit could you actually get that would be worth being taxed at 40% and climbing. Move all your money over seas renounce your citizenship and claim citizenship in a country that will take you and has a Tax Treaty with the US. Kind of a no-brainer. Then when you do earn US income that is effectively connected to a US Trade or business you claim a reduction in withholdings under the US Tax Treaty. Use caution because the country you shift the tax obligation to could have higher taxes than the US, but I’m guessing that would be doubtful in light of our 14.6 Trillion dollar debt.
Come on Man
April 18th, 2012
10:57 am
Truth Seeker – you are a democrat; you are still in the closet though. Why would you tax someone more because they strive to be better. Makes no sense to me but even despite this burden, the facts still support the gap between those that have is widening between those that don’t have. Why? People are still driven despite the governments plan to control them. If you take a handout, you are a vote. If you don’t need the government, you are dangerous. Punish me for earning too much money (extra taxes) and maybe I will be a good little boy and get in my place. At the end of the day, both parties want the same thing; your money and their continued employment. More can’t take out than those who put in though and that is where we are.
Intown
April 18th, 2012
10:58 am
Are these people becoming citizens of other nations or are they “persona non grata.” I’d hate to be a nationless soul. No protection.
Sterling
April 18th, 2012
10:59 am
Wendell, you’re such an idiot. To blame Obama for things that have been going on for decades is the height of foolishness.
News Flash to Wendell: The USA is NOT a dictatorship where one person rules and makes all the decisions!
wendell
April 18th, 2012
11:01 am
In the 39 months since Barack Obama took the oath of office as president of the United States, the federal government’s debt has increased by $5,027,761,476,484.56.
Although he has served less than a term, Obama is now the first American president to see the federal government’s debt increase by more than $5 trillion during his time in office.
Sterling
April 18th, 2012
11:04 am
Another tidbit for you wendell… Google “USA national deficit”… go look and see where the deficit really started to rise…. it was under Regean. I’m sure you blame Obama for it. Also look at the years under Bush. Notice a trend?
wendell
April 18th, 2012
11:07 am
I see, Blame Bush.
LOL