Americans are continuing to renounce their citizenship at the highest levels on record, according to research by Bambridge Accountants. According to their data, 5,816 Americans gave up their citizenship in the first six months of 2020.
This is a 1,210% increase on the prior six months to December 2019, where only 444 cases were recorded. 2,072 Americans gave up their citizenship in the whole of 2019.
Last quarter represented the second highest number of people giving up their US citizenship on record. The record was set in quarter one of 2020, of 2,909 cases.
Americans must pay a $2,350 government fee to renounce their citizenship, and those based overseas must do so in person at the U.S. Embassy in their country.
There are an estimated 9 million U.S. expats. The trend has been that there has been a steep decline over the last few years of U.S. citizens expatriating - the first six months of 2020 is a huge increase in the number of Americans renouncing their citizenship. It seems that the pandemic has motivated U.S. expats to cut ties and avoid the current political climate and onerous tax reporting.
Under the IRS rules (section 6039g), every three months the U.S. Government publishes the names of all Americans who give up their citizenship. The first six months for 2020 had 5,816 Americans renouncing their citizenship, far more than the total of the four quarters for 2019 (2,072 Americans renounced).
Alistair Bambridge, partner at Bambridge Accountants, explained:
BLOG COMMENTS POWERED BY DISQUS
There has been a huge turnaround during coronavirus of U.S. expats renouncing, where the figures have been in steep decline since 2017.
For U.S. citizens living abroad, they are still required to file U.S. tax returns each year, potentially pay U.S. tax and report all their foreign bank accounts, investments and pensions held outside the U.S. For many Americans this intrusion is too complicated, and they make the serious step of renouncing their citizenship as they do not plan to return to live in the U.S.
There has been a silver lining for U.S. expats that they have been able to claim the stimulus check of $1,200, and $500 for each child. For those individuals and families, the proposed second stimulus check will be very welcome once the HEALS Act is approved.