There is an article in TIME, that I thought may be of interest to all our American readers and visitors.
Hit with double taxation and snubbed by local banks, more and more Americans abroad are choosing to relinquish their citizenship and turn in their passports.
For U.S. citizens, cutting ties with their native land is a drastic and irrevocable step. But as Overseas American Week, a lobbying effort by expatriate-advocacy groups, convenes in Washington this week, it’s one that an increasing number of American expats are willing to take. According to government records, 502 expatriates renounced U.S. citizenship or permanent residency in the fourth quarter of 2009 — more than double the number of expatriation in all of 2008. And these figures don’t include the hundreds — some experts say thousands — of applications languishing in various U.S. consulates and embassies around the world, waiting to be processed.
While a small number of Americans hand in their passports each year for political reasons, the new surge in permanent expatriation is mainly because of taxes.
Considering that an estimated 3 million to 6 million Americans reside abroad, the number of renouncement is small. But expatriate organizations say the recent increase reflects a growing dissatisfaction with the way the U.S. government treats its expats and their money: the U.S. is the only industrialized nation that taxes its overseas citizens, subjecting them to taxation in both their country of citizenship and country of residence.
Additionally, the U.S. government has implemented tougher rules requiring expatriates to report any foreign bank accounts exceeding $10,000, with stiff financial penalties for noncompliance.
Relinquishing U.S. citizenship is a fairly simple process: after filling in a few forms, and in some cases, paying an exit tax (based on the applicant’s worldwide income and assets), the former citizen receives his canceled passport in the mail. But the decision can be difficult. Read the full article, here.
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