The U.S. government on Thursday published its latest quarterly list of the names of Americans who have renounced their citizenships, and as expected, due to the fact that renunciation-processing is difficult at the moment, owing to the continuing Covid-19 lockdown in many countries, only 228 names appeared.
This compares with 660 in the final quarter of 2020. If all four quarters of 2021 saw only 228 names listed in each, it would total only 912, and represent the lowest annual number of renunciations since 2009.
However, given the demand by Americans seeking to renounce, according to those in the business of helping them to, there will be a surge in numbers as soon as the renunciation desks reopen.
The data on renunciants is obtained from lists of names that are published in the U.S. government's Federal Register, which journalists, citizenship lawyers and renunciation data fanatics download and count, to update their records. (To see this quarter's data on the Federal Register's website, along with the data for previous years, click here.)
'Not had a single person granted
an appointment since March 2020'
John Richardson, a Toronto-based lawyer and expat rights advocate who specializes in helping American expats to renounce their citizenships, says that in his own experience working with "a large number of people who have submitted their paperwork to get appointments to renounce (mostly in Canada), "not had a single person who submitted a request to renounce after March 2020 granted an appointment. They are all in the queue, waiting."
He adds: "For the most part, the State Department shut down the opportunities to renounce U.S. citizenship in March of 2020. At that time, there were many people with actual appointments who had their appointments cancelled.
"There were also a lot – I would conservatively guess thousands – who had been waiting for appointments.
"Some of the people who were in the queue as of March 2020 have begun to receive appointments in Canada – specifically in Montreal, Ottawa and Vancouver. But there is no evidence that I've seen that renunciations have started again in Toronto."
As for worldwide renunciations, Richardson says he's heard that there are "pockets where they're taking place, but only for residents of the country in question. For example, renunciations have apparently been easy to get in Australia and Singapore, and in Hong Kong, Dubai and Croatia for residents of those countries. I have heard of one person renouncing in Japan.
"But in general, from what I've heard, it seems as though what might have been called 'renunciation tourism' is dead, at least for now."
In a Twitter response to this article the day after it appeared, a would-be renunciant named Robert Nielsen said he has been waiting "15 months here in Canada" for his application to be processed.
"If I were a criminal my charges would likely be dropped due to excessive delays.
"Not born in the US, never worked or lived in the US – just haunted by IRS and a never ending tax season. A nightmare that just won't end." (See below right.)
Also providing insight on social media was David Teitel, the founder and managing director of London-based American Tax Returns Ltd., who observed on LinkedIn – again in response to this article – that it was "quite possible ALL of the 228 [renunciations reported in Q1] were former Green Card holders, because they do not need to visit a US Embassy [in order to complete the renunciation process]."
"Green Card" is an unofficial term for what's known as a Permanent Resident card, which is given to non-Americans who have applied for and given permanent residency in the U.S. A recent Department for Homeland Security report estimated that as of 2019 there were more than 13 million Green Card holders resident in the States.
According to Treitel, Green Card holders don't have to pay US$2,350 to "abandon" their Green Cards ("abandon" being the official term). "Filing an I-407 ("Record of Abandonment of Lawful Permanent Resident Status,") is free, apart from the costs of postage," he told the American Expat Financial News Journal.
"Until 2019 one could take the I-407 in person to a U.S. Embassy, but these days they are all sent by mail or courier to the address in Williston, Vermont."
Treitel adds that his experience as a London-based tax adviser for Americans has meant that talking with some of these clients about renouncing U.S. citizenship and abandoning Green Cards seems to go with the territory these days. "It's an everyday discussion in my universe."
As reported in February, last year saw renunciations break the annual record for a single year, in spite of the fact that U.S. embassies and consulates around the world – which are needed to process such citizenship renunciations – were closed or offering reduced services for most of the year. The reason for the large numbers was said to be due to the fact that there had been a back-up that was gradually getting dealt with.
The total number for 2020 was 6,705, more than three times as many as in 2019, and 1,295 more than the previous record-breaking year, 2016, when renunciations totalled 5,410. (See annual table, below.)
Some experts have questioned the accuracy of the renunciation information published on the Federal Register's website, while others point out that because, as is stated on the Federal Register, the list includes "long-term [U.S.] residents", such as Green Card holder in addition to as full U.S. citizens of a more conventional definition, the data should be viewed with some caution.
However, given that the government doesn't otherwise provide citizenship renunciation data, the quarterly numbers are therefore viewed with interest.
The reason renunciations have been soaring over the past decade is attributed, even by the U.S. government, to the introduction of the Foreign Account Tax Compliance Act, an anti-tax evasion law that was signed into law by President Obama in 2010. It went live in most countries around the world in 2014.
FATCA obliges non-U.S. banks and financial institutions to report to the IRS on the assets of those of their account-holders who have American citizenship, and it has had the effect of shining a spotlight on millions of American expats, many of whom were unaware that they were expected to file U.S. tax returns annually, and in some cases, pay U.S. taxes on certain income.
It has also made life extraordinarily difficult for many expatriates, many of whom find the hassle and cost of having to file annual tax returns and Foreign Bank Account Reports to the U.S. government, coupled with the potential financial risks if they accidentally fail to report something, feel they have little choice but to renounce.
Fabien Lehagre, the outspoken founder and president of the Paris-based Association of Accidental Americans, told the American Expat Financial News Journal in February that he's convinced that the U.S. citizenship-renunciation floodgates would open if his organization, and its co-plaintiffs, were to win their legal complaint against the U.S. State Department for what they claim is the unconstitutional and illegal fee that the U.S. charges for those seeking to give up their U.S. citizenship.
(See State Dept. responds to 'Accidentals' complaint over renunciation fees, citing 'costs', published yesterday.)
As reported, the AAA filed its complaint in U.S. District Court in Washington last December, along with 20 individual accidental Americans of 10 different nationalities.
Editor's note: This story has been updated to include certain social media comments that, as noted, were posted in response to it.
- Online panel discussion to address 'Taxation of Expatriate and Cross-Border Individuals'
- Tables turned: Frost Law's Palsen interviews American expat interviewer John Richardson
- AXFNJ Podcast: Dutch ex-pilot explains what drives him to 'fight for justice' on behalf of EU's 'unintentional Americans'
- SEAT: Comments to Senate Finance Committee on 'Overhauling Int'l Taxation'
- Dr. Snyder, Dr. Alpert and Richardson: 'Mission Impossible: 'Extraterritorial Taxation and the IRS'