Renounce Citizenship: U.S. Government Makes Record $7.5 Million On Mandatory Citizenship Renouncement Fees
Applying to renounce U.S. citizenship costs $2,350, up from the $450 it cost just last year.
The U.S. government made more than $7.5 million from the record number of people who decided to officially renounce their citizenship in the first nine months of 2015.
Simply applying to renounce U.S. citizenship costs a whopping $2,350, up from the $450 it cost just last year, meaning that a large percentage of Americans probably can’t afford to completely disassociate themselves from the country even if they wanted to, reports The Daily Caller.
In the first nine months of 2015, a record 3,221 people chose to ditch their citizenship, the highest amount ever recorded for the first nine months of a year. In all, the feds took in $7,569,350 from application fees alone.
The U.S. Department of State raised the fee for processing such requests last year due to an increase in demand for the service, saying it consumes a large amount of consular officer time and resources. “Because the Department believes there is no public benefit or other reason for” keeping the fee at $450, which was reportedly below processing cost, “the Department is increasing this fee to reflect the full cost of providing the service,” the department said.
If 196 more people renounce their citizenship before the end of the year, it will be an annual record, explains The Daily Caller.
The IRS actually took in even more than $7.5 million from people renouncing, though, since the wealthiest Americans must also pay an expatriation tax that can total into the millions.
Starting in 1996, every three months, the IRS publishes a list of citizens who renounce, with the most recent report released Monday showing that 1,426 Americans permanently said goodbye within the past three months.
Some choose to renounce citizenship for political reasons, but it’s most commonly done to avoid paying taxes.
The U.S. is the only country in the world, aside from the African nation of Eritrea, to levy income taxes on citizens who live and work abroad. This results in many expatriates being forced to pay double taxes, in the U.S. and the country where they live. Expats must also comply with strict income- and wealth-reporting requirements and face harsh financial and criminal penalties for choosing not to, according to Forbes.
Since the 2010 passage of the Foreign Account Tax Compliance Act, which is intended to crack down on expatriate tax dodgers, citizenship renunciations have soared to new highs.