US

Report: Record number of taxpayers flee US over taxes

                

Experts believe tax enforcement is the major factor driving a record number of U.S. taxpayers to renounce their citizenship or relinquish their green cards this year, according to a Wall Street Journal report.

The Treasury Department recently published the names of 560 people who became expats during the third quarter of this year, bringing the total to 2,369 for the year according to tax lawyer Andrew Mitchel, who tracks the data at his International Tax Blog.

“The number of published expatriates for the first three quarters of 2013 has been 2,369 (679 + 1,130 + 560). As stated last quarter, 2013 will clearly be the year with the highest number of published expatriates ever,” Mitchel explained at his blog this week. “The highest number of annual published expatriates prior to 2013 was 1,781 in 2011.”

See Mitchel’s chart: 

chart

The total for 2013 represents a 33 percent increase over the previous high in 2011.

Experts speaking to the Wall Street Journal noted that while people are not required to provide the government with a reason for their renunciation, the tougher enforcement of tax laws could be to blame.

“Nothing has changed in immigration law that would make people want to renounce,” Freddi Weintraub, a partner at Fragomen Worldwide and immigration expert, told The Wall Street Journal. “Current or anticipated changes in tax law and enforcement are driving this increase.”

The Journal notes that people who renounced this year likely avoided higher income and estate taxes.

Further the Foreign Account Tax Compliance Act, which is set to take effect next year, would affect U.S. taxpayers living abroad as it requires foreign banks to report information about those people to the Internal Revenue Service.

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