Record total number US taxpayers renounce citizenship in 2013

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A record number of U.S. taxpayers renounced their citizenship or green cards in 2013, according to new data.

Each quarter the U.S. Treasury publishes the names of the Americans who officially expatriated during that period. In the last quarter of 2013, 630 people renounced their citizenship or relinquished their green cards, added to the previous 2013 quarters (2,369 people), brining the total for 2013 to 2,999.

According to Andrews Mitchel, an international tax attorney who tracks the expatriations at his International Tax Blog, the 2,999 amount represented a 221 percent increase over the 932 total in 2012 — and “shatters” the previous record of 1,781 set in 2011.

Mitchel points to three possible reasons for the increase in expatriations last year.

“Increased awareness of the obligation to file U.S. tax returns by U.S. citizens and U.S. tax residents living outside the U.S.,” he writes. “The ever-increasing burden of complying with U.S. tax laws; and [t]he fear generated by the potentially bankrupting penalties for failure to file U.S. tax returns when an individual holds substantial non-U.S. assets. The increase in expatriations may also be partly due to a 2008 change in the expatriation rules.”

According to Forbes tax columnist Robert Wood, while many expatriations are likely motivated by convenience or family matters, taxes can “help sway a decision.”

“Some go so far as to say that the U.S. tax and disclosure laws are downright oppressive.  No group is more severely impacted than U.S. persons living abroad,” Wood writes. “For those living and working in foreign countries, it is almost a given that they must report and pay tax where they live. But they must also continue to file taxes in the U.S. What’s more, U.S. reporting is based on their worldwide income, even though they are paying taxes in the country where they live.”

William McBride at the Tax Foundation further notes that the last four years have seen more people renounce their U.S. citizenship and green cards (7,246) in 2013 than the total number in the twelve years prior (5,775).

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