Record High in U.S. Citizenship Renunciations and Green Card Turn-Ins

The number of Americans giving up their citizenship, alongside green card holders ending U.S. tax residency, has reached its highest since 2020. This follows a review of Federal Register data which revealed 5,790 individuals reported to the Treasury Department for losing their U.S. citizenship or permanent resident status over the past year. Greenback Expat Tax Services highlighted this as the highest total in six years.

Quarterly Surge

Between April and June, 1,781 names appeared on the register’s list, a rise of 68.5% compared to the same period last year. The first half of the year saw total registrations at 3,243, marking a 38.5% increase over the first half of the previous year.

The data, however, only accounts for when the change was reported to the Treasury, not the actual date of citizenship loss. Despite this limitation, annual figures indicate a rising trend of Americans permanently leaving the country over the last decade.

Reasons for the Increase

Historically, from 2000 to 2008, fewer than 500 Americans annually renounced their citizenship. That changed significantly after the Foreign Account Tax Compliance Act (FATCA) was signed in 2010. This legislation compelled foreign financial institutions to report the foreign assets of U.S. account holders, increasing costs for American expatriates who effectively had to pay taxes in both the U.S. and their country of residence.

“More than 190 countries participated in this program, which became effective in 2014,” said Alexander Marino of Moody’s. He noted the global push to ensure U.S. citizens file their tax returns as technology advances and global connectivity increases.

Whether residing in low- or high-tax environments, such as the United Arab Emirates or the U.K., Americans face U.S. tax obligations. This has driven more expatriates to renounce their citizenship, peaking at 5,409 names in 2016 and 6,705 in 2020, as noted by Greenback.

Current Push Factors

The number of Americans abroad trying to abandon their citizenship rose partly due to dissatisfaction with domestic political conditions, including reactions to Donald Trump’s policies, as recounted by individuals like Alice, a U.S.-born long-term European resident.

Another factor contributing to the rise is the 80% reduction in renunciation fees by the State Department earlier this year. Previously free before 2010, the fee had reached $2,350 by 2015, making it among the highest globally for citizenship renunciation. As of April 13, it was reduced back to $450.

Renunciation Process

Americans abroad can renounce their citizenship through a process involving completion of paperwork, interviews at U.S. embassies or consulates, and taking an oath of renunciation. The State Department must approve the request.

Individuals renouncing citizenship risk becoming stateless and may face entry restrictions to the U.S. if it is deemed they renounced to avoid taxes. Tax obligations are among the primary reasons cited by expatriates for relinquishing their citizenship.