US raises 5-fold the fee to renounce citizenship

WASHINGTON: Each year, millions of people across the world hanker after US visas and green cards for sundry reasons, from perceived economic opportunities and political and social persecution at home, to dreams of a better lifestyle in the US. More than half million immigrants eventually become naturalized US citizens each year, an expanding segment that has pushed the overall immigrant population in US to over 42 million in 2014, a historic 13% high in a country of 313 million.

On the small, miniscule, flip side, there are a few hundred Americans who renounce their citizenship each year. Nearly 4,000 gave up their citizenship between 2001 and 2008. But since then, it has turned to thousands per year (a record 3000 in 2013), which Uncle Sam thinks is enough of a flood to require some serious damming.

Result: Uncle Sam has increased the cost of renouncing US Citizenship five fold, from $450 till recently to $2,350 starting this week. US officials say the new fee is the actual cost incurred by US agencies for processing the renunciation; the old figure was subsidized.

In Uncle Sam's eyes, most people who give up American citizenship are financial renegades skimping on taxes. For the most past, they are American expats living abroad who find it too taxing to comply with Internal Revenue Service rules that require them to pony up taxes on salaries earned abroad. A new 2010 law called the Foreign Account Tax Compliance Act (appropriately dubbed FATCA to go after what Washington looks upon as fattened calves) is making it mandatory for foreign banks to report on accounts held by all Americans, making it more difficult to hide money in offshore accounts.

Since 2009, Uncle Sam has squeezed out more than $6 billion in taxes, interests and penalties from more than 40,000 taxpayers trying to evade taxes, and evidently, more and more are finding it financially prudent to just give up US citizenship rather than face IRS ire. Most of them are wealthy individuals, including celebrities such as singer Tina Turner, songwriter Denise Rich, and Facebook co-founder Eduardo Saverin. A couple thousand bucks is small beer when you are saving millions and can buy citizenship in many other countries for a pittance.

Even then, Uncle Sam does not make it easy to give up and walk out on him. Those who want to renounce their citizenship have to appear in person before an American consular or diplomatic official to fill in a Renunciation Questionaire and sign an oath of renunciation. The questionnaire asks them for their completely history in the US (including all their names/name changes) but does not seek to know the reason for their renouncing US citizenship.

Ironically, in most cases, it appears to be financial betterment, the very reason million seek to come to America. Once they get rich after milking the cow in the so-called land of milk and honey, they want to decamp. Uncle Sam's message: It's okay to moo, not move.

http://timesofindia.indiatimes.com/followceleb.cms?alias=us citizenship,American citizenship

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