Surprisingly, the U.S. Department of State has significantly reduced the fee for renunciation of citizenship by approximately 80%, from $2,350 to $450.
The new rules, expected to take effect on April 13, will make it less expensive for Americans, especially those living overseas, to formally renounce their citizenship.
Although announced in 2023, it is only now being implemented. The action reverses a 2015 rule that made the waiver process U.S. citizenship One of the most expensive countries in the world.
The fees now are equivalent to those in 2010, when the U.S. State Department first began charging fees for Americans who wanted to formally renounce their citizenship.
This fee increased to US$2,350 in 2015 due to an increase in the number of applications for Certificates of Loss of Nationality (CLN). According to the Guardian, the IRS said that approximately 4,820 people will renounce their citizenship in 2024.
“While the law does not require individuals to declare a motive for relinquishing U.S. citizenship, anecdotal evidence suggests that difficulties are at least partially attributable to reporting requirements,” State Council pointed out.
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Overview of the process of renouncing U.S. citizenship
Despite the reduced fees, the act of renouncing U.S. citizenship remains complex and lengthy.
Applicants must:
– Go in person to a U.S. Embassy or Consulate
– Fulfill multiple written and verbal confirmations
– Formal oath of renunciation
– Pending final approval and issuance of Certificate of Loss of Nationality (CLN)
The duration of the process may extend to several months or longer, depending on availability at U.S. consulates and embassies.
Reasons for surge in renunciation of U.S. citizenship
The number of Americans choosing to renounce their citizenship has increased significantly in recent years. According to a Boundless report on renunciation of U.S. citizenship, the number of people renounced U.S. citizenship each year has surged from a few hundred before 2009 to more than 5,000 in recent years.
Key factors contributing to this trend include:
– The United States has complex tax reporting requirements for citizens living abroad
– Financial and banking restrictions imposed by other countries
– personal or political motives
U.S. citizens are obligated to file annual tax returns regardless of their place of residence. This requirement creates ongoing compliance difficulties for many people, particularly those who are designated as incidental Americans.
