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August 6, 2021 12:10 am

Wealthy People Are Renouncing American Citizenship

An anonymous reader quotes a report from Axios: The number of Americans who renounced their citizenship in favor of a foreign country hit an all-time high in 2020: 6,707, a 237% increase over 2019. While the numbers are down this year, that's probably because many U.S. embassies and consulates remain closed for COVID-19, and taking this grave step requires taking an oath in front of a State Department officer. The people who flee tend to be ultra-wealthy, and many of them are seeking to reduce their tax burden. New tax and estate measures proposed by the Biden administration could, if implemented, accelerate this trend. The IRS publishes a quarterly list of the names of people who have renounced their citizenship or given up their green cards, but it only includes people with global assets over $2 million. The numbers started swelling in 2010, when Congress passed the Foreign Account Tax Compliance Act, or FATCA, which increased reporting requirements and penalties for expats. But the Wall Street Journal discovered that the lists aren't up to date: A lot of people who were reported to have renounced citizenship in 2020 actually did so years earlier. "Only the U.S. and Eritrea tax people based on citizenship rather than residency," notes Axios. "For most countries, if you are a citizen but don't reside there, you aren't taxed in that country."

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