With the Internal Revenue Service’s (IRS) release of data for the fourth quarter of 2016, this past year broke all records for the number of US citizens who have opted to renounce their citizenship.
As explained by Andrew Mitchel in his International Tax Blog, “the number of published expatriates for the quarter was 2,365, bringing the total number of published expatriates in 2016 to 5,411,” which, in turn, “breaks last year’s record number of 4,279 published expatriates.”
In other words, compared to 2014 and 2015, the number of US expatriates giving up their passports has increased by 55 and 26 percent, respectively.
According to Mitchel, this growing trend is the result of a rapid increase in the number of tax penalties hitting US expats for “failing to report certain foreign-related transactions.”
Furthermore, as explained by Robert Wood in Forbes, another key regulation that could boost these numbers moving forward is the IRS’ newfound ability to revoke citizens’ passports if they have not paid their taxes.
According to Wood, using a lower limit of 50 thousand dollars in taxes owed, “the State Department will start blocking Americans with ‘seriously delinquent’ tax debts,” which “will mean no new passport and no renewal. It could even mean the State Department will rescind existing passports of people who fall into that category.” READ MORE: https://taxlinked.net/blog/february-2017/record-number-of-us-citizens-give-up-passport