There is a growing movement among so-called “accidental Americans” to renounce their American citizenship. An accidental American is a person who has US citizenship because he was born to US parents or because he was born in the United States, but does not live in the United States. The reason why such people want to renounce their nationality is because they are required to report their assets to the Internal Revenue Service (IRS).
The Foreign Account Tax Compliance Act (FATCA), enacted in 2010 to prevent tax evasion, is a burdensome law for US nationals living outside the US. The law requires foreign financial institutions in which Americans living outside the United States entrust their assets to report those assets to the IRS. Against this background, some financial institutions refuse to open accounts or provide services to US citizens in order to avoid paying fees in case of non-compliance.
A $2,350 application fee is required to renounce US citizenship, and accidental Americans who wish to renounce are unhappy with the high application fee. However, after a lawsuit was filed over the application fee, the State Department is proposing to lower it to $450 by the end of the year.
renounce nationality
Many people consider renouncing their US citizenship as a result of moving to lower application fees. Rob Geresten, 67, was born in the United States to Dutch parents, but has lived in the Netherlands since he was a year and a half. He has no connection to the United States other than being born there. But both sides have been in trouble for the past seven years, with the bank in the Dutch province of Friesland where Geresten keeps his assets trying to close his account because it cannot provide his US social security number. These problems occur not only among Ms. Geresten, but among many accidental Americans.
“I can’t wait for the application fee to come down,” Gelesten said. “As soon as it goes down, I will renounce (my American citizenship). Then I will be able to say goodbye to everyone. this trouble.”
The United States is one of the few countries in the world to tax people based on nationality rather than place of residence; the only other countries to do so are Eritrea and North Korea. According to a recent survey by Greenback, a provider of tax services for Americans living abroad, nearly 33% of Americans living abroad are planning or seriously considering giving up their citizenship. Many of these people cite the “burden of filing US tax returns” as their biggest complaint.
denial of service
Ronald Aries, 65, is also waiting for the application fee to be reduced. Aries was born in the United States while his father was stationed in the Air Force. She moved to the Netherlands when she was nine months old and has never lived anywhere else since.
Mr. Ronald Aries
source: Ronald Ariës
However, after FATCA was enacted, Aries received a notice from his bank that his account would be closed. We filed a lawsuit in 2019 and won. However, they were still required to keep their bank deposits under $50,000 to avoid attracting alarm from the US authorities.
“I’m tired of it,” said Aries. “I have nothing to do with the United States, but this country disturbs me,” he complained.
In addition to having their bank accounts denied or closed, many undocumented Americans also say they cannot receive services related to pensions, investments and loans.
news-rsf-original-reference paywall">Original title: More Americans Abroad Eager to Drop Citizenship at Lower Fees (excerpt)
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