US hikes fee to renounce citizenship by 422 Percent to $2,350
By Ronald Kessler From Newsmax
The United States plans to hike the fees it charges American citizens to give up their passports as the nation also tries to stem the tide of U.S. businesses moving headquarters overseas.
The State Department has boosted the fee for renunciation of U.S. citizenship by 422 percent to $2,350 from $450.
The State Department claims the new fee is the actual cost of processing an application to lose citizenship.
“Demand for the service has increased dramatically, consuming far more consular officer time and resources,” Under Secretary of State Patrick Kennedy wrote, according to Global News.
“Documenting a U.S. citizen’s renunciation of citizenship is extremely costly, requiring American consular officers overseas to spend substantial amounts of time to accept, process, and adjudicate cases,” he wrote. “The department believes there is no public benefit or other reason for setting this fee below cost.”
The wait time for an expatriation interview has increased to as much as six months in some areas, while it is as short as two to four weeks in others, a State Department spokesman told The Wall Street Journal. He added that three-quarters of all renunciations are processed by consular offices in Canada, the U.K. and Switzerland.
In recent years, the United States has seen a 221 percent surge in Americans renouncing their citizenship, according to Forbes. “It isn’t exactly Ellis Island in reverse, but it’s more than a dribble. With global tax reporting and FATCA, the list of the individuals who renounced is up,” Forbes reported.
Meanwhile, the Canada Free Press reported that both U.S. citizens and American business want to free the home of the brave because of the double-pronged whammy of “high taxes and burdensome tax compliance” in foreign jurisdictions.
“Instead of facing the problems directly, the Obama Administration has resorted to punitive measures. The shame and blame tactic of calling out businesses who wish to relocate as “unpatriotic” was undignified. Perhaps realizing that using the same strategy with individuals would be even less well received, they went the more quiet, direct route,” the CFP’s Alan Joel wrote.
The new amount is “more than 20 times the average level in other high-income countries,” according to the Isaac Brock Society, which describes itself as a group of “individuals who are concerned about the treatment by the United States government of US persons who live in Canada and abroad.”
The United States has been battling a rising tide of tax inversion, commonly defined as the relocation of a corporation’s headquarters to a lower-tax nation, or corporate haven, usually while keeping key operations in its higher-tax country of origin.
International Business Times reported that Burger King Worldwide Inc.’s plans to buy 51 percent of the Canadian coffee-and-doughnut chain Tim Hortons Inc. for $11.4 billion may have been about saving on taxes by moving to Canada
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Related story:
Record number renounces US citizenship: IRS
From Press TV
Nearly 1,800 Americans have in 2011 renounced their citizenships or turned in their so-called Alien Registration Cards to avoid sharing more information than necessary with the US government.
“Disclosing joint accounts I hold with my wife and anyone I ever want to do business with – that’s just too much,” said Peter Dunn, a dual US-Canadian citizen currently residing in Canada, quoted by Reuters on Monday.
Americans living and working abroad are, according to the Foreign Account Tax Compliance Act, not only forced to pay taxes to the Internal Revenue Service (IRS), the US agency responsible for collecting taxes, but also obligated to report all their bank accounts and retirement funds to the agency.
Failure to report these details to the IRS means breaking US law, for which the penalty is up to USD 50,000 or 50 percent of any undeclared accounts held overseas.
“My wife’s account is none of their business,” said Dunn, who is married to a Canadian.
Dunn, who had earlier in the month renounced his US citizenship, said that the policies of the IRS were “driving us away.”
Marylouise Serrato, head of American Citizens Abroad, a Swiss-based organization, has also reported that many Americans are being pushed away from their citizenship due to the act.
“Americans abroad are terrified. We’ve had people pay tens of thousands of dollars in fines,” Serrato said.
“Up to this point, we never heard of anyone renouncing, or if they did, they didn’t talk about it,” said Serrato, adding that “Now, we’re seeing a lot of people speak openly about it and comes to us for information.”
The IRS had in 2011 recorded as many as 1,788 Americans renouncing their US citizenships. The number is a record high since the IRS began publishing such data in 1998. Overall, the IRS records some 1,100 renunciations a year.
An estimate of 6.3 million US citizens live abroad.
IMAGE: US Passport
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