FBI statistics show that 1,030 Americans finished the citizenship renunciation process in March 2015, far higher than the normal monthly total of about 270.
FBI spokesperson Stephen Fischer told the News Website Global News that “the Department of State is working on updating this file, and thus the increase.”
(Under U.S. law, people who renounce citizenship are barred from buying guns in the United States. They’re entered in an FBI database that includes fugitives, convicts, drug addicts, people dishonorably discharged from the military and people subject to domestic violence-related restraining orders.)
“People who want to lose U.S. citizenship are added to U.S. consulates’ existing workload”, says Canadian lawyer David Lesperance, who booked a citizenship renunciation appointment for a client at the U.S. consulate in Toronto.
“They do have other things to do. They’re not going to open it up 24 hours a day to deal with expatriations. It’s also there to service existing U.S. citizens who want consular services.”
Unlike other industrialized countries, the U.S. requires its citizens to file tax returns whether they live in the country or not. While it has been on the books for many years, the rule has only recently started to be seriously enforced.
Canadian residents won’t normally owe the U.S. any taxes, though there are situations where that can happen. However, U.S. tax filings can be confusing, intrusive and expensive to prepare, dual citizens say. Among other things, they must report all accounts they have signing authority over to an arm of the U.S. Treasury Department called the Financial Crimes Enforcement Network, or face large penalties.
“Some renunciants have reported to consular staff that the cost of preparing and filing U.S. tax returns, even though they may have had no U.S. tax liability, was a factor in their decision, ” a U.S. State Department official who spoke on condition she not be identified wrote in an e-mail.
The top countries for people shedding U.S. citizenship are Canada, Britain and Switzerland, she said.
Somebody who renounces U.S. citizenship in 2016 won’t be able to file their last piece of U.S. tax paperwork until mid-2017.
In August of last year, the U.S. State Department announced it would increase the fee people pay to renounce their citizenship – from US$450 ($550 Canadian) to $US2,350 ($2,873 Canadian).
Global News asked the State Department why, with the increased fee, it couldn’t afford to staff up to clear the backlog.
“The Department continues to work with overseas posts to refine the renunciation process to meet customer needs, and considers this among the numerous workload and other factors involved in making staffing decisions at our diplomatic missions overseas,” the US State Department official said.
“The Department does not discuss the details of personnel and staffing patterns of our missions overseas.”
Lesperance says he hasn’t seen clients motivated to shed U.S. citizenship put off by the higher fee:
“The resentment is there, but the cost is not enough for them to not do it, because the relief they will get from having ceased to be a U.S. person is greater than the cost. I haven’t had a single client who has said ‘I was going to expatriate, but they increased the cost, and not I’m not going to,” concluded the Canadian lawyer.
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