Why has the fee for renunciation of US citizenship dramatically increased?
The following post was provided by our guest contributor, Ashley Puscas, Associate Attorney with Immigration law firm Laura Devine, LLP in London.
On September 12, 2014, the fees for many consular services dropped. However, the cost of renunciation of U.S. citizenship increased fourfold. Instead of $450, the fee is now $2,350, which is more than 20 times higher than the average fee in similar, high-income countries.
The Department of State maintains that the fee increase reflects the true cost of providing the service. Renunciation of U.S. citizenship involves consular officials conducting one or two intensive interviews to confirm that the person is a U.S. citizen and fully understands the consequences of renunciation. Following renunciation at the post, the Directorate of Overseas Citizens Services in Washington, D.C. must approve the loss of nationality before a Certificate of Loss of Nationality is issued. The process may take several months to complete.
Some observers, however, attribute the increased fee to a desire to make it more burdensome to renounce U.S. citizenship. The U.S. taxes based on citizenship as well as residency, unlike all other developed countries. Generally speaking, U.S. citizens living abroad, who may never have lived in or even entered the U.S., are still required to file U.S. tax returns. The Foreign Account Tax Compliance Act (FATCA), enacted in 2010, further requires U.S. citizens to report certain foreign financial accounts and offshore assets. Since then, there has been a steady rise in people renouncing U.S. citizenship. In 2013 alone the increase was 221%, a new record.
If you need legal representation for the renunciation of citizenship, you can contact Laura Devine LLP directly on +44 (0)20 7469 6460 or email them at email@example.com. For tax advice for expatriation or otherwise, please contact us.