Although it has taken a while, it appears that the reduction of the fee for a Certificate Of Loss Of Nationality ("CLN") from $2350 to $450 is going forward … https://t.co/bQOugdXOSO
— John Richardson – lawyer for "U.S. persons" abroad (@ExpatriationLaw) September 28, 2023
October 2, 2023 – Notice of Proposed Rule Change
Okay, it’s official. Here is a link to the proposed rule change which is necessary to reduce the renunciation fee from $2350 to $450. Officially, the fee is NOT a fee to expatriate. Rather it is a fee to issue the “Certificate Of Loss Of. Nationality”. also known as a CLN.
There is a 32. day comment period and I strongly suggest that you DO comment!
I encourage you to read the Notice in. its entirety. But, I note that it includes the following:
In the years since the fee was increased, members of the public have continued to raise concerns about the cost of the fee and the impact of the fee on their ability to renounce their citizenship. While there is no legal requirement for individuals to declare their motivation for renouncing U.S. citizenship, anecdotal evidence suggests that difficulties due at least in part to stricter financial reporting requirements imposed by the Foreign Account Tax Compliance Act (FATCA), Public Law 111–147, on foreign financial institutions with whom U.S. nationals have an account or accounts may well be a factor.
After significant deliberation, taking into account both the affected public’s concerns regarding the cost of the fee and the not insignificant anecdotal evidence regarding the difficulties many U.S. nationals residing abroad are encountering at least in part because of FATCA, the Department has made a policy decision to help alleviate at least the cost burden for those individuals who decide for whatever reason to request CLN services by returning to the below-cost fee of $450. Although the prior fee of $450 represents a fraction of the cost of providing CLN services, this change will better align the fee for CLN services with other fees for services provided to U.S. citizens abroad, including, for example, applications for a Consular Report of Birth Abroad, which all are set significantly below cost, even as the costs of providing these services have fluctuated over time.
If you go to the following link you can submit a comment (and even email this to a friend).
Buying Their Freedom – A More Efficient Renunciation Process – The “Readers Digest” Version Of This Post …
Q. Why are people getting rid of their US citizenship? A. It's because of the "10 Commandments of U.S. Citizenship" in a #FATCA and #FBAR world by John Richardson https://t.co/cbjEJ91Ijw
— John Richardson – lawyer for "U.S. persons" abroad (@ExpatriationLaw) January 3, 2018
The effects of US citizenship taxation enforced by FATCA are causing great distress to the US citizens who reside in and are tax residents of other countries. They are being constructively forced to renounce US citizenship because of (1) the out of pocket costs of US tax compliance (2) the possibility of double taxation (3) the US taxation of things that are not taxable in their country of residence (4) the “opportunity cost” of their inability to engage in financial and retirement planning and in some cases (5) the threat or reality of bank/financial account closures. In addition, these circumstances are unfair to their countries of residence who are forced to deal with a group of people who are more likely to require “social assistance” in their retirement years. US citizenship is a problem for US citizens who attempt to live outside the United States and for the countries where they live.
Although many people are constructively forced to renounce US citizenship, the US has made renunciation very difficult from both a cost and availability perspective.
The purpose of this post is to suggest that the process of renouncing US citizenship should be facilitated in the US citizen’s country of residence by that government. Renunciation could be achieved more quickly, at lower cost and (under my proposal) partially subsidized by the government of residence (which would justify this as “buying back their citizens” from any US claim of taxation or other regulatory burdens). I believe that this proposal would benefit the individual US citizen, the US citizen’s country of residence and the United States itself. The following post describes how this can be achieved under the existing US laws.
As President Obama once said:
“The circumstances of one’s birth should not determine the outcome of one’s life.”
This post is composed of the following parts:
Part A – Introduction Part B – The US Government And The Oppression OF Americans Abroad Part C – The Legal Framework Of Renunciation Part D – The Logistics – How The New Renunciation Process Would Work Part E – Reviewing The Benefits Of The New Renunciation Process Part F – The Revised Renunciation Fee Part G – Democratizing Renunciation – Making It Available To All – A Financing Proposal Part H – Sadly this could all be be prevented if the United States were to end citizenship taxation and adopt the world standard of residence taxation. But, … Part I – Conclusion – “All Roads Lead To Renunciation”
Renunciation of US citizenship has evolved into a routine matter that is taken less and less seriously by the US Government. "Reflections Of An Expatriation Lawyer: From The Solemn Occasion of 1988 To The Non-event of 2021" https://t.co/l5Aq2moYJx via @expatriationlaw
— John Richardson – lawyer for "U.S. persons" abroad (@ExpatriationLaw) December 30, 2021
Diane is a London, UK based New York lawyer who specializes in issues affecting Americans abroad including renunciation. What follows are her thoughts on how the renunciation process has evolved since 1988. The message is that in 1988 the renunciation of US citizenship was a serious and solemn event that was taken very seriously by the US government (it was also free of charge). By 2021 it had become a routine matter, of little concern to the US government (and cost $2350). This is one more reason why the State Department should process renunciations of US citizenship through video conferencing!
It has become increasingly difficult for US citizens living outside the United States to comply with the US tax and regulatory regime. Unfortunately Americans abroad are being constructively forced to renounce US citizenship.
People are NOT renouncing US citizenship because they want to! They are renouncing because they have to!
The following podcast discusses many of the issues surrounding the renunciation decision. The discussion includes a discussion of several profiles, the applicability of the 877A Exit Tax and the dual citizenship from birth exemption.
Clearly one must be an American citizen to be eligible to vote. This post is for the purpose of identifying a category of person who was “Born In The USA” but is NOT a US citizen. The basic theme of this post is discussed in the following podcast. But, the bottom line is this:
Fascining discussion. In this election season the politicans are agressively courting the vote of Amerians abroad. Yet, they seem unwilling to take the time to understand the problems of Americans abroad and how FATCA has destroyed many life – resulting in many renunications of US citizenship.
On June 25, 2020 Dr. Karen Alpert and I did a series of podcasts where we discussed how renunciation will affect your interaction with the US tax system. The key point is that you will still be taxable by the United States on US source income. What does that mean? Under what circumstances could renunciation of US citizenship actually increase your US tax liability?