The State Department has slashed by about 80% the fee for Americans to formally renounce their U.S. citizenship.

The State Department has slashed by about 80% the fee for Americans to formally renounce their U.S. citizenship.

After years of legal battles with several groups representing Americans wanting to give up their citizenship, the department on Friday published a final rule in the Federal Register that reduces the cost from $2,350 to $450.

The new fee, which took effect on Friday, had been promised in 2023 but had never been implemented. The cost is now the same as it was when the State Department first started charging Americans to formally renounce their citizenship in 2010.

  • plyth@feddit.orgEnglish
    717·
    1 day ago

    That was not the expensive part. The expensive part is when they calculate the future taxes that they won’t receive and take a share of that. Edit: if you are above a threshold.

    • Aproposnix@scribe.disroot.orgEnglish
      26·
      1 day ago

      Are you kidding me?

      Edit: stop with the misinformation

      According to the IRS, most Americans who renounce their citizenship don’t owe any exit tax because they don’t meet the “covered expatriate” thresholds. The State Department fee for renouncing U.S. citizenship is $450 (reduced from $2,350 effective April 13, 2026). Only those with a net worth exceeding $2 million, a high average tax liability, or incomplete tax compliance are subject to additional exit taxes.

      • dhork@lemmy.worldEnglish
        4·
        1 day ago

        There is some truth to it, that exit tax is not calculated on future income, but is calculates on one’s net worth, including real estate, investments, and retirement funds. They are basically looking for people who have chunks of unrealized gains accrued while still citizens, then file to leave the country so that they can sell those assets without paying capital gains taxes on them. So, before leaving they make you pay taxes as if you sold it all.

        Yes, there are exceptions and exclusions that make it so most non-rich people wouldn’t owe anything, but it’s still up to you to prove that.

        There are services that specialize in this, I found this one with a good writeup here. Note that they are looking to sell their service here, so may be overestimating the impact of non-compliance.

          • dhork@lemmy.worldEnglish
            5·
            1 day ago

            Not many, but more common than you think, particularly in HCOL areas where real estate prices have spiked, and even a modest house is over $1M. You might think “Yeah, but those folks have no equity”, but there are plenty of people who bought in 20+ years ago who are sitting on all that equity but can’t do anything with it until they sell.

            Also, retirement assets count in that, and even though we see headlines talking about how unprepared most people are for retirement, there are plenty of people who are.

            Add in the fact that most countries won’t hand out residency to anyone unless they are in a key field, and you will find that the people with the means to decide to emigrate are often the ones that have these assets in the first place.

            • favoredponcho@lemmy.zip
              3·
              10 hours ago

              Also, plenty of people that would renounce American citizenship are probably doing so because of tax concerns. The US is the only country that taxes citizens even if they don’t live there. You could make all your income in another country and the US still wants a piece. For people that make a modest wage in another country, there are exceptions to avoid double taxation. But, if you make a sizable part of your income from capital gains, being taxed on that when you don’t even live in the US probably becomes a motivating factor.

              • plyth@feddit.orgEnglish
                1·
                10 hours ago

                Which has a price:

                Notably, entry can be denied to persons who renounced their U.S. citizenship to avoid paying income taxes.

                https://en.wikipedia.org/wiki/Reed_Amendment_(immigration)

                The U.S. government has never issued regulations to implement the Reed Amendment.

                Passport control at John F. Kennedy International Airport. U.S. Customs and Border Patrol officers decide whether former U.S. citizens arriving in the U.S. are inadmissible based on the Reed Amendment. They have only found two people inadmissible in the past 15 years.

          • plyth@feddit.orgEnglish
            1·
            9 hours ago

            What’s the share of wealthy Americans who have renounced their citizenship?

            Since 2020, 21,027 wealthy Americans have officially exited the U.S. tax system, accounting for nearly 39% of all expatriations recorded by the IRS since 1996.

            IRS Expatriation List only reflects “covered expatriates,” defined as those with a net worth over $2M or who paid $178K+ annually in taxes over the last five years.

            This makes it about 50,000 since 2020 who had to pay extra. How many have renounced overall?

            https://www.savoryandpartners.com/news/american-millionaire-citizenship-renunciations

            Since 1998, the Federal Bureau of Investigation has also maintained its own list of people who have renounced citizenship under 8 U.S.C. § 1481(a)(5), as this is one of the categories of people prohibited from purchasing firearms under the Gun Control Act of 1968 and who must be entered into the National Instant Criminal Background Check System (NICS) under the Brady Handgun Violence Prevention Act of 1993

            The list of all renouncements:

            https://en.wikipedia.org/wiki/Quarterly_Publication_of_Individuals_Who_Have_Chosen_to_Expatriate

            However, in 2013, the number of records of renunciants added to NICS again exceeded the number of names published in the Federal Register expatriate list, with 3,128 renunciants in the former against only 3,000 losing citizenship or permanent residence by any means in the latter.[2