U.S Citizens Giving Up Passports to Avoid Taxes - Taxes | Financial Buzz

U.S Citizens Giving Up Passports to Avoid Taxes

Taxes, Uncle SamIn efforts to avoid Uncle Sam, last year saw an all time high of people giving up their U.S Citizenship. Accordignt to financial advisory firm, deVere Group, 3,415 people revoked their Citizsenship in 2014, up 14 percent from 2013.

As mentioned, the prime motivator seems to be in efforts to avoid U.S tax laws that make it difficult for assets to be hidden overseas.  The Foreign Tax compliance Act (FATCA), as it is known, calls for foreign financial institutions to report holdings of their U.S. Clients or face a 30 withholding tax. In light of this new act, the report from DeVere found that four out of their five clients would consider handing over their passports.

Nigel Green, founder of deVere confirmed this in a statesment saying, “Treasury Department data show that a steadily growing number of individuals have been giving up their U.S. citizenship over the last few years.. it can be reasonably assumed that this trend is in direct response to complying with the onerous, expensive and privacy-infringing FATCA, which finally came into effect on July 1 last year.”

While last year had a particularly high number of Americans giving up their passports, it appears the trend has been occuring since 2010, which is right aroudnt he time that FATCA was enacted by Congress.

It was only last year that it was placed in full effect an brought about the highest number since 2010. It is however, important to note that the numbers reported are still only a small fraction the numer of americans who live outside the U.S. Borders, which is at 7.6 million.