Donna-Lane Nelson was so upset after giving up her U.S. citizenship that she threw up.
“Like the day I was divorced, this was one of the saddest of my life,” Nelson wrote of the day in 2011 her paper work to renounce U.S. citizenship was approved.
In 2011, Nelson was one of nearly 2,000 Americans to give up their citizenship. Last year, a record 4,279 people gave up their American citizenship, according to the U.S. Treasury Department.
New York Daily News cover This year, the Google search “How to move to Canada?” surged as businessman Donald Trump won seven of 11 Republican contests on Super Tuesday.
Peter Spiro is a Temple University law professor. He is not sure if those who oppose Donald Trump would consider leaving the U.S.
Joyce Angio, who lives in Canada, is one of a record number of Americans who gave up their U.S. citizenship last year. |
“Trump, if he wins, may be president for only four years (eight years if he wins a second term) and giving up your citizenship cannot be reversed,” Spiro said.
Why do people give up U.S. citizenship?
Most of those giving up their U.S. citizenship do so for tax reasons. The surge, Spiro said, is due to a 2010 law to increase enforcement of an existing law requiring U.S. citizens to pay taxes on worldwide income, not just money earned in the United States.
Joyce Angio of Quebec, Canada, gave up her U.S. citizenship last year. She is an English as a Second Language teacher at Université Laval in Quebec City.
Angio never planned to live in Canada. But in 1973, while studying French in Quebec City, she met a man who would become her husband.
Angio said she had no idea Americans must pay taxes on income earned outside the United States. Even her father, an accountant, she said, never told her, “Joyce, you'd better file every year because the U.S. law requires” it.
In 2013, she learned that the U.S. government was ready to collect fines on Americans who did not pay U.S. taxes while living outside the country.
Donna-Lane Nelson |
“Emotions: I hesitated for two years,” Angio wrote in an email to Voice of America. “Lost sleep. Read. Discussed. Debated. Cried twice in front of the Consul on the date I was given to formally renounce my citizenship. Felt heartbroken the day I had to go back to pick up my cancelled passport.”
U.S. Treasury Secretary Jacob Lew said the federal government has a responsibility to ensure all Americans pay their taxes.
“Offshore tax evasion undermines confidence in our tax system and deprives the United States of revenues necessary to protect and provide for its citizens,” Lew said in a statement.
Donna-Lane Nelson Donna-Lane Nelson lives in Switzerland. She also writes a blog and has reported for trade newspapers. It was not just the tax burden that led her to give up U.S. citizenship. It was all the additional paper work, she said.
Also playing a role was the refusal of Swiss banks to accept deposits from U.S. citizens. Banks, Nelson said, want nothing to do with increased reporting required now by the U.S. government.
According to the U.S. Department of the Treasury, Americans living abroad are required to pay income taxes based on their “worldwide income.” They can exclude up to $100,800 from their income as well as certain housing costs, the Treasury Department said.
The State Department estimates 7.6 million Americans live outside the United States. Better enforcement can bring in an extra $800 million a year to the United States government, according to a congressional report.
New York Daily News cover |
Spiro, the Temple University law professor, said the cost of filing and paying taxes on Americans overseas is falling most heavily on people of “modest means.” The United States, he said, is the only major country that taxes its citizens on income earned overseas.
Downsides of giving up U.S. citizenship
As for downsides of giving up citizenship, there definitely are some. Fees for completing the application process went up recently from $450 to $2,350.
And before Americans can give up their citizenship, they must settle U.S. tax liabilities covering the last five years, according to the Treasury Department.
U.S. Tax Services is a private tax services company. It says Americans who renounce their citizenship can still return to the U.S. for short visits. But longer visits are a problem.
”For example, if a relative who lives in the U.S. were to become sick, you would not be allowed to simply move to the U.S. to take care of them,” Tax Services says in its guide to renouncing citizenship. “Or if your kids end up residing in the U.S., you would not be able to simply move in with them as you grow older.”
Angio, the Canadian English instructor, said she can use her Canadian passport to continue regular visits with friends and family in the United States.
“The difference is emotional,” Angio said. “I'm bitter that I have to use the non-citizen line at the airport. I'm resentful that the immensely wealthy will still find clever ways to illegally hide their money while I had to make a painful decision to renounce.”
I'm Bruce Alpert.
Words in This Story
threw up – v. to have the food, liquid, etc., that is in your stomach come out through your mouth
divorce – v. the ending of a marriage by a legal process
reverse – v. to change something to an opposite state or condition
surge – v. to move very quickly and suddenly in a particular direction
renounce – v. to formally give up something
exclude – v. period of time during which someone does not work at his or her regular job
evasion – n. the act of avoiding something that you do not want to do or deal with
modest – adj. not very large in size or amount
resentful – adj. having or showing a feeling of anger or displeasure about someone or something unfair
immensely – adv. very great in size or amount