Record Numbers of U.S. Citizens Handing Back Passports

More U.S. citizens than at any time before are handing back their U.S. passports in favor of one from another country.

The number of U.S. citizens as well as long-term permanent residents cutting official ties with the U.S. jumped over 20% in 2015 to 4,279 said an analysis done last week by an online news service.

This trend of late has been increasing with many Americans living overseas who do not like to deal with the complicated paperwork of taxes, a headache that worsened since new U.S. regulations went into effect.

Eighteen times the number of Americans renounced citizenship or permanent residency during 2015 as compared to 2008. Last year was the third consecutive record breaking year.

Unlike the majority of other countries, the citizens of the U.S. are taxed on all their income, regardless of where it is earned or where they are living.

For Americans that live abroad, that results in paperwork that is complex and often times they are forced to search for professional assistance that cost high fees for lawyers and accountants.

The burden had become heavier of recent the 2010 Foreign Account Tax Compliance Act.

The regulations are part of the government of the United States’ plan of fighting tax evasion, which was given added impetus following after major banks in Switzerland admitted to helping hide assets for Americans offshore.

As the financial institutions battle with the FATCA, some banks overseas are ditching their U.S. customers, leaving some without basic checking or savings accounts.

That is due to the fact that if banks mistakenly to do not report any of the accounts that American hold outside the U.S. that could face steep fines.

Some wealthy U.S. citizens who have been renouncing their citizenship might end up paying less taxes down the road.

However, it is illegal to give up your U.S. status in order to dodge paying for taxes and in doing so, it does not mean the tax authorities will not come looking for taxes.

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