Renouncing US citizenship can be a life changer. A person seeking to renounce U.S. citizenship must renounce all the rights and privileges associated with such citizenship. The immediate effects of renouncing include, US passport revoked or will be invalidated as a result of renouncing US citizenship. You cease to be US citizen.
The number of americans terminating US citizenship every year increasing and growing by thousands. This ‘unbecoming’ american trend started in 2013, An estimated 8.7 million Americans living in 160+ countries. An average of 6,000 americans every year voluntarily renounce their citizenship. Most of them giving up their U.S. passport already live abroad and hold another citizenship. The Pandemic, FATCA and tax bureaucracy are main drivers for americans abandoning their nationality. US expats living abroad have difficulty with foreign bank accounts as a result of FATCA and IRS. US passport is no longer considered safe. During terrorist attacks, US passport can be most dangerous item to carry, making second passport more convenient)
In short the consequences of abandoning US citizenship are: no voting rights, no citizenship for children born abroad, no access to federal jobs, no consular protection and no rescue if you are stuck in war zone. If you want to visit US to meet family and friends, you will be forced to apply for visa to enter United States.
Loss of US citizenship
You might lose your U.S. citizenship in specific cases, including if you:
- Run for public office in a foreign country (under certain conditions)
- Enter military service in a foreign country (under certain conditions)
- Apply for citizenship in a foreign country with the intention of giving up U.S. citizenship
- Commit an act of treason against the United States
Irreversible
It is also very important to understand renouncing your US citizenship is an irrevocable act, meaning you can’t change your mind and regain U.S. citizenship (exception is children citizenship reinstated by notifying the Department of State within six months of turning 18)
No Escape from Prosecution
the act of renouncing U.S. citizenship does not allow persons to avoid possible prosecution for crimes which they may have committed or may commit in the future which violate United States law, or escape the repayment of financial obligations, including child support payments, previously incurred in the United States or incurred as United States citizens abroad.
No Effect on US Tax and Military service
Persons who wish to renounce U.S. citizenship should be aware of the fact that renunciation of U.S. citizenship may have no effect on their U.S. tax or military service obligations.
Deportation
Renunciation of U.S. citizenship may not prevent a foreign country from deporting that individual to the United States in some non-citizen status.
Minors
Parents may not renounce the citizenship of their minor children. Similarly, parents/legal guardians may not renounce the citizenship of individuals who lack sufficient capacity to do so.
Stateless
Persons intending to renounce U.S. citizenship should be aware that, unless they already possess a second nationality, they may be rendered stateless (no country) and, thus, lack the protection of any government. Statelessness can present severe hardships: the ability to own or rent property, work, marry, receive medical or other benefits, and attend school can be affected.
In person
U.S. citizens can only renounce their citizenship in person, and therefore cannot do so by mail, electronically, or through agents. The government fee to renounce U.S. citizenship is $2,350.
Accidental Citizens
An Accidental American is someone whom US law deems to be an American citizen, but who has only a tenuous connection with that country. Many citizens of foreign countries also happen to hold a U.S. citizenship unknowingly, without setting foot in US soil.
Pursuant to the Immigration and Nationality Act, an individual born outside the United States nevertheless is a U.S. citizen, at birth, if both his or her parents are U.S. citizens and if either parent resided within the United States or one of its possessions at any time before his or her birth.
Taxation
Citizenship based taxation means that the US taxes all of its citizens on their worldwide income, wherever in the world they happen to be or reside. Once you renounce your US citizenship, you will no longer have to pay US taxes (may be subjected to double taxation abroad).
Exit/Expatriate tax -You meet the qualifications for an exit tax if you are considered a “covered expatriate”- i.e. if you have more than $2 million net worth or you failed any part of the 8854 Form. This involves filling out a 8854 Form, which is a checklist that ensures you have the items listed previously (5 years of tax filling, asset estimate, etc…). IRS is sending notices to expatriates who have not complied with the Form 8854 requirements, including the imposition of the $10,000 penalty where appropriate.
A citizen will be treated as relinquishing his or her U.S. citizenship on the earliest of four possible dates:
- the date the individual renounces his or her U.S. nationality before a diplomatic or consular officer of the United States, provided the renunciation is subsequently approved by the issuance to the individual of a certificate of loss of nationality by the U.S. Department of State;
- the date the individual furnishes to the U.S. Department of State a signed statement of voluntary relinquishment of U.S. nationality confirming the performance of an act of expatriation specified in paragraph (1), (2), (3), or (4) of section 349(a) of the Immigration and Nationality Act (8 U.S.C. 1481(a)(1)-(4)), provided the voluntary relinquishment is subsequently approved by the issuance to the individual of a certificate of loss of nationality by the U.S. Department of State;
- the date the U.S. Department of State issues to the individual a certificate of loss of nationality; or
- the date a U.S. court cancels a naturalized citizen’s certificate of naturalization.
Entry Ban
The Reed Amendment, also known as the Expatriate Exclusion Clause, created a provision of United States federal law (8 U.S.C. § 1182(a)(10)(E)) attempting to impose an entry ban on certain former U.S. citizens based on their reasons for renouncing U.S. citizenship.
If the Department of Homeland Security determines that the renunciation is motivated by tax avoidance purposes, the individual will be found inadmissible to the United States under Section 212(a)(10)(E) of the Immigration and Nationality Act (8 U.S.C. 1182(a)(10)(E)).
Retirement Benefit
Of course! You can receive social security benefits if there is a agreement between the U.S. and your expat country.
Disclaimer: Please seek a professional help before your renounce your US citizenship as this is a complex process and must be planned well in advance.
