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Who Are the Record Numbers of Americans Renouncing US Citizenship During the Coronavirus Pandemic?

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Who Are the Record Numbers of Americans Renouncing US Citizenship During the Coronavirus Pandemic?

August 14
02:45 2020

It has been widely reported recently that a record number of Americans have renounced their US citizenship this year. The Federal Register shows 5,816 renunciations in the first six months of 2020, compared to 2,072 in the whole of 2019.

The US requires all US citizens to file US taxes, including expats, and historically the most common group renouncing US citizenship is Americans who have permanently settled abroad and wish to stop filing US taxes.

This wouldn’t explain the recent spike in numbers though, as there is no new tax law adversely affecting Americans abroad. In fact, US expats have benefited from US citizenship this year by being eligible for a Coronavirus stimulus check.

Many media outlets reporting on the spike, including CNN, Forbes, Fortune, and Newsweek, have attributed the high numbers to political discontent with the US government’s handling of the Coronavirus Pandemic and the US political situation in general.

The truth though is that a mystery lies at the heart of the figures.

Katelynn Minott, a partner at Bright!Tax, a leading US expatriate tax services provider, has pointed out that to renounce US citizenship you first have to be a resident and citizen of another country (so that you don’t become stateless), and you also have to have an interview with a member of the State Department in person, at a US consulate or embassy abroad.

With international travel severely limited since the pandemic started, and appointments for exit interviews at American consulates and embassies also having been suspended in most countries, even American dual citizens who already live abroad would have struggled to complete the renunciation process this year (let alone disgruntled Americans in the States).

So who are the record numbers renouncing, and how have they managed to do so?

The most probable answer is a time lag in reporting.

So rather than the record number of renouncers being folks who are unhappy about events in the US this year, as has been widely attributed, they are more likely to be folks who started the renunciation process previously.

Miss Minott said: “Renouncing US citizenship is a significant and irreversible decision, and it only benefits a tiny minority of high net worth expat Americans. While it may be too early to fully understand the recent spike, we can safely say that it wasn’t caused by discontent with American’s response to the Coronavirus pandemic.”

Media Contact
Company Name: Bright!Tax US Expat Tax Services
City: New York
State: NY
Country: United States
Website: https://brighttax.com