Sun Aug 11, 2013 10:5AM
Tougher rules by the US government have increased the number of Americans who are renouncing their citizenship in the second quarter from a year earlier, a report says. Federal Register figures showed that expatriates giving up their nationality at US embassies climbed to 1,131 in the three months through June from 189 in the year-earlier period, Bloomberg reported. The new figures brought the first-half total to 1,810 compared with 235 for the whole of 2008. The United States is the only country in the Organization for Economic Cooperation and Development that taxes citizens wherever they reside. The Obama administration is now searching for tax cheats in offshore centers, including Switzerland, as the government tries to curb the budget deficit. Shunned by banks in Switzerland and Germany and facing tougher asset-disclosure rules under the Foreign Account Tax Compliance Act (FATCA), more of the estimated 6 million Americans living overseas are weighing the cost of holding a US passport, according to the report. “With the looming deadline for FATCA, more and more US citizens are becoming aware that they have US tax reporting obligations,” said Matthew Ledvina, a US tax lawyer at Anaford AG in Zurich. “Once aware, they decide to renounce their US citizenship.” According to FATCA, foreign financial institutions should report to the Internal Revenue Service information about financial accounts held by US taxpayers, or held by foreign entities in which US taxpayers hold a substantial ownership interest. It was estimated to generate $8.7 billion over 10 years, the congressional Joint Committee on Taxation said. AGB/HJ