Scarinci Hollenbeck, LLC
The Firm
201-896-4100 info@sh-law.comFirm Insights
Report: Rising Number of Americans Relinquish Citizenship to Avoid High Taxes
Author: Scarinci Hollenbeck, LLC
Date: September 18, 2013
Key Contacts
Back
A growing number of Americans are renouncing their U.S. citizenship and handing in their passports at faster rates in an effort to avoid rising high tax rates and complicated tax law, according to a newly-published government report.
The Internal Revenue Service released its Quarterly Publication of Individuals who have chosen to Expatriate in the Federal Register. The findings reveal that during the fourth quarter of 2012 – ending on December 31 – 45 Americans renounced their U.S. citizenship. This number increased to 679 during the first quarter of the year, ending on March 31, and jumped by 1,130 during the second quarter alone.
The spike in the number of people renouncing their citizenship has largely been attributed to the upcoming implementation of the Foreign Account Tax Compliance Act (FATCA), which will require foreign financial institutions to disclose more account information on assets and investments held by U.S. taxpayers. The new tax law is expected to provide for more transparency, build an international network of institutions combating tax evasion, and lower the prevalence of tax law violations. New penalties recently announced by the government revealed that Swiss banks that want to avoid criminal lawsuits may be required to pay as much as 50 percent in penalties for hiding foreign accounts held by Americans. This move is expected to greatly diminish the viability of Swiss tax havens.
As these penalties and further pressure on foreign institutions continues, some Americans who can no longer gain favorable tax treatment by hiding assets overseas have opted to renounce their citizenship to legally avoid American income tax. However, some analysts agree that the FATCA is not the sole driver of the spike in renounced citizenships recently. An increase in capital gains and income tax rates in 2013 may also be a component in the high number of renunciations, the San Francisco Gate reports.
- Practices: Tax and Trusts & Estates, International Law & Trade, Sophisticated Estate Planning & Wealth Preservation
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
Supreme Court and Title VII: Implications for Reverse Discrimination
Earlier this month, the U.S. Supreme Court issued a decision in Ames v. Ohio Department of Youth Services vitiating the so-called “background circumstances” test required by half of federal circuit courts.1 The background circumstances test required majority group plaintiffs pleading discrimination under Title VII of the Civil Rights Act to meet a heightened pleading standard […]
Author: Matthew F. Mimnaugh
SPACs Are Back, What You Need to Know
Special purpose acquisition companies (better known as SPACs) appear to be making a comeback. SPAC offerings for 2025 have already nearly surpassed last year’s totals, with additional transactions in the pipeline. SPACs last experienced a boom between 2020–2021, with approximately 600 U.S. companies raising a record $163 billion in 2021. Notable companies that went public […]
Author: Dan Brecher
Short Form Merger: Streamlining the Process for Businesses
Merging two companies is a complex legal and business transaction. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process that involves important corporate governance considerations. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process. However, […]
Author: Dan Brecher
Tariff Response Options for Small Businesses Facing Financial Distress
The Trump Administration’s new tariffs are having an oversized impact on small businesses, which already tend to operate on razor thin margins. Many businesses have been forced to raise prices, find new suppliers, lay off staff, and delay growth plans. For businesses facing even more dire financial circumstances, there are additional tariff response options, including […]
Author: Brian D. Spector
Common Causes of Partnership Disputes and How to Resolve Them
Business partnerships, much like marriages, function exceptionally well when partners are aligned but can become challenging when disagreements arise. Partnership disputes often stem from conflicts over business strategy, financial management, and unclear role definitions among partners. Understanding Business Partnership Conflicts Partnership conflicts place significant stress on businesses, making proactive measures essential. Partnerships should establish detailed […]
Author: Christopher D. Warren
Businesses Are Facing Financial Headwinds—A Practical Guide
*** The original article was featured on Bloomberg Tax, April 28, 2025 — As a tax attorney who spends much of my time helping people and companies who have large, unresolved issues with the IRS or one or more state tax departments, it often occurs to me that the best service that I can provide […]
Author: Scott H. Novak
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.