Photo: Flickr / rangerholton
A record number of Americans renounced their citizenship last year, according to Reuters. 1,800 Americans traded in their citizenship or green cards in 2011 — at least the most on record since the IRS started keeping track in 1998. The 1,800 people that gave up citizenship or turned in their green cards in 2011 was more than 2007, 2008 and 2009 combined.
The reason? Taxes, of course.
The main defectors: American citizens living abroad. That’s because they are sick of the increasingly complicated tax filing process.
What makes it so complicated and tedious? Lots and lots of paperwork. Barely any online filing options. And no foreign-language or local resources in many countries where U.S. citizens have to file their taxes.
The IRS publishes the list of names that renounce their citizenship in the Federal Register. One name that Reuters tracked down, Peter Dunn, said in a damning assessment of the tax-filing process that his U.S. citizenship had become “more of a liability than a privilege.”
As an American, Dunn had to file tax returns and report all of his bank accounts – even joint accounts and his Canadian retirement fund. If he didn’t, he would be breaking U.S. law and could face penalties of up to $100,000 or 50 per cent of his undeclared accounts, whichever is larger. Dunn says he was tired of tracking IRS policy changes, and he had no intention of returning to the United States. Renouncing his citizenship, as he puts it, was “a no-brainer.”
Marylouise Serrato, head of American Citizens Abroad, said American citizens abroad are “terrified” of the complexity of tax filing overseas and the fines that come with it.
Some members of Congress are finally beginning to see the light.
“While I fully support measures that reduce fraud and address offshore havens, the U.S. should not have policies that place undue burdens on legitimate Americans abroad,” said Rep. Carolyn Maloney, who chairs of the Congressional Americans Abroad Caucus.
Also, according to Reuters, these Americans are like Superman, who announced a year ago in Action Comics that he would renounce his U.S. citizenship.
Taxes are the new kryptonite.
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