For Americans living abroad, renouncing US citizenship has become a lengthy and costly process, yet many feel compelled to do so due to political and financial reasons. Margot, a 30-year UK resident, faced a 14-month wait at the London consulate, so she traveled to Belgium for her appointment. The waiting lists in Sydney and major Canadian cities are similarly long, with European cities averaging six months.
Why Renounce?
The US is one of only two countries (along with Eritrea) that taxes based on citizenship, not residency. This can lead to complex tax situations, such as paying taxes on a former spouse's assets after divorce. The Foreign Account Tax Compliance Act (FATCA) requires foreign banks to report US clients, making it hard to open accounts abroad. While the renunciation fee dropped from $2,350 to $450 after a legal battle, legal costs can reach $7,000 to $10,000.
Political Motivations
Many cite political disillusionment. Paul, 55, renounced on his 51st birthday after Trump nominated Amy Coney Barrett to the Supreme Court. Ella, 66, left the US for Germany 34 years ago and finally renounced in 2021, fearing US foreign policy. Joseph, 36, living in Norway, worries about the US becoming a dictatorship and the impact on his job in data science. Mary, 73, decided after the 2016 election, saying, “I finally fell asleep – vodka can only do so much.”
The Process
Renunciation involves swearing an oath, paying fees, and surrendering the passport. The US government publishes a quarterly list of renunciants, which some view as punitive. Alexander Marino, head of Moody’s law practice, notes that the list serves no legal purpose. Renunciation can also lead to “covered expatriate” status, with lifelong tax consequences and potential entry issues.
Family and Draft Concerns
Sinclair, 54, renounced after moving to Australia, worried about his 17-year-old daughter being subject to automatic draft registration starting this December. The Selective Service System creates a database of eligible citizens, causing anxiety for parents of young adults.
Mixed Emotions
While some miss aspects of American life, like Steak 'n Shake, most feel relief. Michael, 57, said, “If I never see America again, I am absolutely fine with that.” Joseph, however, struggles with losing his political voice: “As an American citizen, I can criticize my government. As soon as I give up my citizenship, it is me saying I don’t think I can make a change anymore.”
