A record number of Americans gave up their US citizenship in the first quarter of 2015, according to IRS data. This is blamed on the taxation of income earned outside the US, along with laws expanding offshore bank account and asset reporting. A total of 1,335 people renounced US citizenship during the first three months of the year, topping the previous record by 18 percent, according to data compiled by Bloomberg. The new figure puts 2015 on track to exceed last year’s 3,415 renunciations, which is an all-time record.
The data released by the Internal Revenue Service (IRS) includes the names of those who renounced their citizenship, but not their reasons for doing so. However, it comes as the US government is becoming more aggressive when it comes to the assets of the estimated 6 million Americans who live abroad. The United States is the only country within the Organization for Economic Cooperation and Development that taxes citizens wherever they reside.
American citizens who live abroad can exclude as much as $100,800 in earned income and can receive tax credits for payments to foreign governments. However, US tax liabilities can apply to children born to Americans abroad. In many cases, there are only partial offsets available for double taxation. MORE