March 20, 2008 - Phil Hodgen

Microtrend – renunciation of citizenship and green cards

Yes, this is purely anecdotal. Draw your own conclusions, bang your own political drums, whatever.

Because we do international tax work we get lots of inquiries from people who have U.S. citizenship but want to give it up. Or they have a permanent residency visa (the mis-named “green card”) and want to get rid of it.

Until recently, this has mostly been an area where people would kick the tires, think about it, and back off. In short, they kept their U.S. citizenship or permanent residence visas. Usually this was driven by a fear that they wouldn’t be able to re-enter the United States at some point in the future. With either family or investments (or both) here, they didn’t want to run the risk of being denied entry to the United States.

Now we have a steady flow of this work. We are taking folks through the process of renouncing citizenship and permanent resident status. It involves mountains of bureaucratic paperwork for two different arms of the U.S. government (one agency handles citizenship/visa status, the other agency handles the U.S. tax implications of switching from citizen to non-citizen/resident to nonresident).