AMSTERDAM - October 30, 2020 - (Newswire.com)
Americans living overseas, urgently lining up to renounce their citizenship, are refused service at their local embassies due to COVID regulations, shows research by US tax preparers and specialists of Americans Overseas.
- 5,797 (dual citizen) Americans gave up their US citizenship in the first 6 months of 2020
- 806 Americans gave up their US citizenship in the past 3 months of 2020
- US federal register data shows 30% drop in renunciations in the third quarter
- Wait time at embassies has gone up from 2 weeks up to 1 year, a 2600% increase
- Americans residing overseas seem desperate to renounce as banks outside the US are closing their accounts, ending mortgages, and blocking pensions.
A law called FATCA is forcing banks outside the US to report all American account holders (also those that have never resided in the US) under threat of astronomical fines. Banks prefer to rid themselves of these clients as they pose a liability.
Specialists at Americans Overseas have been flooded with reports of people who couldn't pay for their daily groceries or continue their mortgages. Many (dual citizens) Americans living outside the US are therefore forced to renounce and provide a CLN (Certificate of Loss of Nationality) to their bank to keep their banking services.
US citizens wanting to renounce must also pay a $2,350 government fee to renounce their citizenship, and those based overseas must do so in person in the U.S. Embassy in their country of residence. Unfortunately, the doors of consulates and embassies remain firmly shut for the majority of renunciation cases due to the (local) COVID regulations.
There has been a growing trend of US citizens expatriating since banks are ramping up their efforts to track down American clients and expel them. This is caused by the rapidly approaching deadlines that the US have set for foreign banks to report Americans with accounts outside the US.
"A law intended to catch tax evaders inside the US is now dragging innocent (coincidental) Americans living outside the US down. Lobbying efforts by the EU have so far not led to any change in policy by the US," says Daan Durlacher, partner at Americans Overseas.
The onerous and costly tax reporting obligations also play a big role. People with a US citizenship or Greencard must file their taxes regardless of where they live in the world every year. They also need to report every single bank account which feels intrusive for many.
The US tax forms are complex and mistakes are costly to rectify with the IRS. The upside is the CARES act cheque that all Americans get of up to $1.200,- and $500,- for children. This is redeemable up to June 2021 when the deadline expires for the 2020 return.
Contact Daan Durlacher,
d.durlacher@Americansoverseas.org
+31202389420 CEST
Americans Overseas is a European based organization specializing in US tax preparation and supplies information to governments for policy updates.
Press Release Service by Newswire.com
Original Source: US Embassies Struggle With Record Number of Americans Giving Up Citizenship
