There has been a massive increase in the number of Americans who've renounced their American citizenship. The Internal Revenue Service (IRS) data analysed by Bambridge Accountants, New York, showed that the number of Americans who renounced their citizenship increased by a staggering 1,051 percent in the first three months of 2020 as compared to October-December period, last year.
According to the IRS data, as many as 2,909 Americans renounced their American citizenship from January till March. The figure for the last three months of 2019 stood at 261, thus recording a jump of 1,051 percent.
The number of Americans who renounced their citizenship in the first three months this year is even greater than the total throughout 2019, when 2,072 Americans renounced their citizenship, according to Bambridge Accountants.
The 2020 quarterly increase is the highest since the fourth quarter of 2016 when 2,365 Americans gave up their citizenship. Under the IRS rules, every three months the US government publishes the names of all Americans who renounce their citizenship.
For the purpose, they need to pay a government fee of $2,350. Those based overseas have to do the same, in person at the US Embassy in their country.
Why are Americans renouncing their citizenship?
According to Alistair Bambridge, partner at Bambridge Accountants, "For US citizens living abroad, they are still required to file US tax returns, potentially pay US tax and report all their foreign bank accounts, investments and pensions held outside the US. For many Americans this intrusion is too much, and they make the serious step of renouncing their citizenship, as they do not plan to return to live in the US".
He said that the Covid-19 pandemic gave individuals the time to catch-up on matters, such as citizenship, which they had put on the backburner. "The surge in US expats renouncing from our experience is that the current pandemic has allowed individuals to get their affairs in order and deal with an issue they may have been putting off for a while", he said.
Covid-19 disease has infected over 1.4 million Americans and killed 83,425 of them.
