WASHINGTON (UPI) — A record number of people, some U.S. citizens and some green card holders, renounced their citizenship or gave up their green cards in 2015, the Treasury Department said.
For the third consecutive year, the number of people giving up their citizenship or green card has topped the previous year. Last year, it was 4,279 people, and it’s most likely due to newer, more strict tax policies.
The passing of the Foreign Accounts Tax Compliance Act in 2010 was designed as a tool to fight tax evasion in the months after UBS AG Bank scandal, which revealed that a large bank could aid rich clients who held duel residency in the U.S. and elsewhere to avoid U.S. taxes. UBS eventually paid $547 million to settle the case.
U.S. citizens can be required to pay taxes regardless of which country they live in for periods of time. But the law also allowed the U.S. government to go after foreign bank accounts, which prompted many foreign banks to drop their U.S. customers. Eventually, some of the those customers just renounced their U.S. citizenship.
“An increasing number of Americans appear to believe that having a US passport or long-term residency isn’t worth the hassle and cost of complying with US tax laws,” Andrew Mitchel, an international lawyer who analyzes IRS data, told the Wall Street Journal.
Because of FATCA, the U.S. was able to recoup $13.5 billion for foreign bank accounts.
Copyright 2015 United Press International, Inc. (UPI). Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI’s prior written consent.
This content is published through a licensing agreement with Acquire Media using its NewsEdge technology.