Americans in Europe: US finally moves to cut $2,350 fee for renouncing citizenship
The US looks finally set to push ahead with its promise to cut the fee for renouncing American citizenship from $2,350 down to $450, writes Helen Burggraf.
News that the US government will finally act on its pledge to cut the fee for renouncing citizenship - first promised last January - has been welcomed by American expat groups.
The latest move was made public in a notice dated October 2nd and posted on the government's Federal Register.
The State Department says it is “proposing to amend” the fee from its current $2,350 to $450, in response to concerns that “members of the public have continued to raise” since the fee was increased to the current amount from $450 in 2014.
The State department noted "the not insignificant anecdotal evidence regarding the difficulties many US nationals residing abroad are encountering" when trying to renounce citizenship.
It said that $450 is only “a fraction of the cost of providing” the consular services involved in processing a Certificate of Loss of Nationality (CLN).
The State Department said that it’s accepting comments on the matter from members of the public until November 1st.
The move has been particularly welcomed by group representing 'Accidental Americans' - predominantly citizens of other countries who were born in the US to foreign parents, who have since moved abroad and have had little connection to the US during their adult lives.
Fabien Lehagre, the Paris-based founder of Accidental Americans Association said the State Department's notification represented “a massive relief for accidental Americans, as well as our fellow Americans living abroad.
"It's still quite a price tag, but hey, it's over 80 percent off," he said on X, formerly known as Twitter.
“Rest assured, I do not intend to give up the fight to make the waiver procedure even more affordable,” Lehagre added.
“Renunciation is a right, protected by the U.S. Constitution.”
🚨 𝐁𝐫𝐞𝐚𝐤𝐢𝐧𝐠 𝐍𝐞𝐰𝐬!🚨 Thanks to the persistent efforts of the Association des Américains Accidentels (AAA), the cost to renounce U.S. citizenship will plunge from a whopping $2,350 down to a more reasonable $450. 💸
It's still quite a price tag, but hey, it's over 80%…
— Accidental Americans (@USAccidental) September 30, 2023
Because Accidental Americans are US citizens through birth and due to the United States’ citizenship-based tax regime, they are deemed by the US to have tax reporting (and potentially tax-paying) obligations for as long as they live, even if they never set foot in the US.
Americans interested in renouncing their citizenships had been wondering for months whether the government would go ahead with its intention to lower the fee, which was first announced by the State Department on January 6th 2023.
READ ALSO: How Americans in Europe are struggling to renounce US citizenship
But the fact the new notification doesn't give an exact date for when the fee will be cut might give rise to worries that it may still be months before the new fee is brought in.
However Toronto-based lawyer and US expatriation expert John Richardson and other campaigners for fairer tax treatment of American expatriates say they are reasonably certain that the reduction in the renunciation fee will now go ahead, but they weren’t able to say when it is likely to happen.
“It’s just a matter of time,” Richardson said.
He added that he doubted that the lowering of the fee to $450 would have any effect on the numbers of people who are renouncing their US citizenships, which has been running as high as more than 6,000 annually.
The United States is unusual in that it imposes tax responsibilities based on both residence and citizenship - so even citizens who have lived abroad for many years and have no economic activity in the US have to file an annual tax declaration to the IRS.
There are also certain limitations on US citizens who live abroad such as the 2010 FATCA law that effectively made it hard for them to open European bank accounts and limitations on certain types of financial investments in Europe.
The number of Americans choosing to renounce citizenship was far lower before FATCA was introduced.
"For those Americans living abroad who are seeking to renounce, the advantages [of no longer being American] are worth far more than $2,350,” Richardson explained.
A spokesperson for the State Department told The Local: "On October 2nd, 2023, the Department published a proposed rule proposing a reduction of the fee for Administrative Processing of a Request for a Certificate of Loss of Nationality of the United States (CLN) from $2,350 to $450.
"This proposed rule will be open for public comment until November 1, 2023. After the close of the public comment period, the Department will issue a Final Rule that will take into account any substantive public comments.
"Once implemented, the fee change will not be retroactive, and no refunds or partial refunds will be issued as a result of this fee change."
Address for sending comments
Those Americans who are interested in submitting comments to the State Department on the subject of the proposed reduction in the cost of renouncing US citizenship may do so in one of a number of ways. These are detailed in the State Department’s Federal Register statement mentioned above, which may be accessed by clicking here.
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News that the US government will finally act on its pledge to cut the fee for renouncing citizenship - first promised last January - has been welcomed by American expat groups.
The latest move was made public in a notice dated October 2nd and posted on the government's Federal Register.
The State Department says it is “proposing to amend” the fee from its current $2,350 to $450, in response to concerns that “members of the public have continued to raise” since the fee was increased to the current amount from $450 in 2014.
The State department noted "the not insignificant anecdotal evidence regarding the difficulties many US nationals residing abroad are encountering" when trying to renounce citizenship.
It said that $450 is only “a fraction of the cost of providing” the consular services involved in processing a Certificate of Loss of Nationality (CLN).
The State Department said that it’s accepting comments on the matter from members of the public until November 1st.
The move has been particularly welcomed by group representing 'Accidental Americans' - predominantly citizens of other countries who were born in the US to foreign parents, who have since moved abroad and have had little connection to the US during their adult lives.
Fabien Lehagre, the Paris-based founder of Accidental Americans Association said the State Department's notification represented “a massive relief for accidental Americans, as well as our fellow Americans living abroad.
"It's still quite a price tag, but hey, it's over 80 percent off," he said on X, formerly known as Twitter.
“Rest assured, I do not intend to give up the fight to make the waiver procedure even more affordable,” Lehagre added.
“Renunciation is a right, protected by the U.S. Constitution.”
🚨 𝐁𝐫𝐞𝐚𝐤𝐢𝐧𝐠 𝐍𝐞𝐰𝐬!🚨 Thanks to the persistent efforts of the Association des Américains Accidentels (AAA), the cost to renounce U.S. citizenship will plunge from a whopping $2,350 down to a more reasonable $450. 💸
— Accidental Americans (@USAccidental) September 30, 2023
It's still quite a price tag, but hey, it's over 80%…
Because Accidental Americans are US citizens through birth and due to the United States’ citizenship-based tax regime, they are deemed by the US to have tax reporting (and potentially tax-paying) obligations for as long as they live, even if they never set foot in the US.
Americans interested in renouncing their citizenships had been wondering for months whether the government would go ahead with its intention to lower the fee, which was first announced by the State Department on January 6th 2023.
READ ALSO: How Americans in Europe are struggling to renounce US citizenship
But the fact the new notification doesn't give an exact date for when the fee will be cut might give rise to worries that it may still be months before the new fee is brought in.
However Toronto-based lawyer and US expatriation expert John Richardson and other campaigners for fairer tax treatment of American expatriates say they are reasonably certain that the reduction in the renunciation fee will now go ahead, but they weren’t able to say when it is likely to happen.
“It’s just a matter of time,” Richardson said.
He added that he doubted that the lowering of the fee to $450 would have any effect on the numbers of people who are renouncing their US citizenships, which has been running as high as more than 6,000 annually.
The United States is unusual in that it imposes tax responsibilities based on both residence and citizenship - so even citizens who have lived abroad for many years and have no economic activity in the US have to file an annual tax declaration to the IRS.
There are also certain limitations on US citizens who live abroad such as the 2010 FATCA law that effectively made it hard for them to open European bank accounts and limitations on certain types of financial investments in Europe.
The number of Americans choosing to renounce citizenship was far lower before FATCA was introduced.
"For those Americans living abroad who are seeking to renounce, the advantages [of no longer being American] are worth far more than $2,350,” Richardson explained.
A spokesperson for the State Department told The Local: "On October 2nd, 2023, the Department published a proposed rule proposing a reduction of the fee for Administrative Processing of a Request for a Certificate of Loss of Nationality of the United States (CLN) from $2,350 to $450.
"This proposed rule will be open for public comment until November 1, 2023. After the close of the public comment period, the Department will issue a Final Rule that will take into account any substantive public comments.
"Once implemented, the fee change will not be retroactive, and no refunds or partial refunds will be issued as a result of this fee change."
Address for sending comments
Those Americans who are interested in submitting comments to the State Department on the subject of the proposed reduction in the cost of renouncing US citizenship may do so in one of a number of ways. These are detailed in the State Department’s Federal Register statement mentioned above, which may be accessed by clicking here.
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