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February 7, 2016 - UNITED STATES - Once again, the number of Americans renouncing U.S. citizenship has gone up, up 560% from its Bush administration high. In 2015, there were approximately 4,300 expatriations according to the published names of individuals who renounced. The name and shame list is published quarterly, with the most recent three-month total being 1,058. That brings the total to 4,279 for 2015.
These numbers seem tiny compared to the influx of immigrants. Yet expatriations have historically been much lower. Moreover, the published list is also incomplete, with many not counted. Surprisingly, no one seems to know exactly how big the real number is, even though the IRS and FBI both track Americans who renounce citizenship. There is no single explanation, though with global tax reporting and FATCA, the list of the individuals who renounce keeps increasing,
2014 was also a record year with 3,415 published expatriates. The reasons that Americans renouncing citizenship is at an all-time high can be over family, tax and legal complications. Dual citizenship isn’t always possible, as this infographic from MoveHub shows. Some countries make citizens pay a fee to hand in their passport. Some countries have no fee, but America’s $2,350 fee is more than twenty times the average level in other high-income countries.
Many now find America’s global income tax compliance and disclosure laws to be a burden, some say downright oppressive. No group is more severely impacted than U.S. persons living abroad, who can be pariahs shunned by banks for daily banking activities. For those living and working in foreign countries, it is almost a given that they must report and pay tax where they live. But they must also continue to file taxes in the U.S.
What’s more, U.S. reporting is based on their worldwide income, even though they are paying taxes in the country where they live. Many can claim a foreign tax credit on their U.S. returns, but it generally does not eliminate all double taxes. These rules have long been in effect, but enforcement was historically less of a concern with expats. Today, enforcement fears are palpable. Moreover, the annual foreign bank account reports known as FBARs carry civil and criminal penalties all out of proportion to tax violations. Even civil penalties can quickly consume the balance of an account.
FATCA has ramped up worldwide and requires an annual Form 8938 filing if foreign assets meet a threshold. Foreign banks are sufficiently worried about keeping the IRS happy that many simply do not want American account holders. Still, leaving America can be costly. To exit, you generally must prove 5 years of IRS tax compliance. Plus, if you have a net worth greater than $2 million or have average annual net income tax for the 5 previous years of $160,000 or more, you can pay an exit tax.
It is a capital gain tax as if you sold your property when you left. Long-term residents giving up a Green Card can be required to pay the exit tax too. No one wants to pay an exit tax if they can avoid it. Sometimes planning and valuations can reduce or even eliminate the tax. But taxed or not, many still seem to be headed for the exits. Last year, dual citizens in Canada trying to shed their U.S. citizenship created a backlog at the U.S. consulate in Toronto. President Obama has joked about his birth certificate, but accidental American status is no joke. Many end up in untenable financial situations.
The U.S. has been criticized for hiking its fee to renounce by 422% to $2,350. Previously, there was a $450 fee to renounce, and no fee to relinquish. But the precise difference between the two procedures was often confused. Presently, the $2,350 fee is supposed to apply either way. That was a hike from $450 to $2,350 for renouncing, and an even steeper hike–from zero to $2,350–for relinquishment. The U.S. State Department said raising the fee was about demand and paperwork, but American expatriations still grew even after the increase. - Forbes.
Obama Has Launched a New Effort to Help More Immigrants Become US Citizens
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Immigrants take the Oath of Allegiance during a
naturalization ceremony in Washington DC on August 28, 2015. (Photo by
Michael Reynolds/EPA)
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A federal task force created by President Barack Obama to increase the number of immigrants that become naturalized US citizens just kicked off a national tour in Los Angeles, launching a politically controversial effort seen by some conservatives as a way to enroll more Democratic-leaning Hispanic voters for upcoming elections.
Senior White House advisors and members of the Task Force on New Americans met on Friday with LA Mayor Eric Garcetti and local leaders who have been trying to help 750,000 eligible immigrants across the greater LA area gain citizenship.
The task force was created in November, 2014, as part of the president's executive actions on immigration, with the stated goals of increasing funding for programs that help naturalize immigrants, working with city and state governments to increase their ability to help with the process, and to "celebrate 'New Americans,'" according to a 2015 White House report.
The visit to LA comes amid a push by the task force to highlight how some cities and states across the country have opened government offices specifically to help "integrate" immigrants. New York, Illinois, Massachusetts, and Michigan have all opened Offices for New Americans, while Chicago, LA, New York, and Boston are among the cities that have local offices devoted to the cause, according to the report.
Jared Sanchez of the University of Southern California's Center for the Study of Immigrant Integration said the task force is, in some ways, looking to follow the lead of the cities who have already started this work. The meeting Friday in California will highlight efforts to expand access to healthcare, driver's licenses, and college for immigrants, as well as non-profit programs in LA that help individuals apply for citizenship and study for the test, the mayor's office told the Los Angeles Times. The office did not respond to VICE News' request for comment.
"The groundswell is really coming from city level," Sanchez said. "For the federal government, the most important thing to notice is these city offices and groups on the ground already doing the work."
City workers and non-profit groups have stepped up their efforts to reach out to immigrants to explain the benefits of naturalizing: earnings increase 8 to 11 percent after the first three years of citizenship, and individuals can find a more stable sense of place, as well as earning the right to vote in their community, Sanchez said.
"Of course there are the civic benefits: increasing voting, increasing the electorate, especially around upcoming elections, which explains why there's such a focus on naturalizing immigrants now," he added.
Immigrants with lawful permanent resident status — meaning they hold a green card — are eligible to become citizens after five years, or three years if they are married to a US citizen. The programs do not apply to the more than 11 million undocumented immigrants estimated to be living in the United States illegally. Obama has taken executive actions to shield as many as 5 million undocumented individuals from deportation, but the move has been challenged by 26 states in a lawsuit that will be heard by the Supreme Court later this year.
Total deportations in the US have dropped 42 percent since 2012 under the Obama administration, a reversal from Obama's first two years in office, when more immigrants were deported than in any year under George W. Bush. Recently, however, US immigration authorities began rounding up dozens of Central American families who had arrived since May 2014 and who were denied asylum after claiming to have fled violence in their homeland.
Activists suggested that the raids — which were highly publicized and widely criticized by many on the left — were intended to show that the Obama administration is not soft on immigration ahead of the 2016 presidential election, in which Republican candidates have lambasted their Democratic counterparts for their stances on immigration. In particular, GOP candidates and other party leaders have slammed Obama's executive actions.
Texas Senator Ted Cruz called Obama's program to shield young immigrants from deportation "lawless" and "wrong," and claimed that the president has "no legal authority to do what he's doing." Florida Senator Marco Rubio said he "would love to defund the immigration order," while frontrunner Donald Trump has vowed to deport all of the undocumented people in the US and build a giant wall along the US-Mexico border, a project he claims would be paid for by Mexico.
The GOP's bluster has largely ignored the fact that there are millions of legal immigrants in the US, including many that will gain citizenship and become voters in the coming years. The US issues about 1.1 million green cards each year, and the Census Bureau found that by the year 2023, there will be 51 million immigrants in the US, accounting for one in seven US residents.
In LA, task force officials and the mayor met with immigration experts from USC to learn how to effectively reach out to immigrants and help them begin the citizenship process. Sanchez and other researchers at USC have found that a lack of clear information, language barriers, and an ambivalence about putting down roots in the US can often prevent immigrants from initiating the naturalization process, as well as the $685 naturalization fee.
The federal government's infusion of cash into local and state programs could help them waive the fee as well as increase awareness and accessible information, Sanchez said. The task force will meet with other cities around the country to discuss funding and support in during the spring of 2016, according to its 2015 report. - Vice.
