If you wanna go the way of Tina Turner and formally renounce your U.S. citizenship, you have less than a week to pay the rate the famous diva would have last year.
Beginning Sept. 12, the State Department is increasing fivefold the fee it charges Americans to cut ties with the (overtaxed?) land of the free. It used to cost $450 to go through the lengthy process of permanently leaving the United States. It will now cost $2,350 to officially hand over your U.S. passport.
In announcing the fee change last week, State described the process as “extremely costly,” including two “intensive interviews” where the consular officer ensures that the American “fully understands the consequences of renunciation.” (No more apple pie and baseball games.)
There’s been a surge in expatriations in recent years. “Through the first half of this year 1,577 Americans worldwide renounced their citizenship or gave up their green cards. In 2013, a record 3,000 of Americans renounced, up from just a few hundred a year in the mid-1990s and early 2000s,” according to a story in Canada’s Globe and Mail.
Many Americans living abroad are frustrated by U.S. tax laws that require them to still pay the Internal Revenue Service on salaries earned in other countries. A 2010 law, the Foreign Account Tax Compliance Act, sought to crack down harder by requiring foreign banks to report on American accounts. It was intended to make it more difficult for tax-evading Americans to hide money in offshore accounts.
People are sure to be upset. But the new fee is chump change for the very wealthy compared to the potential tax savings, right?