Aline, 59, a nursing assistant who lives in Bayonne, France, said she was shocked to receive a letter from her bank in February warning that her account would be closed if she could not provide a U.S. Social Security number. She’d had little to do with the United States since leaving California as a baby.
When she tried to arrange an appointment to apply for one at the U.S. Embassy in Paris, she found that the service had been suspended during the novel coronavirus pandemic.
Months later, after receiving another warning from her bank, she decided to renounce her U.S. citizenship. “I never thought of myself as an American,” she said. But neither the embassy nor other U.S. consulates in France would process her request. The service had ground to a halt worldwide.
“It seems to me that the U.S. administration is doing everything to prevent us from renouncing U.S. citizenship,” she said.
Aline is not alone. U.S. government data suggests that a record number of Americans are seeking to give up citizenship or permanent residency this year. But disruptions to consular services around the world have made it nearly impossible for some Americans to stop being American.
“The hurdles have never been higher,” said Peter Spiro, an expert on dual citizenship at Temple University School of Law.
The Washington Post spoke to a half-dozen U.S. citizens abroad who said pandemic-related restrictions had delayed their plans to give up their citizenship. The potential consequences: closed bank accounts, canceled loans and disrupted lives.
Like Aline, most spoke on the condition that their full name remain private, as they were figuring out compliance with U.S. tax law. Many others did not want to publicize their plight at all.
Fabien Lehagre, the leader of the Paris-based Association of Accidental Americans, said he was working with about 100 U.S. citizens who wished to renounce citizenship but were unable to — himself included.
A State Department spokesperson, speaking on background because of department rules, said that cutbacks to consular services, which began in March, were meant “to protect our customers, our workforce and public health worldwide,” and that the department had begun a “phased resumption of routine consular services.”
But for many people struggling in financial limbo, that may be too little, too late.
Citizenship renunciation is surging. Data released by the Internal Revenue Service suggests that more than 6,000 people have either chosen to expatriate from the United States or give up U.S. permanent residency in the first three quarters of the year, already the highest figure for at least a decade.
“I speak to U.S. citizens on a daily basis who are looking to renounce their citizenship,” said Alistair Bambridge, an accountant based in New York. “There will be a large wave of U.S. citizens renouncing their citizenship once they are able to book appointments again.”
Reasons to give up a U.S. passport vary. Bambridge said that in his experience, some of those looking to give up their citizenship were doing so because they “have had enough of President Trump,” or pandemic chaos that has weakened the prestige of an American travel document. But for the most part, it comes down to taxes.
The United States bases its taxation requirements on citizenship rather than residency, unlike almost every other nation, and those born in the country automatically become citizens, which means many thousands of people with few ties to the United States are required to file U.S. taxes.
Citizens abroad were long often able to ignore these laws if they did not have significant U.S. connections.
But in 2010, hoping to curtail tax evasion, the United States passed a law called the Foreign Account Tax Compliance Act that required all non-U.S. financial institutions to search their records for U.S. citizens and permanent residents, and report them. Banks were expected to become compliant by 2020 or have a 30 percent withholding tax on all U.S. income.
Although the majority of U.S. citizens who live abroad do not owe any U.S. taxes, coming into compliance with U.S. laws can be confusing and costly. As can renouncing citizenship: In 2014, the fee for renouncement rose 422 percent, to $2,350.
A little-noticed provision in tax cuts pushed by the Trump administration, calling for a one-time tax on assets controlled by U.S. businesses, made the burden worse for many small-business owners, including doctors in parts of Europe who operate as private corporations.
Renunciation can be a long process. Even some who set it in motion before the pandemic said their plans were derailed.
Patrick, 51, an office worker who lives in Ghent, Belgium, said that he first visited the U.S. Embassy in Brussels to discuss his plans to renounce citizenship in September 2019. This year, he had three appointments canceled. He doubts that he will be able to drop his citizenship before the end of 2021.
Born in Georgia to parents studying there, he returned with them to Belgium when he was 2 months old. Although his bank is threatening to close his shared account with his wife, he said that U.S. officials have offered little help.
“They say I am an American citizen because I was born there,” Patrick said, “but they don’t even help American citizens.”
The problem is global. Sean Golding, a tax lawyer based in California, said that about half of his clients looking to renounce their citizenship live in Asia, and that the issue remains acute in Europe, where the coronavirus is raging and banks have seen huge fines over U.S. sanctions violations.
Carrie, 51, a doctor living in Amsterdam, said that without an avenue to renounce citizenship, she is unable to open a bank account for her teenage son or get a mortgage to buy a new home.
“It’s like a Kafka story,” she said, or “as if my identify was stolen.”
Carrie spoke to The Washington Post last year about the unexpected effect of the 2017 U.S. tax law on her Dutch savings. She was told by accountants that she may owe more than $107,000 in U.S. taxes under the new rules, but what little progress she made last year in collecting documents to get a Social Security number and file taxes was curtailed when consular services stopped.
The very wealthy still have options. Since 2016, the number of registered tax advisers with foreign addresses has increased, according to IRS data. Both Golding and Bambridge said that they knew of clients who had traveled to places such as the Bahamas or Panama to receive U.S. consular services.
But for health care-workers such as Carrie and Aline, already working long hours during the pandemic, there is no easy way out.
Those seeking to give up their citizenship have resorted to forming groups to pressure the State Department. Daan Durlacher, the founder of the Dutch organization Americans Overseas, said he had spoken with Peter Hoekstra, the U.S. ambassador to the Netherlands.
Hoekstra, a Trump appointee, was understanding but unhelpful, Durlacher said. “The only thing that they say is, yes we are aware of the problem,” Durlacher said. “They simply do not understand what an unbelievable, strange and impossible situation these people are in.”
Aline said she would be joining a lawsuit to challenge the fee for renouncing citizenship. She still hopes to give up her passport.
“We should have the right to choose the country we want,” she said.