More Americans Renounce Citizenship During First Quarter of 2011

The number of wealthy Americans who have renounced their US citizenship or terminated long-term permanent residency for tax purposes has been rising is recent quarters, according to information published by the Treasury Department.

A total of 499 Americans gave up their citizenship – or expatriated -during the quarter ending March 31, 2011. Although it is not the largest number to expatriate during a single quarter, the quarterly average is steadily rising. For instance, a graph compiled by international tax attorney Andrew Mitchell found that the average number of expatriates during the first quarter of the past seven years has hovered around 115.

In an email to the New York Times, Mitchell said two tax-related changes have inspired more people to give up their US citizenship. In 2008, expatriation rules were changed allowing nonresidents to visit the US for 120 or more days without being taxed as US residents. Regulations before 2008 required individuals visiting the US for more than 30 days during the 10-year period after an expatriation to be treated as a US resident that year for tax purposes.

Mitchell also said rich Americans with dual citizenship may be revoking their US citizenship to avoid the hassle of US tax filing rules. The US is one of the only nations in the world that requires citizens living permanently in other countries to file tax returns in their home country.

As many as 743 people with American citizenship or permanent residency renounced their US citizenship in 2009, almost three times as many as in 2008.