The federal government takes renunciation of U.S. citizenship extremely seriously and requires petitioners to adhere to strict procedures for reversing naturalization.
Renunciation is governed by Section 349(a)(5) of the Immigration and Nationality Act (INA). The U.S. Department of State oversees the process.
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First, an individual seeking renunciation must appear in person at a U.S. embassy or consulate outside the United States. The petitioner, in effect, forfeits the right to be in the country to travel freely here. Some exceptions are allowed during wars and special circumstances.
During the appearance before a U.S. consular or diplomatic officer, the petitioner must sign an oath of renunciation. The State Department warns that Americans cannot renounce their citizenship “by mail, through an agent, or while in the United States.” Exceptions are virtually nonexistent.
Renunciation is an all or nothing proposition. A petitioner cannot choose to retain some privileges of citizenship and discard other parts of it. The State Department will reject renunciation requests that are not total and unconditional.
Unless petitioners hold citizenship with another nation, they will become stateless and without government protections after the renunciation is completed. The State Department warns that individuals receiving renunciation could find themselves without a passport and unable to travel if they have no other national allegiance.
Don’t even think about petitioning for renunciation if the intent is to avoid taxes, or military service or prosecution for crimes. It won’t absolve you from paying what you owe the Internal Revenue Service or get you out of the Army if you owe it service. People who have committed crimes in the United States won’t get a pass if they leave the country and renounce their citizenship.
The United States is one of only a handful of nations that taxes based on citizenship rather than residency. People who renounce their U.S. citizenship may be subject to an expatriation tax that can also apply to green card-holders as well as citizens.
Eduardo Saverin, the Brazilian internet entrepreneur who helped Mark Zuckerberg found Facebook, caused a stir before the company went public in 2012 by renouncing his U.S. citizenship and taking up residency in Singapore, which does not permit dual citizenship. Saverin was able to avoid capital gains taxes on his Facebook stock but was still liable for federal income taxes. He also faces an exit tax the estimated capital gains from his stock at the time of renunciation in 2011.
Saverin’s renunciation provoked a backlash in Congress. Sen. Charles Schumer, D-N.Y., and Sen. Bob Casey, D-Pa., introduced legislation known as the Ex-Patriot Act that would levy capital gains taxes of 30% on people who try to avoid their liability by giving up their citizenship.
Saverin’s family moved to the United States in 1992 and he became a citizen in 1998. It is unknown whether the government will allow him a visa to enter the United States in the future.
Schumer called Saverin’s renunciation “outrageous” and accused him of being ungrateful to the country that enabled him to become a billionaire.
Parents cannot renounce the U.S. citizenship of their minor children. The children themselves must convince a U.S. diplomatic or consular officer that they are voluntarily giving up their citizenship.
There is no turning back once renunciation is granted. Giving up U.S. citizenship is considered permanent. However, some latitude is allowed for children under 18 who renounced their citizenship. They can petition for reinstatement after they turn 18.
Though the annual number of renunciations is quite small, more Americans have sought to give up their citizenship in recent years to avoid taxes and seek relief from the sagging economy.
According to government statistics, 235 citizens received renunciation in 2008, about 740 in 2009, 1,485 in 2010 and 1,781 in 2011. It can take months to formally receive renunciation after the interview, and the government charges a fee of $450 to process the request.
The government publishes the names of those receiving renunciation in the Federal Register.