You’ve probably heard of Eduardo Saverin, a co-founder of Facebook who made billions of dollars and then renounced his U.S. citizenship in order to avoid tax consequences. While most of us will never come close to what Mr. Saverin made, there has been an increase in Americans renouncing their citizenship in the last few years. While reasons often vary from individual to individual, the overriding theme is usually that American expats loathe having to report all worldwide income to the IRS every year – even if they no longer reside in the United States.
While cross border tax issues are beyond the scope of this article, the fact is that Americans do have the option to renounce their citizenship if they choose. Furthermore, the process is much less complicated than people may think. Generally speaking, the applicant has to make an appointment at a U.S. consulate and attend an interview before a consular officer – stating his/her intent to renounce U.S. citizenship.
The decision to give up U.S. citizenship is an important one. Those considering this should ensure that they are citizens of another country – otherwise they could be rendered stateless (a citizen of no country). Furthermore, renouncing citizenship is permanent – you cannot reverse the decision if you change you mind later on. Once you give up your citizenship, you can no longer live, work or otherwise reside in the United States on a permanent basis without first acquiring an appropriate visa or green card.