A recent New York Times article has highlighted the small but growing number of people who give up their US citizenship; more than twice as many people expatriated themselves in the last quarter of 2009 as in all of 2008.   US citizenship can be explicitly renounced by making a statement to that effect before a US diplomatic or consular officer outside the United States (except in time of war).  Alternatively it can be relinquished by undertaking one of a number of acts, such as naturalizing in another country, if one does so with the intention of abandoning one’s US citizenship.¹   For a full discussion of renunciation and relinquishment of citizenship, see our article US Citizenship—Having It, Getting It, Giving it Up.

Reasons for the highly personal decision to expatriate oneself vary widely.   Some people become US citizens simply by being born in the US and have no emotional or social ties to the country.²    They find onerous the requirements imposed by their US citizenship, such as the potential for Selective Service obligations and the requirement that they travel to the US only on a US passport. Boris Johnson, now London’s mayor, famously renounced in 2006 the US citizenship he had acquired through being born in New York and said ‘What I want is the right not to have an American passport.’

Similarly, some people are born US citizens through transmission of citizenship from a parent, have few ties to the United States, and do not regard themselves as ‘American’ in any way that is important to them.  Others may have been born and bred in the US but have since made their home abroad and wish to formalise their identification with their new country by giving up their obligations and allegiance to the United States. 

In 1996 Congress enacted a sweeping change to US immigration law—the ‘Illegal Immigration Reform and Immigrant Responsibility Act.’  It includes a provision, known as ‘the Reed Amendment,’ making inadmissible to the US and ineligible for a visa any former US citizen who officially renounces US citizenship and is determined by the Attorney General to have done so for the purpose of avoiding taxation by the US.   The provision can be found in section 212(a)(10)(E) of the Immigration and Nationality Act. The exclusion applies only to former US citizens who lost citizenship by officially renouncing citizenship on or after September 30, 1996.  To see the Department of State’s limited regulations on the subject, click here.

In 2008 the fraught issue of taxes and US citizenship was given an additional level of complexity by the passage of the ‘Heroes Earnings Assistance and Relief Tax Act’ (‘the HEART Act’).   That law imposes an ‘exit tax’ upon certain persons who relinquish or renounce their citizenship, mandating that the property of such persons  ‘shall be treated as sold on the day before the expatriation date for its fair market value’ and taxed accordingly.  

The existence of the Reed Amendment and the HEART Act’s exit tax make it more important than ever that all persons desiring to relinquish or renounce their US citizenship obtain both US tax and immigration advice before undertaking such action. 

 
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¹   The Supreme Court of the United States, in the 1967 decision Afroyim v. Rusk, held that US citizens have a constitutional right to remain citizens unless they voluntarily relinquish that citizenship.