Americans living overseas are not able to renounce their U.S. citizenship while banks threaten to close their accounts.

According to the Washington Post Americans living overseas are not able to renounce their U.S. citizenship while banks threaten to close their accounts.

Aline, 59, a nurse who lives in 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 (SSN). She’d had little to do with the United States since leaving the United States 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.

RECORD NUMBER RENOUNCE U.S. CITIZENSHIP

She is not alone. U.S. government data suggest that a record number of Americans are seeking to give up citizenship this year. But disruptions to consular services around the world have made it nearly impossible for some Americans to stop being American.

A large group of U.S. citizens abroad said corona-related restrictions had delayed their plans to renounce U.S. citizenship. The potential consequences: closed bank accounts, canceled loans and disrupted lives.

A State Department spokesperson, 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. 

TAXES REASON TO RENOUNCE U.S. CITIZENSHIP

Citizenship renunciation is surging. State Department releases suggested that 5,816 Americans gave up their citizenship in the first half of 2020, heading toward a record.

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. 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.

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 (FATCA) that required all non-U.S. financial institutions to search their records for U.S. citizens and permanent residents, and report them.

FREE U.S. tax guide for Americans abroad

The only e-book about U.S. international taxation, which you need to read as U.S. expat:

1. Foreign Tax Credit vs. Foreign Earned Income Exclusion

2. What is the danger of holding a Controlled Foreign Corporation?

3. Why more and more people are renouncing U.S. citizenship?

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