As the U.S. government has once again published its latest quarterly list of the names of Americans whom it says surrendered their U.S. citizenships in the three months to the end of June, experts in the business of assisting Americans to renounce and relinquish their citizenships are again questioning the numbers.
According to the latest quarterly list, which is published on the Federal Register four times year, 733 individuals either handed in their passports or their Green Cards as of June 30, compared with 228 in the first quarter – one of the lowest quarterly numbers in the past five years (see table, above) – and 2,406 in the same period in 2020.
Renunciations/relinquishments in the first half of this year totalled only 961, compared with 5,313 in the same period last year, reflecting the fact that, as reported last August, U.S. officials were evidently working their way through a backlog of names that had built up in previous quarters, a fact that was confirmed anecdotally by a number of renunciants who spotted their names on the 2020 Q2 list, even though they had formally renounced more than a year earlier.
This appears to be the case again this time, according to sources, and postings on social media. "Still waiting for my name to appear, so apparently they haven't reached Sept 2019 yet," @Malichi2067 said on Twitter.
She added: "My son finally appeared... he renounced [in] Feb 2019."
A lawyer who specializes in helping American expats to renounce, meanwhile, said a Green Card holder he knows "received notification from the U.S. authorities that his official 'abandonment' was effective in March of 2021, yet his name was on neither of the two lists for 2021.
"Assuming that the names of Green Card holders who relinquish their permanent resident status are included on the quarterly lists, which we're told they are, and this person's name wasn't on either list, it's difficult to know what any of this stuff actually means."
As reported, more Americans handed their citizenships back to Uncle Sam in 2020 than during any other year to that point, in spite of the fact that U.S. embassies and consulates around the world – which are needed to process such citizenship renunciations – were closed or offering reduced services for most of the year, as many if not most still are, according to renunciation industry sources.
The total number for 2020 was 6,705, more than three times as many as in 2019, and 1,295 more than the previous record-breaking year, 2016, when renunciations totalled 5,410. (See table, below.)
John Richardson, a Toronto-based lawyer and expat rights advocate who specializes in helping American expats to renounce their citizenships, said it was "hard to know what the Q2 numbers mean," but surmised that many of the names were likely to be those of Green Card holders who were handing back their Green Cards, which they're able to do more easily than citizenship-renouncers or relinquishers are able to do, as it can be done by mail, and therefore doesn't depend on the individual in question being able to secure an appointment at a U.S. embassy or consulate.
"Although, at the best of times, these numbers [on the Federal Register] are difficult to understand," Richardson added, noting that the Treasury Department seems to publish them almost as an aside, rather than in the interests of making important information available to the public.
The Federal Register explains that the quarterly list of names is "provided in accordance with IRC section 6039G of the Health Insurance Portability and Accountability Act (HIPPA) of 1996, as amended," and adds that it "contains the name of each individual losing United States citizenship (within the meaning of section 877(a) or 877A) with respect to whom the Secretary received information during the quarter [just ended].
"For purposes of this listing, long-term residents, as defined in section 877(e)(2) [i.e., Green Card holders] are treated as if they were citizens of the United States who lost citizenship."
Richardson and other renunciation experts say that the Federal Register's quarterly list of names is monitored as closely as it is simply because the U.S. government doesn't formally provide citizenship renunciation data anywhere else.
The reason renunciations have been soaring over the past decade, and thus the reason for the interest, is attributed, even by the U.S. government, to the introduction of the Foreign Account Tax Compliance Act, an anti-tax evasion law that was signed into law by President Obama in 2010. It went live in most countries around the world in 2014.
FATCA obliges non-U.S. banks and financial institutions to report to the IRS on the assets of those of their account-holders who have American citizenship, and it has had the effect of shining a spotlight on millions of American expats, many of whom were unaware that they were expected to file U.S. tax returns annually, and in some cases, pay U.S. taxes on certain income.
It has also made life extraordinarily difficult for many expatriates, many of whom find the hassle and cost of having to file annual tax returns and Foreign Bank Account Reports to the U.S. government, coupled with the potential financial risks if they accidentally fail to report something, feel they have little choice but to renounce.
Backlog of those wishing to renounce 'huge'
Like others in the renunciation industry, and those who monitor it, Richardson said that there continues to be a "huge" backlog of American expats who are keen to give up their U.S. citizenships, but can't get the U.S. embassy or consulate appointments they need to begin the process, even though such offices have begun to open up for this purpose in Japan, Australia, Singapore, and, to a limited degree, in Canada.
For this reason, Richardson and others say, there is certain to be a surge in numbers as soon as the renunciation desks reopen -- at least, to the extent that the Federal Register list of names is indicative of what is actually happening.
(To see this quarter's data on the Federal Register's website, along with the data for previous years, click here.)
- AXFNJ Podcast: Dems Abroad’s Rebecca Lammers discusses the ‘suffocating’ U.S. expat tax situation with AXFNJ’s Richardson
- Accidental Americans group launches appeal, after DC court dismisses renunciations case
- Canadian court rules against 'Gwen and Kazia' challenge of FATCA information-sharing law's constitutionality
- New European Parliament 'update' of 2018 report on FATCA said to acknowledge many FATCA critics' concerns
- Mixed response in Expatland as U.S. Treasury unveils plans for new FATCA reporting 'guidance' for 'FFIs'