Almost 80% of Americans living abroad are considering relinquishing their U.S. citizenship to escape the consequences of the Foreign Account Tax Compliance Act, according to deVere Group. That represents an increase of 11 points since last year.
The Foreign Account Tax Compliance Act, or FATCA, requires U.S. taxpayers to report certain foreign financial accounts and offshore assets, and requires foreign banks to disclose information on accounts held by U.S. taxpayers. It was passed as part of the Hiring Incentives to Restore Employment (HIRE) Act in March 2010, and took effect July 1.
In a survey released Tuesday of over 400 American expat clients, deVere Group found 79% of respondents said they had “actively considered,” were “thinking about,” or had “explored the options of” renouncing U.S. citizenship.
However, the U.S. State Department noted on its website that anyone considering such a drastic — and irrevocable — step “should be aware of the fact that renunciation of U.S. citizenship may have no effect whatsoever on his or her U.S. tax” obligations.
Fourteen percent of respondents said they would not consider relinquishing their citizenship.
When asked the same question in November, just 68% of respondents agreed they were considering taking that step.