A total of 2,909 Americans renounced their US citizenships within the first three months of 2020, according to Internal Revenue Service (IRS) data highlighted on Tuesday by enrolled agents and accountants at Bambridge Accountants New York.
This presents a 1,015% increase from the 261 Americans that ditched their citizenships in the previous three-month period, as reported by the IRS for its fourth quarter of 2019.
Moreover, the latest record of renunciations also surpassed the total 2,072 cases documented by the federal government in all of 2019.
Bambridge Accountants noted in its Tuesday news release via Newswire.com that 2020’s first quarter now holds the US record for the highest number of citizenship renunciations in any quarter observed in recorded IRS history. The fourth quarter of 2016 previously held the title, with 2,365 cases.
While a 10-fold increase in severed ties from the US is quite a leap in terms of statistics, the firm explained that the increase may be representative of American expatriates’ efforts to avoid hefty expenses paid to the US government while they are physically overseas.
Despite the fact that it costs approximately $2,350 in government fees to renounce one’s US citizenship, Alistair Bambridge, partner at Bambridge Accountants, says that cost is well worth it for many in the long run.
“For US citizens living abroad, they are still required to file US tax returns, potentially pay US tax and report all their foreign bank accounts, investments and pensions held outside the US. For many Americans this intrusion is too much, and they make the serious step of renouncing their citizenship, as they do not plan to return to live in the US,” Bambridge asserted in the company release.
He also claimed that the global COVID-19 pandemic allowed many individuals the much-needed time to catch up on matters previously placed on the backburner, such as citizenship.
“The surge in US expats renouncing from our experience is that the current pandemic has allowed individuals to get their affairs in order and deal with an issue they may have been putting off for a while,” Bambridge said.
However, those who renounced their citizenship did not receive their estimated $1,200 relief check from the US government stimulus package, he noted. At the same time, there are clear benefits to the trade-off, such as not having to file US tax returns and pay taxes and also not being tied to the US’ dangerously crippled economy.