Citizens Find NonCitizenship A Good Thing : A Profit Motive

Interesting - I wonder why this never happened with George Bush as president? Maybe it's the progressive socialists Democrats that are driving people to leave the country as they pursue their collective agenda of "redistribution of wealth". This tactic applies to everyone except those in power, they get a pass as they have with ObamaCare.

What's good for goose is not necessarily good for the gander.

Number of Americans Renouncing Citizenship Surges
Source: Liam Pleven and Laura Saunders, "Number of Americans Renouncing Citizenship Surges," Wall Street Journal, August 9, 2013.
August 15, 2013

The number of U.S. taxpayers renouncing citizenship or permanent-resident status surged to a record high in the second quarter, as new laws aimed at cracking down on overseas assets increase the cost of complying and the risk of a taxpayer misstep, says the Wall Street Journal.

• A total of 1,130 names appeared on the latest list of renunciations from the Internal Revenue Service, according to Andrew Mitchel, a tax lawyer in Centerbrook, Conn., who tracks the data.
• That is far above the previous high of 679, set in the first quarter, and more than were reported in all of 2012.
• Taxpayers aren't required to explain the move, but experts say the recent rise is likely due to tougher laws and enforcement.

Lags in reporting renunciations might mean that many who appeared on the current list made the move months earlier. Taxpayers who renounced can be subject to an exit tax, and people who renounced last year may have avoided higher taxes on capital gains and income that went into effect in 2013.

The United States is rare in that all income earned by citizens and permanent residents, even those living abroad, can be subject to U.S. tax, according to Bryan Skarlatos, a New York lawyer. The United States also confers citizenship on people who are born on American soil.

The United States launched the tax crackdown after the terrorist attacks of Sept. 11, 2001, and ratcheted up its efforts after 2009, amid evidence that UBS AG and other foreign institutions helped U.S. taxpayers hide assets.

• Some taxpayers have applied for IRS limited-amnesty programs, in which they pay stiff penalties for past noncompliance but avoid prosecution.
• Tax lawyers say the crackdown has ensnared smaller violators who weren't intentionally evading U.S. taxes.
• In addition, a law enacted in 2010, the Foreign Account Tax Compliance Act, requires foreign financial institutions to certify they aren't hiding U.S. taxpayer assets, which lawyers say is leading some to reject U.S. customers.
• Taxpayer penalties for failing to report assets can be severe, including up to 50 percent of an account balance for each year.

Expatriation can also be costly, requiring that taxpayers prove they have properly paid five years' taxes, among other things.