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Cutting ties with the US -

In 2024, nearly 5,000 individuals officially renounced their US citizenship, according to a February 2025 notice from the Internal Revenue Service published in the Federal Register.

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Turning away from the "American Dream" -

In 2009, renunciations of US citizenship was under 750 per year. So why this upward trend, and what are the consequences of making such a move?

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Consequences of renouncing US citizenship -

Americans renouncing or losing their citizenship both result in them no longer being US citizens.

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An irrevocable act -

Loss of US citizenship is a serious and generally irrevocable act. It cannot be canceled or set aside without successful administrative or judicial appeal.

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Reasons for renunciation -

Yet despite the implications, in the last decade a growing number of US citizens have been voluntarily renouncing their citizenship. But why are so many people feeling compelled to explore this option?

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Turbulent times -

The United States is experiencing one of the most turbulent periods in recent history.

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A better future? -

As the political landscape of the country continues to evolve, many individuals are contemplating what to do about their future.

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Why would someone voluntarily give up their citizenship? -

The uncertainties surrounding the government's policy directions, such as on immigration, climate change, abortion, and LGBTQ+ rights, have made many question their allegiance to the flag.

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Financial freedom -

Other reasons include the financial freedom renouncing citizenship affords.

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Citizenship-based taxation -

American citizens living abroad are taxed by the US and their country of residence on the same income. This is known as double taxation.

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Tax burdens -

Although tax treaties between the US and particular countries can reduce this burden, they don't eliminate it entirely.

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Gaining financial control -

Some people therefore renounce US citizenship to escape complex tax obligations. For Americans earning and investing abroad, renouncing can mean keeping more of their money, thus avoiding IRS scrutiny and gaining full financial control.

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Accidental American -

An accidental American is one that holds dual citizenship with the United States and another country without realizing their US citizenship status.

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A citizen by default -

These individuals were either born in the US but left when they were young, or were born abroad to US parents and became citizens without ever living in the United States.

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Same fiscal obligations -

Even though they might only have minimal personal or cultural ties to the United States, an accidental American still faces the same tax obligations as any other US citizen.

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Risk of penalties -

Failure to file and pay US taxes can mean paying thousands of dollars in penalties. This reason alone is enough for some to renounce their US citizenship.

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Family matters -

Family and career commitments can sometimes prompt renunciation of citizenship. Building a life often involves settling down, marrying, and raising children. As previously outlined, dual citizenship can complicate legal and financial matters, leading some to simply turn their backs on the United States.

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What happens when you renounce your US citizenship? -

People who renounce their US citizenship lose all rights and privileges associated with being a US citizen.

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What you lose -

These privileges include the right to live and work in the United States, and access to US consular services.

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Generational considerations -

Renunciation also results in being unable to pass citizenship to your children.

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Loss of US passport -

Renouncing US citizenship means the loss of your passport. The American passport in 2025 is ranked 9th among global passports, according to the Henley & Partners Passport Index.

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The need for a visa -

Former US citizens will need a visa to travel to the United States, and there's no guarantee of entry, especially if you have any legal or financial issues with the US government.

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Remaining tax obligations -

In fact, renouncing your US citizenship doesn't immediately cancel your tax obligations.

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Final tax returns -

You are still required to file a final tax return covering income up to the date of renunciation, and all previous tax responsibilities must be settled before the IRS considers your renunciation complete.

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Possible legal recriminations -

Renouncing citizenship does not exempt you from potential prosecution for crimes committed or financial obligations incurred while a US citizen.

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Exit tax -

Americans bidding farewell to their citizenship may also be liable for exit tax. Also known as an expatriation tax, it essentially looks at all untaxed assets and creates a final lump sum, that is then paid to the inland revenue service.

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How to renounce US citizenship -

Taking an oath of renunciation is the most unequivocal way in which a person can manifest an intention to relinquish US nationality.

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Required documentation -

Documentation required to ensure a smooth and successful renunciation process includes proof of US citizenship (passport, birth certificate, etc.), all completed forms, and if you hold another nationality, your foreign passport as proof of your dual citizenship.

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Signing off on renunciation -

The renunciation process is carried out during a scheduled appointment at a US embassy or consulate. 

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Don't become "stateless" -

Remember that before officially becoming a non-US citizen, you must first obtain a second passport or citizenship from another country. Not to do so may render you "stateless." 

Sources: (NNU Immigration) (USA.gov) (U.S. Department of State) (IRS) (Expat Tax Online) 

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