Growing numbers of Americans renounce United States citizenship

A record 2,999 Americans renounced their US citizenship last year, with many and varied reasons for making the once-inconceivable decision

PUBLISHED : Monday, 28 April, 2014, 5:04am
UPDATED : Monday, 28 April, 2014, 5:04am


Inside the long-awaited package, six pages of government paperwork dryly affirmed Carol Tapanila's anxious request. But when Tapanila slipped the contents from the brown envelope, she saw there was something more.

Her United States passport had four holes punched through it from cover to cover. Her departure from life as an American was stamped final, with the words: "Bearer Expatriated Self."

With the envelope's arrival, Tapanila, who has lived in Canada since 1969, joined a largely overlooked surge of Americans rejecting what is to many a highly sought prize: US citizenship.

Last year, the US government reported a record 2,999 people renounced citizenship or terminated permanent residency. Most were widely assumed to be driven by a desire to avoid paying taxes on hidden wealth.

The reality is more complicated. The government's pursuit of tax evaders among Americans living abroad is indeed driving the jump in abandoned citizenship, experts say. But renouncers - whose ranks have swelled more than five-fold from a decade ago - often contradict the stereotype of the financial scoundrel. Many are from vastly different economic circumstances.

Some call themselves "accidental Americans" who recall little of life in the US, but long ago happened to be born in it. Others say they renounced because of politics, family or personal identity. Some say signing away citizenship was a huge relief. Others recall being sickened by the decision.

One of the few times rejected US citizenship has received significant attention was Facebook co-founder Eduardo Saverin's 2011 decision to turn in his passport after moving to Singapore. Saverin probably avoided millions of dollars in taxes by doing so shortly before Facebook's initial stock offering.

Other wealthy Americans have relinquished citizenship. Denise Rich, the ex-wife of pardoned trader Marc Rich, expatriated in 2012 and lives in London. Last autumn, singer Tina Turner, a resident of Switzerland since 1995, relinquished her US passport.

In recent years, federal officials have increased pursuit of potential tax evaders, using a law that requires Americans overseas to report assets to the IRS or pay stiff penalties.

Those trying to comply complain of costly fees for accountants and lawyers, having to report the income of non-American spouses, and decisions by some European banks to close accounts of US citizens or deny them loans.

Decisions to renounce "are driven by a whole range of emotional considerations. You've got anger, you've got fear, you've got a strong sense of indignation", said John Richardson, a Toronto lawyer who advises people on expatriation. "For many of these people, this is not a tax issue at all."

Sports played the central role in Quincy Davis' decision. Davis, raised in Los Angeles and Alabama, played professional basketball in Europe. By 2011, he was home studying to become a firefighter when he was offered a spot on a Taiwanese professional squad. He has since helped lead the Pure Youth Construction team to two championships.

When the team's owner suggested last year that he join Taiwan's national team, Davis says he found little motivation to keep his US citizenship.

"When you think about who I am as a black guy in the US, I didn't have opportunities," he said. "You get discriminated against over there in the south. Here everyone is so nice. They invite you into their homes, they're so hospitable. ... There's no crime, no guns. I can't help but love this place."

Until the 1960s, US citizenship remained a privilege the government could take away on certain grounds. It's only since then that US citizenship has come to be viewed as belonging to an individual, who could keep — or surrender it — by choice.