More Americans living outside the U.S. gave up their citizenship in the first quarter of 2015 than ever before, according to data released Thursday by the IRS.
The 1,335 expatriations topped the previous record by 18 percent, according to data compiled by Bloomberg. Those Americans are driven to turn in their passports in part because of laws that have expanded bank reporting and tax compliance requirements for expatriates.
The increase in early 2015 follows an annual record in 2014, when 3,415 Americans gave up their citizenship.
An estimated 6 million U.S. citizens are living abroad, and the U.S. is the only country within the Organization for Economic Cooperation and Development that taxes citizens wherever they reside.
In many cases, those choosing to give up their citizenship have limited connections to the U.S. and have lived outside of the country for most of their lives. Anyone born in the U.S. automatically receives citizenship, and people born abroad to U.S. parents are typically citizens as well.
For some the decision is easy, because they perceive little benefit from holding U.S. citizenship. For others, the choice is more complicated.
“The cost of compliance with the complex tax treatment of non-resident U.S. citizens and the potential penalties I face for incorrect filings and for holding non-U.S. securities forces me to consider whether it would be more advantageous to give up my U.S. citizenship,” Stephanos Orestis, a U.S. citizen living in Oslo, wrote in a March 23 letter to the Senate Finance Committee. “The thought of doing so is highly distressing for me since I am a born and bred American with a love for my country.”
London Mayor Boris Johnson, who had a tax dispute with the IRS, said earlier this year that he would give up the U.S. citizenship he received because he was born in New York. His name isn’t on the IRS list. Eduardo Saverin, a Brazilian-born co-founder of Facebook Inc., gave up his U.S. citizenship in 2012.
U.S. citizens who live abroad can exclude as much as $100,800 in earned income and in many cases can receive tax credits for payments to foreign governments.