Law Offices of Connie Yi, PC - estate planning
Tell Us About Your Case

For the safety of our community, clients and staff, we have suspended all in-person meeting effective March 17, 2020. All consultation meetings will be via Phone or Zoom Video Conferencing. Please contact us at 925-484-0888 or email us directly at [email protected] to schedule the consultation.

Bay Area Estate And Tax Planning Law Firm
Estate Planning
Trust Administration and probate

Does it make financial sense to give up citizenship?

| Mar 14, 2014 | Uncategorized |

It may sound at first like a political talking point to say that there are more and more Americans giving up citizenship because of high tax rates, however, recent data shows that in fact more people are pursuing this option and that in many cases it can be linked to taxes. In 2013 3,000 Americans decided to give up their citizenship, according to government publications. This is a major increase from the previous year, when only 993 people gave up their citizenship.

Looking back even further to the first stages of the financial crisis before the IRS had begun to crackdown on overseas taxpayers, only 231 people gave up their citizenship in 2008. A poll conducted by a financial consultancy group found that 68 percent of Americans living abroad had considered tax issues in assessing whether to maintain their citizenship.

The United States is unique in the fact that citizens living abroad must continue to pay taxes even if they do not earn money or have assets in the United States. Only one other country bases their taxes on nationality, the north African country of Eritrea.

The reason that people would consider giving up their citizenship is that this tax policy results in double-taxation for income earned abroad. It also gives rise to costs from tax preparation and compliance efforts, which can be time consuming and difficult. Calculating taxes incorrectly or making a mistake about what to report to the IRS can lead not to just to fines, but to prosecution for tax evasion, so the stakes are high.

Source: USA Today, “Americans abroad find citizenship too taxing to keep,” Kim Hjelmgaard, March, 8, 2014


FindLaw Network

Recent Blog Post

Is estate planning necessary for young people?

Misconceptions exist about the relationship between age and estate planning. Yes, older people may prioritize estate planning for reasons related to advancing age and health concerns. That does not mean only older California residents benefit from the process. Young...

What are the responsibilities of a fiduciary?

Residents of California may want to learn more about the role of the fiduciary and their responsibilities. Because fiduciary duty may be a requirement among certain professions, clients and professionals should know more about what this is. The meaning of fiduciary...

5 factors to consider when choosing a guardian

For parents, one of the biggest reasons they decide to create an estate plan is to ensure their child will be cared for no matter what. It isn’t easy to think about a tragedy where a child may lose both their parents before they turn 18, but parents have to plan for...

View More Blog Posts