US News

More Americans living abroad are ditching citizenship over tax regulations, report says

While the summer’s political conversation has been dominated by plans to increase legal immigration to the United States, a record number of expats living in Asia are ditching their citizenship over taxes and paperwork woes.

The Wall Street Journal reports that more than 1,000 Americans renounced their U.S. citizenship in the second quarter of 2013, an increase over recent years. Many of those are concerned about paperwork burdens imposed by the Foreign Account Tax Compliance Act, or Fatca, the law designed to stop overseas tax evaders, several lawyers told the Journal.

“When I became an immigration lawyer 30 years ago, people really were excited about going to America. Now, more than half of my clients are people thinking of other alternatives rather than people seeking to immigrate to America,” said Eugene Chow, the principal of Chow King & Associates in Hong Kong. “My mentor, who is in his early 80s, said to me, ‘You became an immigration lawyer to fulfill the American dream, and now you are helping people leave.’ “

The 1,130 people who renounced their citizenship in the second quarter is higher than the previous record, set in the first quarter of this year, of 679, and is more than all the people who gave up their citizenship in 2012, the paper reported,

A popular alternative is to establish citizenship in places like Hong Kong, which caps taxes at 10 percent, the Journal reported.

“My decision was less about the actual amount of taxes I had to pay, and more about the system,” an investment banker who renounced his U.S. citizenship and is now a Hong Kong citizen, told the paper. “I’m not an ultrawealthy dude. It was the hassle with all the paperwork.”

There are more than 6 million US citizens living abroad, the Journal reported.

Read more: http://online.wsj.com/article/SB10001424127887323585604579007860126146566.html?mod=WSJ_MIDDLENexttoWhatsNewsSecond