Renouncing U.S. citizenship has risen sharply in recent years, but the process remains more complex than many headlines suggest.
In 2020 a record 6,707 Americans formally gave up their citizenship—a 237 % jump from 2019, according to data compiled by the State Department and reported by Axios. The surge continued despite the COVID‑19‑related closure of many U.S. embassies and consulates, which slowed processing in 2021.
Why people are renouncing
- Tax considerations – The United States taxes citizens on worldwide income, regardless of residence. Proposed tax and estate reforms under the Biden administration have heightened concerns among high‑net‑worth individuals.
- Administrative burdens abroad – Since the enactment of the Foreign Account Tax Compliance Act (FATCA) in 2010, expatriates face increased reporting requirements and penalties, prompting some to seek a clean break.
- Practical obstacles tied to U.S. citizenship – In certain countries, U.S. citizens encounter difficulties obtaining mortgages, opening savings accounts for children, or accessing local services, even when their tax burden is comparable to that of residents.
The renunciation process
- Be outside the United States – Renunciation cannot be completed on U.S. soil; it must occur at a U.S. embassy or consulate.
- Schedule an appointment – Applicants request a “renunciation of nationality” appointment through the embassy’s website or by phone. Availability varies widely; some posts accept non‑residents, others require six‑month residency, and a few allow a preliminary interview by phone followed by an in‑person oath.
- Submit required forms – The primary document is Form DS‑4080 (Oath of Renunciation). Additional paperwork includes a passport, proof of identity, and a completed Form 8854 (Exit Tax) for the IRS.
- Pay the fee – As of the latest data, the State Department charges $2,350 per renunciation.
- Take the oath – The applicant must appear before a consular officer, swear an oath of renunciation, and receive a Certificate of Loss of Nationality.
Processing times can extend several weeks to months, especially where embassy staffing is limited. The State Department publishes a quarterly list of individuals who have successfully renounced, but the list often lags behind actual filings.
Embassy capacity constraints
- COVID‑19 closures – Many posts were shuttered in 2020, reducing the number of locations where renunciations could be processed.
- Appointment backlogs – Lawyers cited estimates of 20 000–30 000 people wanting to renounce but unable to secure appointments, indicating that demand exceeds current consular capacity.
- Geographic disparities – Larger missions (e.g., in Switzerland, the United Kingdom, Canada) historically have longer wait times, while smaller posts may accept non‑resident applicants more readily.
Risks and considerations
- Loss of consular protection – Former citizens no longer have access to U.S. embassy assistance abroad, which can be critical in emergencies.
- Exit tax liability – The IRS may impose an “exit tax” on certain high‑net‑worth individuals, calculated as if all assets were sold on the day of renunciation.
- Future travel restrictions – Renouncing can affect visa eligibility for the United States and may complicate re‑entry for business or family reasons.
- Irreversibility – Restoring U.S. citizenship is possible only through naturalization, which involves a new application, residency requirements, and the associated fees.
Practical steps for prospective renunciants
- Secure alternative citizenship – Most applicants obtain a second passport (often from Caribbean nations) before renouncing to maintain travel flexibility.
- Confirm embassy appointment policies – Check the specific U.S. mission’s website for residency requirements, required documentation, and whether a phone interview is permitted.
- Prepare tax filings – Complete Form 8854 and consult a tax professional to assess exit tax exposure.
- Budget for fees and travel – In addition to the $2,350 renunciation fee, factor in travel costs to the embassy and any legal assistance fees.
While the process has become more time‑consuming due to pandemic‑related closures and limited consular resources, renouncing U.S. citizenship remains legally possible. Prospective renunciants should conduct thorough research, secure a reliable second nationality, and plan for the tax and logistical implications before proceeding.
