A record 4,279 people renounced their U.S. citizenship or long-term residency in 2015, according to new data released by the Treasury Department.
Last year was the third year in a row that renunciations have increased to record levels and the number of people dropping their U.S. citizenship increased by over 1,000 since 2014, according to the data.
“An increasing number of Americans appear to believe that having a U.S. passport of long-term residency isn’t worth the hassle and cost of complying with U.S. tax laws,” Andrew Mitchel, an international lawyer in Centerbook Conn., who tallies and tracks the data told the Wall Street Journal.
Experts say the growing number of renunciations is related to an enforcement campaign by U.S. officials against undeclared offshore accounts. It intensified in 2009, after Swiss banking giant UBS AG admitted that it encouraged U.S. taxpayers to hide money abroad.
Since then, the U.S. has collected more than $13.5 billion from individuals and financial firms in taxes and penalties due on such accounts.
This week, Swiss bank Julius Baer Group AG agreed to a $547 million settlement after it admitted it encouraged U.S. taxpayers to hide money abroad.
The tax collections have become a major burden for the estimated 7 million or more Americans living abroad, according to the Wall Street Journal.
Unlike many other countries, the U.S. taxes nonresident citizens on income they earn abroad and U.S. laws provide only partial offsets for double taxations when taxes are owed to both the U.S. and a foreign country.
The penalties for noncompliance have also increased dramatically — in some cases from as little as $2,000 to $70,000 annually since 1995.