What Happens if You Renounce Your American Citizenship
Being a U.S. citizen grants you certain rights and protections while overseas, plus the benefit of moving freely when you are in the country. However, you also have obligations and may be liable for various tax payments even if you don’t live in the U.S. anymore.
That’s why some American citizens who found their path in a different country may want to sever all connections with their old home. And they do so by initiating the citizenship renunciation procedure, which is a right granted to any U.S. citizen.
However, the procedure is not as easy as throwing away your passport (learn more about how to give up your U.S. citizenship). In summary, to give up on your citizenship, you have to go through a face-to-face interview with a government official (which can be done at the U.S. embassy in your new country of residence) and pay a renunciation fee.
Plus, if you decide to take this step, it’s important to understand the consequences. Here is what happens when you renounce your American Citizenship:
A One-Way Road
The act of renouncing your U.S. citizenship is irrevocable. You can’t change your mind a few years/months after your request has been approved and have your citizenship reinstated. You will also lose any rights, protections, and benefits you had as a U.S. citizen abroad or in the country with citizenship.Your Obligations to the IRS
When you are a citizen, you need to report any assets and accounts you or your business owns abroad to the IRS. Unfortunately, this means that you may still have to pay some tax, depending on your current situation.
This happens because the U.S. taxes its people based on citizenship and not a geographical location.
By renouncing your citizenship, you won’t have to continue reporting to the IRS. However, it doesn’t mean you will be exempt from paying what you already owe. Also, any financial obligations, like child support payments, will have to be honored even if you’re no longer a citizen.
Their case will be afforded careful consideration to make sure it is a voluntary request that the parents’ choice hasn’t been influenced. They will also be fully informed of the consequences of giving up their citizenship.
You would have to go through the proper immigration channels and obtain a visa or a work permit to work in the country again (whether you live there or not). And if you find the renunciation process difficult, you’ll learn that applying for a visa can be exasperating.
This happens because the U.S. taxes its people based on citizenship and not a geographical location.
By renouncing your citizenship, you won’t have to continue reporting to the IRS. However, it doesn’t mean you will be exempt from paying what you already owe. Also, any financial obligations, like child support payments, will have to be honored even if you’re no longer a citizen.
Children Under 16 Can’t Renounce Citizenship
Citizenship is considered an individual right, so parents can renounce it in their children’s name (if they are under 16). However, children under 18 will be provided additional safeguards during the citizenship renunciation process.Their case will be afforded careful consideration to make sure it is a voluntary request that the parents’ choice hasn’t been influenced. They will also be fully informed of the consequences of giving up their citizenship.
No Access to the US Job Market
Like it or not, the U.S. job market is still one of the most promising in the world, with various opportunities for citizens in the country and abroad. However, once you give up citizenship, you also give up access to the job market since you are no longer hireable by a U.S. company.You would have to go through the proper immigration channels and obtain a visa or a work permit to work in the country again (whether you live there or not). And if you find the renunciation process difficult, you’ll learn that applying for a visa can be exasperating.
Wrap Up
In summary, you should only give up your U.S. citizenship if the benefits outweigh the downsides. However, avoid making this decision when you feel emotional - this needs careful consideration and analysis. It may also help to talk to a specialist who can provide unbiased guidance.Do You Need An Attorney?
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Posted - 02/03/2022
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