Why More Americans Are Renouncing U.S. Citizenship

A couple of years ago, the Treasury Department published a list of those Americans who had abandoned their citizenship. A decade ago, this number always circled around 500 people, however, last year the number hit a record high of almost 3,000 Americans
This change was not foreseeable, but more the result of different parts leading to this unexpected outcome.
Starting in 2008, when the federal prosecutors accused a Swiss bank of helping wealthy Americans hide their money tax-free in overseas accounts. Barney Frank, the Democratic congressman from Massachusetts told NPR in 2009 that they just found UBS in a terrible scheme of encouraging tax evasion – speaking of billions of dollars. 
Therefore, in 2010, Congress passed the Foreign Accounts Tax Compliance Act (see also our FATCA articles), which effected everybody – not only – that did business with the United States. 
Nevertheless, renouncing citizenship is not as simple as “burning ones passport”, it is a long process involving interviews, paperwork and legal procedures. People who are renouncing their citizenship clearly have a compelling motivation to do so. Everybody may have their own personal reasons, however, the recent tremendous spike is more than likely caused by the 2010 tax law than anything else. 
Having to immediately report all American clients, cause a huge hassle for the foreign banks, so that most of them decided to cancel all accounts of Americans in Europe. Congress wanted to actually catch tax cheats, but they also snagged those Americans with foreign bank accounts who need them to pay their bill, hence they live abroad. 
The United States is very uncommon in this respect that most other countries do not tax their citizens living abroad. So that today, Americans who do not want to pay double taxes and plan on living outside the U.S. will give up their citizenship
In Switzerland, for instance, so many people want to renounce their citizenship that the local U.S. Embassy has a waiting list. For most of them, it is not about the tax value they would have to pay, rather than the hassle and work they would have to go through filing these taxes. People are ready to renounce, despite the fact that they still feel closed and tied to their place of birth.
Also officials from the Treasury Department, the State Department, the IRS and Congress agreed to this problem behind curtains, but for the government the main goal of the law is to catch the tax cheats
If this is really this is worth losing thousands of Americans over the years, is up to them!
Best regards
und viele Grüße aus Charlotte
Reinhard von Hennigs