{"id":25867,"date":"2014-04-29T01:37:14","date_gmt":"2014-04-29T00:37:14","guid":{"rendered":"http:\/\/pointblanknews.com\/pbn\/?p=25867"},"modified":"2014-04-29T01:37:14","modified_gmt":"2014-04-29T00:37:14","slug":"a-record-2999-people-renounced-us-citizenship-last-year-but-not-just-to-avoid-taxes","status":"publish","type":"post","link":"https:\/\/pointblanknews.com\/pbn\/news\/a-record-2999-people-renounced-us-citizenship-last-year-but-not-just-to-avoid-taxes\/","title":{"rendered":"A record 2,999 people renounced US citizenship last year — but not just to avoid taxes"},"content":{"rendered":"

Inside the long-awaited package, six pages of government paperwork dryly affirmed Carol Tapanila’s anxious request. But when Tapanila slipped the contents from the brown envelope, she saw there was something more.<\/span><\/p>\n

‘We the people….’ declared the script inside her U.S. passport – now with four holes punched through it from cover to cover. Her departure from life as an American was stamped final on the same page: ‘Bearer Expatriated Self.’<\/span><\/p>\n

With the envelope’s arrival, Tapanila, a native of upstate New York who has lived in Canada since 1969, joined a largely overlooked surge of Americans rejecting what is, to millions, a highly sought prize: U.S. citizenship.
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Renouncers: This July 2012 photo provided by Carol Tapanila shows her and her second husband in Calgary, Alberta, Canada. Tapanila, a native of upstate New York who has lived in Canada since 1969<\/p>\n<\/div>\n

Last year, the U.S. government reported a record 2,999 people renounced citizenship or terminated permanent residency; most are widely assumed to be driven by a desire to avoid paying taxes on hidden wealth.<\/span><\/p>\n

The reality, though, is more complicated. The government’s pursuit of tax evaders among Americans living abroad is indeed driving the jump in abandoned citizenship, experts say. But renouncers – whose ranks have swelled more than five-fold from a decade ago – often contradict the stereotype of the financial scoundrel. Many are from very ordinary economic circumstances.<\/span><\/p>\n

Some call themselves ‘accidental Americans,’ who recall little of life in the U.S., but long ago happened to be born in it. Others say they renounced because of politics, family or personal identity. Some say signing away citizenship was a huge relief. Others recall being sickened by the decision.<\/span><\/p>\n

At the U.S. consulate in Geneva, ‘I talked to a man who explained to me that I could never, ever get my nationality back,’ says Donna-Lane Nelson, whose Boston accent lingers though she’s lived in Switzerland 24 years. ‘It felt like a divorce. It felt like a death. I took the second oath and I left the consulate and I threw up.’<\/span><\/p>\n

When Americans do hear about compatriots rejecting citizenship, it’s more often people keeping their U.S. citizenship and dropping that of another country.<\/span><\/p>\n

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Last year, Texas Sen. Ted Cruz acknowledged the Canadian citizenship he was born to, but said he would renounce it. In 2012, Rep. Michele Bachmann, R-Minnesota, saying she was ‘100 percent committed to our United States Constitution,’ announced she was giving up Swiss citizenship gained through marriage.<\/span><\/p>\n

One of the few times rejected U.S. citizenship has gotten significant ink was Facebook co-founder Eduardo Saverin’s 2011 decision to turn in his American passport after moving to Singapore. Saverin likely avoided millions of dollars in taxes by doing so shortly before Facebook’s initial stock offering.<\/span><\/p>\n

Other wealthy Americans also have relinquished U.S. citizenship. Denise Rich, the ex-wife of pardoned trader Marc Rich, expatriated in 2012 and lives in London. Last fall, singer Tina Turner, a resident of Switzerland since 1995, relinquished her U.S. passport.<\/span><\/p>\n

But Saverin’s decision, in particular, hit a political nerve, along with scandals surrounding UBS and Credit Suisse, which were caught matching wealthy Americans with offshore accounts.<\/span><\/p>\n

In recent years, federal officials have stepped up pursuit of potential tax evaders, using the Foreign Account Tax Compliance Act which requires that Americans overseas report assets to the IRS or pay stiff penalties. Those trying to comply complain of costly fees for accountants and lawyers, having to report the income of non-American spouses, and decisions by some European banks to close accounts of U.S. citizens or deny them loans.<\/span><\/p>\n

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Au revoir: People are increasingly renouncing their citizenship to live in foreign countries because they don’t identify with the U.S. for a variety of reasons<\/p>\n

But some of those surrendering citizenship say their reasons are as much about life as about taxes, particularly since the U.S. government does not tax Americans abroad on their first $96,600 in yearly income.<\/span><\/p>\n<\/div>\n

Decisions to renounce ‘are driven by a whole range of emotional considerations. … You’ve got anger, you’ve got fear, you’ve got a strong sense of indignation,’ said John Richardson, a Toronto lawyer who advises people on expatriation. ‘For many of these people, this is not a tax issue at all.’<\/span><\/p>\n

Even some who acknowledge tax worries say decisions to renounce are far more complicated than a simple desire to avoid paying.<\/span><\/p>\n

Peter Dunn, born in Chicago and raised in Alaska, moved to Canada to pursue a graduate degree in theology. He met his wife, Catherine, and they made Toronto home when her work as one of the owners of an aviation maintenance firm made her the breadwinner.<\/span><\/p>\n

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Dunn remained an American. But he was alarmed by a change in U.S. law requiring those with more than $2 million in assets to pay an exit tax if they gave up citizenship. He didn’t have $2 million. But his wife was doing well enough that he imagined one day they could get there. The idea of the U.S. government taxing his Canadian wife’s money didn’t seem right.<\/span><\/p>\n

‘When I learned about that, I decided that to protect my wife, I better expatriate,’ he says.<\/span><\/p>\n

Corine Mauch arrived at the same decision by a different route. Mauch was born a U.S. citizen to Swiss parents who were college students in Iowa. They lived in the U.S. until she was 5, then again for two more years before she turned 11. Mauch maintained dual citizenship even after she was elected to Zurich’s city council. But when she became mayor, she reconsidered.<\/span><\/p>\n

During the last American presidential election, ‘I asked myself `Where do I feel at home?’ And the answer is clear: In Zurich and in Switzerland. My attachment to America is limited to my very early youth,’ Mauch said. Double taxation was ‘not the crucial factor for my decision. But I will not miss the U.S. tax bureaucracy either.’<\/span><\/p>\n

Taxes play little or no role in other decisions.<\/span><\/p>\n

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Norman Heinrichs-Gale’s parents were missionaries from Washington state who raised him in Asia and the Middle East. In 1986, he traveled to Austria with his American wife, and they found work at a conference center in an alpine valley town of 6,000. The jobs were supposed to last a year. But the couple stayed, sending their children to local schools.<\/span><\/p>\n<\/div>\n

On yearly trips to the U.S. he felt increasingly like a stranger. ‘I never forget going into a grocery store and just being stunned by my choice of cereals,’ Heinrichs-Gale says. ‘I was stunned by just the pace of life compared to what we have here, stunned by the extremes of wealth and poverty that I encountered.’<\/span><\/p>\n

There wasn’t one single thing that pushed him away. But his children wanted to attend Austrian colleges and he and his wife wanted to vote in the country they considered home. The family was tired of renewing visas and work permits. And so they signed documents giving up U.S. citizenship. Now, one of the last vestiges of American culture in their home is watching Seattle Seahawks games online.<\/span><\/p>\n

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Sports played the central role in Quincy Davis III’s decision. Davis, raised in Los Angeles and Mobile, Ala., played professional basketball in Europe after three years as Tulane University’s leading scorer. By 2011, he was home studying to become a firefighter when he was offered a spot on a Taiwanese pro squad. He’s since helped lead the Pure Youth Construction team to two championships.<\/span><\/p>\n

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