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Record 1,426 Americans return US passports: Government data

Saturday, 31 October 2015 11:14 AM [ Last Update: Saturday, 31 October 2015 11:16 AM ]

A record 1,426 people gave up their US citizenship in the third quarter of 2015, according to new US government data.

A record 1,426 people gave up their US citizenship in the third quarter of 2015, according to new US government data.

That puts the number of Americans who have renounced their citizenship at 3,221 so far this year, according to data by the US Treasury Department analyzed by CNNMoney.

In 2014, a record 3,415 Americans gave up their passports. Last year, 15 times more Americans renounced their citizenship than in 2008.

Many are expatriates living abroad tired of dealing with complicated tax paperwork, a hassle that has increased lately as hefty tax regulations have gone into effect.

Unlike most countries, the US government taxes citizens on all income, no matter where it is earned, or where the citizens live.

For Americans living abroad, that means a pile of paperwork so complicated that expatriates are often forced to seek help from accountants and lawyers and have to pay high fees.

“The headache is only getting worse,” CNN’s Sophia Yan said. “The Foreign Account Tax Compliance Act requires individuals to report certain foreign assets, and for banks to disclose all foreign accounts held by Americans. The new law comes on top of another rule that requires Americans to disclose foreign bank holdings above $10,000.”

The new regulations are part of a wider effort by the US government to battle tax evasion, especially after several Swiss banks admitted to assisting wealthy Americans hide their assets.

But the campaign is making life difficult for the 7.6 million Americans living overseas.

As financial institutions rush to understand the new tax laws, some foreign banks have kicked out their American clients, leaving some without even basic checking and savings accounts.

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