A
growing number of American citizens living outside the US are
considering renouncing their US citizenship because of reporting
complexities and penalty risks related to the looming Foreign Account
Tax Compliance Act, warns Nigel Green, chief executive at deVere Group.

As of January 1, 2013, the US will require that each citizen reports
their global assets and earnings to the Internal Revenue Service,
regardless of where they live, how long they have lived there or whether
any money is owed. Foreign financial institutions will also be required
to disclose such information of any American clients they may have.

"Over the last six months, we have received a 22 per cent increase in
the number of inquiries from American expatriates around the world who
tell us that they are considering the drastic step of switching their
homeland citizenship to that of their adopted countries," Nigel Green said today.

"This sense of anxiety is compounded by the fact that a growing
number of Americans are being left stranded by their foreign financial
institutions as all banks and wealth management firms will also have to
declare the assets of their American clients - and this process is
perceived as too costly and burdensome, meaning many are refusing to
deal with US citizens." For example, some Americans are being rejected
by foreign firms for jobs which would require signatory authority, as
those accounts would also be subject to FATCA, he noted.

“The majority of these US expats are being prompted to consider this
due to the complexity of the reporting process to the IRS, plus the
threats of heavy penalties, including for previous, inadvertent
non-compliance." 

In July the deVere Group claimed a 65 per cent surge in professional
financial inquiries over the previous three months due to the looming
arrival of the new US tax compliance rules. Meanwhile, last year
alone nearly 1,800 Americans officially renounced their US citizenship -
six times more than in 2008, the global IFA said.