When “American” stops feeling simple
Most Americans never think about giving up citizenship. Then life abroad turns everyday paperwork into a full-time side job. For some people, renouncing becomes less emotional and more practical.
This isn’t common, but it happens every year. The U.S. Department of the Treasury publishes a quarterly list (required under Internal Revenue Code Section 6039G) naming individuals who have chosen to expatriate for tax purposes. Seeing page after page of names is a reminder that this choice is real.
The big reason is taxes, not travel
The U.S. expects many citizens abroad to file a U.S. tax return each year. That rule can surprise people who have lived overseas for a long time. Even if they owe little or nothing, the filing requirement can still be stressful.
Most countries tax by where you live, not your passport. The U.S. is a standout for taxing based on citizenship, and Eritrea is often cited as another example. That difference is why this issue follows Americans across borders.
FATCA turned banking into a headache
FATCA pushed foreign banks to identify and report certain U.S. account holders. Banks that don’t comply can face U.S. withholding penalties tied to some U.S. payments. For everyday customers, it can mean extra forms or even being turned away.
On the taxpayer side, many Americans abroad also have to report specified foreign financial assets on Form 8938. This is separate from other long-standing foreign account reporting rules. The paperwork can feel heavy even when nothing shady is happening.
Double-tax fear, even when credits exist
A common worry is “Will I get taxed twice?” Many expats can use exclusions or credits, but the rules are still complicated. Paying for professional help becomes normal, and that cost repeats every year.
The stress is often about compliance, not just money. People get nervous about missing a form and getting penalties. Over time, some decide the simplest path is to cut the tie completely.
The paperwork can feel never-ending
FATCA is only one piece of the puzzle. U.S. international tax compliance often involves multiple forms and different thresholds. Even organized people can feel like they’re always “catching up.”
That burden hits retirees, teachers, and small business owners abroad too. It’s not just a “rich person problem.” When your financial life is centered in another country, U.S. reporting can feel out of sync with real life.
“Accidental Americans” get trapped
Some people are U.S. citizens without feeling connected to the U.S. This can happen if you were born in the U.S. but raised elsewhere, or got citizenship through a parent. Later, they learn the U.S. still expects tax and financial reporting.
For them, renunciation can feel like cleaning up a mismatch. It’s less about “leaving America” and more about fixing a legal status that complicates banking and normal adult life. The decision can still be painful, even if it’s practical.
Little-known facts: The Treasury/IRS expatriation-name list is published because of IRC Section 6039G, which requires quarterly reporting of individuals who lost citizenship for tax purposes.
Identity shifts after years abroad
A lot of renouncers are dual citizens who have lived abroad for decades. Their jobs, kids, and community ties are in their new home. Over time, U.S. citizenship can start to feel like paperwork rather than identity.
Some also say the U.S. passport is less central to their lifestyle. If you rarely travel to the U.S., and your daily life is built elsewhere, the benefits may feel smaller than the ongoing compliance. That “cost vs. value” math matters.
Little-known facts: USA.gov notes that renouncing or losing U.S. citizenship does not automatically strip away Social Security eligibility, as many former citizens remain eligible for benefits.
Politics can be a factor, but not the only one
Some people mention discomfort with the U.S. social climate or constant political tension. Others point to safety worries or feeling like the country no longer reflects their values. These reasons are personal, and they vary a lot by person.
Still, the most consistent drivers tend to be administrative and financial. Taxes, reporting rules, and banking friction show up again and again. When those pressures stack, a values-based reason can become the final push.
Renouncing isn’t a quick online form
To formally renounce, you generally appear in person before a U.S. consular officer abroad. The State Department treats it as a serious legal act that must be voluntary and intentional. It’s designed to be hard to do by accident.
That’s one reason people plan for months. Appointment availability depends on the embassy or consulate. You also need to understand what rights you lose, and what your new immigration status will be afterward.
Yes, it costs thousands up front
Renouncing comes with a large government fee. Many U.S. embassy pages list the administrative processing fee as $2,350 for a Certificate of Loss of Nationality case. That fee is separate from any tax prep or legal help you might need.
That price tag alone stops a lot of people. If you’re a family of four thinking about it, the total can be huge. It’s one reason many people try years of “making it work” before they take this step.
You may still have IRS steps to finish
Renouncing doesn’t automatically erase tax responsibilities. The IRS has specific expatriation tax rules, and some people may owe an “exit tax” depending on their situation. Even people who owe nothing still have compliance steps.
Form 8854 is a key part of the process for many expatriates. It’s used to certify tax compliance for the years leading up to expatriation. This is where people often hire help, because mistakes can be expensive.
Losing citizenship changes U.S. travel
After renouncing, you’re no longer a U.S. citizen at the border. You may need a visa to visit the U.S., depending on your new nationality and travel rules. USA.gov flags this clearly, since it surprises people later.
That matters for family visits, holidays, and emergencies. Someone who used to fly to Chicago or Miami at the last minute might not have that same ease. It’s a tradeoff that people sometimes underestimate before they sign.
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The risk of becoming stateless is real
Renouncing is permanent in practice, and it can’t be treated like a trial run. USA.gov warns that you should be a citizen of another nation or you could become stateless. That can make travel, employment, and basic rights much harder.
This is why many renouncers already have another passport. It’s also why consular officers take the process seriously and confirm you understand the consequences. The goal is to make sure nobody is pressured or confused.
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If you lived abroad, would you keep U.S. citizenship no matter what, or would you consider renouncing someday? Share your thoughts and your view in the comments.
This slideshow was made with AI assistance and human editing.
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