Today the Treasury Department published the names of individuals who renounced their United States citizenship (“expatriated”) during the quarter ending September 30, 2009. A total of 158 individuals expatriated. This is the highest number of individuals expatriating in more than four years. The following graph shows the number of expatriates for the past 4 years.
The increase in expatriations may partially result from last year’s changes to the expatriation rules under the Heroes Earnings Assistance and Relief Tax Act of 2008. Prior to these changes, for the 10 year period after expatriation individuals could not be present in the U.S. for more than 30 days in a calendar year without being taxed on their worldwide income. This rule was repealed with the 2008 law change. Thus, under current law individuals can renounce their U.S. citizenship, remain in the U.S. for 120 days or more each year and in many cases avoid U.S. tax entirely.
Individuals with dual passports may find that it is financially rewarding to expatriate. The elimination of U.S. taxes may free up enough money to finance their world travels.