Expatriation: The Empire Strikes Back

Since the United States taxes its citizens, no matter where they live, the only way for a U.S. citizen to eliminate U.S. tax liability is to give up U.S. citizenship. The only way for U.S. permanent residents to achieve this goal is to give up their green card. This process is called expatriation. For a primer on expatriation basics, click here.

If you expatriate, the agency you’ll need to deal with is the Department of State. The process is relatively simple. You make an appointment at the consular section of whatever embassy you’ve chosen. At the appointed time, you show up, sign some forms, turn in your passport, and depart. Once you receive your “certificate of loss of U.S. nationality” (CLN), you’re done.

Unfortunately, the procedure is often much more convoluted than this. To begin with, each consulate has its own rules for expatriation. Some consulates require as many as three visits, up to one month apart, in order for you to complete the expatriation process. One consular official told me this is required, “so the prospective renunciant can reflect on the profound consequences of giving up U.S. citizenship and passport.”

Well, excuse me! Anyone with the balls to show up for an appointment at the consulate with the intention of giving up their U.S. citizenship surely understands the consequences of the act. I can understand a one-day “cooling off period,” as imposed by one consulate to which we often refer clients. But to extend the process over a two month period is ridiculous.

Another State Department initiative is charge a $450 fee to process your expatriation. This began last year, to “help defray a portion of the total cost to the U.S. Government of documenting the renunciation of citizenship.” The State Department says this fee represents less than 25% of the actual cost of “providing this very costly service.” That may be true, but a great deal of those costs are self-imposed by the State Department. Simply streamlining the procedure so that only a single brief visit is necessary would cut costs considerably.

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