From ValueWalk: Cost Of Renouncing US Citizenship To Increase Five-Fold

And so it begins. As the fiscal situation of the US continues to deteriorate and as popular dissatisfaction with the government mounts, the Empire Strikes Back. Expect to see such measures more often as the US tightens the noose around the necks of its hapless tax cows.

With all the talk about corporate tax inversions, especially after Burger King Worldwide Inc (NYSE:BKW) announced the acquisition of Canadian coffee chain Tim Hortons Inc. (NYSE:THI) (TSE:THI), it seems like the Obama administration is going to do something to make it more difficult for corporations to change their tax residence. But as Cliff Kule spotted in a recent State Department document, US citizens will also have to pay more if they want to renounce their citizenship.

“Documenting a U.S. citizen’s renunciation of citizenship is extremely costly, requiring American consular officers overseas to spend substantial amounts of time to accept, process, andadjudicate cases,” says the State Department document. “Accordingly, the Department is increasing the fee for processing such requests from $450 to $2,350.”
Renunciation has increased dramatically, says State

As you would guess for such a serious decision, there’s a lot more involved than just filling out a form. The process outlined by the State Department includes verifying the person’s identity, at least two intensive interviews to make sure the person understands the full consequences of renunciation, review that has to pass through three different systems, and final approval from the Directorate of Overseas Citizen Services in Washington D.C. before sending the Certificate of Loss of Nationality to the now former US citizen. It’s a time and labor intensive process, and the State Department says that the $450 fee established in 2010 never covered the costs in the first place.

Which only raises the question, why now?

“Since that time, demand for the service has increased dramatically, consuming far more consular officer time and resources, as reflected in the 2012 Overseas Time Survey and increased workload data,” says the document.

The rest of the article can be read here.

 

Image from: http://www.impawards.com/1980/empire_strikes_back_ver9.html

Image from: http://www.impawards.com/1980/empire_strikes_back_ver9.html

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