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Record Number Of People Renounce US Citizenship

Figures for 2016 show a record number of people renounced their U.S. citizenship.

The main reason for many of the 5,411 people who decided to give up their citizen status was to avoid paying tax in the country, The Huffington Post reported.

The election of President Donald Trump may have had some influence, as the number of renunciations rose in the last quarter of the year.

U.S. citizens are required to declare their income to the Internal Revenue Service wherever they live in the world. British Foreign Secretary Boris Johnson, who was born in New York, said in 2014 that it was "absolutely outrageous" that he had to pay U.S. taxes on the sale of his home in the U.K.

"The United States comes after me, would you believe it ... for capital gains tax on the sale of your first residence which is not taxable in Britain, but they’re trying to hit me with some bill, can you believe it?" Johnson said in 2014, according to The Guardian.

Johnson was among those who gave up his U.S. citizenship in 2016. The tax bill for the sale of his home in 2014 was estimated at more than $50,000. Reports say Johnson ultimately paid the tax, but he was not happy about it.

"Why should I? I haven’t lived in the United States for, you know, well, since I was 5 years old," he said.

The Foreign Account Tax Compliance Act came into force in 2010. It was adopted after it emerged that Swiss banks were helping U.S. citizens to keep large sums of money secret from the IRS. The law obliges foreign banks to provide information on U.S. citizens to the IRS or face a severe fine.

The numbers of those renouncing their citizenship has risen significantly ever since, with each of the last four years producing record highs.

Between 1998 and 2009, the number of people renouncing their citizenship ranged from 231 to 762.

In 2015, Congress moved to crack down on tax dodgers by granting the IRS powers in some cases to revoke or not issue passports when individuals are delinquent on their taxes.

Sources: The Huffington Post, The Guardian / Photo credit: Think London/Flickr/Wikimedia Commons

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