The Wall Street Journal reports today on a trend stemming in part from more aggressive IRS enforcement against U.S.-native expatriates who don't report information on foreign bank accounts. "The requirement has been in place for years," the WSJ writes, but last month the IRS announced stricter reporting requirements for foreign bank accounts, and the agency has enforced penalties more in recent years.
Public records show more than 500 people renouncing U.S. citizenship or permanent residency in the last quarter of 2009--which exceeds the total number for all of 2007.
An IRS spokesman told the WSJ that some of the increase may come from an IRS push to complete paperwork among people who had surrendered their passport but not yet submitted the IRS form. Meanwhile, high U.S. tax rates and the downturn of 2008-2009 likely also played a role.
The WSJ quotes one lawyer on what may be a new trend:
"Fifteen or 20 years ago there was a big rush to make sure your kids became U.S. citizens, for access to U.S. schools for example," said Timothy Burns, a tax lawyer at Withers law firm in Hong Kong. "Now we're seeing just the opposite."