NEW YORK (CNN) – Some will do anything to get out of paying taxes. Some think giving up their U.S. citizenship is a good way to keep more of their money.
That’s what 3000 Americans decided to say last year, lining-up around embassies and renouncing their U.S. citizenship.
A CNNMoney analysis of government data shows a dramatic spike in Americans turning-in their passports. In fact it was three times the average of the previous five years!
Why the big rise? You can blame a complicated tax system for some of it.
Unlike most countries, the U.S. taxes citizens on all income regardless of where it’s earned or where you reside. For some ex-patriots, reporting taxes can be so difficult that they need expert help that can cost thousands.
What’s making things even more complex is a new tax law that targets overseas tax evasion. Tax experts say the new law is making things so onerous that more people seem to be throwing in the towel and giving up their U.S. citizenship just to simplify things.
Add to that the fact that banks like deutsche bank have even decided to close out the securities accounts of u-s residents outside of America because they’re afraid of big penalties should they make a mistake reporting information on u-s held accounts.
The other big factor in giving-up your U.S. passport: protecting wealth. While it’s illegal to renounce your U.S. status to avoid paying taxes, people may be doing it anyway.
Giving up your citizenship doesn’t mean you’re off the hook for back taxes, because you’ll still owe them.