Investor's Business Daily ^ | 05/29/2012 06:54 PM ET | TOM GRAY
Eduardo Saverin is not exactly your typical ex-American.
He's too rich to be that. But the newly minted Facebook billionaire, who renounced his U.S. citizenship last year in favor of Singapore, is part of a trend.
A small but growing number of Americans are turning in their passports.
Last year, the Treasury Department reported that 1,781 American citizens or long-time legal residents cut their ties with the U.S. This was up from 1,534 in 2010, 742 in 2009 and just 231 in 2008. There were 461 renunciations in the first quarter of 2012 alone. By comparison, the annual average for the 10 years from 1998 to 2007 was 497.
Why the increase? The timing points to at least two possible reasons. One is the fear of higher taxes on the wealthy under the Obama administration. Another was the government's shift to more aggressive enforcement of its reporting rules after 2008, when Swiss banks were found to be helping Americans evade taxes through offshore accounts.
In the wake of that scandal, says Connecticut-based international tax attorney Andrew Mitchel, Washington amped up the publicity about filing requirements and penalties.
For many citizens living abroad, this news came as an unpleasant surprise. In a typical case, says Mitchel, someone born in America to foreign parents may have been living overseas for years with dual citizenship, not intending to live in America and unaware of the need to file U.S. tax returns or financial-asset reports. Suddenly, they were told they could lose a large part of their wealth if they didn't comply. …
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