The FATCA may be causing some taxpayers to give up their US citizenship. According to statistics issued by the US Treasury Department statistics and included in the Federal Register, more than one thousand United States taxpayers relinquished their US passports or their green cards during the first three months of 2014, compared to 679 individuals doing so in the first quarter of the previous year. The number of people giving up their US citizenship is likely to increase to the highest ever level this year.
This increased number may be connected to the FATCA legislation, as the Treasury and the Internal Revenue Service (IRS) prepare to put into effect plans to trace American undeclared assets and income held abroad. The deadlines set by the Foreign Account Tax Compliance Act are drawing nearer. The Act aims to provide the IRS with information on accounts held abroad at foreign financial institutions by US taxpayers.
Also, awareness of the compliance burden of the US tax reporting obligations attached to US citizenship is growing as taxpayers become more informed about FATCA. The compliance obligations that FATCA imposes on financial institutions do not necessarily lessen the compliance obligations of individuals.
