State Department Reduces Citizenship Renunciation Fees
The State Department has significantly lowered the fees for Americans wishing to renounce their U.S. citizenship—about 80%, bringing the cost down from $2,350 to $450. This change took effect on Friday and follows new regulations that had been announced earlier in 2023 but were not implemented until now.
Interestingly, these new fees revert to the same amount that was established back in 2010 when the government first introduced fees for renunciation. The State Department explained that this decision stems from a desire to alleviate the financial burden on individuals seeking a Certificate of Loss of Nationality, which is a required document issued after one formally renounces their citizenship with a diplomat or consular official.
It’s worth noting that the fee was raised from $450 to $2,350 in 2015. This was in response to a spike in the number of Americans renouncing their citizenship, driven by new tax filing rules affecting foreign nationals. Reports indicate that the number of applications soared from 956 in 2010 to 3,436 in 2014, according to State Department data.
The State Department mentioned that the newly set $450 fee still falls short of the actual processing costs associated with these applications. They estimate around 4,661 individuals apply for a Certificate of Loss of Nationality annually. However, the reduction in fees is projected to decrease federal collections by about $8.9 million.
Renouncing U.S. citizenship involves a multi-step process. Applicants must meet a U.S. consular officer abroad and confirm that they understand the ramifications of their decision before taking the official oath of renunciation. After this, the application needs to be reviewed and approved by the State Department for the issuance of the Certificate.
In recent years, stricter financial reporting requirements for Americans living overseas, particularly those associated with the Foreign Account Tax Compliance Act (FATCA), have led to increased requests for disinheritance.
Back in 2015, the fee increase faced backlash, especially from advocacy groups representing U.S. citizens who, although born in the United States, have spent most of their lives abroad. These groups have filed lawsuits arguing that renouncing citizenship should incur no cost at all.
Fabian LeHagre, president of the Association of Accidental Americans, expressed approval of the recent fee reduction, emphasizing the importance of making this fundamental right more accessible. LeHagre attributed this change to years of advocacy from the group.
According to reports, more than 8,755 Americans have paid the previous $2,350 fee to relinquish their citizenship since the State Department announced plans to reduce the cost. However, the department has not provided updated statistics on the total number of citizenship renunciations.
