If you live abroad, hold a
second passport, or have been a U.S. green card holder for many years, these
numbers matter less as a headline and more as a reminder: leaving the U.S. tax
system is a tax event, and it has to be planned.
Every quarter, Treasury
publishes the names of individuals who lost U.S. citizenship, and of long-term
residents who ended their U.S. residency, as required by Internal Revenue Code
Section 6039G. The most recent releases show a clear climb:
|
Quarter ending |
Federal Register notice published |
Names listed |
|
September 30, 2025 |
November 17, 2025 |
1,593 |
|
December 31, 2025 |
January 23, 2026 |
954 |
|
March 31, 2026 |
April 22, 2026 |
1,462 |
|
June 30, 2026 |
July 23, 2026 |
1,781 |
|
Rolling four-quarter total |
|
5,790 |
Source: Greenback Expat Tax
Services analysis of Federal Register notices; March 2026 quarter confirmed in the Federal Register, April
22, 2026.
Some other figures stand
out:
·
The second quarter of 2026
was up 68.5% year over year. The 1,781 names published in July compare with 1,057 for the same
quarter of 2025 (Greenback).
·
The first half of 2026 was
up 38.5%. The first
two quarters produced 3,243 names, versus 2,342 in the first half of 2025 (Greenback). That is almost as many as
were published for all of 2023 (Andrew Mitchel LLC).
·
The long-term trend is up. The eight-quarter moving
average has risen from about 750 names in 2022 to about 1,360, an increase of
roughly 80% in four years (Andrew Mitchel LLC).
·
2026 could be the
second-highest year on record. At the current pace, 2026 would end at about 6,500 names, behind
only 2020, which had roughly 6,700 (IMI Daily).
The quarterly list is the
best public data available, but it is imperfect:
·
It tracks reporting, not
renunciation dates. Each notice lists the individuals "with respect to whom the
Secretary received information during the quarter" (Federal Register). Someone who renounced in
2024 may not appear until 2026. Published figures lag actual renunciations by
12 to 18 months on average, and sometimes by more than two years (IMI Daily).
·
It includes former green
card holders. Long-term residents who end their U.S. residency are treated as
if they were citizens who lost citizenship (Federal Register).
·
It does not match State
Department figures. The State Department and Treasury measure different populations
and different stages of the process, so their totals differ (Greenback).
The trend is real. Just
treat a single quarter as a rough signal, not a precise count.
No single cause explains the
increase, but several factors keep coming up.
Compliance burden abroad. The United States taxes its citizens on worldwide income wherever
they live. For Americans abroad, that means annual U.S. returns, FBARs, FATCA
reporting, and often trouble with foreign banks. Advisers report that tax,
compliance, and banking friction, including mortgage refusals and account
closures for U.S. persons, are leading motives (IMI Daily). Among commenters on the
State Department's fee proposal who gave a figure, the median annual compliance
cost was about $1,200 (Greenback).
A much lower renunciation fee. On April 13, 2026, the State Department cut the
fee for a Certificate of Loss of Nationality from $2,350 to $450 (AILA), returning it to its 2010
level (BDO). Because of the reporting
lag, only one published quarter so far covers the period after the cut, so its
effect has not shown up in the data yet (Greenback).
Politics and personal ties. In Greenback's surveys, the share of U.S. expats
planning or seriously considering renunciation rose from 20% in 2023 to 49% in
2025, and dissatisfaction with the direction of the U.S. government became the
leading factor in 2025 (Greenback). Other common reasons
include strong ties to another country and the wish to keep options open.
Renouncing citizenship, or
giving up a long-held green card, does not end your U.S. tax obligations by
itself. The tax consequences depend largely on whether you are a "covered
expatriate."
For 2026 expatriations, you
are generally a covered expatriate if you meet any one of these tests:
1. Net worth test. Your net worth is $2 million or more. This amount is not adjusted
for inflation.
2. Tax liability test. Your average annual net income tax for the five years before
expatriation is more than $211,000 (Rev. Proc. 2025-32).
3. Compliance certification test. You cannot certify on Form 8854, under penalty
of perjury, that you complied with all U.S. federal tax obligations for the
five years before expatriation.
The third test catches many
people by surprise. Someone with modest wealth can still become a covered
expatriate simply because their past filings are not in order. Limited
exceptions apply to certain dual citizens from birth and to some individuals
who expatriate before age 18½.
·
The exit tax. Under Section 877A, covered
expatriates are generally treated as having sold all of their worldwide
property at fair market value the day before expatriating. For 2026, the first
$910,000 of net gain is excluded (TSCPA; Rev. Proc. 2025-32). Deferred compensation,
specified tax-deferred accounts such as IRAs, and interests in nongrantor
trusts follow separate rules.
·
A tax on future gifts and
bequests to U.S. persons. Under Section 2801, U.S. citizens and residents who receive gifts
or inheritances from a covered expatriate may owe tax on them. This can affect
family members who remain in the United States.
Green Card Holders Are Included
A "long-term
resident" is a lawful permanent resident in at least 8 of the last 15 tax
years. Long-term residents who give up their green card, or who claim treaty
residence in another country, can be subject to the same expatriation rules as
citizens. Many green card holders do not realize this until after they have
filed Form I-407.
Practical Steps Before Expatriating
If you, a family member, or
a client is considering renunciation or giving up a green card, plan ahead:
·
Get current first. Make sure the last five
years of income tax returns, FBARs, and information returns (such as Forms
5471, 8865, 8938, and 3520) are filed and accurate. Where they are not,
consider the available compliance programs before expatriating, not after.
·
Value assets early. Determine whether you are
near the $2 million net worth threshold and estimate any exit tax. Gifting,
timing, and restructuring may be worth considering, but they need careful
analysis.
·
Review retirement accounts,
deferred compensation, and trusts. These receive special treatment under Section 877A and can
produce unexpected tax or withholding.
·
Consider the family. If heirs will remain in the
U.S., Section 2801 can change the estate plan significantly.
·
File Form 8854 on time. The form is due with your
tax return for the year of expatriation. Failing to file can make you a covered
expatriate regardless of your wealth and can bring a $10,000 penalty.
·
Coordinate the immigration
and tax timelines. The date on your Certificate of Loss of Nationality, or the date
your green card residency ends, drives the tax analysis.
The rise in expatriation reporting reflects a growing number of Americans and long-term residents deciding that the costs of U.S. status outweigh the benefits. With the renunciation fee now $450, the administrative cost of leaving has dropped. The tax cost has not. For anyone near the covered-expatriate thresholds, or with gaps in past compliance, the difference between a planned exit and an unplanned one can be substantial.
or Toll Free at 888-8TaxAid (888) 882-9243
Disclaimer: This article is
for general information only and is not legal or tax advice. Expatriation has
significant and often irreversible tax and immigration consequences. Consult a
qualified tax professional about your specific situation before taking action.
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