US embassy expat backlog causes tax headache

Worldwide tax liability for US expats means that many consider renouncing citizenship to extricate themselves from high tax bills, but it is not straightforward, explains Glenn Snow, tax director, USTAXFS

A pandemic-induced backlog in applications to expatriate has left many in a tortuous and costly tax limbo.

In the decade pre-Covid-19, an increasing number of US citizens living abroad, faced with some of the world’s toughest tax laws, began applying for loss of nationality appointments.

The US is one of a very small number of countries to tax you on your citizenship rather than where you live. The passing of the Foreign Tax Compliance Act (FATCA) in 2010 heightened the importance of US citizens being compliant with their tax filing and reporting obligations.

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