Why Thousands Of Americans Are Renouncing Their Citizenship — Money, Identity And Politics

Within six months of arriving in New Zealand on a working-holiday visa in 2016, Erin Klatt realized she wanted to stay. Using dairy-farming experience from Wisconsin, she obtained an essential-skills work visa, met her husband while working on farms, and became a New Zealand citizen in May 2025. Shortly afterward, and before a later State Department fee cut, she formally renounced her U.S. citizenship.

Why People Are Walking Away

People who renounce cite a mix of reasons: political disillusionment, a desire to align legal nationality with where they live and raise families, and major financial and administrative burdens tied to U.S. tax rules for citizens abroad. For many expatriates — and especially “accidental Americans” who inherited U.S. citizenship by birth but never lived in the United States — compliance with U.S. reporting and banking rules can be disruptive.

Erin Klatt renounced her American citizenship at the US consulate in Auckland, New Zealand. - Kehan ChenMoment RF/Getty Images

Financial Pressure: FATCA And Worldwide Taxation

The Foreign Account Tax Compliance Act (FATCA) and the U.S. system of citizenship-based taxation (one of only two such systems worldwide) are frequently cited drivers. FATCA, enacted in 2010 and implemented from 2014, pushed many foreign banks to treat customers with U.S. ties as higher compliance risks, sometimes resulting in refused accounts, mortgages or insurance products.

“FATCA…makes a normal financial life extremely difficult in Europe,” says Fabien Lehagre of the Association of Accidental Americans.

The Process And Practical Hurdles

Renouncing U.S. citizenship is a formal legal act. It requires contacting the U.S. consulate or embassy where you live, completing paperwork, filing U.S. tax returns for the five years prior to renunciation, and appearing in person to take an oath at a consulate outside the United States. Applicants must already hold another citizenship before they can renounce; you cannot become stateless by renouncing the U.S.

Caroline Chirichella and her family live in Italy. She holds dual US and Italian citizenship, but is weighing giving up her American citizenship. - Courtesy Caroline Chirichella

Timing and responsiveness vary: applicants often wait months to receive an appointment. Until recently the State Department charged $2,350 to process renunciations; that fee has since been reduced to $450. Special reporting rules and possible exit-tax calculations apply to people with significant assets (commonly noted at or above $2 million in worldwide assets), so prospective expatriates are usually advised to consult an international tax attorney or CPA.

Numbers, Trends And Uncertainty

Official counts are fragmented. The State Department does not publish a running total of renunciations; Treasury and the IRS publish quarterly expatriation lists that some organizations aggregate. Americans Overseas, a nonprofit that tracks names reported in quarterly IRS listings, shows 4,889 people on the list for 2025 — the highest since the spike of 6,705 names in 2020. The group says it currently advises about 40,000 U.S. citizens abroad who are exploring or undergoing renunciation and is predicting further increases in the coming years.

Jennifer Sontag is a dual American and Italian citizen. The owner of a relocation agency, she is in the process of getting the paperwork in order to renounce her US citizenship. - Courtesy Jennifer Sontag

Advocates and advisers warn the IRS lists may undercount actual renunciations; some clients known to have completed the process do not always appear in the published data. Many advisers report cyclical surges in interest around U.S. presidential elections and during periods of heightened political polarization.

Personal And Emotional Costs

Renunciation can bring relief and clarity for some, like Klatt, who says she felt excited and unburdened after completing the oath. For others it is wrenching: many describe losing a piece of identity or worrying about permanently giving up the right to live and work in the United States. After renunciation, former U.S. citizens typically require a visa to enter the United States, and approval is not guaranteed.

Some US citizens who also hold Italian citizenship opt to drop their American passports. Palermo, Sicily, is pictured. - elzauer/Moment RF/Getty Images

Legal advisers caution against short-term thinking. Brad Bernstein of The Law Offices of Spar & Bernstein warns that visa-free travel, consular protections and other advantages associated with U.S. citizenship can be difficult or impossible to recover once renunciation is final.

What Prospective Renunciants Should Know

• You must already possess another nationality before renouncing U.S. citizenship.
• File U.S. tax returns for the five years before renunciation and consult an international tax specialist, especially if your worldwide assets are large.
• Expect administrative delays: contact your local U.S. consulate and plan for several months to secure an appointment.
• Consider the emotional and practical consequences: loss of visa-free travel to many countries and the possibility you may not be able to return to the U.S. easily.

For many Americans living and building lives abroad, renunciation is a practical choice, an expression of identity, or both. It remains a consequential and often irreversible step that benefits from careful legal and financial planning.