More U.S. citizens renounce citizenship to dodge taxes

May 14, 2012 at 2:13 PM   |   Comments

WASHINGTON, May 14 (UPI) -- A growing number of U.S. citizens living abroad are renouncing their U.S. citizenship to avoid a crackdown on foreign bank accounts, analysts say.

The Internal Revenue Service has ramped up efforts in the last three years to prosecute U.S. citizens who dodge taxes by hiding money in foreign bank accounts. As a result, 1,780 U.S. citizens renounced their citizenship last year to avoid disclosing information to the IRS. In 2010, 1,485 people renounced, up from 731 in 2009.

The Miami Herald reported the number of renunciations began to grow in 2009 after the Swiss banking giant UBS AG agreed to provide the United States with the names of thousands of U.S. clients with secret bank accounts.

Prior to the crackdown, 200 to 400 U.S. citizens renounced their citizenship every year.

Analysts expect the number to continue to climb next year when more foreign banks will be required make the disclosures. Some foreign banks are already turning away U.S. citizens who wish to open new accounts.

Miami tax attorney Alan Weisberg told the Herald he has noticed more of his clients expressing an interest in renouncing their citizenship.

"I have seen more interest, but it's not a floodgate yet," he told the Herald.

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