Price of renouncing U.S. citizenship goes up

WASHINGTON, Sept. 3 (UPI) -- The cost of renouncing U.S. citizenship will increase Sept. 12, from $450 to $2,350 per person, the U.S. State Department said.

The new fee reflects what a U.S. Federal Register notice calls the "full cost" of the paperwork involved.

"Documenting a U.S. citizen's renunciation of citizenship is extremely costly, requiring American consular officers overseas to spend substantial amounts of time to accept, process and adjudicate cases," the notice said.

Through the first half of 2014, 1,577 Americans around the world voluntarily renounced their citizenship or green card, indicating permanent U.S. residency. Most were for tax avoidance purposes, and compares to only several hundred per year in the mid-1990s and early 2000s. A new U.S. law, the Foreign Account Tax Compliance Act, compels foreign banks to share substantial amounts of information with the Internal Revenue Service about American customers.

The United States, unlike virtually any other country, assigns taxes based on citizenship and not residency, meaning American citizens must file U.S. tax forms regardless of their location.