U.S. citizenship

Royal Bride Meghan Markle Faces a Major Tax Bill if She drops U.S. Citizenship

By Peek & Toland on May 28, 2018

Every year thousands of people become U.S. citizens. However, some people seek to relinquish citizenship. It’s a move that can carry a hefty price tag.

The United States is one of the only countries to tax based on citizenship. Even if you are living abroad you must pay taxes.

The issue was recently highlighted in relation to Meghan Markle, an American citizen who is engaged to marry Britain’s Prince Harry.

A CNBC report noted it’s tempting for expats to renounce their U.S. citizenship so as they don’t pay taxes. However, it’s a move that comes at a heavy price.

Americans living abroad must pay U.S. taxes. That can make it tempting for expatriates to renounce their citizenship and skip U.S. tax rules. Doing so comes at a price.

According to Joshua Ashman, a co-founder and partner at Expat Tax Professionals, there are some very complex tax considerations.

Royal Bride to Drop U.S. Citizenship

Royal Bride Faces Tax Bill for Dropping U.S. Citizenship

Ashman provides professional tax services to U.S. expatriates. He pointed out people who want to renounce their citizenship must make an appointment at a U.S. embassy, sign the relevant forms and take the Oath of Renunciation.

They must also pay a hefty $2,350 administrative processing fee. Once an application is approved, a process that can take several months, you receive a Certificate of Loss of Nationality.

Ashman pointed to a further issue. When you give up your citizenship, you must notify the Internal Revenue Service via Form 8854 that you have expatriated. You may then be liable to pay exit tax. The exit tax looks at the asset’s value and assesses taxes as if it were sold.

The high cost of giving up U.S. Citizenship has not prevented a record number of Americans giving it up, according to the U.S. Treasury Department. In 2016 alone more than 5,400 Americans either gave up citizenship or terminated long-term residency. The figure was a 26 percent increase on 2015.

Although more people are giving up U.S. citizenship, far more immigrants are seeking it.

There are numerous benefits of citizenship. It often makes sense to hire an attorney to help you with the process.

At Peek & Toland , an Austin citizenship attorney can take over the whole complex and bureaucratic process for you and help you embark on a secure life in a new country. Call us today at (512) 474-4445.

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Can Your U.S Citizenship be Revoked?

By Peek & Toland on December 2, 2016

We are sometimes asked if it’s possible for a U.S. citizen who has been naturalized to lose his or her U.S. Citizenship. The answer is it’s possible but it’s rare.

However, a naturalized citizen can lose his or her status through a process called “denaturalization.” If you are denaturalized, you will be deported from the United States. Citizens will only be denaturalized in serious circumstances.

Citizens born in the United States cannot lose their citizenship against their will. They can renounce it on their own accord.

Your U.S. Citizenship can be revoked in certain circumstances

The grounds for denaturalization are discussed in this FindLaw article. You can read our Texas immigration attorneys’ page on citizenship here.

Grounds to Lose U.S. Citizenship

  1. 1 Membership of a Dangerous or Subversive Group

If the U.S government can prove you joined a subversive group within five years of becoming a naturalized citizen, you could be denaturalized. Joining groups dedicated to the overthrow of the state is considered a violation of the oath of allegiance. The types of organization which could lead you to lose your citizenship are ISIS or white supremacist groups.

2 Falsifying or Concealing Relevant Facts

It’s important to be truthful when you are filling out the applications for citizenship. You must also answer the interview questions honestly. Even if U.S. Citizenship and Immigration Service (USCIS) does not discover untruths at the time of granting your application, it can file a denaturalization action after you become a citizen. These lies or non-admissions could include providing a false name or failing to disclose criminal convictions that would have barred your application.

3 Refusal to Provide Testimony to Congress

It’s unlikely to happen to you but if you are called to testify before Congress, you could lose your citizenship if you refuse. A pertinent example would be a congressional committee that’s looking into your alleged involvement in a subversive act. The requirement to testify to maintain your naturalized status expires after 10 years.

4 Dishonorable Discharge from the Military

Some people serving in the military can gain citizenship through their service. However, you could lose your citizenship if you are dishonorably discharged before you have served for five years. You must have been sentenced by a court martial. Conduct like desertion or rape could lead to a dishonorable discharge.

Under the denaturalization process, a naturalized citizen is stripped of his or her citizenship in a federal court. The case follows the standard rules of civil court cases in federal courts and is not an immigration case, although it affects your immigration status.

If you are facing possible denaturalization it’s vital to talk to a Texas family immigration attorney as soon as possible. Contact us at (512) 474-4445.

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