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More renounce US citizenship but deny stereotype

APTOPIX New Citizens

Inside the long-awaited package, six pages of government paperwork dryly affirmed Carol Tapanila's anxious request. But when Tapanila slipped the contents from the brown envelope, she saw there was something more.

"We the people...." declared the script inside her U.S. passport - now with four holes punched through it from cover to cover. Her departure from life as an American was stamped final on the same page: "Bearer Expatriated Self."

With the envelope's arrival, Tapanila, a native of upstate New York who has lived in Canada since 1969, joined a largely overlooked surge of Americans rejecting what is, to millions, a highly sought prize: U.S. citizenship. Last year, the U.S. government reported a record 2,999 people renounced citizenship or terminated permanent residency; most are widely assumed to be driven by a desire to avoid paying taxes on hidden wealth.

The reality, though, is more complicated. The government's pursuit of tax evaders among Americans living abroad is indeed driving the jump in abandoned citizenship, experts say. But renouncers - whose ranks have swelled more than five-fold from a decade ago - often contradict the stereotype of the financial scoundrel. Many are from very ordinary economic circumstances.

Some call themselves "accidental Americans," who recall little of life in the U.S., but long ago happened to be born in it. Others say they renounced because of politics, family or personal identity. Some say signing away citizenship was a huge relief. Others recall being sickened by the decision.

At the U.S. consulate in Geneva, "I talked to a man who explained to me that I could never, ever get my nationality back," says Donna-Lane Nelson, whose Boston accent lingers though she's lived in Switzerland 24 years. "It felt like a divorce. It felt like a death. I took the second oath and I left the consulate and I threw up."

When Americans do hear about compatriots rejecting citizenship, it's more often people keeping their U.S. citizenship and dropping that of another country.

Last year, Texas Sen. Ted Cruz acknowledged the Canadian citizenship he was born to, but said he would renounce it. In 2012, Rep. Michele Bachmann, R-Minnesota, saying she was "100 percent committed to our United States Constitution," announced she was giving up Swiss citizenship gained through marriage.

One of the few times rejected U.S. citizenship has gotten significant ink was Facebook co-founder Eduardo Saverin's 2011 decision to turn in his American passport after moving to Singapore. Saverin likely avoided millions of dollars in taxes by doing so shortly before Facebook's initial stock offering.

Other wealthy Americans also have relinquished U.S. citizenship. Denise Rich, the ex-wife of pardoned trader March Rich, expatriated in 2012 and lives in London. Last fall, singer Tina Turner, a resident of Switzerland since 1995, relinquished her U.S. passport.

But Saverin's decision, in particular, hit a political nerve, along with scandals surrounding UBS and Credit Suisse, which were caught matching wealthy Americans with offshore accounts.

In recent years, federal officials have stepped up pursuit of potential tax evaders, using the Foreign Account Tax Compliance Act which requires that Americans overseas report assets to the IRS or pay stiff penalties. Those trying to comply complain of costly fees for accountants and lawyers, having to report the income of non-American spouses, and decisions by some European banks to close accounts of U.S. citizens or deny them loans.

But some of those surrendering citizenship say their reasons are as much about life as about taxes, particularly since the U.S. government does not tax Americans abroad on their first $96,600 in yearly income.

Decisions to renounce "are driven by a whole range of emotional considerations. ... You've got anger, you've got fear, you've got a strong sense of indignation," said John Richardson, a Toronto lawyer who advises people on expatriation. "For many of these people, this is not a tax issue at all."

Even some who acknowledge tax worries say decisions to renounce are far more complicated than a simple desire to avoid paying.

Peter Dunn, born in Chicago and raised in Alaska, moved to Canada to pursue a graduate degree in theology. He met his wife, Catherine, and they made Toronto home when her work as one of the owners of an aviation maintenance firm made her the breadwinner.

Dunn remained an American. But he was alarmed by a change in U.S. law requiring those with more than $2 million in assets to pay an exit tax if they gave up citizenship. He didn't have $2 million. But his wife was doing well enough that he imagined one day they could get there. The idea of the U.S. government taxing his Canadian wife's money didn't seem right.

"When I learned about that, I decided that to protect my wife, I better expatriate," he says.

Corine Mauch arrived at the same decision by a different route. Mauch was born a U.S. citizen to Swiss parents who were college students in Iowa. They lived in the U.S. until she was 5, then again for two more years before she turned 11. Mauch maintained dual citizenship even after she was elected to Zurich's city council. But when she became mayor, she reconsidered.

During the last American presidential election, "I asked myself `Where do I feel at home?' And the answer is clear: In Zurich and in Switzerland. My attachment to America is limited to my very early youth," Mauch said. Double taxation was "not the crucial factor for my decision. But I will not miss the U.S. tax bureaucracy either."

Taxes play little or no role in other decisions.

Norman Heinrichs-Gale's parents were missionaries from Washington state who raised him in Asia and the Middle East. In 1986, he traveled to Austria with his American wife, and they found work at a conference center in an alpine valley town of 6,000. The jobs were supposed to last a year. But the couple stayed, sending their children to local schools.

On yearly trips to the U.S. he felt increasingly like a stranger. "I never forget going into a grocery store and just being stunned by my choice of cereals," Heinrichs-Gale says. "I was stunned by just the pace of life compared to what we have here, stunned by the extremes of wealth and poverty that I encountered."

There wasn't one single thing that pushed him away. But his children wanted to attend Austrian colleges and he and his wife wanted to vote in the country they considered home. The family was tired of renewing visas and work permits. And so they signed documents giving up U.S. citizenship. Now, one of the last vestiges of American culture in their home is watching Seattle Seahawks games online.

Sports played the central role in Quincy Davis III's decision. Davis, raised in Los Angeles and Mobile, Ala., played professional basketball in Europe after three years as Tulane University's leading scorer. By 2011, he was home studying to become a firefighter when he was offered a spot on a Taiwanese pro squad. He's since helped lead the Pure Youth Construction team to two championships.

When the team's owner suggested last year that he join Taiwan's national team, Davis says he found little motivation to keep his U.S. citizenship.

"When you think about who I am as a black guy in the U.S., I didn't have opportunities," he says. "You get discriminated against over there in the South. Here everyone is so nice. They invite you into their homes, they're so hospitable. ... There's no crime, no guns. I can't help but love this place."

Many others cutting their U.S. ties say tax laws drive decisions that have nothing to do with secreting wealth.

"I wish I were wealthy," said Nelson, who says she takes in about $50,000 a year from pensions and earnings from publishing an online journal covering credit union news.

Nelson has vivid memories of growing up in the U.S. Even after moving to Europe, she continued sending five to 10 emails a week to members of Congress, opposing the Iraq war and the Patriot Act. After 15 years, she acquired Swiss citizenship so she could vote. But she began considering expatriation only in 2010 after a banker told her that, because of new U.S. financial reporting laws, it was closing the accounts of many Americans and a mistake as minor as an overdraft could mean the same for hers.

"How would my clients pay me?" says Nelson, who is 71 and also an author of mystery novels. "Where does my Social Security get deposited? Where does my pension get deposited?"

The jump in renunciations reflects evolving views about national identity, said Nancy L. Green, an American professor at the L'Ecole des Hautes Etudes en Sciences Sociales in Paris. When the U.S. got its start, citizenship was defined by "perpetual allegiance" - the British notion of nationality as a birthright that could never be changed.

American colonists rejected that to justify becoming citizens of a newly independent country. But changeable citizenship wasn't widely embraced until the mass immigration of the late 1800s, says Green, a historian of migration and expatriation.

Even then, U.S. artists and writers who moved to Europe in the 1920s were criticized, suspected of trying to avoid taxes. Until the 1960s, U.S. citizenship remained a privilege the government could take away on certain grounds. It's only since then that U.S. citizenship has come to be viewed as belonging to an individual, who could keep - or surrender it - by choice.

But Carol Tapanila's life in Canada has tested that redefinition.

Six years after Tapanila's husband lost his job at a Boeing factory in Washington state and they moved to Canada for work, the couple became citizens of their new country. She says U.S. consular officials told her that, by swearing allegiance to Canada, she might well have lost her American citizenship.

After retiring from a job as an administrative assistant at an oil company in Calgary, Tapanila began putting $125 a month into a special savings account for her developmentally disabled son, matched by the Canadian government. In her will, she authorized creation of a trust fund to draw on retirement savings and other assets to provide for her son, who is now 40, after her death.

Tapanila says she didn't know she was required to file U.S. tax returns until 2007, when her daughter raised the subject. Her troubles were compounded by her decision to apply for a U.S. passport after a border officer told her she should have one. She has since spent $42,000 on fees for lawyers and accountants and paid about $2,000 in U.S. taxes, including on funds in her son's disability savings account.

In 2012 she turned in the passport, renouncing U.S. citizenship to protect money saved for her retirement and her son. Tapanila, 70, has tried and failed to renounce U.S. citizenship on his behalf, saying officials told her such a decision must be made by the individual alone.

"You know, we are not rich people and we are not tax evaders and we are not traitors and I'm more than tired of being labeled that way," Tapanila says.

"I'm sorry that I've given my son this burden and I can do nothing about it ... I thought we had some rights to go wherever we wanted to go and some choices we could make in our lives. I thought that was democracy. Apparently, I've got it all wrong."

Join the discussion

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genicke April 26 2014 at 5:36 PM

I was friends with a family from Denmark who moved back to Denmark due to a number of factors, one of which was the rising cost of dual citizenship. Comments were made about the cost of processing the paperwork to maintain this citizenship was increasing and prohibitive. They may have had concerns about being targeted as villianous rich folks despite the fact that they worked very hard. I think that the reasons they came to the U.S. no longer exist. Our government is creating within the U.S. some of the very conditions immigrants once came here to avoid. And the wealthy will leave and take their money someplace else. After all it's their money, why shouldn't they be able to go wherever they want with it. If the Bin Laden family was welcome here after all the terrorism Osama conducted globally why should the U.S. treat these expatriots like outcasts? They aren't guilty of any crimes.

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Mark Johns April 26 2014 at 5:42 PM

Many people are just fed up with the ever increasing BS in the United states. I think you will see many more leaving in the not to distant future.

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1 reply
julihunter Mark Johns April 26 2014 at 5:55 PM

Let them go, and please join them!

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1 reply
Janie julihunter April 27 2014 at 12:32 AM

As long as they don't take the freedom and US money with them. They should be made to leave everything behind.

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lgvxl42 April 26 2014 at 5:51 PM

...........My wife is considered still to be a citizen of her native country although naturalized here. What I am saying is that, in many respects, our laws are archaic regarding citizenship. If you are a tax cheat, then you should be punished. But, perhaps its time for us to recognize dual-citizenship.

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hockeyn109 April 26 2014 at 5:59 PM

It's a personal decision. What I hate are people that say love it or leave it. Really? Americans have always fought hard to change things. I'm not happy with the current state of this country. I won't leave, I will continue pushing to change it.

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1 reply
jff411 hockeyn109 April 26 2014 at 6:05 PM

............the only way , this place will change, is if people WAKE UP ..... TO WHAT IS GOING ON IN THIS COUNTRY..............people need to get their heads out of their iphones, ipods, or whatever there doing with there concious mind and start being aware of what is going on ,,,,,,,,our so called leaders do not care about you,,,,,,democrats or republicans ..........america get your head out of the sand and wake up to whats going on.

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Elnor2e April 26 2014 at 6:00 PM

So they are going to go to another Country? OK?

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revenbvh April 26 2014 at 6:03 PM

Not just wealthy, my nephew and his friends went to Brussels and stayed there. They all work and love the clean streets and low crime rate. Regarding taxes my nephew said in the US they take taxes then you have a water bill electric gas property taxes etc. When they take his taxes all of the mentioned are paid for by the government including health care. No homeless every citizen is entitled to a place to live. The stress level is less than the US. They are not coming back. All are employed and very happy.

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ohiohikingstick April 26 2014 at 6:05 PM

This should send a signal to someone "Hey the taxes are too high here in the USA!!!"....... This year was the first year I have paid so much in taxes, it is a mess. I make a good salary, but I do not feel I should give 47% of it away to a Gov't that squanders it away on dumb projects and insane spending on things like the ACA, IRS, BATFE, EPA and NSA. At some point it needs to stop.

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1 reply
sewandsew73 ohiohikingstick April 26 2014 at 6:07 PM

I am retired and paid taxes. And I'm not a millionaire. and because of a loophole in my profession, I don't get Social Security. I can see why people leave.

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ggmac9 April 26 2014 at 6:05 PM


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sewandsew73 April 26 2014 at 6:06 PM

I wonder...are they illegals in their new country, or have they gone through the legal citizenship process?

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1 reply
ohiohikingstick sewandsew73 April 26 2014 at 6:16 PM

Many other countries, many in Euro and Asia, it only takes money and renouncing your departed country to become a citizen. Nothing like what people have to go through here in the USA to become a citizen.

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1 reply
thewolfamongsheep ohiohikingstick April 26 2014 at 6:36 PM

Because many other countries have declining populations and need immigration. They do not have the amount of people who wish to come to the United States. Birth rates in Russia and Japan are so low that the government is offering free hospitalization and to pay people to have more children. They have aging pension populations and less and less work force each year.

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dredselw April 26 2014 at 6:08 PM

2999 left this country? Well that many snuck in last week! And 1000 times that are trying to get in. More AOL BS headlines.

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1 reply
neutralslamm dredselw April 26 2014 at 6:18 PM

The problem is the wealthy 2999 are leaving and the 1000 times are looking for a free ride.

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