40,000 Americans Are Asking How to Give Up Their Citizenship. Here's the Honest Answer.

July 1, 2026 | United States | Expatriation | FATCA | Renunciation | Accidental Americans

The renunciation fee dropped from $2,350 to $450 in April 2026. Americans Overseas is advising 40,000 people. Wait times at London, Sydney, and Singapore embassies are months long. Here's what renouncing actually costs, who should consider it, and what nobody tells you about the exit tax.

On the same day the Supreme Court confirmed that being born in America guarantees citizenship, tens of thousands of Americans who already have that citizenship are lining up at consulates around the world to give it back.

Not protesters. Not the ultra-wealthy hiding assets offshore. Not people fleeing justice. Mostly: middle-income Americans who have built lives in other countries, who struggle to open a bank account or get a mortgage because of their U.S. passport, and who have done the math and decided that the cost of keeping their American citizenship — in paperwork, in compliance fees, in banking restrictions, in annual tax filings on income they earn in countries that are not the United States — is simply higher than the cost of letting it go.

Americans Overseas, one of the largest firms advising on citizenship renunciation, is currently working with approximately 40,000 people who are either in the process of renouncing or actively asking about it. Embassy wait times for renunciation appointments have stretched to months in London, Sydney, Singapore, and Edinburgh. The largest renunciation law practice in the world describes the list of locations with short wait times as "shorter than the list of places where it is long."

This article is the complete, honest guide to what renouncing U.S. citizenship actually involves in 2026 — including the fee change that most people don't know about, the exit tax that catches many people off guard, and the specific profiles of people for whom this decision makes sense versus those who should think much more carefully.

The Fee Just Dropped 81% — But Almost Nobody Knows

This is the piece of news that started the current surge in renunciation inquiries and that most coverage has buried.

On April 13, 2026, the State Department reduced the consular fee for renouncing U.S. citizenship from $2,350 to $450.

That is an 81% reduction — reversing a 2014 increase that had taken the fee from $450 to $2,350 in a single jump. The 2014 increase was widely criticized as a deterrent fee rather than a cost-recovery measure: it was more than 20 times the average fee charged by other developed countries for the same process, and more than twice the fee of the next-highest country (Jamaica). Legal scholars at McGill and Temple had argued the fee constituted an arbitrary barrier to change of nationality under international law.

The reduction to $450 removes that barrier for many people who were previously priced out of formal renunciation — particularly "accidental Americans" who may have limited income and for whom the $2,350 fee was simply not possible.

Why People Are Doing This — The Real Reasons

The dominant narrative in media coverage frames renunciation as political protest. It's a more compelling story than the truth, which is primarily bureaucratic and financial.

The most common reasons, in order of frequency according to practitioners:

1. FATCA: The Banking Problem

The Foreign Account Tax Compliance Act, enacted in 2010 and implemented from 2014, requires foreign banks to report the accounts of U.S. persons to the IRS or face a 30% withholding penalty on U.S.-source income. Most major banks outside the United States have decided the compliance cost and legal exposure are not worth it.

The practical result: Americans living abroad are routinely refused mortgages, investment accounts, life insurance, and in some cases basic checking accounts — not because of their personal financial situation, but because their U.S. passport creates compliance obligations their bank doesn't want.

In Paris, a bank compliance system detecting U.S. ties may automatically decline an account application. In Canada, an American executor named in a will can make every account they touch suddenly reportable under FATCA. In Germany, a U.S.-citizen spouse on a joint investment account can expose the entire portfolio to U.S. reporting requirements.

This is not a hypothetical problem. It is the daily reality for millions of Americans abroad. Most of the 40,000 people Americans Overseas is currently advising are renouncing because of FATCA, not politics.

2. Citizenship-Based Taxation

The United States is one of only two countries in the world that taxes its citizens on worldwide income regardless of where they live. The other is Eritrea.

Every American abroad must file a U.S. tax return every year. Always. Even if they owe no U.S. tax — which is common, given foreign tax credits and the Foreign Earned Income Exclusion — the filing requirement remains. The forms are complex. The penalties for errors or late filing are severe. Professional assistance is expensive.

For someone living and working in Germany, France, or New Zealand who has no connection to the United States beyond their birthplace, the annual obligation to file U.S. returns and maintain U.S. compliance is an ongoing cost with no corresponding benefit.

3. The Political Trigger

Political motivation is real — particularly since January 2025 — but practitioners consistently describe it as secondary to financial and compliance reasons. Election cycles produce spikes in inquiries; the practical calculations produce actual renunciations.

The Erin Klatt story from CNN is illustrative: she left the US in 2016, became a New Zealand citizen in May 2025, and renounced her U.S. citizenship in March 2026. She describes political motivation as a factor — but the timing followed, not preceded, her acquisition of New Zealand citizenship. She didn't renounce out of anger; she renounced because she had finished building her life somewhere else and the paperwork no longer made sense.

The Process: What Actually Happens

Renouncing U.S. citizenship is a formal legal process that takes months and cannot be undone.

Step 1: Confirm you have another nationality

The U.S. State Department requires evidence that you hold or will acquire another citizenship before renouncing. This is not negotiable — the U.S. will not allow you to become stateless. If you are a dual citizen, this is already satisfied. If you are not, you must obtain another citizenship first.

Step 2: Book a consulate appointment

Contact the U.S. embassy or consulate in the country where you live. Demand far exceeds supply in most major cities. Wait times at current high-demand posts:

Book as early as possible. The wait time is genuinely the longest part of the process for many applicants.

Step 3: The two-appointment process

Renunciation requires two separate appointments with a U.S. consular officer:

First appointment: A counseling session during which the officer explains the consequences of renunciation — loss of U.S. passport, loss of right to live and work in the U.S. without a visa, potential exit tax liability, permanent bar on future naturalization without special authorization. The officer will attempt to confirm you understand and are acting voluntarily.

Second appointment: The formal renunciation. You sign Form DS-4080 (Oath of Renunciation of Nationality) and Form DS-4081 (Statement of Understanding). You pay the $450 fee. You take the oath.

Step 4: Await your Certificate of Loss of Nationality

After the appointment, your file goes to the State Department in Washington for review and approval. Processing time has historically been several months. Once approved, you receive your Certificate of Loss of Nationality (CLN). This is the document that proves to banks, governments, and the IRS that you are no longer a U.S. person.

Step 5: File your final U.S. taxes

This is the step that surprises most people. Renouncing your citizenship does not end your U.S. tax obligations on the spot. You must file:

• Dual-status Form 1040 for the year of renunciation (U.S. resident for part of the year, non-resident for the remainder)

• Form 8854 (Initial and Annual Expatriation Statement) — this is the form that determines whether you are a "covered expatriate" subject to the exit tax

The Exit Tax: The Part Nobody Tells You About

The exit tax is the most significant financial consideration in the renunciation decision — and the one that most people haven't calculated before they start the process.

When you renounce, the IRS treats you as if you sold all of your worldwide assets the day before you expatriated. Any unrealized gains above the exclusion amount are taxed at the time of renunciation, even though you didn't actually sell anything.

But — critically — the exit tax only applies if you are a "covered expatriate." You become a covered expatriate if you meet any of these three tests:

The third test catches accidental Americans hardest. Someone who was born in the U.S. but has never lived there, never earned U.S. income, and never knew they had U.S. tax filing obligations cannot truthfully certify five clean years of compliance. They become a covered expatriate by default — even with modest income and low net worth.

If you are NOT a covered expatriate:

No exit tax applies. You owe nothing beyond normal income tax for the year of renunciation. This is the situation for the majority of people who renounce.

If you ARE a covered expatriate:

The exit tax applies to unrealized gains above an inflation-adjusted exclusion ($910,000 in 2026). Common high-exposure assets include:

• Real estate with significant appreciation

• Unrealized gains in investment portfolios

• Interests in businesses or partnerships

• Retirement accounts (IRAs, 401(k)s — treated specially)

• Stock options with unvested gains

The planning implication: if you are a covered expatriate with significant unrealized gains, you may need to sell assets before renouncing rather than triggering a deemed sale at potentially unfavorable timing. This requires careful tax planning with a qualified international tax advisor — ideally 12-24 months before the renunciation appointment.

Who Should Seriously Consider Renouncing

The Post-Renunciation Reality

Renouncing U.S. citizenship ends your right to live and work in the United States without a visa. It does not mean you can never visit or return — but you will need a visa to do so, like any other foreign national.

One important edge: under the "Reed Amendment," the U.S. can bar former citizens from entering if their renunciation was motivated by tax avoidance. In practice, this provision has almost never been applied. But it exists, and consular officers sometimes raise it as a theoretical concern during the counseling appointment.

What changes immediately upon CLN issuance:

• You surrender your U.S. passport

• FATCA reporting obligations end for your foreign accounts

• Future U.S.-source income may still be subject to U.S. withholding tax at 30% (unless a tax treaty applies)

• You are no longer eligible to vote in U.S. elections

• You may visit the U.S. as a tourist, on a B-2 visa, for up to 6 months at a time

The Timing Factor: Why 2026 Is Different

Three factors have converged in 2026 to make renunciation more prevalent than at any point since the post-FATCA surge of 2020:

1. The fee dropped to $450. For many accidental Americans who were blocked by the $2,350 barrier, the practical path is now open.

2. The post-2024 election climate. Both those who oppose the Trump administration's direction and those who have decided the U.S. is simply moving in a direction incompatible with their lives abroad are making decisions they had been deferring.

3. Trump v. Barbara's aftermath. This sounds counterintuitive — the Supreme Court just upheld birthright citizenship. But for Americans abroad who have been watching the administration's immigration agenda, the week's events have clarified what kind of country the U.S. is becoming. For some, that clarity is a deciding factor.

FAQ

Can I renounce and still visit the US? Yes. Former U.S. citizens are not automatically barred from entering the U.S. You would need a visa (typically a B-2 tourist visa) for visits, just like any other foreign national.

What happens to my Social Security benefits? Former U.S. citizens may still receive Social Security benefits they have earned, subject to tax treaty rules between the U.S. and your country of residence.

Can I renounce if I only hold U.S. citizenship and no other passport? The State Department will not process a renunciation that would make you stateless. You must have or be in the process of acquiring another citizenship first.

If I renounce, do my U.S.-born children keep their citizenship? Yes. Your renunciation does not affect citizenship your children have already acquired. Children who are U.S. citizens remain citizens regardless of what their parent does.

What is the Streamlined Filing Compliance Procedure? If you have been living abroad and haven't filed U.S. tax returns because you didn't know you were required to, the IRS Streamlined Foreign Offshore Procedures allow you to catch up without the normal penalties for late filing — typically by filing 3 years of returns and 6 years of FBARs, with a written non-willfulness statement. This is generally required before you can certify the compliance required on Form 8854.

Is renouncing permanent? Yes. Once the State Department approves your Certificate of Loss of Nationality, renunciation is permanent. There is no "undo" option. The only path back to U.S. citizenship would be naturalization as a foreign national, which requires starting the immigration process from scratch.

Editorial Opinion — The Immigrants

It is worth sitting with the juxtaposition that defined this week.

On June 30, the Supreme Court confirmed that birth on American soil confers citizenship — that the Constitution's promise, made in 1868, holds for every child born here regardless of their parents' status.

On July 1, tens of thousands of people who already hold that citizenship are waiting in line at consulates around the world to give it back.

We don't think this is a contradiction. We think it reveals something important about the gap between what American citizenship is, legally and symbolically, and what it costs to maintain, practically and financially, for people who live their lives in other countries.

The United States is one of two countries on earth that taxes its citizens on worldwide income. It is the country that passed FATCA — a law so aggressive in its extraterritorial reach that major banks in Europe and Canada have quietly decided the simplest compliance strategy is to refuse American clients. It is a country where the paperwork burden of maintaining citizenship, even for someone who has not lived there in decades, involves annual IRS filings, FBAR disclosures, Form 5471s for foreign business interests, and Form 3520s for foreign trusts — with penalties measured in thousands of dollars per form for mistakes.

The 40,000 people asking how to give up American citizenship are not, in the main, wealthy tax evaders or political protesters. They are ordinary people who built lives elsewhere and discovered that their U.S. passport follows them everywhere — not as a benefit, but as a compliance obligation. For them, renunciation is not abandonment. It is completion.

The United States could address this by moving to residence-based taxation, as nearly every other developed country does. It has chosen not to. The queue at the consulate is the result.

Disclaimer

This article is for informational and journalistic purposes only and does not constitute legal or tax advice. Renouncing U.S. citizenship is an irreversible decision with significant legal, financial, and tax consequences. The exit tax analysis in this article is general in nature and does not apply to every situation. Individuals considering renunciation should consult a qualified international tax attorney and a licensed immigration attorney before taking any action. The Immigrants is not affiliated with any law firm, tax advisory firm, or government agency.

July 1, 2026 | United States | Renunciation | Expatriation | FATCA | Accidental Americans | Exit Tax | Form 8854 | CLN | Americans Abroad | Citizenship