Renounce or Lose Your U.S. Citizenship: What Happens Next?
As we’ve explained so far, renouncement of citizenship is a serious action with serious consequences. So, it’s normal that there’ll be some outcomes of renounceing or losing your US citizenship. There are also some pros and cons.
- You lose the rights and responsibilities of a US citizen.
Pro: You can have less tax burden as you’ll not pay tax on your worldwide income anymore.
Con: It’s possible that you’ll lose the right to live and work in the United States as well as vote and receive the protection of the US government.
- You’ll need to become a citizen of another country, so be prepared for this and choose one already. If you don’t do this, you may face the risk of becoming stateless.
Pro: You can start benefiting from another country’s citizenship. For example, if you have a citizenship from a European country, then you have visa-free travel opportunity within the EU countries, use the social services.
Con: You can experience severe hardships as a stateless person. For instance, owning a property, working, marrying, receiving medical care, or attending school in the US will become difficult.
- The need to get a visa to make a return to the US or not be eligible for applying for the Visa Waiver Program.
Pro: As you were a citizen of US for your all life until renunciation, you’ll have bonds with the US. If you plan to visit the US for tourism, business, or family reasons, you’ll need a valid visa. However, it depends on the second citizenship you hold. You may be able to visit the US without a visa for a specific period of time.
Con: You may experience trouble getting a visa or being denied entry to the US if you have a criminal record. If you renounced your US citizenship for the tax avoidance means or consideration of a security threat, there may be other reasons for the denial of your visa application.
- An exit tax, a final tax return, and other possible tax obligations may come along with renunciation.
Pro: It’s possible to avoid your future tax liabilities and filing requirements as a US citizen. Instead, you can report your foreign bank accounts or foreign companies.
Con: You may need to pay a one-time tax on your property’s net unrealized gain, submit your dual-status tax return, and pay taxes and social security benefits.
- You can’t give up on your military obligations if you’re a male born after 1960 in the US.
Pro: As a dual citizen of the US obligated to provide military personnel to the U.S., you may still be subject to the U.S. military draft in a national emergency; doesn’t matter if you primarily reside outside the U.S. But it’s not a certain obligation, so it depends on your situation.
Con: If you fail to register with the Selective Service System, it may result in legal consequences, including prosecution and denial of certain benefits.
