More Americans giving up citizenship to evade taxes due to new law

The number of Americans giving up their U.S. citizenship is at an all time high because of the new rules created to pursue tax evaders. In the first half of this year 1,577 Americans gave up their citizenship. The law which is causing this is called the Foreign Account Tax Compliance Act and the new rules require foreign banks, including those in Switzerland to turn over data on American clients to the United States Government.

100 Swiss banks are handing over information to avoid prosecution for helping tax evaders, leading 576 American expatriates to renounce their citizenship in the second quarter.

The USA is the only Organization for Economic Cooperation and Development nation that taxes citizens wherever they live. This means that to expats who want to avoid paying higher, U.S. level taxes, the idea of giving up their passports is becoming more attractive.

Almost 9,000 Americans have given up their nationalities in the past five years.

Swiss bank UBS AG was fined $780m and forced to hand over data on 4,700 accounts in 2009, triggering the U.S. government’s clamp down on expatriates evading tax

About six million Americans live abroad.

The government’s step up in their search for tax evaders was triggered in 2009, when UBS AG (UBSN) paid a $780m fine for aiding them, and was forced to give up information on around 4,700 accounts.

Swiss banks are now going back through their records as far as the 1990s to find any traces of American clients, including people with U.S. addresses or phone numbers, or even those who were schooled there.

Jeffrey Newman represents whistleblowers.