The U.S. State Department is cutting the fee Americans pay to formally renounce their citizenship from $2,350 to $450, under a final rule effective April 13.
In 2015, the State Department raised the fee to $2,350 to cover rising demand and administrative costs. The new $450 fee now returns the cost to levels charged from 2010 through 2014. Before 2010, it was free.
“This action is being taken to help alleviate the cost burden for those individuals who decide to request CLN services by returning to the below-cost fee that was in place from 2010-2014,” according to the State Department.
The reduction comes amid an interest in renunciation from Americans living abroad who face U.S. worldwide taxation and reporting obligations regardless of residence.
According to the State Department’s analysis of comments on the rule, roughly 880 of 910 public comments submitted during the rulemaking period highlighted frustration with U.S. tax rules.
“Many reported spending hundreds or thousands of dollars a year on tax professionals, even when they might have no U.S. tax liabilities,” stated the analysis.
Some also said that although they had to comply with U.S. tax laws, they received few of the services funded by taxes, such as free COVID vaccines, Medicare, and improved U.S. infrastructure.
“A few also expressed political objections to the way their tax dollars were used,” it stated.
Several commenters also cited problems created by the Foreign Account Tax Compliance Act (FATCA), saying it complicates opening bank accounts, obtaining mortgages, and investing abroad.
The sharp fee increase in 2015 drew strong opposition from advocacy groups, including the France-based Association of Accidental Americans. The group represents people who live primarily overseas and hold U.S. citizenship solely because they were born in the United States.
The association has filed multiple lawsuits challenging the fee’s constitutionality, including one ongoing case that argues renouncing citizenship should be free of charge.
“The Association of Accidental Americans welcomes this decision, which acknowledges the necessity of making this fundamental right accessible to all,” its president, Fabien Lehagre, said in a statement. “This victory is the direct result of six years of relentless legal action and advocacy.”
The association told the court that since the 2023 announcement to lower the fee, at least 8,755 Americans paid the full $2,350 to renounce their citizenship.
Eight individuals who had already paid the $2,350 fee for renouncing U.S. citizenship requested a refund under the new $450 fee, but the State Department declined, citing the need for government services to be self-sustaining.
For Americans seeking to renounce their citizenship, the process is strict. It requires one to appear in person at a U.S. embassy or consulate, complete two interviews with a consular officer, and take a formal oath relinquishing nationality.