13 NEW CITIZENSHIP AND RENOUNCING YOUR U.S. CITIZENSHIP

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Renouncing your U.S. citizenship is the only true way to get out

of paying U.S. taxes, and with the exception of a few possible

strings attached, the process is very much achievable. For anyone

who faces significant income taxes and a desire to leave the

United States, this is a viable option.

Depending on how you structure your post-U.S. life, it is quite possible

to avoid personal income taxes entirely. Find a nice no-tax alternative

country for securing new citizenship, like Dominica or Saint

Kitts and Nevis, keep your offshore business in the same one, or better

yet for further diversity, use yet another no-tax haven like Belize for

business purposes, and keep your personal banking and investments

in Switzerland, Liechtenstein, Austria, Panama, or even Andorra. As

with the other strategies presented here for going offshore, the

sooner the better, while the opportunities still exist. All good things

are subject to change.

The Internal Revenue Service could perceive people in a high tax

bracket who want to renounce their citizenship as wanting to avoid

taxes. The government has developed some posturing to discourage

and limit this practice. A person with over $100,000-a-year income at

the time of renouncing U.S. citizenship might still be required to pay

income taxes for 10 consecutive years thereafter. There is also the

rather unlikely possibility that should your reason for leaving the

United States be “tax motivated,” that you could be permanently exiled,

that is, unable to ever return to the United States. It remains to

be seen if this tactic is constitutional and this has yet to be tested.

But not returning to the United States may not be a problem

either. Your children and grandchildren may like coming to visit you

during the holidays in sunny Corfu in the Greek Islands, where the

government will not tax your retirement income. Or, they may enjoy

speaking Spanish with the locals when they find you have taken up

painting in San Miguel de Allende, Mexico. Probably they’ll want to

join you on that leisurely sailing trip through the Caribbean while

you country-shop for your next retreat. After years of paying high

taxes and working hard to legally avoid them, not being able to go

back to the United States may be a nonissue. It could be just what the

doctor would order.

Even if you wish to renounce your U.S. citizenship after you have

expatriated your personal and financial affairs offshore, you must

first obtain new citizenship in a favorable country, preferably with no

income tax and other taxes. There are many possibilities, but Dominica

and Saint Kitts and Nevis can give you citizenship as fast as

within 60 to 90 days—and with it comes their passport, which in both

cases is good for visa-free travel to 90 countries. Other citizenship opportunities

exist, but without guarantees, unlike these two countries,

which promote their Economic Citizenship Programs aggressively.

Both of these countries, at the time of this writing, are excellent for

this purpose. Neither of them imposes personal income tax, and both

of them permit dual citizenship; nor will they report your activities or

status back to the U.S. government.

Once you obtain your new citizenship and your life is now entirely

offshore, you can renounce your U.S. citizenship whenever you wish

(see Part Four: “Offshore Citizenship and Retirement Opportunities”).

This is the final step in expatriating, and to get there, you should

take it in steps, as outlined here. Prior to renouncing your U.S. citizenship,

you should seek professional advisors with specific expertise

in this area.