Complicated taxes causing some Americans to give up citizenship - wave3.com-Louisville News, Weather & Sports

Complicated taxes prompting some Americans to give up citizenship

Posted: Updated:
Unlike most countries, the U.S. taxes citizens on all income regardless of where it's earned or where you reside. (Source: CNN) Unlike most countries, the U.S. taxes citizens on all income regardless of where it's earned or where you reside. (Source: CNN)

(CNN) - "See you later, Uncle Sam!"

That's what 3,000 Americans decided to say last year, lining up around embassies and renouncing their U.S. citizenship.

A CNN Money analysis of government data shows a dramatic spike in Americans turning in their passports. In fact, the 2013 number was three times the average of the previous five years.

Why the big rise? You can blame a complicated tax system for some of it.

Unlike most countries, the U.S. taxes citizens on all income regardless of where it's earned or where you reside.

For some ex-patriots, reporting taxes can be so difficult that they need expert help that can cost thousands.

What's making things even more complex is a new tax law that targets overseas tax evasion.

Tax experts say the new law is making things so onerous that more people seem to be throwing in the towel and giving up their U.S. citizenship just to simplify things.

Add to that the fact that banks like Deutsche Bank have even decided to close out the securities accounts of U.S. residents outside of America because they're afraid of big penalties should they make a mistake reporting information on U.S. held accounts.

The other big factor in giving up your U.S. passport: protecting wealth.

While it's illegal to renounce your U.S. status to avoid paying taxes, people may be doing it anyway.

But giving up your citizenship doesn't mean you're off the hook for back taxes because you'll still owe them.

Copyright 2014 CNN. All rights reserved.

  • More NewsMore>>

  • Crimea in crisis

    Crimea in crisis

    The Ukrainian region of Crimea is facing a dramatic change by siding with Russia, threatening to further weaken the already unstable situation in this highly divided nation.More >>
    The Ukrainian region of Crimea is facing a dramatic change by siding with Russia, threatening to further weaken the already unstable situation in this highly divided nation.More >>