Tax Compliance

This CNNMoney Article Profiles a Number of Citizens Residing Overseas who Renounced

By · March 13, 2014 · Updated June 3, 2026

Why expats are ditching their U.S. passports

CNNMoney.com

By Sophia Yan (11 March 2014)
Reading the personal stories of some of these individuals demonstrates the complexities of living as a U.S. citizen overseas.   As a group, they are all intelligent, highly educated and in one way or another very negatively impacted by the U.S. citizenship based taxation system the U.S. has had since the U.S. Civil War.
See the summary of current law below:

U.S. taxation of citizens has a long history going back to 1861 and the Civil War.4  The concept of citizenship based taxation was upheld by the U.S. Supreme Court in the 1920s.5  See Cook v. Tait,6  where a U.S. citizen resided permanently and was domiciled in Mexico City with his Mexican citizen wife and the Court found that U.S. taxation of his Mexican source income was indeed constitutional. Notwithstanding the long history of U.S. citizenship based taxation, the authors view it as an anachronism in the 21st century since it is particularly difficult to administer and cannot be enforced effectively overseas.7

The complete proposal can be read at  “Tax Simplification: The Need for Consistent Tax Treatment of All Individuals (Citizens, Lawful Permanent Residents and Non-Citizens Regardless of Immigration Status) Residing Overseas, Including the Repeal of U.S. Citizenship Based Taxation,”  by Patrick W. Martin and Professor Reuven Avi-Yonah, 2013.

 

 

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Patrick W. Martin

Patrick W. Martin

U.S. International Tax Lawyer · Shareholder, Chamberlain Hrdlicka

Patrick W. Martin is a U.S. tax lawyer licensed in California, Texas, and Washington, D.C., with 32+ years advising on the tax consequences of renouncing U.S. citizenship or abandoning lawful permanent residency. He served as lead counsel in Aroeste v. United States, the landmark federal case on green card holders, tax treaties, and the exit tax. Best Lawyers in America® (Tax Law), 2015–2025.

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