On Thursday, March 12, 2026, the U.S. State Department announced a fee reduction for renouncing U.S. citizenship from the current amount of $2,350 to $450 to begin on April 12, 2026. $450 was the cost to renounce from 2010-2014 before the State Department raised the fee from 2014 to present day. The State Department has reduced the fee after pressure and a lawsuit from L'Association des Américains Accidentels (AAA). The lawsuit was filed on the basis it has “violated the U.S. Constitution and international law by charging a fee for individuals to renounce their American citizenship.”
In 2023, the State Department ran a comment period to solicit public feedback in its consideration to reduce the renunciation fee. Democrats Abroad ran a campaign encouraging Americans abroad to submit their individual comments to raise awareness that the increase in renunciations was due to the pain and suffering caused by the U.S. citizenship based tax system. The final rule from the State Department confirms that the comments received by Democrats Abroad members and Americans abroad-at-large were heard and entered into official record.
The most important takeaway from the State Department’s final rule is not just the fee reduction itself. In the government’s own words, the Department took into account “not insignificant anecdotal evidence” of the tax-related difficulties faced by Americans abroad, including in part because of FATCA. The rule further acknowledges that most commenters did not want to give up their citizenship at all. They wanted to remain U.S. citizens, but found that worldwide taxation, compliance costs, and ordinary financial barriers abroad had made that status increasingly unworkable. Reducing the renunciation fee addresses one symptom. It does not solve the underlying problem. Only Congress can do that through residence-based taxation.
We thank everyone who participated in this public comment in 2023. It is hugely beneficial in our tax advocacy work to have these comments on official record with the U.S. government.
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