British Foreign Secretary Boris Johnson was among the record number of American-born citizens handing back their passports last year.
The latest Federal Register shows 5,411 Americans gave up citizenship – a rise of 26% compared to the previous 12 months.
The register is published quarterly by the US Treasury.
Johnson is a leading Tory politician and one of the architects of the Brexit leave campaign which won the June referendum, starting off the process of Britain to leave the European Union.
He was born in New York and lived there until he was five years old, when his parents came to the UK.
Vow not to pay taxes
The renunciation follows a public row between Johnson and the Internal Revenue Service (IRS) over capital gains on a property sale in 2014.
He vowed not to pay the money to the IRS, but later relented.
The US raises taxes by domicile not residence, so wherever a US citizen lives in the world, they are liable to report their earnings and gains for taxation in the US.
Campaigners leading the fight to repeal the Foreign Account Tax Compliance Act (FATCA) blame the law for the rise in passport surrenders.
FATCA demands banks report details of accounts they hold for US expats with cash or investments of more than $200,000 to the IRS each year.
Repeal FATCA campaign
In a bid to avoid the high costs of compliance, many financial institutions have turned away their US customers, leaving them with nowhere to bank.
“FATCA is an extraterritorial diktat that burdens financial institutions in other countries and their clients, which violates the sovereignty of other countries and is detrimental to their consumers and taxpayers,” said one of the leading anti-FATCA campaigners, Nigel Green, CEO of the world’s largest independent IFA for expats, deVere Group.
“FATCA turns law-abiding, middle-class Americans living overseas, of whom there are approximately 8 million, into financial pariahs,” leading to record numbers of US citizenship renunciations.”
Green is a figurehead for the repeal FATCA campaign which is urging president Donald Trump to dump the law as part of his forthcoming tax bill.
The group is counting on the Republican party’s pledge to repeal FATCA to win the day for them now Trump, a Republican, is in the White House.