The U.S. State Department published the final rule on Friday (March 13) in the Federal Register, officially reducing the administrative processing fee for renouncing U.S. citizenship from $2,350 to $450. This policy change fulfills the government’s commitment to reducing fees made in 2023.
According to the official terms in the Federal Register, the new fee will officially take effect on April 13th (30 days after publication). This means that applicants whose interview appointments are scheduled after April 13th can enjoy the new price of $450, while those after that date will still have to pay the original $2,350 fee.
The official rule clearly states that this fee adjustment is not retroactive. Applicants who have already paid $2,350 before the new rule takes effect will not be eligible for a refund of the price difference. It is estimated that since the government first revealed its intention to reduce fees in 2023, more than 8,700 individuals have paid the full higher price.
In the notification, the State Department admitted that the actual administrative cost of processing a Certificate of Loss of Nationality (CLN) is much higher than $450. The decision to lower the fee is primarily based on two considerations:
1. Easing the burden:
The government acknowledges that the $2,350 fee is a heavy burden for many, especially for overseas nationals facing difficulties in opening bank accounts and tax compliance due to the Foreign Account Tax Compliance Act (FATCA).
2. Upholding rights:
The State Department believes that renouncing citizenship is a fundamental right. In order not to “hinder” people from exercising this right due to economic barriers, the decision was made to adjust the fee.
Renouncing U.S. citizenship is a serious and irreversible legal act with a complex processing procedure.
According to the announcement and relevant laws, many “Accidental Americans,” long-term residents abroad who solely obtained U.S. citizenship through birth but have no substantial ties to the U.S., choose to renounce their citizenship due to burdensome global tax obligations, expensive tax compliance costs, and overseas banks’ restrictions on U.S. citizens.
Applicants cannot complete the process by mail or through an agent. They must personally visit a U.S. embassy or consulate abroad and have at least one (usually two) interviews with consular officers. During the interview, applicants must prove that their decision is voluntary and legally binding, and formally recite and sign an oath of renunciation in front of the officer.
The price reduction also marks the end of years of legal and social controversies. The Accidental Americans Association, based in France, has initiated multiple lawsuits, accusing the high fees of essentially creating a “renunciation barrier” that violates the U.S. Constitution.
Experts caution that the fee reduction only applies to the State Department’s “administrative processing fee.” Applicants should still be aware that renouncing citizenship does not automatically relieve them of their obligations to the Internal Revenue Service (IRS). High net worth individuals who meet certain conditions may still be subject to an Exit Tax and must file the final year’s tax forms (such as Form 8854).