Why 4,900 Americans Renounced in 2025—and Why the Number May Climb
According to reports from Forbes and Bloomberg Tax in January 2026, 4,900 Americans gave up their citizenship in 2025, the highest annual total in years. The drivers are no secret to anyone living abroad: citizenship-based taxation means you file US tax returns no matter where you live, FATCA and FBAR turn every foreign bank account into a reporting obligation, and the cost and complexity of staying compliant—often hiring specialists every year—add up over a lifetime.
For Americans in Switzerland specifically, the friction is amplified. Swiss banks sometimes decline US clients or charge higher fees because of the compliance burden FATCA imposes on them. Your pillar 2 pension and pillar 3a savings may trigger complex US reporting, and certain Swiss mutual funds can be classified as PFICs—passive foreign investment companies—subject to punitive US tax treatment. The administrative weight isn't occasional; it's annual, and it's permanent as long as you hold a US passport.
The April 2026 fee drop—from $2,350 to $450—removes a significant financial barrier. Experts widely expect 2026 renunciation numbers to exceed 2025. The lower fee makes the process accessible to more people, but the decision itself remains just as complex and just as irreversible.
What the Renunciation Process Actually Involves
Renouncing US citizenship is a formal, multi-step legal process conducted through a US embassy or consulate. You cannot renounce by mail, email, or on US soil—it must happen abroad, in person, in front of a consular officer.
- Schedule an appointment at the nearest US embassy or consulate (in Switzerland, that's Bern or the consulate in Zurich)
- Attend the interview, where the consular officer will confirm you understand the consequences and are acting voluntarily
- Take an oath of renunciation
- Receive a Certificate of Loss of Nationality (CLN) weeks or months later, the official proof you are no longer a US citizen
- File IRS Form 8854 (Initial and Annual Expatriation Statement) with your final US tax return
The $450 fee applies at the appointment. The CLN is the document that makes it official; until you have it, you remain a US citizen for all legal purposes. Form 8854 is where the IRS determines whether you owe exit tax—more on that below.
This Decision Is Permanent
Once the CLN is issued, there is no path back to US citizenship except through the standard immigration process (green card, then naturalization after years of residence). You cannot undo renunciation because compliance became easier or your circumstances changed.
The IRS Exit Tax: Who Pays and How It Works
Renouncing citizenship does not automatically trigger a tax bill, but it does trigger an IRS analysis. The question is whether you are a covered expatriate. If you meet any one of these three tests on the day you renounce, you are covered and subject to exit tax rules:
- Your net worth exceeds $2 million (worldwide assets minus liabilities)
- Your average annual US income tax for the five years before renunciation exceeded $206,000 (2025 threshold, adjusted annually for inflation)
- You fail to certify on Form 8854 that you were compliant with all US tax obligations for the five years before expatriation
If you are a covered expatriate, the IRS applies a mark-to-market regime: you are treated as if you sold all your worldwide assets the day before renunciation. Any gain above $866,000 (2025 exemption, inflation-adjusted) is taxed as capital gains income on your final return. This is the exit tax. Your actual assets do not change hands—no forced sale—but the tax bill is real.
Certain assets receive different treatment. US retirement accounts (401(k), IRA) are not marked to market but may be subject to withholding when you eventually take distributions as a non-resident alien. Deferred compensation and some trust interests have their own rules. If you hold a Swiss pillar 2 balance or pillar 3a account, their treatment depends on whether the IRS considers them foreign pensions or foreign grantor trusts—details that require case-by-case analysis.
If you are not a covered expatriate—net worth under $2 million, average tax under the threshold, five years compliant—you owe no exit tax. You file Form 8854, certify your compliance, and you're done. But even in that scenario, your future relationship with the US tax system changes: you become a non-resident alien; many US-source payments may be subject to withholding unless a tax treaty provides relief.
What You Lose When You Renounce
Giving up your US passport is not just a tax decision—it's a legal and practical one with consequences that extend far beyond April 15 every year.
You lose the right to live and work in the United States without a visa. If your career, family situation, or plans change and you want to move back, you will need to apply for a green card like any other foreign national—a process that can take years and has no guarantee. You lose consular protection when traveling: if you run into trouble abroad, the US embassy will not assist you. You lose the right to vote in US elections. If you have US-source income in the future—royalties, rental income, dividends from US stocks—you will be subject to non-resident withholding, often at higher rates than residents pay.
You also lose the ability to pass US citizenship to children born after renunciation. If you renounce and later have a child, that child will not be a US citizen by descent. For families, this can be a significant long-term consideration.
Traveling to the US After Renunciation
As a Swiss citizen (or citizen of another visa-waiver country), you can still visit the US for short tourism or business visits under ESTA. But if you want to stay longer, work, or move back, you need the appropriate visa or green card. The IRS does not ban former citizens from entering the country, but immigration law treats you like any other foreign national.
What You Keep
Renouncing citizenship does not mean you lose everything connected to your US past. If you have earned enough Social Security credits, you remain eligible for Social Security retirement benefits. The US will pay those benefits to non-resident aliens, though there may be tax-treaty implications and withholding depending on where you live.
You keep any assets you own—your Swiss bank accounts, your apartment, your brokerage portfolio. But the US tax treatment of those assets changes. As a non-resident alien, you will not file a US Form 1040 unless you have US-source income, and you will not be subject to FATCA or FBAR. The annual reporting burden that drove many to renounce in the first place disappears.
Your Swiss tax situation remains unchanged. Switzerland taxes you as a resident based on your worldwide income and wealth, just as it did before. Renouncing US citizenship does not alter your status in Switzerland—it removes a second tax filing obligation, not your primary one.
The Emotional and Practical Reality
For many Americans abroad, the decision to renounce is not driven by anger or ideology—it's a practical response to systems that don't fit together. The US taxes citizenship; Switzerland taxes residence. Living in Switzerland means navigating dual filing requirements, FATCA reporting, and complex pension rules every year. Renunciation ends that friction, but it also ends your legal tie to the country, and that carries weight—emotional, familial, professional—that no tax calculation can capture.
Some people renounce and feel relief. Others feel loss, even when the decision was rational. Both reactions are normal. The key is to make the decision with full information, not in frustration during tax season or after a bank closes your account.
How to Think Through the Decision
If you are considering renunciation, the first step is not scheduling an embassy appointment—it's getting clarity on your specific situation. Do you meet the covered expatriate thresholds? What is your actual net worth when calculated under US rules? What are the Swiss and US tax consequences of your pillar 2 balance, your investment accounts, any US retirement funds or real estate?
These questions require personal analysis. The IRS rules are public, but applying them to your balance sheet, your income history, and your future plans is individual work. A cross-border tax advisor and, often, an immigration attorney should be part of that conversation. Renunciation is legal and legitimate—thousands do it every year—but it is also irreversible, and you want to be certain before you take the oath.
Consider your time horizon. If you plan to stay in Switzerland permanently, have no US income or property, and your net worth and tax history keep you under the covered expatriate thresholds, renunciation may simplify your life significantly. If you might move back to the US for work or family, or if you have young children who might want the option of US citizenship, the calculus is different.
Start with the Five-Year Compliance Test
Even if your net worth is under $2 million and your tax bills have been modest, you must certify five years of full US tax compliance on Form 8854. If you have unfiled FBARs, unreported foreign accounts, or gaps in your filing history, you need to address those before renouncing—otherwise you become a covered expatriate by default, regardless of wealth or income.
What the Fee Drop Changes—and What It Doesn't
The reduction from $2,350 to $450 makes renunciation financially accessible to far more people. For someone who has already decided to renounce, it removes a significant out-of-pocket cost. For someone on the fence, it eliminates one practical barrier—but it does not change the legal or tax complexity, and it does not make the decision reversible.
The fee was never the hardest part. The hardest part is the finality, the loss of future optionality, and the need to get the tax and legal details right before you walk into the embassy. The $450 fee is what you pay the State Department; the real cost is in the preparation, the analysis, and the certainty that this is the right move for your life, not just your April tax filing.
When Renunciation Makes Sense—and When It Doesn't
Renunciation makes sense when your ties to the US are truly in the past, when the annual compliance burden outweighs any benefit you derive from citizenship, and when you have no realistic scenario in which you would want to live or work in the US again. It makes sense when you have stable residence and citizenship elsewhere—Switzerland, in your case—and when the cost and complexity of maintaining FATCA and FBAR compliance year after year feel disproportionate to the value of the passport.
It does not make sense as a reaction to a single bad tax season, a frustrating bank experience, or a political moment. It does not make sense if you have unresolved tax issues that you hope renunciation will erase—it won't; the IRS will still expect those resolved, and renouncing with gaps in your filing history makes you a covered expatriate. It does not make sense if there is any meaningful chance your life circumstances might pull you back to the US, because there is no easy path back once the CLN is issued.
4,900
Americans who renounced citizenship in 2025, the highest annual total in recent years
Next Steps if You're Weighing Renunciation
If this is a decision you are seriously considering, the next step is a structured review of your tax, legal, and financial situation with professionals who understand both US and Swiss rules. You need to know whether you would be a covered expatriate, what the exit tax exposure (if any) would be, whether you have compliance gaps to address, and what your Swiss tax picture looks like after renunciation.
You also need to think through the non-financial questions: what losing US citizenship means for your family, your career flexibility, your sense of identity. Those are not questions a tax form can answer, but they matter as much as the balance on Form 8854.
Renunciation is legal, it is your right, and for some people it is the correct choice. But it is a big, one-way decision. Take the time to get it right.