State Department Cuts Price of Renouncing U.S. Citizenship to $450

Key Takeaways

• The State Department has reduced the consular fee to renounce U.S. citizenship from $2,350 (set in 2014) to $450.
• The move follows years of criticism and legal challenges from Americans living abroad and advocacy groups; it has been reported that litigation argued the higher fee was punitive.
• Renunciation remains a serious, often irreversible act with separate tax and legal consequences — including possible exit taxes and IRS reporting (Form 8854).
• The change lowers the out‑of‑pocket barrier for people seeking to give up U.S. citizenship, but it does not alter the legal tests or tax rules that govern expatriation.

What changed

The State Department has cut the consular processing fee for formal renunciation of U.S. citizenship to $450 from $2,350, the level set in 2014. It has been reported that the reduction responds to sustained criticism and legal challenges alleging the 2014 increase created an improper barrier to the right to relinquish citizenship. The Department oversees renunciation at U.S. embassies and consulates (and in limited domestic cases), and consular officers conduct the required in‑person interviews and administer the oath.

Who is affected and why it matters

This affects any U.S. citizen — including dual nationals and Americans living abroad — who chooses to formally renounce citizenship. Renunciation is a legal act that irreversibly ends certain rights of citizenship: loss of a U.S. passport, the right to vote, and the automatic right to enter, live or work in the United States. Importantly, renunciation does not change past or ongoing U.S. tax obligations. The IRS treats some expatriating citizens as "covered expatriates" who may face an exit tax and must file Form 8854 (Initial and Annual Expatriation Statement). Those tax rules, and the thresholds that trigger them, remain in place regardless of the fee change.

What this means now and next steps

For people thinking about renouncing, the lower fee removes a financial hurdle but not the substantive and financial risks. Prospective expatriates should consult both an immigration or consular lawyer and a tax advisor before proceeding. Practically, applicants will still need an in‑person appointment at a U.S. consulate or embassy (or, rarely, at the State Department), complete the required statements and oath, and ensure all IRS filing requirements are met. It has been reported that the Department will publish updated guidance and fee tables on its website; check the local consulate for appointment availability and exact procedures.

Source: Original Article