Dual citizens weigh Trump, taxes in decision to renounce U.S. citizenship

Ella Heyder is bracing for a breakup, even though she already moved out decades ago.

She’s contemplating cutting ties altogether with her home country, the United States of America, and President Donald Trump.

"I'm quite disturbed by what's happening in the U.S. under Trump’s regime. It's a fascist, imperialist regime," Heyder said as she and others waved signs outside the American Embassy in Ottawa during what has become a twice-weekly protest against the current U.S. administration. 

"It makes me a little bit ashamed. It makes me feel very sad," she said.

For decades, Heyder has carried two passports. While she grew up in Norfolk, Va., Canada has her loyalty, and she figures a permanent split is inevitable. 

"I've been thinking about it for a number of years, and motivated in the past 100 per cent by the fact that I've had to pay thousands of dollars to an accountant to file my U.S. taxes. But now I have an additional motivation,” she said.

It’s the Trump factor.  

"I align more with Canadian values and I'd be fine with not having an American citizenship,” Heyder said.

She’s not alone. More dual citizens are contemplating making the same move, according to Alex Marino, leader of the U.S. tax practice at Moody Tax Law in Calgary.

In recent years, Marino says he’s seen a 40-60 per cent increase in requests from those wanting to surrender what he calls "one of the most coveted passports in the world." 

"Individuals [are] not only inquiring [about giving] up their U.S. citizenship, but actually taking the plunge and giving it up," said Marino.

The American government reports such renunciations quarterly, posting the names of individuals who’ve surrendered their citizenship. 

It’s not a straightforward process. The U.S. and Eritrea are the only two countries in the world that tax based on citizenship rather than residency. 

Regardless of whether a dual citizen has ever lived or worked in the States, they still need to file annual tax returns to the U.S. Internal Revenue Service (IRS), and in some cases pay American taxes on Canadian investments such as tax-free savings accounts or registered education savings plans. (The tax-free status of these Canadian plans isn’t recognized by the IRS.)