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Renouncing Citizenship May Prevent Saverin From Entering U.S. Again
You might remember we’ve been reporting on Facebook co-founder Eduardo Saverin’s exit from the United States. He has renounced his United States citizenship and moved to live in Singapore. According to a representative of Saverin’s, the decision has nothing to do with escaping sizable IRS billsattributed to his 4% share in Facebook.
When Saverin’s request goes through to officially resign US citizenship he will owe an exit tax on all his investments equivalent to a capital gains tax if he were to sell. He would owe no US taxes on the investments in the future, and Singapore no such tax. Many have criticized Eduardo’s decision as a ploy to simply evade high IRS taxation on his sizable investments.
Today we learn that there might be a higher price to pay for renouncing US citizenship than just an exit tax. TPM reported yesterday that US immigration law frowns on citizens who renounce their citizenship for monetary gain and may make it difficult for Eduardo to obtain a visa to enter the United States again. Saverin could fall in this category according to immigration code Sec.212 [8 U.S.C.1182]:
Former citizens who renounced citizenship to avoid taxation.-Any alien who is a former citizen of the United States who officially renounces United States citizenship and who is determined by the Attorney General to have renounced United States citizenship for the purpose of avoiding taxation by the United States is excludable
Remember though, Saverin’s representatives are defending the fact that he has not renounced his citizenship because of taxes, but rather to enjoy living in Singapore and focusing on investments abroad. So it could be argued, if it were to come up, that he gave up citizenship for personal reasons, not to avoid taxation. Eduardo has only been a citizen of the United States since 1998. He was born in Brazil and came to America in 1995.
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