How to Renounce American Citizenship in 2026: Process, Costs, Exit Tax, and What Comes Next

In April 2026, the US Department of State reduced the fee to renounce American citizenship from $2,350 to $450. For many expats, this removes one of the most cited practical barriers. But the fee is the simplest part of the process. Understanding the official steps, the exit tax, and the permanent consequences is what this guide covers.

Renouncing US citizenship is, in the State Department’s own words, “a serious and irrevocable act that deserves your thoughtful consideration.” It cannot be undone. It cannot be performed on another person’s behalf. Once completed, your US citizenship is gone permanently.

One critical point must be established from the start: renouncing US citizenship does not erase existing tax obligations. Past liabilities, unfiled returns, and outstanding FBAR penalties all remain enforceable. The IRS requires formal notification through Form 8854, and a final US tax return must be filed for the year of renunciation.

As immigration lawyers with offices across Spain, France, Portugal, Italy, and Greece, we advise US citizens at every stage of this process: from obtaining a second citizenship to understanding what renunciation means for their future.

This guide covers what renouncing US citizenship legally means, the 2026 fee update, the official five-step process, including the US Embassy Spain procedure, required forms and documents, the exit tax, and covered expatriate rules, a country-specific overview for each jurisdiction where Lexidy operates, the consequences of renunciation, and the alternatives worth considering first.

What Does It Mean to Renounce American Citizenship?

Renouncing US citizenship is the formal, voluntary act of permanently surrendering all rights, protections, and obligations tied to US nationality. This applies whether that nationality was acquired by birth or naturalization.

The process is governed by the Immigration and Nationality Act, Section 349(a)(5), 8 USC 1481(a)(5). It must be performed in person before a diplomatic or consular officer outside the United States. It cannot be completed from within US territory.

Renunciation is a personal act. No parent or legal guardian can take the oath on another person’s behalf. Each individual must appear in person and act voluntarily.

Once the Department of State approves the application, the individual receives a Certificate of Loss of Nationality (CLN). This is the official document confirming that the renunciation of US citizenship is complete and legally recognized.

Renunciation vs relinquishment: these two terms are distinct. Renouncing US citizenship is an explicit, deliberate act performed at a consulate. Relinquishment refers to situations where citizenship may have been lost through an earlier voluntary act performed with the intent to relinquish, such as serving in a foreign military or accepting a senior government position in a foreign state. These acts fall under INA Section 349(a)(1)-(4). A person who relinquished years ago but never documented it can still obtain a CLN, the expatriation date is the date of the original act. This distinction carries significant tax consequences.

After renouncing US citizenship, the individual becomes a foreign national for all US legal purposes. They will require a visa or ESTA to visit the United States. They lose US consular protection abroad, the right to vote in US elections, and the right to live or work in the US without immigration authorization.

What renunciation does not do is equally important. It does not cancel existing US tax obligations. Past liabilities, unfiled returns, and FBAR penalties remain fully enforceable. The IRS must be formally notified through Form 8854, and a final US tax return must be filed for the year of renunciation.

The 2026 Fee Update: From $2,350 to $450

On March 13, 2026, the US Department of State published a Federal Register notice announcing a reduction in the fee for the Certificate of Loss of Nationality from $2,350 to $450, effective April 13, 2026.

This returns the fee to its approximate 2010 level. The 2015 increase from $450 to $2,350 represented a 422% rise that drew sustained international criticism, litigation from accidental Americans, and formal complaints from expatriate advocacy organizations. The State Department stated the reduction was intended to “alleviate the cost burden” on individuals who wish to renounce US citizenship.

The fee is non-waivable and non-refundable. It is paid at the consulate immediately after signing Form DS-4079, Part II, at the final interview. If the CLN request is denied, the fee is not returned.

This fee covers only the State Department’s administrative processing of the CLN request. It is entirely separate from the IRS tax obligations that accompany renunciation. For most people, the $450 fee is the smallest line item in the total cost of the process.

Full 2026 Cost Breakdown

Acceptable Reasons for Renouncing US Citizenship

The State Department does not require applicants to justify their decision. There is no approved or disapproved list of motivations. The legal standard is straightforward: the act must be voluntary, with full understanding that it is permanent and irrevocable.

At the consular appointment, the officer will confirm that the applicant is acting freely, without coercion, and with complete awareness of the consequences. The reason itself is not evaluated or recorded as a condition of approval.

In practice, the motivations that bring people to this decision tend to fall into four broad categories.

Tax Compliance Burden

The United States is one of only two countries in the world, alongside Eritrea, that taxes citizens on worldwide income regardless of where they live. Every American abroad must file annual US tax returns, FBAR reports, and potentially FATCA forms even when they owe zero additional US tax.

For expats who have lived abroad for decades and built complete financial lives in another country, this annual compliance burden is the most common driver of considering renouncing US citizenship. The cost is both financial and administrative. Tax preparation fees, professional advice, and the time required to maintain compliance with a country you no longer live in add up year after year.

Accidental Americans

An accidental American is someone who holds US citizenship through birth, either born on US soil to foreign parents or born abroad to a US-citizen parent, but who never lived in or meaningfully connected to the United States.

Many accidental Americans in Spain and elsewhere discovered their citizenship only when their bank account was flagged under FATCA, or when applying for a local passport triggered a citizenship claim. For this group, renouncing US citizenship is about simplifying their legal and financial life. It carries no disaffection toward the United States. The State Department acknowledged this population explicitly in its 2026 Federal Register notice announcing the fee reduction.

Dual Citizenship Simplification

Many US citizens who have lived in Spain, France, Portugal, Italy, or Greece for years and obtained citizenship in their country of residence find the ongoing dual-compliance burden disproportionate to the practical benefits of maintaining US nationality.

Having secured a stable EU citizenship and all associated rights, the practical value of a US passport to someone with no plans to return diminishes significantly. For these individuals, renouncing US citizenship is a rational decision to reduce legal complexity rather than an emotional one.

Personal, Political, or Philosophical Reasons

Some individuals renounce US citizenship for personal reasons: disagreement with US foreign policy, opposition to citizenship-based taxation, or a principled decision to formally align their legal identity with the country where they actually live and pay taxes.

The consulate does not evaluate or judge these motivations. What matters is voluntary intent and a clear understanding of the consequences. As long as those two conditions are met, the reason for renouncing US citizenship is entirely a personal matter.

Can You Renounce US Citizenship?

Yes. Any US citizen may renounce US citizenship. There are no restrictions based on income, asset level, or stated motivation. The right is established under INA Section 349(a)(5) and is available to all US nationals who meet the procedural requirements.

The conditions are as follows.

• You must appear in person at a US Embassy or Consulate located outside the United States. Renouncing US citizenship cannot be completed from within US territory, even if you currently reside there. A US resident who wishes to renounce must travel abroad to a US diplomatic post to complete the process.
• You must be at least 18 years old. Minors may renounce US citizenship only in limited circumstances and with additional judicial oversight. This is not a standard pathway.
• The act must be voluntary. The consular officer will confirm that you are acting freely, without pressure or coercion, and that you fully understand the permanent and irrevocable nature of the decision.
• You must hold citizenship in another country before renouncing. The consulate will ask you to confirm this. Renouncing US citizenship without holding another nationality creates statelessness, which the US government does not prevent by law, but will counsel against clearly. Holding citizenship in Spain, France, Portugal, Italy, or Greece, for example, satisfies this requirement fully.
• Finally, renunciation cannot be performed by a proxy. No parent, legal guardian, or representative can take the oath on another person’s behalf. Each individual must appear in person and act for themselves.

How to Renounce US Citizenship: The Official Process

The process described below draws on the official procedure published by the US Embassy Madrid and the US Consulate General Barcelona. It applies to all US consulates globally, with minor variations by location. The legal basis is INA Section 349(a)(5).

Step 1: Review the Legal Requirements and Effects of a CLN

Before initiating the process, carefully review the official information provided by the US Embassy in Madrid and the US Consulate General in Barcelona, also available on the State Department and IRS websites.

Loss of US nationality is irrevocable. You must fully understand the effect of a CLN before taking any further steps.

For tax implications, contact the IRS directly or review the FATCA FAQ. For questions about Social Security or other federal benefits, contact the Federal Benefits Unit. Renouncing citizenship does not cancel accrued Social Security entitlements.

Key resources to review before proceeding:

• Relinquishing US Nationality Abroad (state.gov)
• Oath of Renunciation of US Citizenship under INA 349(a)(5) (state.gov)
• Advice about Possible Loss of US Nationality and Dual Nationality (state.gov)
• IRS Expatriation Tax Guidance
• IRS Form 8854 and its Instructions
• IRS Notice 2009-85 (Guidance for Expatriates Under Section 877A)

Step 2: Initiate the Process via the Embassy or Consulate Online Assistant

In Spain, use the US Embassy Madrid Assistant or the US Consulate General Barcelona Assistant to initiate the process and receive personalized instructions. This online step delivers your specific document requirements before any in-person appointment is scheduled.

For those in other jurisdictions, the equivalent starting points are the US Embassy Paris (France), US Embassy Lisbon (Portugal), US Embassy Rome or Consulate General Milan (Italy), and the US Embassy Athens (Greece).

Step 3: Gather Documents and Schedule Your First Interview

Following the instructions received in Step 2, gather and submit scanned copies of all required documents and schedule your first interview.

Review Form DS-4079 (Request for Determination of Possible Loss of United States Nationality) and complete all applicable sections of Part I. Do not complete or sign any section of Part II before your final in-person interview. Part II must be completed before the consular officer at the final appointment.

Required Documents include:

Step 4: Attend the Final Interview and Pay the Fee

Schedule and attend the final interview at the US Embassy in Madrid, the US Consulate General in Barcelona, or the relevant embassy in your country of residence.

Bring the originals of all documents previously submitted by scan. You will be asked to reschedule if you arrive without the required originals.

At the interview, a US diplomatic or consular officer will give you the opportunity to review the sections of Form DS-4079 you completed in Part I. You will then complete the required sections of Part II in person before the officer and sign where required.

After signing, if you choose to proceed, you must pay the consular services fee of $450, effective April 13, 2026. This fee is non-waivable and non-refundable.

One important travel note: your US passport will be retained by the embassy or consulate during the remainder of the process. If you need to travel to the United States after the interview but before the CLN is approved, advise the embassy at the time of your appointment. Your passport will be cancelled and returned to you upon request once the CLN is approved.

Step 5: Receive the Certificate of Loss of Nationality

The Department of State reviews each CLN request to determine whether there is a legal basis for approval. This review may take several months or longer.

The embassy or consulate may contact you for additional information before a decision is made.

If approved, the embassy will notify you by email. The CLN is the official document confirming loss of US nationality. If denied, the embassy will send a denial letter. Denial is uncommon in straightforward cases but may occur if the renunciation is not found to be voluntary or if documentation is incomplete.

Once you receive your CLN, provide it to your banks, investment institutions, employer, if applicable, and any entity that previously identified you as a US person for FATCA purposes. The CLN is the document that formally ends your FATCA reporting obligations.

IRS Obligations After the Consulate: Form 8854 and the Final Tax Return

The IRS process runs parallel to and after the State Department consulate process. These two tracks are entirely independent. Receiving your CLN does not satisfy your IRS obligations, and failing to complete the tax side of renouncing US citizenship carries serious financial penalties.

Step 1: Get Tax Compliant Before You Renounce

Before renouncing US citizenship, confirm that you have filed all required US tax returns for the five years prior to renunciation. This is not optional. Form 8854 requires you to certify five years of tax compliance under penalties of perjury.

Check your FBAR filing history. If you held foreign financial accounts exceeding $10,000 in aggregate at any point during a calendar year, you were required to file FinCEN Form 114 for that year. Gaps in your FBAR history must be addressed before proceeding.

If you have unfiled returns or FBARs, the IRS Streamlined Filing Compliance Procedures are the standard resolution path for non-willful failures. This requires filing the three most recent years of tax returns and six years of FBARs, typically with penalties waived. This must be resolved before you can certify compliance on Form 8854.

Step 2: File Form 8854

Form 8854, the Initial and Annual Expatriation Statement, must be filed with your final US tax return for the year in which renunciation occurred. This form serves two purposes: it certifies your five-year tax compliance, and it determines whether you are classified as a covered expatriate subject to the exit tax.

The filing deadline follows your final year return: April 15 for most filers, June 15 for those living abroad, with an extension available to October 15. A separately signed copy must also be mailed directly to the IRS at: Internal Revenue Service, 3651 S IH35, MS 4301 AUSC, Austin, TX 78741.

The penalty for failing to file Form 8854 is $10,000 per year. More critically, non-filing results in automatic covered expatriate status regardless of your actual financial situation. This means the exit tax rules apply to you by default, even if your net worth or tax liability would otherwise fall below the covered expatriate thresholds.

Step 3: File Your Final US Tax Return

For the year of renunciation, you must file a dual-status tax return. This return covers two distinct periods: the portion of the year during which you were a US citizen, when worldwide income is taxable, and the portion following renunciation, when only US-source income remains taxable.

Once your final return is filed, accepted, and Form 8854 is processed, your US tax obligations end with two exceptions. First, US-source income earned after renunciation, such as rental income from US property or dividends from US holdings, remains subject to US tax. Second, covered expatriates who elected to defer exit tax on certain assets must continue filing Form 8854 annually until all deferred items are fully resolved.

The Exit Tax: Who Pays It and How It Works

The exit tax, formally the Expatriation Tax under IRC Section 877A, applies only to covered expatriates. Most people who renounce US citizenship are not covered expatriates and pay no exit tax. Understanding whether you meet the covered expatriate threshold is one of the most important steps in evaluating the true cost of renouncing US citizenship.

The exit tax works as a deemed sale. The IRS treats you as having sold all your worldwide assets at fair market value on the day before your renunciation date. Net gains above the annual exclusion threshold are taxed at applicable capital gains rates.

The Three Covered Expatriate Tests (2026 Thresholds)

Meeting any one of the three tests makes you a covered expatriate. The tests are applied independently.

One important exception applies to dual citizens from birth. If you held dual citizenship from birth and were taxed as a resident of the other country for all years after age 18, including the 10 years before expatriation, you are exempt from the net worth and tax liability tests. You must still pass the compliance test.

How the Exit Tax Is Calculated

The IRS treats all worldwide assets as sold at fair market value the day before renunciation. The resulting net gain is reduced by the annual exclusion of $910,000 for 2026, up from $890,000 for 2025 expatriations. This exclusion applies across all assets combined, not per individual asset.

A practical example illustrates the scale. A covered expatriate with $3,000,000 in unrealized gains subtracts the $910,000 exclusion to arrive at $2,090,000 in taxable gain. At a combined capital gains rate of 23.8%, which is 20% plus the 3.8% Net Investment Income Tax, the resulting exit tax liability is approximately $497,420.

Pensions and retirement accounts are treated differently. Defined benefit pensions, 401(k) accounts, IRAs, and deferred compensation plans are not subject to mark-to-market rules. Instead, they are subject to a 30% withholding tax on future distributions to covered expatriates, or may be treated as immediately taxable depending on the account type.

Covered expatriates can elect to defer exit tax payment on specific assets until actual sale. This requires an irrevocable tax deferral agreement with the IRS and adequate security, such as a bond. The election is made on Form 8854.

One consequence of covered expatriate status that is frequently overlooked is the Section 2801 tax. If a covered expatriate later gives gifts or leaves inheritances to US citizens or residents, the recipient pays a 40% tax on the value received. This extends the financial consequences of covered expatriate status to family members who remain US citizens.

IRS Relief Procedures for Certain Former Citizens

The IRS offers specific relief procedures for people who have already relinquished citizenship and wish to come into compliance retroactively to avoid covered expatriate status.

To be eligible, the person must not have filed US tax returns as a resident during the covered period, must have a net worth below $2 million, must have an average net income tax liability below the applicable threshold, and the failure to comply must have been non-willful.

These procedures allow certain former citizens to satisfy the compliance test retroactively and avoid exit tax exposure entirely. For accidental Americans and others who were unaware of their filing obligations, this is a route worth exploring before initiating the consulate process.

Alternatives to Renouncing US Citizenship

Renouncing US citizenship is permanent and irreversible. Before proceeding, the most important question to answer is a practical one: how much do you actually owe in US tax each year, and what does full compliance realistically cost? For many expats, the answer is less than expected.

For US citizens living in Spain, France, Portugal, Italy, or Greece, the actual US tax owed after correctly applying foreign tax credits is frequently zero or very close to it. These countries have strong US tax treaties, and their tax rates are generally equal to or higher than US rates. The compliance burden is real, but the financial burden is often overstated.

Two mechanisms reduce or eliminate US tax liability for most expats.

The Foreign Earned Income Exclusion (FEIE) allows US citizens living abroad to exclude up to $130,000 of foreign earned income from US taxation for the 2025 tax year, with the figure for 2026 adjusted to approximately $132,900. This exclusion alone removes most wage and self-employment income from US tax exposure.

The Foreign Tax Credit allows you to offset US tax liability with taxes already paid to your country of residence. For expats in high-tax European countries, this credit typically eliminates any remaining US tax liability after the FEIE is applied.

If the primary burden is unfiled returns from previous years, which is extremely common among accidental Americans, the IRS Streamlined Filing Compliance Procedures allow catch-up filing with penalties typically waived for non-willful failures. This resolves the compliance issue without renouncing US citizenship and without the permanence that renunciation carries.

The decision to renounce US citizenship should follow, not precede, a full analysis of your income, assets, country of residence, and treaty position. Consult a US-qualified tax professional specializing in expatriate taxation before making any decision. The cost of that analysis is a fraction of the cost of renunciation, and the outcome may change your conclusion entirely.

Renouncing US Citizenship in Lexidy’s Jurisdictions

The practical experience of renouncing US citizenship varies depending on where you live. Each US Embassy and Consulate operates the same five-step process, but local context, dual nationality rules, and tax treaty positions differ meaningfully across jurisdictions. This section covers what US citizens need to know in each country where Lexidy operates.

Spain (US Embassy Madrid and US Consulate General Barcelona)

Spain offers two consular locations for renunciation: the US Embassy in Madrid and the US Consulate General in Barcelona. The official process follows a two-step interview structure: a first interview to gather and submit documents, and a final interview to sign Part II of Form DS-4079 and pay the $450 fee.

To initiate the process, use the US Embassy Madrid Assistant or the US Consulate General Barcelona Assistant. Do not attempt to schedule a final interview without completing this initiation step first. Appointment availability varies at both locations. Book as early as possible once you have decided to proceed.

On dual nationality: Spain formally requires renunciation of prior citizenships for most non-treaty nationals as part of the Spanish naturalisation oath. However, this is a declaration made to Spanish authorities and does not constitute an actual loss of US citizenship, because the US does not strip citizenship when someone naturalizes abroad. Many US citizens hold both nationalities in practice.

On tax: the Beckham Law, which provides a flat 24% income tax rate on Spanish-source income for six years, and the Ley Mbappe, which provides a 20% investment deduction for new Madrid residents, are both available to US citizens resident in Spain without requiring renunciation. A full tax comparison of US compliance costs versus Spanish tax advantages should be completed before making any decision.

France (US Embassy Paris and US Consulate General Marseille)

Renunciation appointments in France are processed at the US Embassy in Paris and the US Consulate General in Marseille. France has no restriction on dual citizenship. US citizens who naturalize as French are not required to renounce US citizenship under French law.

The US-France tax treaty and Social Security Totalization Agreement mean that many US citizens resident in France owe little or no additional US tax once treaty benefits and foreign tax credits are correctly applied. A full compliance analysis is strongly recommended before proceeding with renunciation.

France has one of the largest accidental American populations in Europe, partly due to post-war births on US military bases. French courts have ruled on FATCA-related bank account closures, reflecting the ongoing legal and policy tension surrounding this population.

Portugal (US Embassy Lisbon)

Renunciation appointments in Portugal are processed at the US Embassy in Lisbon. Portuguese nationality law does not require renunciation of prior citizenship. US citizens who naturalize as Portuguese retain their American passport without any legal conflict under Portuguese law.

One important planning note for 2026: Portugal’s updated Nationality Law has extended the residency requirement for citizenship to 7 years for CPLP nationals and 10 years for most others. US citizens planning to obtain Portuguese citizenship before considering renouncing US citizenship now face a significantly longer timeline than previously.

Portugal and the United States each have their own exit tax rules for departing tax residents. US citizens who are also Portuguese tax residents considering renunciation need simultaneous advice on both the US expatriation tax and any applicable Portuguese exit charges.

Italy (US Embassy Rome, Consulate General Milan, Consulate General Naples)

Italy offers multiple consular locations for renunciation: the US Embassy in Rome, the US Consulate General in Milan, and the US Consulate General in Naples, among others. Italy explicitly permits dual and multiple citizenship. No renunciation of prior nationality is required when naturalising as Italian.

Greece (US Embassy Athens)

Renunciation appointments in Greece are processed at the US Embassy in Athens. Greece permits dual citizenship without restriction. US citizens who naturalize as Greek are not required to renounce US citizenship under Greek law.

US citizens who obtained Greek residency through the Golden Visa and are planning toward Greek citizenship, which now requires seven years of qualifying physical presence, should complete a full exit tax analysis well before their citizenship milestone.

What Happens After You Renounce US Citizenship?

Receiving your CLN marks the end of the consulate process. It does not mark the end of all US obligations or connections. The following covers what changes, what stays the same, and what requires immediate action.

Travel to the United States

After renouncing US citizenship, you need a visa or ESTA to visit the United States. Citizens of Spain, France, Portugal, Italy, and Greece can apply for the US Visa Waiver Program via ESTA for stays of up to 90 days. ESTA approval is not guaranteed and can be denied at the US Customs discretion.

Your US passport

Your passport is retained at the consulate during processing. Once the CLN is approved, it is canceled before being returned to you upon request. If you need to travel to the United States after the final interview but before the CLN is approved, advise the embassy or consulate at your appointment.

FATCA and FBAR obligations

Once the CLN is recognized and your final US tax return is filed and accepted, your annual US reporting obligations end, provided you have no ongoing US-source income. Provide the CLN to your bank, investment institutions, and any entity that previously identified you as a US person for FATCA purposes. This is the document that formally ends those reporting obligations with each institution.

US-source income

Dividends from US companies, rental income from US property, and certain other US-source income remain subject to US withholding tax after renunciation. The standard non-resident rate is 30%, reduced by the applicable tax treaty.

Social Security

Renouncing US citizenship does not affect your right to collect US Social Security benefits you have accrued. Benefits remain payable to non-citizen former citizens abroad, subject to applicable bilateral agreements. Contact the Federal Benefits Unit for specifics relevant to your country of residence.

Children

Renouncing your citizenship does not retroactively remove citizenship already transmitted to your children. Children born after your renunciation will not acquire US citizenship through you going forward.

The Reed Amendment

A rarely enforced provision of US law technically allows the US to bar re-entry to former citizens who renounced primarily for tax-avoidance purposes. This provision has not been applied in any known case, but it is a theoretical risk worth understanding before proceeding.

Reversal

Renunciation cannot be appealed or automatically reversed. The State Department’s position is that renunciation is permanent once the CLN is approved. One narrow exception exists: individuals who renounced before the age of 18 have a six-month window after turning 18 to reclaim US citizenship. For adults, renunciation is fully permanent with no reconsideration period.

Special Considerations for Green Card Holders

Green card holders, formally long-term permanent residents, face the same exit tax rules as US citizens. The trigger is different, however. If you have held a green card in 8 of the past 15 calendar years, surrendering it counts as an act of expatriation and may trigger the exit tax rules under IRC Section 877A.

To formally surrender a green card, file Form I-407 (Record of Abandonment of Lawful Permanent Resident Status) at a US Embassy or Consulate.

Two specific risks require careful attention.

The treaty election trap is the first. Making a tax treaty election before reaching the 8-of-15-years threshold stops the year count. However, if you have already been resident for eight years, making a treaty election is itself an act of expatriation that could trigger the exit tax even without formally surrendering the green card. Green card holders should consult a specialist before making any treaty elections.

The timing rule is the second. You are considered to have lived in the United States for an entire calendar year if you were present even one day during that year. Presence on January 1 of year one and December 31 of year eight can count as eight full years of residence. This makes the year count less intuitive than it appears and easier to miscalculate without professional guidance.

Frequently Asked Questions About Renouncing American Citizenship

How much does it cost to renounce US citizenship in 2026?

The State Department fee is $450, reduced from $2,350 effective April 13, 2026. Total costs, including tax preparation, Form 8854 filing, and legal advice, typically range from $2,500 to $8,000 for non-covered expatriates, and significantly more for covered expatriates with exit tax exposure.

Where can I renounce US citizenship in Spain?

You can renounce US citizenship in Spain at two locations: the US Embassy in Madrid and the US Consulate General in Barcelona. Both follow the same two-step interview process. Use the official online assistant at each location to initiate the process before scheduling any appointment.

What forms are required to renounce US citizenship?

The core consular forms are DS-4079, DS-4080, DS-4081, and DS-4083. On the IRS side, you must file Form 8854 with your final US tax return for the year of renunciation. FBAR filings and Streamlined compliance forms may also be required, depending on your filing history.

What is the exit tax when renouncing US citizenship?

The exit tax renounce citizenship USA rules apply only to covered expatriates. The IRS treats all worldwide assets as sold at fair market value the day before renunciation. Net gains above the $910,000 exclusion for 2026 are taxed at applicable capital gains rates, up to 23.8% combined.

Am I a covered expatriate?

You are a covered expatriate if you meet any one of three tests: your worldwide net worth equals or exceeds $2 million, your average annual US federal tax liability for the five preceding years exceeds $211,000, or you cannot certify five years of full US tax compliance on Form 8854. Meeting any single test is sufficient.

Can I renounce my US citizenship if I live in Spain, France, Portugal, Italy, or Greece?

Yes. US citizens resident in any of these countries can renounce US citizenship at the US Embassy or Consulate in their country of residence. Spain has two locations: Madrid and Barcelona. France has Paris and Marseille. Portugal uses Lisbon. Italy has Rome, Milan, and Naples. Greece uses Athens.

Do I still have to pay US taxes after renouncing my citizenship?

Your annual US filing obligations end once the CLN is recognized and your final return is filed and accepted. However, US-source income earned after renunciation, such as dividends from US companies or rental income from US property, remains subject to US withholding tax at non-resident rates, generally 30%, reduced by applicable treaty.

What are the acceptable reasons for renouncing US citizenship?

The State Department does not require or evaluate your reasons. The only legal standard is that the act is voluntary and performed with full understanding that it is permanent. In practice, the most common motivations are tax compliance burden, accidental American status, dual citizenship simplification, and personal or philosophical reasons.

What happens to my Social Security if I renounce US citizenship?

Renouncing US citizenship does not cancel accrued Social Security entitlements. Benefits remain payable to non-citizen former citizens living abroad, subject to applicable bilateral agreements between the US and your country of residence. Contact the Federal Benefits Unit for details specific to your situation.

Is renouncing US citizenship permanent?

Yes. Renouncing US citizenship is permanent and irrevocable once the CLN is approved by the Department of State. It cannot be appealed or reversed. The only narrow exception applies to individuals who renounced before the age of 18, who have a six-month window after turning 18 to reclaim their citizenship.

What is the difference between renouncing and relinquishing US citizenship?

Renouncing US citizenship is an explicit, voluntary act performed in person at a US consulate. Relinquishment refers to a prior voluntary act, such as serving in a foreign military or accepting a senior foreign government position, performed with the intent to relinquish. Both result in a CLN, but the expatriation date differs, which has significant tax consequences.

What happens to my US passport when I renounce?

Your US passport is retained by the embassy or consulate during CLN processing. Once the CLN is approved, the passport is cancelled before being returned to you upon request. If you need to travel to the United States before the CLN is finalized, advise the consulate at your final interview.

Need Support Renouncing Your US Citizenship?

Renouncing US citizenship is one of the most consequential legal decisions a person can make. The 2026 fee reduction to $450 removes a practical barrier, but the process itself remains multi-step, the IRS obligations are substantial, and the decision is permanent. Understanding the official consulate process, assessing your covered expatriate status, getting tax compliant before you proceed, and knowing what changes after renunciation are all essential steps before taking any action. 

For many expats in Spain, France, Portugal, Italy, and Greece, a proper analysis of actual tax liability reveals that full compliance is simpler and less costly than renunciation. For others, renunciation is the right and considered decision. Either way, the path forward is clearer with the right legal and tax guidance behind you.

If you are considering renouncing US citizenship and want to understand what it means for your specific situation, Lexidy’s team is here to help. We advise US citizens across Spain, France, Portugal, Italy, and Greece at every stage of this process, from obtaining a second citizenship to preparing for renunciation and everything in between. Fill out the form below to hear from our team, and we will be in touch to discuss your situation.