The new fee for renouncing U.S. citizenship will decrease from $2,350 to $450.

It was recently announced that the U.S. government will significantly reduce the fee for applying for a Certificate of Loss of Nationality (CLN) , following years of advocacy by various interest groups. The administrative fee for processing a renunciation of U.S. citizenship will drop from $2,350 to $450.

This decision was published in the Federal Register on March 13, 2026, and is expected to take effect approximately 30 days after publication. The news has also received attention in the media and is raising questions among many U.S. persons.

While the lower fee may prompt some individuals to reconsider their situation, it is important to understand that renouncing U.S. citizenship is a major, personal, and irreversible decision.

Additionally, before renouncing U.S. citizenship, you must ensure that you are compliant with tax regulations:

* U.S. tax returns (for the 5 years preceding the year of renunciation and the year of renunciation)

* Foreign bank accounts must be reported (FBAR)

* Form 8854 must be filed upon renunciation

For U.S. persons abroad who are not yet fully compliant, there is often the possibility to use the Streamlined Foreign Offshore Procedures to become compliant with U.S. tax law.

Tax returns and tax obligations

Renouncing U.S. citizenship does not automatically mean that all tax obligations end immediately. Individuals who renounce their citizenship must state that they have been, or will become, fully compliant with their U.S. tax filings for the five years preceding renunciation. In addition, a tax return must also be filed for the year of renunciation.

This is confirmed by filing IRS Form 8854 with the IRS. Depending on income, assets, and prior tax status, someone who renounces it may also be subject to the so-called exit tax. Americans Overseas also points out that tax compliance and possible covered expatriate rules can play an important role here.

Because the tax consequences can be complex and differ from person to person, it may be wise to check other possible consequences with us.

If you are not fully compliant.

For some Americans abroad who have not fully complied with their U.S. tax filing obligations, it may be possible to use the Streamlined Foreign Offshore Procedures. This IRS program is intended for taxpayers who failed to file their returns without willful intent (“non-willful”).

Through this procedure, overdue tax returns and reporting obligations can still be submitted so that the taxpayer can become compliant again.

What is a Certificate of Loss of Nationality?

A CLN, or Certificate of Loss of Nationality, is an official document issued by the U.S. government to individuals who have renounced their U.S. citizenship. If you are a current U.S. citizen who is considering renouncing your citizenship, you must first complete a CLN application. 

The CLN application is a two-page form that must be completed in English. The form asks for basic information about the applicant, including their name, date of birth, place of birth, and current address. The form also asks for the reason the applicant is renouncing their U.S. citizenship. After the form is completed, it must be signed by the applicant in the presence of a U.S. consular officer. The consular officer will then issue the CLN. The CLN is an important document that proves that the holder is no longer a U.S. citizen. 

It is required for many purposes, including applying for a passport from another country. If you are a U.S. citizen who is considering renouncing your citizenship, be sure to complete a CLN application.

Exit tax & Form 8854

If you renounce your citizenship, you have to settle with the IRS forever by means of Form 8854. Only after this final settlement, you are no longer required to file a tax return in America.

You may also have to pay an “exit tax” on any unrealized capital gains you have in the year you expatriate. The exit tax is basically a capital gains tax on any assets you own that have gone up in value since you bought them. The expatriation tax can be a complex and confusing topic.

If you are considering expatriation should contact Americans Overseas to ensure you understand all of the US tax implications. You must have filed tax returns for 5 years plus the year of renunciation including Form 8854.

Can I renounce and never file?

You can renounce your US citizenship but be aware that renunciation may have no effect whatsoever on your US tax obligations. Upon renunciation, you need to fill in form 8854 which asks you clearly to state that you have filed all your taxes. If you aren’t compliant, you might be able to renounce.

But the IRS will not let you go until you have filed up a number of years back until the date of renunciation. There are cases of people renouncing and still owing tax. Worst of both worlds. Also (in a limited number of cases) you might have to pay exit tax upon renouncing.

 US Tax Consultants specializes in assisting Americans abroad. If you have further questions, call us at +34 915 194 392 or visit //ustaxconsultants.es for all the details. Book your free, no-obligation appointment today and get expert guidance wherever you are.

Antonio Rodriguez – Tel +34 915 194 392