How to Renounce US Citizenship in 2026: Costs, Process, and Consequences

This is a purely informational walkthrough of the process and its consequences — not a case for or against renouncing. Renunciation is a legal, financial, and personal decision that depends entirely on individual circumstances, and it is irrevocable once completed, so accuracy on the mechanics matters more than persuasion here.

The State Department fee, and why it's lower than older articles say

The consular fee for processing a renunciation of US citizenship was raised to $2,350 in 2014, and for years it remained the highest such fee among comparable countries by a wide margin. In 2025, the State Department reduced it by roughly 80%, to $450, following legal pressure over the earlier increase. Because the $2,350 figure circulated for over a decade, it still shows up in older guides and is worth explicitly correcting: confirm the current fee on the State Department's own consular fee schedule before budgeting, since it applies per person and is separate from any tax-related costs.

Renunciation is a State Department process; taxes are a separate IRS process

These are two different government processes that happen to be connected by consequence, not procedure. Renouncing citizenship is done in person at a US embassy or consulate abroad, requires two appointments in most cases (an initial interview and a follow-up to take the formal oath of renunciation), and results in a Certificate of Loss of Nationality (CLN) once approved — processing for the CLN itself has been reported to take anywhere from several months to well over a year depending on the post, so this is not a fast process even after the interview is complete. Separately, the IRS requires anyone who expatriates to file Form 8854, the Initial and Annual Expatriation Statement, which is where "covered expatriate" status is determined.

Covered expatriate status is the financial trigger that matters most

Form 8854 asks you to certify five years of US tax compliance under penalty of perjury. Failing that certification alone makes you a covered expatriate, regardless of your net worth. Beyond that, two financial thresholds independently trigger covered expatriate status: a net worth over $2 million on the date of expatriation (this figure is not indexed for inflation, so it catches a growing number of people over time as asset values rise), or an average annual net income tax liability above a threshold that is adjusted for inflation each year and was in the low-to-mid six figures as of the mid-2020s — check the current IRS-published figure rather than relying on an old number, since it moves annually. Meeting any one of the three tests is sufficient to be classified as a covered expatriate.

What covered expatriate status actually triggers: the exit tax

If you're a covered expatriate, the IRS treats your worldwide assets as if they were sold the day before expatriation — a "mark-to-market" exit tax on the deemed capital gains, with an exclusion amount (adjusted annually for inflation) subtracted before the tax applies. This can apply to retirement accounts, real estate, business interests, and other assets regardless of where in the world they're held, which is why higher-net-worth individuals generally need professional cross-border tax planning well before the expatriation date, not after.

FBAR and other reporting obligations don't disappear on their own

Anyone who has held foreign financial accounts above the reporting threshold has separate FBAR (Foreign Bank Account Report) obligations that exist independent of citizenship status, and penalties for non-willful violations can run into five figures per violation, with willful violations far higher. Renouncing citizenship does not retroactively resolve past non-compliance — the five years of certified tax compliance on Form 8854 generally needs to be genuine, not just declared, since the IRS can audit prior filings.

The decision is irrevocable

Once a renunciation is approved and a CLN is issued, US citizenship cannot be reinstated through a simple administrative process — regaining it, if even possible depending on individual circumstances, would require going through immigration channels from scratch like any other foreign national, with no guarantee of approval. This irreversibility is the single most important practical fact for anyone considering the decision, independent of the tax or fee mechanics.

Continue with these closely related guides:

Athens vs Lisbon for Expats in 2026: Which Southern European Capital? — Overlapping theme (citizenship).
How to Move to Iceland in 2026: Work Permit, Costs, and Expat Life — Overlapping theme (citizenship).
How to Move to Paraguay in 2026: Residency, Low Taxes, and Expat Life — Overlapping theme (citizenship).
How to Move to Uruguay in 2026: Residency, Tax Benefits, and Expat Life — Overlapping theme (citizenship).

Consult Relova for practical relocation planning as you weigh next steps.