How Many US Citizens Are Currently Living Abroad?

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When it comes to how many Americans currently live outside the United States and where they live, no one seems to have a clue. Even the US government isn't sure.

The United States Department of State publishes a sentence on its website stating that "approximately 9 million American citizens live abroad". Four years ago, that number was 8.7 million.

However, there are different definitions of what constitutes a US citizen abroad. Surveys differ in whether they include students who are abroad for one year or even less; US military personnel; People who went to work abroad and stayed there, and even "accidental Americans". An example of "accidental Americans" might be those whose citizenship they obtained because their non-American parents were in the United States when they were born.

As a result, many lawyers and financial advisers who specialize in serving American expats are skeptical of the 9 million figure.

Note the discrepancy: What could explain the discrepancy between the number of US expats and the number of tax returns received?

One of the reasons to question the 9 million figure is that the US tax administration, the Internal Revenue Service (IRS), only receives about 600,000 tax returns.

Again, American expats only file about 900,000 Foreign Bank Account Reports (FBARs) each year. Americans are required to file FBAR for each year they have "a financial interest in or authority to sign" one or more "foreign" financial accounts with a balance that exceeds $10,000 at any time, even for a single day.

The figures above are for 2017 and are quoted by Democrats Abroad, the foreign arm of the political party.

 

The large discrepancy between these registration numbers and the estimate of a total of 9 million American emigrants is a mystery. But this clearly confirms the opinion of most legal and tax experts, who assume that a large number of American expats do not comply with their tax reporting obligations, perhaps because they are completely unaware of these requirements.

What can data from other countries tell us?

Of course, while the United States' own data on Americans abroad is questionable, other countries have records of the number of American citizens living within their borders.

Again, this data is not necessarily reliable or up to date.

It is generally accepted that Mexico is home to most American expats. A recent Washington Post report on what it called a "barely perceptible increase" in "Americans heading south" cited official Mexican statistics that the U.S.-born population reached 799,000 "a increase of about four times since 1990".

Canada is second only to Mexico for American expatriates, and in Europe, Germany is said to be home to the largest number of American citizens.

There are said to be between 100,000 and 200,000 American citizens in the UK. This wide range is because different sources of information suggest different numbers.

For example, the latest figures from the UK's Office for National Statistics for the period 2017-2018 are 138,000. The ONS census data includes a different measure of Americans living in the UK which does not pose no questions on nationality, but instead indicates where the persons counted were born. In 2011, the most recent year for which this information is available, just over 177,000 UK residents said the US was their place of birth.

Actual figure "close to 5.1 million"?

The main lobby group for American expats outside of the Republican and Democratic parties overseas is American Citizens Abroad, based out of Washington, D.C.

Its executive director, Marylouise Serrato, told an IRS hearing in October 2018: "While it is often said that approximately 9 million Americans live abroad, the ACA estimates that number is closer to 5.1 million".

Why is the number important?

Unlike other tax systems, the unpopular “citizenship-based” tax system in the United States requires citizens to file returns with the US IRS regardless of where they live. The recent tightening of these requirements and associated heavy penalties for non-compliance have created problems for American expats.

This includes "accidental Americans" who are considered U.S. citizens by certain circumstances of their birth but who have lived most, if not all, of their lives outside the United States. Prior to the introduction of FATCA and other relatively new laws, these "victims" were unaware that they were supposed to file tax returns and eventually pay taxes.

Better data on expatriates would enable better communication and allow stakeholders to seek advice when needed.

Concerned about the possible consequences of not meeting US tax filing and other information requirements, some US expats choose to renounce their citizenship.

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Answered 2 years ago Ola	 Hansen	Ola Hansen