The mayor of Zurich gave up U.S. citizenship, one of a growing number of Americans to do so after Switzerland agreed to implement tighter asset-disclosure rules.
Corine Mauch, 52, a member of the Socialist Party born in Iowa City, Iowa, returned her passport to the U.S. Embassy as she regards Switzerland as her home and doesn’t want to deal with Internal Revenue Service paperwork, according to an e-mailed statement from her office today.
“My relationship with the U.S. is limited to my very early youth,” said Mauch, who retains Swiss citizenship. “Neither the double taxation or any new directives on the taxation of U.S. citizens outside the U.S. have affected this decision. But I won’t miss the U.S. tax bureaucracy either.”
The U.S. is the only nation in the Organization for Economic Cooperation and Development that taxes citizens wherever they reside, including an estimated six million expatriates. Americans are shunned by Swiss and German banks and face tougher disclosure rules under the Foreign Account Tax Compliance Act.
The 2010 Fatca law requires foreign banks to withhold 30 percent from “certain U.S.-connected payments” to some accounts of American clients who don’t disclose enough information to the IRS. Switzerland and the U.S. signed a bilateral agreement in February to help implement the law.
Mauch began the citizenship-renunciation process late last year and didn’t vote in the 2012 U.S. presidential elections, Nat Baechtold, a spokesman for the mayor, said by phone.
About 1,780 expatriates gave up their nationality at U.S. embassies in 2011, up from 235 in 2008, according to figures compiled last year by Geneva’s Overseas American Academy, citing the U.S. government’s Federal Register.
The U.S., which created the Fatca law to discourage tax cheats from using offshore centers, including Switzerland, is in talks to resolve a Department of Justice probe of more than 11 Swiss financial firms that have provided cross-border wealth management and private banking services to Americans.
The head of private banking at Bank Frey & Co. in Zurich and a Swiss lawyer were charged on April 16 with conspiring to help U.S. clients use offshore accounts to hide millions of dollars from the IRS.