Americans Abroad Dump Citizenship to Escape Offshore Tax Law

A growing number of Americans are renouncing their citizenship to escape a law that was designed to crack down on offshore tax evasion.

The Foreign Account Tax Compliance Act, or FATCA, requires foreign banks to report the assets of US account holders to the Internal Revenue Service. It was designed to go after wealthy Americans keeping money overseas to avoid taxes, but is also ensnaring regular people living abroad. Rather than risk steep penalties for failing to provide the information, some banks refuse to open accounts for US citizens at all.

This is particularly frustrating for so-called accidental Americans — people who are ...