Original Facebooker Renounces US Citizenship as IPO Comes
Eduardo Saverin was pretty much unknown to the millions of Facebook users before “The Social Network” hit movie screens in 2010. His tax bill will also be unknown to the IRS now that he’s renounced his US citizenship.
Saverin joined almost 1,800 other US nationals in 2011 who gave up their allegiance to Uncle Sam. His move to Singapore – which has no capital gains tax – will likely cut his tax bill by hundreds of millions of dollars after Facebook’s IPO on May 18.
Facebook is worth an estimated $100 billion, and Saverin owns a reported 4 percent interest in the social networking site. His move will save him from paying taxes on upwards of $4 billion worth of capital gains.
In 2008 just 235 renounced their US citizenship, and the jump over three years may be due to the IRS’s vigilance in prosecuting international tax scofflaws.
Swiss banking giant UBS saw more than 150 of its American customers investigated for tax evasion in 2009. Foreign banks are required to report their American clients to US authorities, and the US is just one of two countries that taxes its citizens when they live and work abroad.
Saverin became a US citizen in 1998, moved to Singapore in 2009, and Facebook is a uniquely American success story. But his impending tax bill, double US taxation, and IRS vigilance in pursuing international tax debts may have caused him to call Singapore and not Silicon Valley his new home.
The IRS is showing that Americans at home or abroad can’t evade the long arm of US tax laws. For those looking to get rid of their tax debt and come clean, working with a tax professional or tax attorney is the best way for the IRS to accept your friend request.
Sign up for our newsletter and be the first to find out when exciting IRS news happens. Yes, exciting. We're really into taxes.