An advocacy group says the data underscores the case for moving the US tax code to a residency-based one. 

With US Treasury data showing a rise in the number of people who have renounced their citizenship, the narrative of Americans seeking to move overseas took another turn. 

On Friday last week, quarterly figures in the Federal Register listed 1,331 people who had renounced their status in the third quarter. That brings the total to 4,574 for the first nine months of the year, a 16 per cent rise from the same period a year earlier, and the highest nine-month total since 2020. A further 316 names in the fourth quarter would be enough for 2026 to exceed last year's total.

The trend is sharpening the need for US expats to be taxed territorially rather than on a citizenship basis, Tax Fairness for Americans Abroad (TFAA), a group advocating for change, said in a statement emailed to this news service. 

"These are not billionaires fleeing taxes," Brandon Mitchener, executive director of TFAA, said. "They are ordinary Americans who have built lives overseas and find themselves trapped by a tax system that forces them to navigate two countries' tax and reporting regimes indefinitely."

The US tax code requires Americans living permanently or indefinitely overseas to continue filing US tax returns and information reports even when they already pay taxes in their country of residence.

"Every American who renounces citizenship is a policy failure," Mitchener said. "Congress can stop this trend by moving towards residence-based taxation, the same approach used by other developed countries. Americans abroad should not have to choose between maintaining their citizenship and living normal financial lives where they reside."

The information comes as Americans vote in this week’s mid-term elections.

The Residence-Based Taxation for Americans Abroad Act, introduced by Darin LaHood, a Republican congressman from Illinois, would move toward residence-based tax. Rep LaHood is expected to re-introduce an updated version of the bill before the end of the year, TFAA said.

The advocacy group American Citizens Abroad has also called for the US to change its tax system to a residency-based one. Estimates of the number of Americans living abroad range from about 4.4 million to 5.5 million, or roughly 1.3 to 1.6 per cent of the population. Once concern is that with a relatively small share of Americans living outside the country, their political clout is arguably limited. 

Separately, there has been a trend of Americans seeking residence, even if it is temporary, in mainland Europe, the UK, and other parts of the world. In the UK, the arrival of Americans has countered a pattern of high net worth people leaving the UK.

On May 25, the Wall Street Journal reported that in 2025, for the first time since the Great Depression, more people moved out of the country than entered it.