With little remorse, fanfare, or regret, 54-year-old Jerusalem resident Eliezer B. gave up his US citizenship last month. After 17 years living in Israel, the accounting costs and hassle of annually filing taxes to the IRS just to prove he didn’t owe the US anything seemed too big a hassle.

“In the US it’s innocent until proven guilty, but with the IRS it’s the opposite,” he said. “Why do I need this expenditure on something for which there is no return whatsoever?” By the end of Monday, US expatriates around the world will have to file their annual Foreign Bank Account Report (FBAR) form, informing the IRS of any assets worth over $10,000 they hold in foreign banks.

While in previous years many Americans may have been blissfully unaware of their filing obligation, this year they are facing a greater chance of getting caught – and fined – for non-compliance.

For the first time, a 2010 law called the Foreign Account Tax Compliance Act (FATCA) is going into effect, forcing many foreign banks to disclose Americans’ accounts to the IRS.

In May, Israel agreed to cooperate with the law. Failure to do so would have led to crippling financial sanctions by which the US would withhold nearly a third of all US-based transactions from non-compliant institutions.

According to The Economist, which called the law “a piece of extraterritoriality stunning even by Washington’s standards,” over 77,000 financial firms and around 80 countries agreed to fess up.

FATCA’s implementation means that for the first time ever, the IRS will know precisely what people living abroad have failed to disclose.

Though the law was intended to get wealthy tax evaders to pay up, its draconian penalties could hit regular people’s pocketbooks hard.

People who willfully avoid filing can be fined up to $100,000, or 50 percent of the maximum account balance for each year they did not report their foreign assets going back six years. For those who mistakenly did not file, the penalty can be as high as $10,000 per missed filing.

According to Jonathan Strouse, an attorney at the Chicago-based law firm Harrison & Held, the IRS has a lot of wiggle room for how much of a fine, if any, they will impose.

It is more likely to be lenient toward people with “reasonable cause” for not filing their FBARs.

“If you talked to an adviser who told you not to file when you needed to, that’s reasonable cause,” said Strouse. “There’s a lot of fly by night people in Israel that give bad advice.”

The IRS has made it easy to file the form online, and only requires a few basic details, such as the account number, bank address, and the maximum balance held in the year.

Strouse recommended that every US citizen or green card-holder with a foreign bank account file their 2013 form by Monday’s deadline, and move quickly to fill in gaps going back to 2007.

“The longer you wait, the more it becomes willful nondisclosure.” he said.

Not every American expatriate is taking the measure lying down, however.

Eliezer is one of a growing number of people who have decided that their continued US citizenship is not worth the filing hassle or tax obligation the IRS demands.

“I had been to the States one time in the last eight years. It’s cheaper to buy a visa than pay out $600 a year [in accountant fees] to prove I don’t owe anything,” he said. “I don’t believe in what they’re doing and how they’re doing [it], I think it’s wrong, and that’s my way to protest it.”

According to a February post in the International Tax Blog, a record 2,999 people renounced their US citizenship in 2013, a 68% increase over the previous record set in 2011, and a 221% increase over the 2012 figure.

Because his annual income was under $97,600, Eliezer, whose small hi-tech business complicates his filing procedure, did not owe the US taxes over the years.

He managed to renounce his citizenship with relative ease after giving two interviews at the consulate and paying a $450 fee for renouncing citizenship.

Wealthier ex-pats looking to escape the tax man, however, may find the process somewhat more expensive.

People with a net worth of over $2 million or those whose average tax liability for the previous five years was above $157,000 are obligated to pay an “exit tax.”

The US government calculates the difference between their current assets and their cost basis. The IRS then taxes any amount over $680,000 as income.

That twist, Strouse said, has people renouncing their citizenship for tax planning purposes years before they might owe anything.

For example, consider an American citizen living in Israel who believes her new start-up is going to take off, and worries that she will have to pay a big chunk to Uncle Sam once it does. She may get rid of her citizenship now – just in case – to avoid paying the exit tax later.

“The tax planning concept is to expatriate now, before it blasts off,” Strouse said. “You do it now instead of waiting for it to mature, because then it’s worth a zillion dollars.”

While many US expatriates may prefer to keep their US voting rights, easy visitation, and the open option of returning in case things get too tough, Eliezer sees little use for his citizenship.

“I know it’s a big decision for a lot of people because it’s a one-way ticket. You don’t get it back,” he said. ”But this is my place, this is my home. I’m not leaving. I’m here for thick and thin.”

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