US Law Could Force Meghan Markle To Renounce Citizenship And Deny Her Re-Entry

A 1986 legislation could spell trouble for Meghan Markle, the Duchess of Sussex, should she choose to renounce her citizenship. The U.S. government has recently begun enforcing provisions from the legislation, which allows the country to bar “tax refugees” from re-entering the U.S.

Tax refugees are high-earning citizens who choose to drop their citizenship and live abroad to avoid paying taxes on income they make overseas. U.S. law gives the government power to deny tax refugees re-entry if there is reason to believe that they gave up their U.S. citizenship for financial gain.

Meghan’s earnings are subject to tax both in the U.S. and in the U.K. Should the Duchess of Sussex decide to solely hold a British citizenship, she could be barred from re-entering the U.S. based on the provisions of the 1986 legislation.

Because the U.S. taxes its citizens irrespective of where they currently reside, many “accidental Americans” or those who were born in the U.S. but moved to another country shortly after birth have been burdened with hefty taxes.

Former London Mayor Boris Johnson is one of the most prominent examples. Born in New York, Johnson was slapped with a considerable tax bill for the earnings from the sale of his London home in 2014. At that time, BBC noted that Johnson thought that the tax demand was “absolutely outrageous.” He renounced his U.S. citizenship two years later.

According to CNN, Meghan’s citizenship also poses numerous potential problems for the Royal Household. Both the duchess and her newborn son, Archie Harrison, will be required to pay taxes in the U.S. This means that the Internal Revenue Service (IRS) will have to pore over the accounts of the royal family, who are known for being extremely private.

As long as the Duchess of Sussex chooses to keep her U.S. citizenship, she will be subjecting her and her husband Prince Harry’s wealth to scrutiny by U.S. tax inspectors. The income of her child, including any trust funds set up for him by the royal family, will also be examined.

“There is no other precedent of anybody else in the Royal Family who's been American,” American Tax Returns Ltd. founder David Treitel told CNN. “So nobody else has ever faced this circumstance before.”