Democratic Sens. Charles Schumer (N.Y.) and Bob Casey Jr. (Pa.) on Thursday will unveil a plan designed to punish people who renounce their citizenship in order to dodge U.S. taxes. The plan is a direct response to Eduardo Saverin, the wealthy co-founder of social networking site Facebook.
Schumer and Casey allege that Saverin is looking to avoid millions in U.S. taxes by giving up his citizenship a few months before his company goes public. Saverin's stake in the company is expected to be worth more than $3 billion as of Friday.
Schumer and Casey charge that Saverin is looking to save up to $67 million in taxes by renouncing his citizenship. The amount was calculated by Bloomberg as Saverin's initial capital gains bill, but denied by Saverin's spokesman.
Saverin, a dual citizen of Brazil, requested to give up his U.S. citizenship in September, according to IRS documents.
Saverin has denied that he is giving up his citizenship in order to dodge U.S. taxes. He currently lives in Singapore, a country that taxes income but not capital gains.
"This had nothing to do with taxes. I was born in Brazil; I was an American citizen for about 10 years. I thought of myself as a global citizen," he told The New York Times in an interview published Wednesday.
According to the Times, Saverin could be saving himself around $100 million by renouncing his citizenship before cashing in his Facebook shares after the company's initial public offering.