Please Note: The US State Department under John Kerry, who served in Viet Nam, is now charging $2350 to receive any CLN whether one has relinquished or renounced. So if you are coming to this only now, you are SOL when it comes to getting a free CLN.
See also Relinquishing your US citizenship in Germany
Those of us who have participated in the Expat Forum have seen that one of the first things that many many newbies say is, “I am going to renounce my US citizenship as soon as I have my Canadian citizenship.” Now, I want to suggest that one should never renounce their citizenship if they can relinquish it instead. Months ago I wrote a post on this subject, which I provide below.
But first, some explanations: Renouncing is one of seven ways to lose your citizenship. It requires swearing an oath in front of an official of the US government and it now has a $450 fee attached to it. Relinquishing does not require a US government official, for it is one of several acts that a US citizen can perform that can result in a loss of citizenship, provided the person intends to lose it. Then, the former citizen must only inform the State Department, not so as to validate the relinquishing act, but to make sure that the US government understands what your intent was when you performed it.
It has become clear that there are several advantages to relinquishing over renouncing:
(1) Relinquishment takes the act of losing your citizenship out of the hands of the US government. This has two benefits. (a) There should be no fee because it doesn’t require a US government official–it doesn’t take place in a US Consulate–you only go to the consulate to inform them of a fait accompli, and it only takes one visit, unlike renunciation which usually take two visits. (b) This saves you $450, or it should, because you are not requiring the services of the Consulate–you are there only to inform them of your intention when you committed a potentially expatriating act such as making a pledge to a foreign power.
(2) Relinquishment is usually a positive act which cannot be confused with an expatriation to avoid taxes. You do it so that you can take part in foreign government or to vote in the country you live in, not so that you can avoid US taxes.
(3) Relinquishment is not a renunciation of your citizenship, so much as a positive act vis-a-vis your new home and country. It is not a repudiation of your country but an acknowledgement that dual citizenship is an unworkable absurdity. Thus, relinquishment comes with less stigma, potentially.
Finally, a caveat is in order. Don’t do one thing and say another. That is don’t relinquish your citizenship then travel on US passport, pay tax in the US, register your children born abroad as US citizens, or take up a residence or a job in the USA, except as one holding a legitimate permit to reside or work in the US as an alien. If a person does any of these things, the State Department may not accept your relinquishment. Those who desire to lose their citizenship but who have done such things after the relinquishing act, may need to renounce their citizenship after all.
So without further ado, here is my original post, “Renunciation of US citizenship: On avoiding the new $450 renunciation fee (update 2), which explains in greater detail, what would constitute a relinquishing act:
Renunciation of US citizenship: On avoiding the new $450 renunciation fee (update 2)
I’ve been pretty upset that it would cost me $450 to renounce my citizenship now that the US consulate in Toronto has instituted a fee. But today I was looking at the various government websites: Consider this website from the US state department and its explanation of how to renounce US citizenship:
Section 349(a) of the Immigration and Nationality Act (8 U.S.C. 1481) governs how a U.S. citizen shall lose U.S. nationality. Section 349(a) states:
A person who is a national of the United States whether, by birth or naturalization, shall lose his nationality by voluntarily performing any of the following acts with the intention of relinquishing United States nationality:(5) making a formal renunciation of nationality before a diplomatic or consular officer of the United States in a foreign state, in such form as may be prescribed by the Secretary of State; or(6) making in the United States a formal written renunciation of nationality in such form as may be prescribed by, and before such officer as may be designated by, the Attorney General, whenever the United States shall be in a state of war and the Attorney General shall approve such renunciation as not contrary to the interests of national defense.
Now perhaps it would interest readers to know that this government website is not telling the whole story: The U.S.C. 1481 lists several other ways that a natural born US citizen may lose their citizenship. Here is the full text (emphasis mine):
§ 1481. Loss of nationality by native-born or naturalized citizen; voluntary action; burden of proof; presumptions
(a) A person who is a national of the United States whether by birth or naturalization, shall lose his nationality by voluntarily performing any of the following acts with the intention of relinquishing United States nationality—
(1) obtaining naturalization in a foreign state upon his own application or upon an application filed by a duly authorized agent, after having attained the age of eighteen years; or(2) taking an oath or making an affirmation or other formal declaration of allegiance to a foreign state or a political subdivision thereof, after having attained the age of eighteen years; or(3) entering, or serving in, the armed forces of a foreign state if
(A) such armed forces are engaged in hostilities against the United States, or(B) such persons serve as a commissioned or non-commissioned officer; or(4)
(A) accepting, serving in, or performing the duties of any office, post, or employment under the government of a foreign state or a political subdivision thereof, after attaining the age of eighteen years if he has or acquires the nationality of such foreign state; or(B) accepting, serving in, or performing the duties of any office, post, or employment under the government of a foreign state or a political subdivision thereof, after attaining the age of eighteen years for which office, post, or employment an oath, affirmation, or declaration of allegiance is required; or(5) making a formal renunciation of nationality before a diplomatic or consular officer of the United States in a foreign state, in such form as may be prescribed by the Secretary of State; or(6) making in the United States a formal written renunciation of nationality in such form as may be prescribed by, and before such officer as may be designated by, the Attorney General, whenever the United States shall be in a state of war and the Attorney General shall approve such renunciation as not contrary to the interests of national defense; or(7) committing any act of treason against, or attempting by force to overthrow, or bearing arms against, the United States, violating or conspiring to violate any of the provisions of section 2383 of title 18, or willfully performing any act in violation of section 2385 of title 18, or violating section 2384 of title 18 by engaging in a conspiracy to overthrow, put down, or to destroy by force the Government of the United States, or to levy war against them, if and when he is convicted thereof by a court martial or by a court of competent jurisdiction.(b) Whenever the loss of United States nationality is put in issue in any action or proceeding commenced on or after September 26, 1961 under, or by virtue of, the provisions of this chapter or any other Act, the burden shall be upon the person or party claiming that such loss occurred, to establish such claim by a preponderance of the evidence. Any person who commits or performs, or who has committed or performed, any act of expatriation under the provisions of this chapter or any other Act shall be presumed to have done so voluntarily, but such presumption may be rebutted upon a showing, by a preponderance of the evidence, that the act or acts committed or performed were not done voluntarily.
I swear or affirm that I will be faithful and bear true allegiance to her Majesty Queen of Elizabeth the Second, Queen of Canada, Her Heirs and Successors, and that I will faithfully observe the laws of Canada and fulfill my duties a Canadian Citizen.
An individual who has performed any of the acts made potentially expatriating by statute who wishes to lose U.S. citizenship may do so by affirming in writing to a U.S. consular officer that the act was performed with an intent to relinquish U.S. citizenship. Of course, a person always has the option of seeking to formally renounce U.S. citizenship abroad in accordance with Section 349 (a) (5) INA.
Update 2: Today a consular officer called me from the US consulate in Toronto. She confirmed what I’ve said in this post, that relinquishing US citizenship and renouncing US citizenship are two different processes that are treated in a different manner by the consulate (including the fee structure).
I have recently been thinking about relinquishing my US citizenship. I was born in the US when my parents were visiting the US from New Zealand. I have never lived in the US. I live in Canada and have since moving from New Zealand in 1970. I have never paid US taxes and only learned about it recently. I’m probably quite Canadian after all these years and all my family (children/husband) are Canadian. If I were to become a Canadian citizen will I be able to travel into the US freely for holidays? And will I still be required to file US taxes, which I haven’t done yet? Please know that I do not dislike the US, I have felt honoured to be considered an American, but realistically I’ve never known what it would be like to even live there. Any thoughts?
@Sharon
Yes, you’ll still be able to go to the USA for holidays as a Canadian. And yes, according to the IRS you’re required to file US taxes as long as you’re a US citizen…
@all not sure where to put this but did any see the rick mercer report on cbc last nite.
his second segment of the nite was to take a jab at FATCA. my wife and i both looked at each other and high fived each other
Thank you for your response – so to be clear, if I become a Canadian I do not have to file US taxes?
Sharon,
I am going to describe your / our situation as US Persons in Canada who will renounce or claim relinquishment of US citizenship in as few words as I know how.
You may apply and eventually get Canadian citizenship (the wait for completing that process is, I think, about two years), and if the reason you are become a Canadian citizen is to relinquish US citizenship, then you will be able to claim that your becoming a Canadian citizen (when finalized) for relinquishment of US citizenship. Eventually (another long wait), you will receive a Certificate of Loss of Nationality to be able to show your Canadian “foreign financial institutions” (which the US considers our Canadian banks, credit unions, insurance companies, etc.) so those institutions will not turn over your private financial information either directly to the US or to the CRA, which in turn will turn your information over to the IRS. All that is contingent upon our Canadian government signing and intergovernment agreement with the US to allow FATCA law into Canada by waiving the rights of so-called ‘US Persons’ (not just citizens). We would become 2nd class Canadians to any other, no matter what country they may be from or the country their parents / grandparents may be from. The “foreign financial institutions” in Canada and every other country signing on will then be arms of the US IRS.
To answer your question, eventually you will no longer have to file US taxes — but the US says you do have a requirement to file back US tax returns and Foreign Bank Account Reports (FBARs) and then complete Form 8854, giving your net worth to determine you will not be deemed a “covered expatriate”. You are also asked on that form to certify that you have complied with all your IRS requirements.
You may wait until our Canadian government announced what they will sign for FATCA; that seems to be the general consensus. In the meantime, your job is to read, read, read and know exactly what your particular options are. This site provides a lot of resource material, a lot of opinion (but none of us give legal opinion), and, most of all, support to you and others going through this. It will not be easy as your friends and family may think the US could not do such a thing. They can.
If you think that this is injustice, I recommend that you join with us in writing your Member of Parliament, the Canadian Finance Minister and other government representatives, asking:
Do ALL Canadians have the same rights under the Charter of Rights and Freedoms? (or will the rights of US Persons in Canada be waived?)
I’d suggest one thing to read first thing is this at Maple Sandbox, an excellent introduction: http://maplesandbox.ca/2014/have-you-just-learned-that-the-united-states-considers-you-a-us-person/
Welcome to Isaac Brock and please after you have done your drudge work (and as you’re doing it), ask any questions you have. We’ll try our best to give some opinion, point you to more reading, give you moral support. Stay as calm and focused as you can. You have a lot of company.
Couldn’t believe it. Today I attended a seminar in Florida geared to Cdn citizens holding US property (like a winter condo) & one of the speakers was a very well known cross-border accountant. Asked him the question about whether hubby should use his SIN or have to get a new TIN (now that he has renounced) to put on the legal docs RE the sale of our Florida condo in 7 weeks.
The word from this expert was “your SSN never dies & should be used if necessary even after one renounces – – no need to / should not get a TIN.
He also suggested that in 2015, when we report this sale (as well as my renunciation) since the property is held jointly 50/50, that hubby & I should file jointly so to pay less tax – – that we can do this even tho we haven’t filed jointly for a couple years.
2015 will be my last US IRS filing!!!!!
BTW, the accountant who spoke today also suggested that folks like me, who will renounce in the spring, should make sure to get a notarized statement from the consulate on the date of oath-taking to show my bank that as of July 1, 2014 I’m no longer a US citizen – – so they don’t “iidentify me” as a US citizen prior to my receiving my CLN that can be copied and given to the bank for their records. Good suggestion.
I actually got a signed CLN from the consulate where I renounced with their official stamp on it. I also saved my receipt for the $450 fee. The consulate voided my US passport also and gave it back to me.But I’m still waiting for the CLN from the state department. Maybe I’ll never get it since it has been so long – 11 months now. Who cares. As far as I’m concerned, I’m no longer a US citizen and they can stick that country where the sun don’t shine.
Claire, when and which consulate was this?
TIA
Yes, what consulate did you go to?
Definitely hold on to the docs that you got there but contact them for an update RE getting the official State Dept CLN (you may need this for your bank post July 1/14). 11 months seems unreasonable; perhaps it has come into the consulate and they haven’t notified you for pick-up?
BTW, has anyone gotten official policy information from their Cdn bank as to how the bank will be dealing with customers who are no longer US citizens but have a US place of birth? I mean, what is the legal process of these banks notifying the customer that their accounts “may be IRS-identified” – – so the customer knows to show them a CLN doc? Any banks have a policy that you know of that one can do this preemptively? Or might the bank just send the info to IRS anyway, not letting the customer know beforehand, and leave the figuring-out to the IRS after they have your account info (so that the customer never knows that his/her account info has been gifted to the IRS monster?
I renounced in Paraguay. The people there are very helpful and responsive, so I know it has not arrived there without them notifying me. I have followed up with them several times. One even went to the US for training and checked on it for me while she was there. She said there’s only one person who is responsible for handling renouncement for a large area. The long delay could be explained by the hoards of people who are now renouncing.
@Claire; that is very interesting as the consulates here in Canada refuse/refrain from giving us anything at all as acknowledgment that our renunciations have taken place, other than a receipt for the $450. paid. Relinquishers here don’t even get that much as it has no fee (for now) – and no copies of any paperwork was given out. The cancelled US passport is usually taken away to be returned at the conclusion of the process – along with the CLN. Other Brockers can correct me if I am wrong (?) but that was my experience and also the impression I’ve gotten from reading other’s experiences here.
I don’t think they have handled many renunciations in Paraguay. I told them I needed a copy of the CLN and they gave me one. I also asked them to void my passport and give it to me. Probably many of the consulates wouldn’t do that.
I vaguely remember that one consulate in Canada was giving out a copy of the signed document around the time we started tracking this stuff in 2011, but stopped doing that by early 2012. I think it’s probably pretty uncommon all over to give the person a signed copy as almost no one seems to have mentioned getting one.
A couple of people have posted much more recently that London provided them a letter, stating that they had renounced. I think someone posted that about another consulate in Europe as well. That would be particularly useful for relinquishers, as they don’t have $450 receipt, but no relinquishers have reported from there.
Returning the passport on the day of expatriation does not seem to be a common occurrence amongst the people who have reported here.
It appears the general procedure is for the consulate to retain the passport and cancel it when they receive the approved CLN, but there is provision made for the consulate cancelling the passport on renunciation day
http://www.state.gov/documents/organization/120546.pdf
7 FAM 1227(g)
s. (2)”The person should obtain the person’s U.S. passport when the individuals executes either Form 4080, Oath of Renunciation of the Nationality of the United States, or the statement of voluntary relinquishment portion of Form DS-4079, Questionnaire; Information for Determining Possible Loss of U.S. Citizenship.”
s. (3) “The post should not cancel the U.S. passport, but rather retain the passport in a secure location until the approved CLN is received back from CA/OCS/ACS”
s. (4), says that the consulate can cancel the passport if the person needs the passport immediately because it contains valid foreign visas.
s. (5) deals with disposition of the passport when the approved CLN is received
Given that FATCA will make it extremely important that one is able to prove to NOT be a USC, it seems pretty ****ing reasonable that something more official than a receipt should be given to a renunciant on the day he renounces.
I have read that the renouncement is actually effective when one swears/affirms allegiance to another country. But they make us go through the expensive dog and pony show.
@ tdott,
Yes – and doubly so since they’re taking so ridiculously long to deliver the CLNs!
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Wow great information on here… I’ve been reading and reading the last few days and have a long way to go. Thanks to everyone and especially the leaders here for your good work.
I am US born to a Canadian mother, moved back to Canada in 1965, went through the immigration system*, became a citizen in 1973 (after April). No SSN, passport, voting, residence in US or any other such activity. Canadian federal government employee for 30 years. From what I read here I should relinquish and I plan to although I do have some hesitation about self-identifying. Does anyone see a risk there?
(*Always considered the fact that if my father had been the Canadian I would not have had to become a permanent resident before becoming a citizen, but now I see it as a blessing because I had to take the citizenship oath. Three cheers for gender discrimination!!)
Another question for the group… if a person took the citizenship oath when they were under 18 years of age (I was 15) does this make a difference? I read somewhere that if we didn’t make claim to US citizenship by age 25 it was considered relinquished. Is that true?
On another note, I do not, for the life of me, understand why anyone who is born in Canada to US citizen parents would do anything but lay low. There is no way they are ever going to find you. With place of birth = Canada on your passport and everywhere else you will be fine. It breaks my heart to hear of folks paying for trips, accountants, lawyers to come clean in this situation. And related, I find the scare-mongering of many of these “professionals” to be outrageous.
Regarding whether they will find you if you are born in the USA, if you don’t have a SSN I can’t see how it will be practical for them to do so. All they will have from your bank is your name and date of birth and this is not enough to really identify someone, especially if your name is not uncommon. Without a unique identifier like a SSN, there would be too many mistakes which would cause them all sorts of problems. This is why I don’t see anything but the rare problem at the border. Too many people crossing that have a US POB. It would be impractical. So even if you have an SSN, maybe it’s best to be unable to remember it and if obtained decades ago, to not even remember that you had one.
@BreakingSad,
Great name. If I had thought of it, I would have used BreakingGlad, or Breaking(From)Bad.
Your history is very much like Benedict Arnold Be Me. Read his report in the Directory (Calgary entry):
http://isaacbrocksociety.ca/wp-content/uploads/2014/01/Consulate-Report-Directory-2013.01.25.pdf
Nobody here that I recall has been afraid of exposure when claiming a relinquishment for the history you described. Benedict’s report describes how his naturalization as a minor was rejected as a claim for relinquishment even though (it seems to us) perfectly valid and legal at the time. (Other Brockers are still going to try though).
The DoS seems to reject everything under the old laws. The age 25 that you mention was INA 350, repealed on Oct 10, 1978, so you were too young for that. The DoS won’t accept it anymore anyway (according to the FAM).
So, mention everything you can that shows you have acted as a Canadian only since 1965, but I think your relinquishment will have to succeed based on your government employment. I hope you started that employment after turning 18? If not, you have a problem, I think. @Benedict might know more about this detail.
Many people have made successful claims based on government employment. Several consuls insist that an oath had to be taken for the employment to be an expatriating act. Read INA 349 (A)4(a) and (b). It’s clear that (a) requires existing Canadian citizenship and no oath, and (b) requires a person without Canadian citizenship to take an oaht. If you took an oath for the employment, or even a confidentiality agree, and even if you can only get a blank copy and not a copy of the actual one you signed, then be prepared to produce that.
I agree – if I were born in Canada to US parents, I would do absolutely nothing.
I disagree – crossing the border with a US place of birth is a problem and it will only get worse and more automated. I see no relationship between FATCA and problems crossing the border. As you continue your reading I think you’ll find that people with US birthplaces on their passports have decided to not cross again until they have a CLN, or never cross again, period.
You’re guessing/assuming that FATCA will not give the US enough information to find US persons in Canada. I’m not assuming that at this point in time.The bank will also turn over your home address:
WhatAmI,
Thanks so much for the response. I will change the handle to “BreakingGlad” when I receive my CLN, though, still with a bit of sadness. Right now I feel like “Walter Fight”.
I read up on the cases you referred to and it was really helpful. Difficult to believe that, just because one is a minor, there is not a way to relinquish when you become an adult. I am lucky that I worked for the government (starting at age 22) but geez what about everybody else? There must be plenty with this circumstance. Maybe someone will challenge it.
The document you linked to was a godsend. Great work folks!!! Seriously I have been reading the site for days now almost nonstop and I hadn’t seen that one although I did see the spreadsheet.
I have sent a request to both CIC and the Federal government for the information they have on me. When I have it, I’ll proceed with a Halifax appointment, and post the results.
On the ability they will have to match records when we cross the border, you are absolutely right. I did not realize the banks would be supplying the address. This is pretty close to a silver bullet for identifying a person. I still wonder if they will bother at the border, as the volume of expats crossing is high. Maybe when they’re not busy. Either way, I’d like to have the peace of mind.
@ BreakingSad,
There’s a couple of threads on border crossing where people have been writing about their experiences.
Isaac Brock Society: Question: Has Anyone had a bad experience crossing the border?
Maple Sandbox: Crossing the US border on a Canadian passport showing a US birthplace
BreakingSad: If you worked for the federal government for 30 years, that should give you grounds to relinquish back to the date of your employment–even if you became a Canadian citizen when you were a minor. You probably swore an Oath of Allegiance to the Queen when you began your employment. Ask for a copy of that from your employee file. I recall one person said a Consulate required a Certified Copy, so see if anyone is HR is able to do that.
I relinquished US citizenship in 1973 when I became a Canadian citizen at the age of 22. US Consulate was clear, firm and direct. I was “permanently and irrevocably“ relinquishing US citizenship.
Many people have gotten backdated CLNs. I am confident I would get one by going to a US Consulate. However, based on my 1973 experience and another experience in 2004, I am not prepared to go anywhere near a US Consulate. The headline from an article from Tax Analysts yesterday reinforced for me that decision–although we do not know what the actual content of the article said because it is available only to subscribers.
We all need to make the decision which gives us the most peace of mind. I encourage you to research all your options and then make the decision you think is best for you.
Continue to hang out here and at Maple Sandbox. You are among friends.
@ Blaze
Calgary411 posted the contents of that Tax Analysts’ article here:
calgary411 says
March 3, 2014 at 1:53 pm
http://isaacbrocksociety.ca/2014/03/01/irs-starts-criminal-investigations-of-renunciants-and-relinquishers/
Thanks folks. Blaze, I would be interested in your backstory (the 1973 and 2004 incidents). If you’ve described them here, could you provide the link. I’ve tried the search feature to no avail.
I’ve reviewed the two discussions on border-crossing, and while it appears that all we are seeing so far are a few power-tripping border officials and nothing systemic, I don’t like not having peace of mind. Will be glad to have the CLN but I know that’s not a guarantee either.