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 decided that I will cross the border whenever I feel like it and not change a thing. Arrest me if they want to. That would make a great story to illustrate the absurdity of all this!
@GwEvil, just make sure you tell the rest of us when you decide to cross the border, as I did in July:
http://isaacbrocksociety.ca/2013/07/29/an-urgent-return-from-exile/
Will do! I told the spouse that all the Brock and Maple Sandbox people and the Canadian Media would have to be contacted if I was incarcerated at the border so we could make the biggest stink on earth about it!
I wish I had read all of this back in 2010 when I became a U.K. citizen. At the time, I had U.S. student loans which I just could not understand the logistics of managing without U.S. citizenship, and also, I stupidly listened to my parents, who are your typical American patriotic ignoramuses who cannot imagine anything not involving a home in the good old U.S. of A. (Which surprised me about them, actually, after moving over here.) So, I effectively “hid” my U.K. citizenship from the U.S. by travelling to the U.S. on my U.S. passport.
Now that I am a bit older and wiser, and having learned all about FBAR and its evils, I decided to formalise my “relinquishment”, only to have the Embassy tell me that because I traveled on my U.S. passport since becoming a U.K. citizen, I have somehow declared my undying love for the U.S., and I must renounce! (Nice little $450 bonus for the Dept of State!)
It’s all such a convoluted, narrow-minded hypocrisy, like most things American (I find). Despite trying to be a good citizen all my life, doing good things like filing all my tax forms, providing additional contact details to the IRS, and just this past month, paying off all of my student loans, they force me down the path of renunciation. Despite having, a legal right to choose my citizenship, they charge me a fee!
In the end, the truth is, I think the U.S. has lost its way and is pretty far from where I would want it to be. So perhaps renunciation is appropriate to me, after all! (Or maybe they’ve just made me feel this way by making me renounce! I wonder if anyone in the U.S. State Dept. has ever thought of that – oh wait, that implies that they actually think!)
Moody’s is putting on their renunciation seminar again in Calgary and Edmonton:
http://www.moodysgartner.com/yyc-and-yeg-seminars-considering-renouncing-your-us-citizenship-now-may-be-the-time-to-get-out/
Consumer beware – to me this seems like a growth industry – an offshoot branching off from the main US tax Compliance industrial complex to offer renunciation services. US tax professionals are now branching out to offer renunciation services in addition to their actual core tax law and filing niche. If your actual US status is not clear, then look at their credentials and see/ask if they have specialty immigration/nationality experience and training before engaging one for expatriation help? Educate yourself so that you can be prepared, and judge whether they know what they are about.
US tax professionals are not necessarily professionally versed in the actual citizenship/status/State Department/immigration/nationality permutations of this issue. Some US tax professionals are not going to be the best judges as to whether one is even a US citizen or not – which is not always a simple determination in some cases – there are lots of variables, as the discussions on IBS attest. In my opinion, it is also possible that some US tax law professionals may also have more recently overcome ingrained personal/value judgements about expatriation (some are US citizens themselves, with more years of ties to the US than to Canada or elsewhere) when a client wants to speak of renouncing.
If you are prepared (you read up on this, considered, and filled out your forms ahead of time with thought and care – or even consulted a lawyer in order to understand the personal tax consequences beforehand) I question how many cases are ones in which a person would need to pay a lawyer a substantial sum (@ potentially > over 350. per hour for a junior US tax lawyer, and perhaps >750. and up per hour for a senior one) to personally stand in line with you, wait around for your turn, and just generally attend the US consulate/embassy with you to *hold one’s hand during the renunciation/relinquishment interview. I think I remember that one IBS participant reported (somewhere in past renunciation thread/s) that they were billed in part for the lawyer’s verification (by phone to the consulate?) of which day of the week renunciation appts were done on (and that wasn’t even part of an actual contract of service). There might be some more complicated relinquishment scenarios, but a US tax lawyer is not necessarily an expert in relinquishing, but rather on the US tax consequences and filings aspect of things. And yes, renunciation/relinquishment can be stressful and emotional, but I am not sure that engaging a US tax lawyer is the best antidote for that.
How often would an ordinary renunciant need to pay a lawyer hundreds an hour to go with them to the US consulate or embassy? I question the use of the word **”many” in the advertisement below:
*http://www.mondaq.com/canada/x/227982/Income+Tax/Renouncing+Your+US+Citizenship+Is+Divorcing+Uncle+Sam+Right+For+You
**”many individuals pursuing the renunciation process request a U.S. trained and licensed attorney accompany them for the interview. If properly admitted, U.S. legal counsel may accompany the renouncing individual to the hearing. The presence of competent and qualified legal counsel can provide a great deal of comfort to what can be an intense, emotional event.”
[Note also the reference to a one hour interview – the actual face to face interview/questions portion is not usually one hour long – unless they are referring to the total time of being processed in general (which can take longer if the staff is not experienced or if they are behind): starting with waiting to be admitted to the building, waiting to be called up to the window, sent back to fill out the forms (if you haven’t filled them out ahead of time), sitting and waiting while they look at your supporting documents (ex. passport, etc.) make copies, and process the paperwork, rather than the active questions portion.]. I am curious as to what is being charged for the service – and whether it is a fixed fee, or per hour billing.
badger,
I, myself, think Pacifica should go into her own business.
@Calgary, me too. She knows her stuff, and would be a true advocate.
I think there is enough info on this blog for a people to understand what they need to do in order to get rid of the cancer of US personhood.
They don’t need to hire any of those carpetbagger lawyers to fill in the forms for the embassy.
@ Badger,
I hate this type of vulturous scaremongering.
What are these dangerous scary questions from the consul at these meetings (not interviews) which run about 10 minutes? Let’s see, I remember, “Would you sign this form here at the bottom?” “Did you sign both copies of this one?” “Will you come in to pick up your CLN or do you want us to mail it to you?”
@ Calgary and Badger,
Thank you for your kind words. We have such a great collective effort here – everyone sharing their experiences to give everyone else an idea of what to expect at the consulate — and sharing their experience and knowledge on all kinds of topics regarding citizenship / FATCA / IRS issues as well.
Many lawyers like to market their services by pressuring/scaring people into becoming their clients. Its like an indirect form of extortion — you need to pay me for my services or else you may find yourself in big trouble.
@Pacifica, re; “I hate this type of vulturous scaremongering. ”
Me too. An attempt to objectively inform people is one thing, but it is isn’t written that way. I have to ask why not? There are professional sites that are far more informative and useful, and not just a way of hooking people in out of fear. Now we’re contending with the Expatriation industrial complex as an offshoot of the Compliance industry. And the joke is that some of the practitioners may not actually be until recently, comfortable or in favour of assisting expatriations for the usual US homelander type reasons.
I sincerely hope that there are not thousands and tens of thousands or more Canadian families who are losing their savings to the US tax and Expatriation industry.
Does anyone have advise on when to apply for renounce? Do i have to have all my taxes back from US or can I go for it now? How long is the wait time for apptmnt?
I am one of those, born in US to canadians people came here at 3. Sworn my aliegence to Canada as soon as 18 but also had US passport although travel under my CND. I don’t think I can relenquish due to having US passport after formalizing my CAN citizenship and swearing to Queen, right?
Thanks for any guidance… still in shock, just found out about all this…
@ Americanmistake
The short answer for taxes is that you can renounce or apply for a relinquishment-based CLN before filing taxes (State Dept doesn’t care one way or the other about tax) as you have til June 15th of the following year to get up to date on taxes and file your exit tax return. (There’s been some discussion recently that it might be April 15th. Someone can weigh in on that.)
Before getting into that, though …
People have got CLNs based on their relinquishment, although they used a US passport after their relinquishing act, if they were told they had to or mistakenly believed they had to. It’s problematic but it’s not necessarily fatal. Note, however, someone ran into serious problems with this at Toronto this week.
Did you take government employment or join the military and serve as a commissioned or non-commissioned officer after the date you used the passport (or got the passport – it’s not clear if you used it)? If you voluntarily performed this act with the intention of terminating your US citizenship, that is a relinquishing act. Immigration and Nationalities Act, s. 349.
Wait time for a consulate appointment seems to currently range from a couple of weeks to a couple of months at the consulates in Canada.
Back to tax …
(Note: As mentioned, there’s been some discussion recently that the date is April 15th. Someone can weigh in on that. I’ll stick with June 15th here.)
You have until June 15th of the year following your renunciation to certify that you have been tax compliant for the five years previous to your renunciation. This certification is a yes/no question on the exit tax form (8854), which reads: “ Do you certify under penalties of perjury that you have complied with all of your tax obligations for the 5 preceding tax years?”
So, to wrap things up with IRS, if you renounced on, say, 23 January 2014, you’d have to have filed the following with IRS by June 15th, 2015 (when I write 1040s, I mean any other forms required with it as well):
(1) 1040s for 2009-2013,
(2) a partial year 1040 for all income to 1 Jan – 22 Jan 2014;
(3) a partial year 1040-NR for 23 Jan – 31 Dec 2014, declaring only US source income.
(4) 8854.
If a person does not do this, it does not affect their citizenship status. It can result in IRS problems, such as being considered a “covered expatriate,” that is subject to exit tax, and possible other IRS problems. However the citizenship remains terminated and the CLN remains valid.
Thank you for that.
My plan was is to file. 2010,11,12 now and 2013 by June 15. Thatvwill be 4 years Then apply for renounce. File 2014 in jan ’15 and be done by august 15 when I get married. I’m terrified the IRS will go after joint assets. My sons resp is already in jeopardy
My latest challenge…. I can’t find my us SSN so now have to go to consulate get new passport as ID then apply for replacement SSN
I got a passport in ’95. So can’t go relinquish route. I think that delay is going to mess up my plan to be done for aug 15.
Life just gets better and better!
@American mistake,
With regards to the lost SSN, can you just call the SS office and ask them to look it up?
I am Canadian born (’50s), then naturalized as a US citizen in 1996. I paid US$450 and renounced in Feb 2012 at the UAE Embassy, and it went very smoothly, mainly because I read the paper called “Divorcing the US Government” and had prepared all the forms in advance.
By the way, the answer to the question: “Why” is very simple: “because it my right to do so.” That’s all that is needed.
I was up-to-date on all US taxes, and FBAR filings, and sent in the final paperwork and part-year tax return in April 2012.
But, to answer a question from another blogger above, I think 15 June would be the natural tax deadline because you are expat by definition. You are supposed to notify the IRS (can be done online) that you are exercising an extension by the normal 15 April deadline.
I am happy to share details of my experience with anyone who asks.
http://www.irs.gov/Individuals/International-Taxpayers/U.S.-Citizens-and-Resident-Aliens-Abroad says:
@LenCamp,
Thanks for writing. Good to hear that your renunciation went smoothly. You mentioned you renounced Feb 2012. I was wondering in what month you got your CLN. I’m keeping a tracking chart of wait times, by location, in the appendix of the Consulate Report Directory.
You’re the first person we’ve heard from that I’m aware of who renounced at the UAE Embassy. If you’d like to write about your experience – as little or as much as you want – for the Consulate Report Directory, please do.
I have a question regarding those of us that relinquished our US citizenships in the 1960s. I was born in 1946 in the US and came to Canada in 1952 when my father moved home and my mom came with him. In 1968 I was over 21 and had to affirm my Canadian citizenship. I also had to relinquish my US citizenship becasue, at the time, there was no such thing as dual citizenship with the US. My intention, both at the time and until this day, was to become a Canadian citizen and not be a US citizen any longer. The current state of things has me calling into question whether or not the US may still consider me a US citizen – especially with the money grab and the supreme court rulings in the 1980s.
Everything I have read does not include a clear answer to my situation and I was hoping someone with some knowledge of such things may know. Basically, if I relinquished m,y citizenship in 1968, while over 21 and never having been an adult in the US or even having lived there for more than 6 years, am I considered American? My contention is that I most certainly am not, but I am not sure.
Arcanum. You are correct. You are not American. You relinquished your citizenship when you became Canadian. CLNs were relatively unknown in those days.
Because of a SCOTUS ruling called Vance V. Terrazas, you are eligible to regain your US citizenship upon application but of course you have no wish to apply.
Thank you for the confirmation. that is a load off.
What happens to those of us with the whole bank reporting process for FATCA now? I was born in the US and have heard that banks are asking as part of the new rules. Will I have to go to the US consulate and get a CLN in order to prove I am not American? Or is it enough to say I gave it up in 1968 when the CLN was relatively unheard of. I still have all my paperwork from that time and I don’t have any type of certificate like that but I do remember having to sign the relinquishment/renunciation documents when I signed my Canadian affirmation ones.
Thanks again
It is enough to say you lost your citizenship back then. IF your bank were to ask, which is unlikely, the following is sufficient
a). Self certification that you are not American
b). Proof you are Canadian and
c) a reasonable explanation why you don’t have a CLN .
The fact that they were unheard of back then is reason enough.
The banks are unlikely to know where you were born and are not supposed to ask.
The above is also ordinarily sufficient if you are questioned when crossing into the US with a Canadian passport.
You will be fine.
Consider a donation to ADCS and spread the word. Cheers.
http://www.fin.gc.ca/treaties-conventions/pdf/FATCA-eng.pdf
See. Page 21. Paragraph 4(a)