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).
*@soconfused That is solid advice from True North. I would seriously consider that approach.
I am like you, born to Canadian parents in 1958, moved to Canada in 73, got Canadian citizenship in 90. I asked for my citizenship documentation from Canadian Citizenship and Immigration, (takes about 4 months) and it confirmed that my Canadian citizenship was made retroactive to birth. I was never registered in the first two years, or at all. In fact, I had to immigrate into Canada. So you are likely dual since birth. This is useful in that it would make you uncovered for the exit tax on form 8854.
Despite what Banany says, anyone that is in the tax system has to file 8854 to end all obligations with the IRS. Doesn’t matter if you are covered or uncovered.
I also had no SSN but decided to get one just days before I went to the consulate in December. I filed all of the taxes, FBARs and 8854 myself afterward with the help of turbotax. Everything is done with no taxes or penalties owing. It was a lot of work and a lot of stress. Now that I know for sure that CLNs are still obtained without being tax compliant, I would have not bothered with tax filing. A CLN will help if you have trouble at your bank in the future. It will also allow you to travel on a Canadian passport with US birthplace. I honestly don’t think you will ever be bothered at the border about taxes if you never have a SSN. The IRS will never know about you and I don’t think they will bother looking for you.
Just my unprofessional opinion.
*@TrueNorth – thank you. This sounds like the right plan for me.
@iamquincy – I’ve checked my Citizenship card and there is no indication that it is retroactive from birth. There is a date on the card but it appears to be the issue date. I will give them a call next week and check that out. Thank you.
*@soconfused It won’t be on your citizenship card. May card says 90, the year my application was approved and card issued. I was totally surprised that I was made Canadian retroactively to birth when I received the letter. I only have the letter from CIC as proof. This is the form I used to obtain the info: http://www.cic.gc.ca/english/pdf/kits/citizen/CIT0058E.pdf
I called CIC first and they were very helpful and tried to look it up for me. They weren’t able to do it because the searchable records the agent had access to didn’t go back to 1990. You may have better luck on the phone.
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Thank you so much for this post (and comments). I’ve read virtually every word, and here are some questions I’m left with at the end of it. As background, I live in the UK and intend to relinquish my US citizenship when I gain British citizenship this autumn.
– What evidence do I need as my intent to relinquish? Is it enough to write a signed declaration of my intent dated prior to my British citizenship ceremony and oath? Like Petros, should I make a video beforehand as further proof?
– As far as I can tell, the timeline will go something like: Write, date, and sign a declaration of intent -> Attend my British citizenship ceremony and swear an oath to Queen Elizabeth the Second -> Notify the U.S. embassy in London by email (the only way I can find to get hold of them) that I have committed an act which caused me to relinquish my US citizenship and ask for an appointment -> Attend the appointment with filled out copies of DS-4079, DS 4081, my US passport, my signed declaration, a written statement to sign there, plus random identifying paperwork like birth certificate, marriage certificate, anything else they request I bring -> Wait 2 to 12 months for my CLN to arrive. Does this sound okay, or is there anything I’m leaving out?
– Taxes… my British citizenship ceremony will fall sometime between September and November this year, so what tax forms do I need to file and when? I’m tax compliant and up to date with my 1040s. We have left almost all accounts and assets solely in my non-US spouse’s name, so I’ve never had to file an FBAR or any other asset-related form, only my simple 1040 and 2555 for a low-earning part-time job. Would I need to fill in an 8854 up to the date at which I relinquished, and if so, where do I file it, and when? Very confused.
– Future financial freedom: My spouse and I want to be able to have joint accounts and assets without the entanglement of incredibly complicated filing requirements. How soon after I relinquish can I be added to the accounts without needing to report it to the US? Would I be safe doing it the day after I relinquished at my citizenship ceremony, after my appointment at the embassy, wait until the next tax year on January 1st, wait until I receive my CLN, or any point in between?
– I don’t foresee travelling to the US in the near or not so near future, but just in case anything were to arise such as family members getting ill… while I’m awaiting my CLN would I be okay to travel on a British passport via the visa waiver program, or would I run into problems if I didn’t have the CLN in hand? I believe someone said it’s all on computers now so they should be able to verify it’s underway, but just checking.
Thank you already for being such an invaluable source of information, and thanks in advance for any advice with these questions.
Hi Avermo,
Re taking takingUK citizenship with the intent of simultaneously relinquishing your US citizenship.
To make this official with theUS govt, you will have to appear at a US consulate, where you will sign forms 4079 and 4081, as you are planning to do.
US Dept of State will consider your citizenship to have terminated the date you relinquished it.
However, according to 877A, IRS will consider you terminated your citizenship on the date you sign these documents at the consulate.
If you sign the documents at the consulate on — say, October 15th — you would file a regular 1040 for 2012 for January 1st-October 14th inclusive. This would be due June 15th, 2013.
If you haveUS income after October 14th, you would file a 1040-NR for October 15-December 31. This would also be due June 15, 2013.
To complete your IRS expatriation, you will also have to file the exit tax form 8854. This form is also due June 15th, 2013.
You can safely act as a NON-US Person for financial matters once you sign the documents at the consulate. DOS Washington does have final approval over granting CLNs, but they seem to almost never override the file as sent to them by the consulate. They apparently go by what’s sent to them by the consulate, not only your forms but the vice consul’s report, so if there were a potential problem with your application — doesn’t sound like you would have one anyway, sounds very straightforward — but it there were to be one, the vice consul should let you know on the spot.
Absolutely use only your British passport once you acquire UK citizenship. On page 49 of the Consulate Report Directory Lord Jim mentioned that upon his expatriation meeting at the London Consulate, it is providing a letter which you can use to show that you have turned in your US passport and that your CLN application is in process.
@ avermo
“My spouse and I want to be able to have joint accounts and assets without the entanglement of incredibly complicated filing requirements.”
My goodness do I ever relate to that and sympathize. My husband and I actually did some careful planning to simplify our lives as we head into our “dotage” years, even to the extent of purposefully bleeding off or avoiding income. And now like you and so many others here we have been dragged into the confused, complex, often conflicted world that is the IRS. So much for the simple life. All we can do now is try to free ourselves from the source of all this madness. Even if we are capable of dealing with this for who knows how many more years, we are not willing to do it anymore. I doubt that we will execute our exit to the satisfaction of 70,000 pages of tax code but we’ll do our best and if it means never going to the USA again then that’s fine with us. I know for others this is not an option but I hope they find a way to freedom too.
@ avermo
You’re in a good position if you’ve been filing up until this point. I don’t think the declaration of intent is necessary, particularly. The important thing is that after you become a UK citizen, not to do anything that implies a continuing claim on US citizenship – voting, travelling on a US passport and so forth.
@pacifica777 – Thank you so much. That was exactly what I wanted to know. I’m so much less stressed and happy knowing the proper procedure, and the three days in my future to look forward to: the day I stop being a US citizen, the day the IRS acknowledges I stop being a US citizen, and the day I file my last ever tax return and 8854.
@Em – Best of luck with your journey, and I hope it all goes well. We’re quite lucky that we’re still relatively young, so we’re able to do this before our finances have gotten complex. It’s still been such an effort to not put a foot wrong, and getting less feasible each year, so it’ll be such a relief when it’s over.
@A broken man on a Halifax pier – Thank you! I’d been a bit concerned the declaration of intent wouldn’t be evidence enough, so I’m happy to hear that it’ll be more than sufficient. I’ll still do it as a precaution. Also, from the day I become British I’ll stop thinking of myself as American and won’t use my US passport or vote again.
One more question: What will be the effect on my US bank account, especially when my social security number becomes invalid? I only use it to transfer in a small amount of money each month for my student loan payment in the US. Will I need to close the account, or notify them that I’ll no longer be a citizen? Is there anyone else besides the consulate and IRS (through my 8854) who I need to notify?
*@avermo
your SSN is never cancelled, your SSN will be invalid for employment purposes only.
You will use it to file 1040NR if you have any US income after renunciation and for identification purposes associated with your student loan
*@avermo
one more thing to add to Pacifica’s info, 8854 is attached to your 1040/1040NR and an additional copy of the 8854 is sent to the IRS in Philadelphia. The address is in the instruction.
If anybody is interested….we crossed the U.S. border last week…the first time since renouncing and with my new Canadian passport..I had been crossing for over 20 years with a U.S. passport so I thought there might be a problem..at which point I was going to whip out my CLN…well the guy just told us to have a nice trip and that was it…so all that worry over nothing.
avermo…Just from my experience….you send a copy of your 8854 in with your 1040 and a copy to the DOS.
also I don’t believe you ever get anything back from the IRS saying you no longer have an obligation to file tax…from what we understand the only time you will hear from them is if there is a problem…they kind of leave you hanging out there…I dread seeing brown envolopes in the mail…since i filed my last years taxes this year and no word back from them…we have to assume all is OK???
@Freeatlast, You can assume all is ok only three years after you have filed. That’s how long the IRS has to establish a claim (if I’m not mistaken). With FBAR it is six years. Department of State doesn’t need anything to do with taxes or 8854.
Finally, I would say that your worry was not unwarranted, although the risk is minimal. If you have CLN, you should have no problem going into the United States–for now. My case is different because I am the ring leader here. They might want to crucify me.
Petros…Well good news now I have to worry about the IRS for 3 more years! LOL… You are right it was not the DOS we sent a copy of the 8854 to it was the Department of the Treasury Internal Revenue Service….sorry for that mistake.
@Freeatlast, I figure I might dare step across the border in about seven years, 2018 or so. But this exile is not entirely self-imposed any more.
*I was born in the US to Canadian parents in 1954. We moved back to Canada in 1966 when I was 12. I have a Canadian certificate of “Canadian Citizen Born Abroad”. I’m now 58. I’ve never worked in the US, never filed any US tax form, never had a US passport. My Canadian passport of course says I was born in the US. As a kid, I remember my mother saying I was a dual citizen up to a certain age. I remember going to the US consulate here in Calgary in the early 70’s. I was somewhere between 18 and 22 or so. I went to ask if I was a dual citizen and what advantage there was to it. As I recall, I was told dual citizenship didn’t really exist and that I wasn’t an American citizen.
I have no idea where I fit into all this IRS/FATCA/FUBAR business. Of course, I want no part of it.
Should I go to the US consul in Calgary and ask questions? I like the idea of some certificate declaring that I’m not a US citizen and have no obligations to any US department. Does the process of relinquishing apply to me?
I’ve spent my whole adult life believing I’m only a Canadian!
Hi all,
Apologies if these question have been raised before but I’m struggling to navigate the huge amount of info on this site.
I was born in the US to non-US parents and left when I was approx 2 months old. My parents thought it wise at the time to ensure I had a US passport. I have returned to the US as a child and more recently on business on numerous occasions, always on my US passport as I knew that this was legally expected of me.
I have just discovered that I should have been filing US tax returns all my adult life. Clearly I have no intention of doing so for the rest of my life, nor do I intend to force my future spouse to do so. It seems I have no choice but to do what I need to do to be in compliance as of today and then nothing further (unless anyone can tell me anything different? Do I need to be in complaince by filing the last 6 years worth of returns before I can renounce or relinquish?)
As far as I understand it, I can renounce or relinquish, and I understand the difference between the two. I can’t see how I can relinguish as I obtained my other citizenship of an EU country at birth, and I can’t just switch jobs to go and work for the goverment over here for a few months just to get rid of it that way.
So I seem to be left with the option of formally renouncing. People seem to shy away from this option because of a feeling that the US goverment will exact its revenge in some way, and the way they seem to be able to do so is by way of the ‘Reed Amendment’.
However, as far as I can tell, this legislation has never been enacted, nor is it enforceable. Does anyone know of anything to the contrary? I travel to the US for business and I don’t want to take any steps that will impact my career.
Many thanks for any advice.
@AccidentalAmerican: However, as far as I can tell, this legislation has never been enacted, nor is it enforceable.
Enacted? Certainly. Enforced? Up to now, mostly no, and possibly unenforceable as it stands. However, also note Ex-PATRIOT. That might or might not pass. If you’ve under $2MM of assets you’re probably okay even if it does. For now. You’ll need a fully functional crystal ball to predict whatever nonsense congress might come up with in future. The trend over the past decade or two has been increasingly anti-expat, and there’s no telling when it will end.
@AccidentalAmerican,
In addition to Watcher’s comment, you also cannot relinquish because you have or had and traveled with a US passport. You have to read and read, get legal advice if you think it necessary and make your decision to renounce if you determine, as many of us here, that that is better done sooner rather than later. Good luck on your research at this site and your decision.
“Do I need to be in complaince by filing the last 6 years worth of returns before I can renounce or relinquish?”
No, you can renounce and take care of the tax paperwork later, IIRC by the overseas filing deadline of the following year. Your late returns will be late anyway, there’s not much point in worrying how late.
*@broken man; @Watcher: There is one danger that Phil Hodgen talked about. If you renounce but do not submit your 8854 & tax returns by the due date for submitting tax returns you automatically become a “covered expatriate”. That puts you into the same “exit tax assessed” category as those with over $2MM in assets. And if you hadn’t been filing for several years (for example, if you didn’t believe you were a US citizen) – well, getting everything ready for 5 years US tax returns + your current year’s 1040 + 1040NR + 8854 return… Well, that could take a while.
So: avoid becoming a covered expatriate if you can by ensuring your tax returns can be submitted by the current year’s due date.
*Thank you to everyone for their advice, it’s much appreciated.
I’d argue this is completely contrary to the European Convention on Human Rights. We have a right to privacy for starters (although many banks will now ask me to disclose any connection to the US if I want to open an account, all the better to find the info the IRS might strong-arm them for), a right to travel (which could apparently be restricted if I renounce), even a right to marry (who on earth would marry me knowing what obligations would be foisted upon them). Then the whole cycle starts again with my children who would also be Americans…??
No thank you. I will be renouncing. Not that citzenship of a nation who willingly bends over every time the US asks them to is anything to be proud of either.
Here’s a question (that it would come up is an unfortunate sign of the times, but there you are).
I was talking the other night to an accidental American born in Canada who is not at all administratively known to the United States – travels there on a Canadian passport, has never applied for a US passport, etc. I found myself suggesting that if he ever wanted to work in the US it would be simpler in the long run, whatever the short-term frustrations, to get a visa and do it as a Canadian and avoid a lifetime of tax entanglements. It’s a sad and ironic footnote to the ACA’s activism in the 70s around the citizenship of US citizens born abroad, but there we are. @RogerConklin?
@broken man;
If I was that individual, I’d avoid any work or residence relationship with the US entirely.
The US may start resorting to
having us all prove our parentage as well – not to extend to anyone the ‘benefits’ of US citizenship, but to capture larger numbers of those the US can define as ‘taxable’ – no matter how tenuous the connections, from those born and living abroad. Although currently transmission through US parentage
has it’s limitations – since if it is only one parent, currently there
are rules about how many years after the age of 14 (why 14?) they must
have spent living in the US. http://travel.state.gov/law/citizenship/citizenship_5199.html . As we know, the US can randomly change rules retroactively, or capriciously – which makes me fear for those Canadian or other non-US born children abroad who currently are exempt from US shackles, but who might end up having it imposed after the fact if the US reconfigures the rules.
It is unfortunate that on the issue of easing the automatic inheritance of US citizenship by children born outside the US, we may oppose the ACA’s efforts, because we don’t want to see the US taxable burden spread to our children, and any other unwitting individuals against their will. As long as citizenship-based extraterritorial taxation in it’s current incarnation is welded firmly onto inherited US citizenship, then it represents a hazard to avoid. It would be better to make the taxation burden tied to some kind of voluntary process undertaken (well) after the age of majority – when individuals abroad can better understand what they’re undertaking (lifelong) by choosing to claim US status – perhaps through actual US residence as an adult.
I understand that the ACA is trying to address the issue of statelessness, or of families who cannot ensure that their children can have the same status and ensure their right to return to the US, but that results in a significant threat via US status to other children. As it stands now, a parent might relinquish or renounce, but children cannot, so that still leaves a family to cope with the US burden imposed on ‘accidental’ or born dual minors or those with disabilities who cannot renounce due to diminshed capacity.
If the person you mention goes to the US to work, and has a child there, then what? Would they leave before that? Would they return to Canada before perhaps marrying and starting a US family? It would cause major complications down the road if they decided to stay in the US.
@badger – We shall see, but I’m not that concerned about the shadow accidentals – it would take a serious amount of research to identify them, particularly if the USC parent was uncooperative and/or dead. There are far lower-hanging fruit.