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).
*It’s sad to see the U.S. crafting new rules to try to prove non-U.S. citizens are in fact U.S. citizens .. rules that are being passed without the knowledge or awareness of these non-U.S. citizens living outside of the U.S. .. what new rules will be crafted to keep citizens form migrating when the educated citizens begin leaving the U.S. for jobs more and more in expanding economic markets?
*If in order to relinquish you should not pay your taxes, how do you avoid becoming a covered expat? Is it okay to file back taxes and fbars about a month before informing a consular officer of the relinquishment?
@Banany,
If one has a successful relinquishment and receives their consequent Certificate of Loss of Nationality from the US Department of State, it would be dated the same date as their reported relinquishment. The receipt of that CLN, in my mind, says that the US Department of State agrees that you were not a US citizen as of the date of your reported relinquishment. Therefore, why would you owe any back tax returns or FBARs to the US from that date?
On the contrary, if you were to file any back US tax returns or FBARs, it would be one act that says you are a US citizen and you would not be allowed to relinquish, but would have to renounce (and do all the requisite tax returns and FBARs so as not to be a covered expatriate).
Of course, it may be seen (and therefore be) entirely different to the US. I so often don’t agree with their reasoning. But, the above makes sense to me.
*Remember when life was normal? How did this gigantic sh– bomb get dropped on us all. I am truly grateful that I am poor and own nothing. At this time, wealth and assets would be a curse. I who have nothing have been going crazy trying to figure this stuff out. I really truly feel sadness for those of you who have much to lose. I know how stressful this nightmare has been for me but I can only imagine the horror that some of you face. I thank all of you for the information you provide on this awesome website. Thank you Petros, Mona Lisa, Calgary 411, True North and all the rest of you. I am going to try to relinquish in about a month before the U.S. decides to draft old ladies to fight in Syria or some other unfortunate part of the globe. I truly love you all.
@Banany,
I hope your relinquishment is successful and that life returns to normal for you! None of us knows how this all happened — but we all remember our own OMG moment, when life as we knew it changed.
I’ll be hopefully be ‘getting out’ next month too, but by renunciation. This old lady doesn’t want to be drafted either. Cyber-love to you too, Banany. Really, the support here has kept so many from insanity in trying to figure this out. All the best of luck to you!
Hi everyone, bit of an update. I’m now a British citizen and have relinquished my US citizenship! I emailed the consulate in London with my documents and filled out DS-4079. They’ve replied that I still need to go to a renunciation appointment, and if it’s deemed that I lost my US citizenship on the day I acquired British citizenship then they’d “date your renunciation to that date.” It was frustrating that the terminology used by the person I emailed with was always “renounce” not “relinquish,” but I stressed the difference and will definitely continue to do so in my interview. The really frustrating part is that they said there’s a waiting list for the renunciation appointments they’re currently booking for March, and they’ll contact me once they have something available.
My main question regards taxes… Previously someone replied that I’d need to file my taxes for up until the day before I visit the US consulate and sign the forms, according to 877A. Is this still true even if the consulate backdates my CLN to the date of my relinquishment? And assuming it’s approved, is it likely they’d backdate it? From what I could find online it looks like they use the earliest of 4 dates, and one is “(C) the date the United States Department of State issues to the individual a certificate of loss of nationality” but I’m not sure if I’m interpreting that correctly. Of course if there’s any way it would effect my taxes then I’ll continue living a life of restricted financial freedom until March, but that would require me and my spouse delaying some financial decisions until then, which is incredibly annoying and disruptive, so I’d be grateful for any advice.
@avermo,
I don’t know the date of your taking British citizenship for your date of claiming relinquishment.
Read ALL of the commentary at this post. http://isaacbrocksociety.ca/2012/10/06/long-awaited-article/
Roy Berg commented:
You may also glean some information you can use by reading the Consulate Directory Report, a compilation of experiences of relinquishments and renunciations at various consulates, as reported here at Isaac Brock: http://isaacbrocksociety.ca/2012/03/24/consulate-visit-report-directory/
@avermo:
To speed up the relinquishment/ renunciation process, you might wish to contact other US embassies/ consulates around Europe for their appointment availability. London is just 2-2.5 hours from Brussels and Paris via the Eurostar. Other considerations could include the US Consulate in Edinburgh, or the embassies in Amsterdam, Frankfurt and Dublin.
Just a tidbit: I found out that Copenhagen consulate is not accepting renunciation appointments from people living in another European country.
@calgary411
Thanks for the link to the article. I’d missed that one and am glad I’ve seen it now. I relinquished less than a month ago so am under the current legislation. Luckily all up to date with taxes, so it was the perfect time to relinquish. Just really don’t want my tax obligations to go into yet another tax year, and not being able to put my name on my non-US spouse’s accounts is starting to really get in the way for us.
@Innocente and @DagobahSwampThing
Great idea! I’ve emailed the Edinburgh consulate. I’ve heard they have appointments earlier and as they’re actually closer to me than the London consulate I’m really hoping I get a good response from them in the next couple days. If not I’ll check out the other nearby consulates.
*Avermo, in the instructions on form 8854 the date of relinquishment is described as follows:
1. The date you renounced your U.S. citizenship before a diplomatic or consular officer of the United States (provided that the voluntary renouncement was later confirmed by the issuance of a CLN.)
2. The date you furnished to the State Department a signed statement of your voluntary relinquishment of U.S. nationality confirming the performance of an expatriating act (provided that the voluntary relinquishment was later confirmed by the issuance of a CLN.)
3.The date the State Department issued a CLN.
4.The date a U.S. court canceled your certificate of naturalization.
I hope this is helpful. Best of luck to you.
*Hi again,
Thanks to those who gave such good advice before. I have one more question if I may: does anyone know of a good US/UK tax accountant based in the UK? I’ve found one but he is going to charge me close to £2000 to file three years worth of tax returns. And this is just to confirm that I don’t owe the IRS anything(!?). Ludicrous just doesn’t cover it.
That might be the going rate but I thought I’d check before I dive into my savings to sort this mess out.
Thank you.
*@Accidental American, I am using one based in London but had to pay her oversix thound pounds to amend 2007-09 and file for 2010. Because I held numerous pfic’s, I wound up owing over $11,000 in US taxes on phantom gains. They explained that I had no choice but to fully declare all the unit trusts on close to fifty 8621’s, especially as I will have also had to list them all on the 8938 form which will be submitted with the 2011 tax return.
Of course it’s been quite a blow but also realise that to not have provided a complete disclosure would have then begun to be willful. I’m just so grateful that she believed my omissions had been innocent enough to use a quiet disclosure vs the OVDI which would have probably cost me over $200,000 when adding all the taxes, accuracy penalties, the 25% misc fbar penalty, plus all the accounting and legal costs…so to have lost ‘merely’ around $30,000 seems relatively light when I consider how harsh the official ‘amnesty’ program would have been.
I find it all outrageous but it is what it is…I’ve concluded that due to the long-winded statute of limitations and the fact that I still have strong family ties means that I am pretty much stuck. I have had to substantially lower my expectations for the future both due to ongoing accounting costs plus the fact that my investments were moved into a US-compliant investment portfolio that has much higher administrative costs which will inevitably lower long-term returns. The dividends it will produce will all have to go towards the ongoing annual accounting fees which will continue to run at at least 1,500 pounds.
I have thus abandoned hopes of an early retirement of 55 and am assuming I’ll have to wait till 70. But if one good thing has come from this, it’s that I realise that my main assets will thus be my friends and my health. I’m learning that money is not everything. 🙂
So sounds as though a mere grand a year is in fact quite reasonable! I think you’re going to have to budget for at least that much to stay compliant! Alas, the de facto extra tax on tax…
*@Mona Lisa1776 – ouch….. Thanks for the advice! Best of luck.
Am considering doing the ‘streamlined compliance’ procedures, and if so, would only be compliant for the 3 years: 2009-2011 returns , plus would report for 2012 – making a fourth. Would have the 6 FBARs done. Missing then one additional 1040. Could I backfile 2008 to make the fifth?
Would like to relinquish US citizenship – as live abroad, and about to be granted another citizenship – so would be a dual – by end of December, or early 2013.
Need some help though about best timing – am stuck about the need to certify 5 years US tax compliance. Would need 1 additional year of return compliance, but can’t stand being a US citizen endentured servant for any longer – ex into 2014. If I were to try and relinquish at end of 2012, or beginning of 2013, I would only have 4 returns. If I relinquished at end of 2013, I would have filed the 2012 FBAR, and 2012 tax return in June (or the 1040 by further extension, by October) – thus performing an act at odds with intent to relinquish US citizenship (?), which would have taken place months prior.
How does this work re timing? Will I have to renounce instead (and pay that onerous 450. fee)?
Really need to be freed of all things US – can hardly live with the anxiety, fear and anger.
@despairing expat,
Have you done a lot of research or gotten any advice? Research as much as you can before proceeding — one post here is http://isaacbrocksociety.ca/2012/10/08/new-article-from-roy-berg-on-ovdi-opt-out-vs-new-minnow-procedure/. There is other discussion on this site as well.
Hi, Despairing Expat, and welcome,
I might be repeating some stuff you already know, but may have some info of use to you.
If you relinquish yourUS citizenship upon becoming a citizen of your new country: Dept of State will consider your US citizenship to have ended the day you actually relinquished it (the day you became a citizen of your new country).
However, IRS will consider yourUS citizenship to have ended the day you notify DoS – that is the day you go to the US consulate and sign the documents (DoS forms 4079,4081).
You have until June 15th of the year following your consulate meeting to file your 8854, on which you certify that you have filed taxes for the past five years.
So, if you relinquish yourUS citizenship (by becoming a citizen of your new country) in November 2012 and you have your consulate meeting in December 2012, you have until June 15th, 2013, to file your 8854.
If your consulate meeting is in 2013, you would have until June 15th, 2014 to file your 8854.
It does not affect a relinquishment if you filed tax forms (or used aUS passport, etc., prior to relinquishing) because you are still a US citizen until you relinquish. And, of course, you’re expected to file your final return and 8854 after you relinquish in order to wrap things up with IRS, so that’s definitely okay to do.
As far as I know, you can backfile so you have five years filed. I think a lot of people are backfilling. I don’t know much about tax, though, but someone else will probably reply to you as well.
The important thing is you don’t have to be in tax compliance for 5 years at the moment you relinquish, nor at the moment you file your expatriation forms at the consulate. You only have to certify you’re in 5 years compliance when you send in your 8854 by June 15th of following year.
Calgary’s advice on research and reading before proceeding with filing taxes, is *really* important. Really research it before you decide exactly how you choose to proceed.
Thank you very much for your reply Calgary411. I have been reading extensively here, and considering my options, but am unclear about the issue of timing and relinquishment. If I obtained the other citizenship with the intent to relinquish the unbearable US one, how does filing returns after that date affect my status – as with the swearing of the other citizenship oath, I have performed the relinquishing act (ex. December 2012, or January 2012). But then, I will have to file the 2012 1040, in order to get a 4th year of returns filed (if I’ve already filed 2009-2011), and would need a 5th right?
I don’t want to have to renounce instead of relinquish, but don’t want to have filing US returns and FBAR after the date of my other citizenship oath to contradict my intent to relinquish. Not sure I’m expressing it clearly, but I am confused.
Any thoughts would be appreciated.
Thanks!
@Despairing Expat,
Another thing — The Dept of State forms and consulate meeting part of expatriation tends to be pretty straightforward. We have information and more details on this in the Consulate Report Directory, where people have described their experiences.
Pacifica;
Thank you for the clarification, and for the advice to think carefully and consider all options before making a decision about what to do re filing, etc. I really appreciate your detailed reply, and also Calgary’s. And all the other advice and sharing of information here by others.
@Despairing Expat,
You’d be filing returns after that date, but the returns are for a time period prior to the date. Everyone has to file at least one return after they relinquish/renounce, because you can only file for your final year as a USC after the year is over (for your final year as a USC, you only file a partial-year return, it covers from January 1st up to the day before you attend at the consulate, but the tax forms aren’t even available until the end of the calendar year.)
Thank you Pacifica and Calgary for your patience and help. Don’t owe any US tax, and always paid up where I live. Why should we live with being threatened and hurt by the US like this for the rest of a lifetime?
Don’t know what I would have done without this site.
You’re welcome, despairing expat. Yours is the question of all of us here. I’m pleased you have gotten value from this site. Besides the wealth of information we have collected, the support we all give each other *because we get it when others don’t as they aren’t going through it* is priceless. It is that which gets us through many difficult days as we go from thinking we’ll be OK to another day (or more likely, sleepless night) imagining the worst that could happen to us and our families. Such a waste of, as Just Me has labelled them, LCUs (life credit units).
I just wanted to echo despairing expat’s last post – I couldn’t find the relevant information in an understandable format anywhere other than this site. Thanks again!
You are so welcome, Despairing Expat and Accidental American! We’re all getting a lot of support and information from each other here.
It’s such an unprecendented and convoluted situation, with reams of false information out there. And it be pretty isolating as it doesn’t affect the people in our normal everyday lives. But as Calgary wrote ” We get it when others don’t as they aren’t going through it.”
It’s like we’re living in some nightmare version of theatre of the absurd trying to survive and get our lives back. But it’s really cool how we’re pooling our research and experiences and actually getting ourselves and our families through this.