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 am confused about the possible backdating of CLNs for US born people who took Canadian citizenship before 1986 ( in my case 1979 ). Will the CLN really be backdated? What forms need to be filled out? If US tax was paid up ’til the backdated date, does IRS have to be notified?
I’ve already received very good advice on the Expat taxes and FBAR thread, but this question seemed morea appropriate here.
*O&S Look at the information for the Montreal consulate here.
http://isaacbrocksociety.ca/wp-content/uploads/2013/01/Consulate-Report-Directory-2013.01.03x.pdf
Look at Petros’s discussion of why you don’t need to inform the IRS here.
http://isaacbrocksociety.ca/2011/12/16/did-you-relinquish-before-february-6-1995-then-you-did-not-have-to-inform-the-state-department/
Google and download DS4079. This form is all you really need because you are informing the consulate that you gave up your US cit. in 1979. Be certain that it is clear to all that you intended to give it up. The form is confusing because it is used both for those informing the consulate that they relinquished and also for those attempting to reestablish their US citizenship.
Your CLN will be backdated. Allez-y. Bonne chance.
@O&S. There should be no problem with backdating the CLN. It’s standard. They’re not out to try and stop you (except Ottawa, and I’ve very recently learned that Ottawa may have cleaned up its act finally. I want to find out more, though, before we lift our “travel advisory” on that place, and I hope to find out more this week).
I applied for my CLN, based on my 1979 relinquishment, at Toronto. I was in the consulate for about one hour — about 5-10 minutes with the clerk, then about 45 minutes waiting in the waiting room, then met with a consul for about 10 minutes. Everyone was very pleasant to deal with. I sensed that the staff there understood that we long-ago relinquishers are suddenly stuck in a difficult and awkward situation and that we just want to get back our normal lives, something others have also mentioned about their meetings there. From what I’ve read, the staff at Montréal sound like pretty decent people to deal with too.
In my case, born in the USA, I was unfortunately ill advised to get a US passport a year and a half ago to travel to the US (after being in Canada for 44 years, 34 of those as a Canadian citizen exclusively using a Cdn passport). After being “caught” at a US airport, interrogated by DHS for 2 hours I was pretty much told that I couldnt reenter without a US passport. After much heart wrenching I got the US passport. However, I have since researched (and I could try to dig it up again, if asked) that US authorities must ask someone like me if I had intended to relinquish my citizenship when I acquired Cdn citizenship — while I applied first time for a US passport. They didnt ask, and I am wondering now if I can argue that point to get me out of the deeper hole I am now apparently in?
In hindsight I would gladly choose to relinquish based on a declaration of original intent, rather than face this horrendous renunciation process. And if I asked I would have said so,,, even now after I have this stupid redundant US passport.
@ msd
If you would like to have your story posted below under Participants you could e-mail Petros at petros@isaacbrocksociety.ca. He was kind enough to post my story there for me many moons ago. If it’s any comfort, there are a lot of us in deep holes. This is an insane situation and I used to think that reason would prevail … not so sure now.
thx Em, I am learning the ropes a bit better. I have all ready written 5 pages of my absurd life. If anything it is therapeutic. I’ll give it some thought whether I will submit it, or just tweek it out post by post in all the threads I am now finding…
Thx again…….
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Can anyone enlighten me as to the difference between the INA: ACT 349 – LOSS OF NATIONALITY BY NATIVE-BORN OR NATURALIZED CITIZEN and making a formal renounciation at a US Embassy abroad (cost $450). I live in an EU country which requires me to declare that I will no longer be a US citizen before I can receive their citizenship.
Thanks for a very infórmative and bit scary site
@allou: “formal renunciation at a US Embassy abroad (cost $450)” means INA 349(a)(5):
http://www.uscis.gov/ilink/docView/SLB/HTML/SLB/0-0-0-1/0-0-0-29/0-0-0-10428.html
Some countries will not give you a certificate of naturalisation at all until you show them your US Certificate of Loss of Nationality; this is how it works for me in Hong Kong. Other countries (like Japan and Korea) will naturalise you and then tell you to submit the CLN within six months or a year as proof that you lost your US citizenship.
If your country follows the second Japan/Korea-style rules, you can relinquish under INA 349(a)(1) without the $450 fee. Otherwise you have to renounce under INA 349(a)(5).
Hi msd
do you think you could fine the passport information?
@lovecanda,
Are you asking about getting a CLN after getting a US passport because DHS told you had to get a US passport, even though you told him/her that you were no longer a USC?
Two people we know of here have done so. David Querbach reported in Consulate Report Directory, Vancouver section, (currently on page 55) that the vice consul there contacted DOS HQ in Washington for guidance on if he could still he could apply for a CLN based on having relinquished rather than having to renounce. He was allowed to and got his appropriately backdated CLN. Another Brocker commented that their brother in Halifax, who had got a US passport in similar circumstances, also received his CLN.
So DavidM,
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.
——————————————————————–
Hypothetical situation:
My wife is going into the loop of getting her Canadian Citizenship which should result in her Canadian citizenship by perhaps November 2015. If I utilize now to gather all her tax information together from 2009 through 2015 and submit them along with the 1040NR for the period between January 2015 to November 2015 and the Form 8854 at the due date of April 2016; Would that timeline trigger the “covered expatriate” clause or would she manage to slip through based on the dates?
Because frankly, my learning disabilities are kicking in here with timelines and I have no clue on what deadlines I have to meet and when. I’m gonna need a “walkthrough” of this relinquishment situation. 🙁 Not happy. And pretty pissed off at the US is not covering the level of RAGE I feel right now.
These are the instructions accompanying the 2012 form, Animal, which I hope is more helpful than more confusing.
If your wife gets Canadian citizenship and has her appointment to renounce US citizenship in 2015, then all will have to be completed as follows, substitute 2015 for 2012 below (and 2016 for 2013 below for completion of 8854, etc.) if the form and instructions remain as is; ie if her renunciation is in 2015, then five years (2014, 2013, 2012, 2011, 2010 — plus partial year for 2015, up to date of renunciation / year of renunciation — all of this due in 2016 (the year following renunciation, due dates as below).
@ The_Animal
I know how you feel about those forms and deadlines. I was trying to explain it to my husband (waiting for Canadian citizenship) last night and by the time I was finished I wasn’t even sure myself of what, when, and where ( and nobody will ever be able to explain why to me). He has always filed 1040s and FBARs and is way below those 8854 thresholds but neither of us is looking forward to navigating the tax exit highway because it seems to be loaded with form mines. (My husband got a FBAR comeuppance letter once just because that one year we neglected to fill in his date of birth.) My husband is very much expecting to have to self-ban himself from the USA even with a CLN in hand. My situation is so murky and muddled I plan to plea dementia and/or say, “I AM a Canadian, so sue me.” I self-banned myself over 15 years ago (unrelated, initially, to any US tax issues because I did not know there were any).
@calgary411: There is an automatic two-month extension to file and pay if you live outside the US. Form 1040 is due on June 17, 2013 for calendar year taxpayers living abroad…
Just a warning here. The IRS carefully points out that this two-month extension is only for US citizens or resident aliens. So if you renounced already the instructions say you no longer qualify (in which case form 4868 is going to be your friend). Yet one more possible tax land-mine to add to the list for anyone going through this process.
@Watcher, my accountant in London has filed 8854 for several clients. Pretty sure she will, as normal for her, file 4868 for an extension.
Thanks, Watcher!
I was counting on the two-month extension since we will have been US citizens up to the date of renunciation — and 2012 1040 will be for period up to date of renunciation. Canadian returns are in process; last information slip received last Thursday. I will need to step up my pace if 1040’s and 8854 is due no later than April 15th. It is doable, but bloody hell! I am so sick of IRS gobbledygook instruction! If 4868 is applicable for an extension even though we have renounced, I am sure that has been done for us as well.
P.S. For anyone who has an interest in 8854, here is a link I just found: http://www.stepjournal.org/journal_archive/2011/tqr_september_2011/advising_us_citizens_and.aspx
Jack Townsend posted that there is a new 8854 form for 2013 just issued.
@downtherabbithole,
Does he give a link? This is the latest I find doing a search for 2013: http://www.irs.gov/pub/irs-pdf/f8854.pdf (Form for Year 2012, reportable in 2013)
sorry I was confused I put the wrong forms down the ones that have ? changed are the offshore disclosure. Jack did not compare to see what the changes are see the link here: http://federaltaxcrimes.blogspot.ca/2013/03/irs-has-new-forms-for-offshore.html
… and just got this back from query to law / accounting firm I’m dealing with:
PS: Official answer on Due Dates for 2012 renunciant / from Roy Berg, Moodys Tax Advisors:
The due date for the 8854 and other returns is 6/15 (6/17 for 2013) if you reside outside of the US.
The due date for the FBAR is 6/30 (no extensions).
OK 2 more questions:
a) My wife has if she relinquishes (after getting her Canadian citizenship) – she’s doing it mainly so that she has a voice in her country of residence – does she have to file back taxes prior to her relinquishment date? Or should she just lay low?
b) Is she obligated to file her taxes prior to her relinquishment date or will it trigger her relinquishment not being accepted as valid?