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).
Cathy,
In this post is a link to the Consulate Report Directory, where there are reports to Isaac Brock of both relinquishments and renunciations. At the beginning of the document you will find accurate information of both the relinquishment and renunciation requirements, forms, etc.
http://isaacbrocksociety.ca/consulate2/
Here you will find a database of the renunciations and relinquishments reported here at Isaac Brock: http://isaacbrocksociety.ca/relinquishment/
Do you have a June appointment for Vancouver? All other Canadian consulates have a better experience, thus far, than those at the Vancouver Consulate. You can read about that in the Consulate Report Directory.
Please read, read, read here and then ask any questions. There will be some one of us who may be able to answer. Stay calm. You will get through this!
I saw the article about relinquishing vs. renouncing too late. I renounced my US citizenship on April 12th, paid the $450, and received a CLN stamped from the consulate where I renounced. Now I’m waiting for the “final approval” – the CLN stamped by the US State Department.
Question (or comment): I no longer have a US passport, so I am very annoyed that I have to wait to get the final document – and who knows for how long. To anyone else who has done this, how long did you have to wait for the US State Department to do their job???
@Claire,
It depends which consulate you were at.
There’s a spreadsheet here where people have reported length of time from their consulate meeting to receipt of their CLN.
It’s ranging from about 1 to 6 months right now. For a while (over a year ago), the ones for Canada were taking a year and there was a big backlog, so don’t let the first entries on the spreadsheet spook you. It’s faster than that now (although still too long).
If you go to the US before you get your CLN, just have your receipt with you in case you’re asked. Schubert reported that a vice consul said that the fact you’ve applied for a CLN is in the DHS database. So far no one has reported any problems entering the US whilst awaiting their CLN.
I renounced at the consulate in Paraguay on April 12, 2013 after having received citizenship in the Dominican Republic in August of 2012. I’m waiting for my CLN from the DOS. I’m not sure what tax forms, if any, I should file. I have not had sufficient income to require filing for several years, and so I did not file. I filed my last 1040 in 2008 (marking “single” after my divorce in 2008) which showed no taxes due (insufficient income to require filing).
Before 2008, I filed the 1040 as “married filing separately” although no taxes were due then either and income was insufficient to require filing. (Even if the income is insufficient, they say filing is required if one is married, but filing separately.)
So since I have not submitted a 1040 or any other documents for five years (and still have insufficient income to require filing a 1040), I don’t know what, if any, tax documents I would be expected to file. Does anyone have a similar situation? Ideas? Thank you.
@Claire, Why not simply file your Form 8854, and explain in an accompanying letter that your income was insufficient to require filing (1040) for the last five years. That should suffice in a reasonable world.
….assuming we are in a “reasonable world.” But thanks for the suggestion.
I forgot to respond Pacifica777’s comment about how I would travel to the US. That’s a moot point. I have been back to the US one time since I left there, and that was to help a family member. I have no intention of going there again, ever.
Claire…. In that case why file anything?
Since Claire has no intention of going back to the US, it would seem she could get away with not filing anything. Well, unless her country enters FATCA and they rat her out to the IRS (I assume she is US-born?).
However, what about people in the same situation who _would_ like to still visit the US (and have a passport showing US birthplace)? Wouldn’t they have to file 3 years of taxes and 6 years of FBARs into the Streamlined Procedure to be able to enter the US as an IRS-compliant ex-citizen with a CLN?
I am US-born so I guess I’ll file the 8854 form with a letter of explanation. The instructions say that renunciation is not “complete” without filing it. Just looking at that form gives me a headache! No wonder that so many people want a “divorce” from the US, if for no other reason than no longer being force to fill out those damn forms that are written to be confusing at best. As for FACTA, unless the US crashes and burns financially first, probably every country will bow under the fascist boot. It may not happen during my lifetime, but the crash is inevitable. I will cheer when it happens, even if via my spirit in the ether.
Well, I assume that since Claire has no income, she has little by way of financial assets. Filing Form 8854 is in such a case not a big deal, though it remains an atrocity, aberration and abomination (hence I used the Fifth Amendment in several places in my filing). I filed Form 8854 to close out the deal, to be honest. But I was in the system, having filed every year since about 1998. Anyone not filing 8854 will likely become a covered expatriate, and that may have consequences that a expatriate may wish to avoid, such as the tax on legacies to relatives still living in the US. Also, one may just prefer to have closure than to have the IRS send nasty letters every few months. Been there, done that.
Yes, I have had minimal income for a quite a few years, but who knows if I may have greater income or any assets in the future? In the event I do, I certainly want the “divorce” from the US to be a done deal.
@Claire, the 8854 form may be necessary to complete tax obligations, but I do not think it is at all necessary for renunciation.
@Petros, I may file the form for the closure, but at this point in time the form would be late. I started to fill it in only last night but stopped myself, I was going to leave much of the form blank. I wonder if I will get any kind of late notice.
Yes, whether or not one files 8854, the renuncation remains valid. Only DoS can determine who’s a citizen. I think you could say that 8854 completes the reunciation for IRS purposes. So, it may or may not cause a person other problems, but they remain a non-citizen.
I reread what I wrote about the logical and legal contradictions of the tax policy here: http://isaacbrocksociety.ca/2012/06/14/instructions-for-form-8854-are-clearly-contradictory/
The IRS code has two kinds of citizenship: real and imaginary for tax purposes. I don’t think that the second one would ever stand up in a fair court of law, though it probably would in IRS court. But if you are resident in another country, would it ever go to any kind of court. Form 8854 taxes and fines are only collectable if the person has assets in the United States. Still the problem even in a US court, would be that there are two kinds of US persons for tax purposes: (1) citizens and residents of the United States; (2) Former citizens who have relinquished their citizenship and have not yet informed a Consulate. This is an impossible contradiction which I don’t think is justifiable. In any case, completing the procedure via their processes cost me little (about $25 including stamps–because I used TaxAct to file my 2011 [free] and 2010 taxes [about $22]) because I filed the forms myself and because I relinquished my US citizenship upon becoming a Canadian instead of renouncing which would cost me $450.
@TrueNorth
I may file the form for the closure, but at this point in time the form would be late. I started to fill it in only last night but stopped myself, I was going to leave much of the form blank. I wonder if I will get any kind of late notice.
If you’re going to file 8854 at all, then filing late is not a good idea, as you will be automatically classified as a “covered expatriate” if you do so. Phil Hodgen wrote an article about this. Perhaps you could apply for the Oct. 15 extention and file it until then, but I’m not really sure if that’s acceptable.
You could file for an extension, as notamused said. On the other hand, what matters is the postmark, not the date it arrives, so you could mail it Monday, though you’d want to make sure it had a June 17 postmark.
Does anyone have any idea whether 8854 extensions are routinely given, or do you need to jump thru severe hoops to get one? I’m thinking of a situation where you’ve renounced *before* becoming compliant, and it turns out that you’re still not compliant in time for the regular deadline.
TIA
@tdott,
Have you filed to get an extension for your 2012 tax return http://www.irs.gov/pub/irs-pdf/f4868.pdf? The 8854 must be attached to that, with a copy Philadelphia.
According to Phil Hodgen, if you expatriated in 2012, your last date for filing the 8854, as an attachment to your 1040 / 1040 NR, would be…
For someone who terminates citizenship in 2012, this means that the earliest filing deadline possible is April 15, 2013, and the conceivably latest filing deadline for Form 8854 (attached to the 2012 tax returns) is December 15, 2013 (assuming you get the right extension requests filed on time).
http://hodgen.com/when-to-file-form-8854/
From this site: http://nestmann.sovereignsociety.com/2009/10/21/what-its-really-like-to-expatriate/
If you decide not to file the 8854, I guess you have to put in place other strategies, depending on where you live, whether you will ever travel to the US, etc.
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hi everyone,
thank you for the article and the many comments that have educated me about relinquish vs renounce. to the common person they sound like the same thing but of course legally it’s always different. anyway, i both appreciate but also now have a headache the size of the United States of America including its territories. i have for a few years been outside the u.s. and want to relinquish my citizenship asap. but i have a few questions.
1. it doesn’t seem like i need to bring any documents of proof of my new citizenship? i have it and have the national id card to prove it…as well as my application documents for citizenship. but are these not necessary to show or attach copies? my word and the u.s. form is good enough for that?
2a. irs – the first couple years i was dealing with heavy family and emotional issues and didn’t work so i earned no income and lived off of savings. at this time i didnt’ file taxes at all because i made no income and didn’t have the emotional strength to really want to file taxes…while going through very difficult personal circumstances its really not a high priority in perspective of life in general. anyway, i didnt think it very necessary because i wasnt making money. but should i backfile for these years? is it even necessary to say i didn’t earn anything?
2b. what did u do about things like SS money? i believe you can sometimes transfer your contributions from the u.s. to the new home country if they have a retirement agreement of some sort. can this be done anytime? should i do it before or after i relinquish?
thanks for your time….now i really need to give this a break as my eyes and headache is really bothering me. this u.s. citizneship has been nothing be an emotional and disturbing experience from beginning to end and i will be very glad to be done with the country altogether.
@headache,
Welcome to this site and we all here relate to your gigantic headache. We have all had what some of us call our OMG moments.
To help start off your further research. You need to completely understand what you are dealing with and various resources and opinions from this site. The best we can advise is to read, read, read here to help you make your individual decisions. The answers for each person differ according to tolerance of risk, etc. You will find very supportive people here who will help with questions you have, but it is impossible to condense into one comment all you need to know — but you do need to know. Best is one small step at a time as not to be overwhelmed.
If you have done nothing US since becoming a citizen of another country (having a US passport, filing US tax returns, voting in a US election), you should be able to claim relinquishment. Please read all of the experiences (and the other information) in the Consulate Report Directory. Many successful relinquishment experiences are recorded in the link in this post: http://isaacbrocksociety.ca/consulate2/.
If you have already relinquished your citizenship (eg. upon obtaining citizenship in another country) and are now applying for a CLN:
4079
. Request for determination of loss of citizenship
. This has four pages of questions, requiring dates; it’s best to fill it out in advance of your consulate meeting.
http://www.state.gov/documents/organization/97025.pdf
4081
. Statement of understanding of consequences
http://www.state.gov/documents/organization/81607.pdf
4083
. Certificate of loss of nationality
http://www.state.gov/documents/organization/81609.pdf
Statement
. Not necessary, but a very good idea to supplement your 4079 with a written statement to show that your relinquishment was intentional and that your post-
relinquishment conduct has been consistent with relinquishment.
You WILL need documentation. What different consulates / embassies required is shown in reports Isaac Brock has received of appointments at the countries listed in the Consulate Report Directory.
You will have to research and know everything about your responsibility to file IRS Form 8854 to completely remove yourself from the IRS http://www.irs.gov/pub/irs-pdf/i8854.pdf
One of many questions about expatriation and the 8854 from lawyer, Phil Hodgen
U.S. International Social Security Agreements
1. You will need to show them proof of another citizenship, whether you relinquish or renounce. They do not want to create stateless people.
@ Headachethesizeof…,
Proof of one’s new citizenship, showing date of naturalisation, is always required if one relinquished by naturalising with intent, as the CLN will reflect that the US citizenship terminated on that date.
thank you guys so much!
i tried to read the entire site yesterday and just had a headache after a while…
i missed some of these links so thank you for listing them calgary411!
i will read all of it today and maybe tomorrow depending how long it is and how complicated the language.
i’m really hoping to be as informed and prepared as possible. the u.s. government have often blindsided me in the past with other issues that i always walked away feeling cheated or duped into not being able to be served properly and that my rights don’t seem to be as respected as the u.s. says they should be. and honestly, that the workers at whatever department could really care less.
also, i just think its ironic but americans originally revolted against england for high taxation among other things but yet now the american government is doggedly pursuing people for all kinds of reasons related to money/taxes. even people like me who just make enough to feed ourselves are scared witless. it would be funny if it weren’t so sad.
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