The Isaac Brock Society consists of individuals who are concerned about the treatment by the United States government of US persons who live in Canada and abroad.
If clicking on a link brings you to the wrong page in the comment thread, click here to arrive on the current page of the thread: http://isaacbrocksociety.ca/2011/12/14/about-the-isaac-brock-society/
The United States is one of two countries in the world that taxes its people no matter where in the world they may reside. The other is Eritrea, which the USA has condemened for terrorism and for its diaspora tax. The majority of US persons who live abroad are not aware of their filing requirements. But recently, the US government has decided to crack down on those who are not in compliance.
But what is more, the US government has begun, since about 2004, to apply with great pressure a long-neglected requirement of 35-year old law called the Bank Secrecy Act. That requirement is FBAR, the foreign bank account report, which the United States government expects annually from those who have accounts outside of the United States which exceed $10,000 in aggregate. The fines for failure to file this form are extortionate, and virtually no US person who lives abroad even knew about FBAR, while most of them, over a certain age, own bank accounts with retirement savings exceeding that amount. The threats of fines and imprisonment has frightened many people who as a result have consulted expensive accountants and tax lawyers to get this mess sorted out, only to face high accounting or legal fees on top of potential fines and back taxes. In 2009 and 2011, the IRS offered voluntary disclosure programs (OVDI). Some who entered into the 2009 OVDI, because of fear of the penatlies, were shocked when the IRS assessed them fines in the tens of thousands, essentially treating them as tax evaders instead of a law abiding citizens in their countries of residence.
For many US expats, renunciation now seems like a really good idea. Why not? Many haven’t lived in the US for years and now they have few ties there except perhaps some family members. So they want to renounce their citizenship only to find that the laws regarding expatriation are confusing and that the exit tax requirements are at best complicated and invasive, and at worst, extortionate and utterly in violation of their right to expatriate.
The media coverage of this issue has been uneven. There have a been a few balanced stories, but most of the time, the media has merely publicized the purposes of the US government; this is especially true of US media sources. The Canadian media has generally done a much better job of grabbing the attention of the world about the abuses of the US government. That being said, even the Canadian media sometimes falls into the IRS trap of projecting fear in order to force compliance. Overall, we regret when the media offers only condemnation and fear without telling the story from the side of the victims or informing them of their rights and alternatives.
US persons abroad also face US border guards who are starting to put pressure on all those who have a US place of birth to travel only on a US passport, even if the person has not been a US person for decades–an arbitrary change of policy making those who relinquished citizenship into would-be loyal taxpayers to a profligate government that has to borrow 40 cents on every dollar its spends.
The Isaac Brock Society is here to fight. Sir Isaac Brock prepared Canadians for war with the United States and gave his life in repelling a US invasion in 1812. So we also want to fight for US persons who are frightened by the IRS, the border guards, the compliance condors, and the media. We are here to provide one another with resources and strategies, comfort and advice.
But not only so, we are here to warn other Canadians about the illegal incursion of the US federal government into the lives of the US expat community. Pretty soon, with the new FATCA legislation, this arrogant attitude of the United States will affect every man, woman and child on the planet who wants to open or maintain a bank account or to invest in a retirement fund. Now, according to FATCA, you will have to tell the United States whether you are a US person when you open up a bank account in, e.g., Australia or Thailand. This makes every country in the world a protectorate of the United States, for, if they comply with FATCA, they are ceding their very sovereignty to a nation which has not invaded or conquered the rest of the world, but only uses its waning hegemony over the financial sphere to coerce other nations.
So whether you are a US person living in exile, a Canadian or a citizen of any other country, we ask you to join us in this struggle for freedom and justice.
Speedy, Your understanding ,at the time, was correct. When the supreme court ruled that US citizens couldn’t lose their citizenship unless they intended to ( 1970s) the state dep’t was unhappy. Consuls routinely told dual citizens that they would lose their US citizenship if they ‘took advantage’ of their other citizenship by for example traveling on a non US passport, voting and so on. Unfortunately they were forced to change the rules retroactively and now there are only a few specific relinquishing acts as outlined by Medea F. and in the State Dep’t procedure manuals 7 FAM 1210-1290
Speedy,
I don’t know how this might work, since your issue is with your financial institution, but you might assert that you are not an American citizen because you are legally recognized by the Canadian government as a Canadian citizen, AND that you are not under US jurisdiction. Why is this important?
I have been looking for a case to test this legal theory, because US citizenship is define in Amendment 14: Section 1 of the US Constitution thusly:
“All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside.”
The important idea here is JURISDICTION. Both conditions of “born or naturalized in the United States” and “SUBJECT TO THE JURISDICTION THEREOF” must be true for persons to be legitimately US Citizens. Since you are not under the jurisdiction of the US government, and Canada fully recognizes you as a Canadian citizen, then you are not an American citizen.
Don’t be troubled by the US government’s assertion based on the circular reasoning that if one is a US citizen, then one is under the jurisdiction of the US government wherever he might be. It is all bluff. The way to call this bluff is to simply demand that the US government to prove it! Prove that you are under it’s jurisdiction. There will be no way US authorities can do this. They cannot arrest you; they cannot charge you; they cannot try you in a Canadian court of law; they cannot fine you or imprison you while you are in Canada as a Canadian citizen under the protection of the Canadian government.
If Canada does allow this, then Canada has, effectively, surrendered its national sovereignty to a foreign government, which would signify a much greater problem for the whole of Canada than for just a few dual nationals.
Your challenge is to convince the financial institutions with whom you want to do business that you are not a US citizen for the reason I outlined above. This will likely require the assistance of a lawyer and, most likely, a lawsuit, of which one is already pending. But who knows? It would be nice if these financial institutions were to go to bat for their clients, but they seem to have too much to lose by not complying with FATCA, and foreign governments do not seem willing to stand up to the US for a few measly dual nationals, anyway.
Good luck!
I’m really concerned. I was not born in the US, I have no Social Security number and have lived in the US for only one year of my 40 years as a two year old.My birth certificate says American born abroad due to my American father who was stationed in Germany at the time. My father and German mother divorced when I was five and we moved to Canada with my mothers new husband. I became a Canadin citizen in 2002. I had no idea that as an American I was obligated to file taxes to the U.S. Government. I assumed that by taking an oath to Canada I had relinquished my US citizenship. Since becoming a Canadian I have not used or reapplied for an American passport as I believed I was no longer a citizen. Well it came to my attention by my recently hired financial advisor that yes indeed I was still an American. He made strong recommendations that I become compliant and renounce my US citizenship because of the major financial consequences it would burden myself and family with. I have tried to do the research to figure out which is the best way to go about this, but I am getting so much contradictory information. I am scared. To renounce will cost my family at least 7-10 grand, something that we do not have at the moment, but not renouncing could possibly get me into even bigger trouble down the road. Some advise would be great. Thank you very much.
@Scaredsh*tless
You’ve come to the right place. I would however recommend you place you question on this thread,
http://isaacbrocksociety.ca/renunciation/
where it will get more exposure. Your financial advisor is not qualified to give you citizenship advice! On the surface it sounds as though you have a strong case for relinquishment of US citizenship, and because you did so prior to 2004 there may be no tax implications for you and no renunciation fee. Do however pose your questions at the above thread where there are many folks better qualified than I am to explain why.
@Scaredsh*tless, don’t panic. If you gained Canadian citizenship in 2002 after you were 18 years old then you can relinquish your US citizenship without cost nor will you need to file any US tax returns. Your financial advisor is wrong and don’t let him/her/them pressure you into filing anything, it’s NOT necessary.
You need to e-mail the nearest US embassy/consulate to you and tell them you want an appointment to relinquish your citizenship. It’ll likely be several months before you can get one though as demand for appointments is high. They’ll send you the forms they need to be filled in and sent back to them before your appointment date. This will be the main one:
http://www.state.gov/documents/organization/97025.pdf
If the questions seem strange remember that it’s designed to work out whether someone has inadvertently lost their citizenship, not for people who do want to lose it. Answer it as best you can and return it to them.
When the appointment comes around you’ll go to the embassy/consulate and they’ll go over the form with you to make sure it’s correct. You’ll need to take your Canadian passport, citizenship certificate, etc. There’ll be no fee to pay, relinquishment is free unlike renunciation. Once they’ve confirmed everything’s correct you’ll be asked to sign the following forms:
http://www.state.gov/documents/organization/97025.pdf
http://www.state.gov/documents/organization/81607.pdf
The embassy/consulate will then send all the paperwork off to the State Department for final approval and eventually you’ll get your Certificate of Loss of Nationality (CLN as it’s shortened down to). And that will be it. As you effectively relinquished your citizenship in 2002 there’s no need or requirement for you to file any US tax returns. See this link:
http://isaacbrocksociety.ca/relinquishing-acts-performed-prior-to-2004/
@Medea Fleecestealer @Scaredsh*tless
Canada’s IGA allows banking customers suspected of being US customers to provide for a “reasonable explanation” as to why one has lost US citizenship. No CLN necessary. Why go through the process of obtaining a CLN if it’s not necessary?
@Bubblebustin, I think Scared is more worried about the tax side than his bank. But another reason to get a CLN is if he ever travels to the US. While not American born he may be in the system as being American as his birth abroad was registered so border control may expect him to use an American passport when entering the country.
What tax side? There is no tax side If Scared’s advisor is satisfied with his explanation. I would take my chances slim, as they are, with the border guard who may have a record of my birth abroad, rather than enter a consulate.
There are a few errors in the advice given here.
One can be born abroad of two American parents and not be an American citizen, most obviously in the case where the parents are not married (including IVF cases and the State Department relies on DNA for proof; in effect there is an “option” to make the child American by declaring paternity until age 18). Also in cases where the parents are married but neither has ever had a residence in the USA.
http://travel.state.gov/content/travel/english/legal-considerations/us-citizenship-laws-policies/citizenship-child-born-abroad.html
An unmarried mother who never spent 365 uninterrupted days in the USA cannot pass American citizenship to a child born abroad. http://www.afsa.org/citizenship-and-unwed-border-moms-misfortune-geography
One of the submissions above says that the SCOTUS Afroyim and Terrazas cases were “retroactive”. That’s not correcet, either with respect to the retention provision or the acquisition of a foreign nationality or foreign-government employment. Under international law (with a few exceptions such as change of sovereignty over territory, but even there it’s customary to offer an option, as in the case of Spanish citizens when Puerto Rico became a US territory) a nationality cannot be imposed on an adult without his/her consent and the IRS concedes in a Revenue Ruling I’ve cited before and that can be found online (Rev. Rul. 75-357, PLR 8138071) that a person who lost nationality would not be deemed to have had it restored unless s/he “availed himself of an attribute of US citizenship”.
https://groups.google.com/forum/#!topic/alt.lawyers/4jWlJxqSz7Y
Unfortunately more than one member of this forum has been intimidated by a US border guard or another official to do exactly that: to apply for a new US passport. Seeking a CLN is also such an act. I’m not sure what the best option might be when a bank or other entity or agency wants proof of loss of nationality: I doubt the Legal Advisor at State will bother to reply to a request for clarification, but certainly an immigration lawyer can provide an opinion letter. If it is a Canadian bank that is demanding the CLN the bank is opening itself to litigation in a Canadian court as to whether you are a US citizen; courts don’t like to rule on foreign law but they do so, based usually on an expert witness like John Richardson.
Finally: one does not need to hold (or have the right to acquire) a foreign nationality in order to renounce or lose US citizenship. Before the Cable Act of 1922 an American woman would lose her US citizenship solely by act of marrying an alien, even if she never set foot outside the USA: See Candace Bredbenner’s PhD dissertation, “A Nationality of Her Own” http://publishing.cdlib.org/ucpressebooks/view?docId=ft0g500376&brand=ucpress One can be born of American parents abroad and yet be stateless at birth (a violation of the UN Declaration of the Rights of the Child, but never mind: the UK does that too), and one can renounce and become stateless The late Garry Davis, founder of the World Service Authority and the World Passport, did exactly that. So did Harmon Wilfred: https://duckduckgo.com/?q=harmon+wilfred+nz&ia=about His wife happens to be Canadian.
@Scaredsitless…….I concur with Bubbles but let me add some clarification and give you strength.
You do not apply for a relinquishment because you ALREADY relinquished.
You are NOT a US Citizen because in 2002 you committed a relinquishing act under 8 US Code. There is no further requirements, period end of story…….
Post FATCA and I say unfortunately, you need to prepare a file documenting your relinquishment. In that file you need;
1. Certificate of Canadian Citizenship.
2. A copy from Canada of your application with all the received stamps on it. Simply nice to have looking so official.
3. Its probably a good idea to trot down to your local lawyer/notary and swear an affadavit that on a date in 2002, you swore an oath to the Queen to become Canadian with the voluntary intention of relinquishing your US Citizenship. That will set you back fifty dollars……..
4. Make a copy of 8 US Code 1481
https://www.law.cornell.edu/uscode/text/8/1481
The above is your remedial action, you can stop there and be done. A CLN is not required to lose US Citizenship UNLESS you renounced.
With that done, regardless your US Tatoo is invisible………
Its now time to catch your breath after the above is done and WAIT….maybe a month….see if YOU are satisfied with the above……..
Beyond that you can apply for a CLN to document your PAST relinquishment. Appointments are hard to get anyway and you might just give up………
Regardless you are in a GREAT position and frankly many around here would be envious………
Best use of your funds is donate to ADCS
@andy05, Scared has already said that his birth certificate says American born abroad so there’s no arguing about that.
I’d also point out that while there is no US law against making yourself stateless many US embassies/consulates will not allow someone to do so despite clear instructions from the State Department that it’s allowed.
@Scared….@Media…..
I think you are referring to the “Birth Certificate” given by the US Embassy in Germany……
It is very likely that you were born off base and that you also have a German Birth Certificate!!!!
You may want to deep six the English US document and request an official German Birth Certificate from the local authroities in Germany!!!
That way if ANYONE asks for your birth certificate……you give them your GERMAN birth certificate showing birth in Germany!!!
This is probably good advice to the many born overseas who have their embassy birth certificate and did not realize they have a local birth certificate.
@Medea:
@Scared wrote: “I’m really concerned. I was not born in the US, I have no Social Security number and have lived in the US for only one year of my 40 years as a two year old. My birth certificate says American born abroad due to my American father who was stationed in Germany at the time.”
I’m guessing, but given the facts (father US military, SOFA status in Germany) Scared has a German birth certificate and perhaps some kind of military-issued document and a Report of Birth Abroad issued by a US consulate.
None of this demonstrates that Scared is, in fact, a US citizen today.
I am not skilled at navigating this forum, so perhaps I missed something. But I’ve explained the issue of restoration of nationality after Afroyim and Terrazas.
The other point is that a scared person — any such potential US citizen — can put the USG to the proof. And that’s difficult or impossible for the USG to do at least for pre-TECS days, unless the target person him/herself admits the relevant facts.
Canada is America’s puppy dog: therein lies to rub. In the days long ago when I taunted the USG from Quebec I always did in French. Both the IRS, the USPS and any other agency. I deal with the USG with contempt, unless they have “le pouvoir d’appréciation” in the matter (discretion, more or less). But then, I haven’t lived in the USA since 1973.
Cheers.
@ Medea,
I wouldn’t go as far as to say there’s no arguing about that.
I wonder what is the exact wording on the certificate. Does it literally say “American-born?” If so, how does that hold up against transmission requirements in effect at the time (whatever they were, as we don’t know when s/he was born) Or does the certificate note the parents’ places of birth, one of which, the father, is the US? And how would that hold up against the transmission requirements at the time? Basically, how is it worded? Actually I’ve never even seen a birth certificates explicitly stating citizenship. That itself sounds odd to me — disclaimer, I’ve only seen them from a few jurisdictions.
At any rate, I think it’s likely that Scaredsh*tless was born with US citizenship, but, from the information provided, not certain.
@andy05, I agree Scared isn’t an American now, he gave that up when he acquired his Canadian citizenship.
@pacifica777, I only have my own birth registered abroad certficate to go on and it says birth registered in the District of the British Consulate in Kansas City, Missouri at the top. I would guess that Scared’s is similar if issued by the US embassy. The assumption of citizenship is in the issuing of the birth certificate in the first place it seems, but then both my parents were British.
@Pacifica…..you are focusing on a US Consular birth certificate NOT the birth certificate issued by Germany!!!
Scared needs the German document for his/her permanent records.
I’ve done a bit of research on this. Apparently most European birth certificates (actes de naissance, Geburtsurkunden) do not show nationality of parents. English/Welsh ones do; Northern Irish do not (as Catholics would say “Irish” and that would give away the religion of the child).
Here’s a specimen of a modern German Geburtsurkunde http://geburtsurkunde.de/images/Geburtsurkunde.png and here’s a link to German consular advice on how to get copies: http://www.germany.info/Vertretung/usa/en/05__Legal/02__Directory__Services/04__Family__Matters/Birth__Certificates.html
British citizenship since 1983 depends on place of birth and nationality (or settled status) and place of birth of parents. All my grandchildren have multiple nationalities: various European countries; some also have US nationality. All based on accident of parentage and place of birth but (happily) those who live in Europe are US-citizenship-free. The challenge is being PFIC-compliant (child benefit, child ISA and other countries’ equivalent). It is a loathsome task for me to prepare US tax returns for those of my offspring who have never lived in the US, have no real connection with the US, and have scarcely ever set foot there.
Members of this forum may have clear heads on the point, but it’s hard to tell someone, even someone whose assets may well soon make him or her a covered expatriate, that s/he ought to renounce US citizenship. Just as most Americans (even perhaps those who never bought a lottery ticket) feel certain they’ll be rich some day, many or most of those abroad see some value. Perhaps in eligibility for evacuation by the U.S. Navy when the migrant hoards and the Caliphate Army take over Europe.
@ George,
I wasn’t focusing on any particular birth registration document. As Scaredsh*tless didn’t state clearly what entity issued the birth certificate he was referring to, I was just thinking generally.
If his German birth certificate had his father’s place of birth on it, that wouldn’t automatically make him a US citizen — but it could raise a red flag in some situations. If it does not — and per Andy’s find, it likely doesn’t — that’s good news!
Don’t know where else to write this: something wonky has happened with the website’s front page. Using Firefox in Windows. The right-hand column of links to other pages and topics is now shunted way to the bottom of the page. As someone who knows a little about HTML, I am guessing that some attempts at ‘creative’ formatting in one of the posts has set the right margin of the first column way off. Hope someone can look at this. I’ve been referring some recent-OMG-moment expats to the site, and without the list of topics on the right being in its obvious place, it makes the site less useful in appearance.
Maybe time to switch to a newer WordPress template.
Thanks, Barbara,
Looks like it was a formatting issue, as you suggested — there was a div tag missing in a recent post.
Born in the US, became a Canadian citizen in 1974, and now want to renounce my US citizenship. My US taxes are up-to-date. I’ve read the technicalities about renunciation, but wonder
1) What is the situation with an exit tax?
2) it’s important for me to be able to go back and forth from the US freely (on my Canadian passport). Has anyone had trouble crossing the border because of a renunciation?
@Mary Doucette, oops! When did you do the tax filing? Because you really didn’t need to. A relinquishment that long ago carries no need to file back taxes.
Mary D. You will be able to travel in the same way as every other Canadian. If your net worth is more than 2 million US$, you may be subject to a tax on the capital gains of your assets . There is an exemption of 690,000 or so. It’s quite complex. If your assets are more than 2 million, figure on 5-10,000 in accounting fees.
I have the same response as Medea. You presumably wanted to be a dual citizen. Otherwise there was no need to file US taxes.
I was born in the US but left aged 10 and have lived in the UK ever since. I have worked in England for local government for 25 years and took British citizenship through naturalisation in 1999. I am being told to now enter the streamlined process for tax regularisation and to take the exit tax route in due course. However, from your comments it sounds like claiming relinquishment might avoid all tax implications? How do I go about this?
@Mark, you contact the American Embassy in London and make an appointment to relinquish. They’ll send you the relevant form (DS 4079) to fill in which you then return to them. At your appointment, they’ll assess your answers on the form, ask you some questions and if they’re happy they’ll forward your application on to the State Department in Washington for final approval. If you get a yes, then you’ll receive a CLN in due time and that will be it. Here’s the form for you to study.
https://eforms.state.gov/editdocument.aspx?documentid=240
Details from the London embassy here on renunciation, but the process for relinquishment is similar:
http://london.usembassy.gov/cons_new/acs/passports/renunciation.html
Also have a look at the Consulate Report Directory to read of other peoples’ experiences when renouncing/relinquishing in the UK.
http://isaacbrocksociety.ca/wp-content/uploads/2015/11/Consulate-Report-Directory-2015.11.e.pdf
Base your relinquishment claim on the fact that you obtained British citizenship with the intention of losing the American one. I hope you haven’t used your American passport, voted in American elections, etc, since gaining your British citiizenship, that might make getting a relinquishment difficult. As you gained British ctizenship back in 1999, there’s no obligation to file US tax returns if your relinquishment application is approved. Intent is the key to a successful relinquishment so you need to emphasize that it was your intention to lose your US citizenship by obtaining the British one.
There’s more on relinquishment here:
http://isaacbrocksociety.ca/how-to-renouncerelinquish/