See also: Please read this post if your actual expatriation date is before 2004 (Updated)
The blog post on ex post facto stirred up a flurry of e-mails between members of the society. It switched on a light bulb for some that the State Department and the IRS were trying to pull a fast one, and that those who were following rules at the time of their relinquishment were not required to follow the new rules.
According to the instructions for 8854, and USC 26 section 877, the date of expatriation is as follows (US Code at Cornell University):
(4)Relinquishment of citizenship
A citizen shall be treated as relinquishing his United States citizenship on the earliest of—
(A) the date the individual renounces his United States nationality before a diplomatic or consular officer of the United States pursuant to paragraph (5) of section 349(a) of the Immigration and Nationality Act (8 U.S.C. 1481(a)(5)),
(B) the date the individual furnishes to the United States Department of State a signed statement of voluntary relinquishment of United States nationality confirming the performance of an act of expatriation specified in paragraph (1), (2), (3), or (4) of section 349(a) of the Immigration and Nationality Act (8 U.S.C.1481(a)(1)–(4)),
(C) the date the United States Department of State issues to the individual a certificate of loss of nationality, or
(D) the date a court of the United States cancels a naturalized citizen’s certificate of naturalization.
Subparagraph (A) or (B) shall not apply to any individual unless the renunciation or voluntary relinquishment is subsequently approved by the issuance to the individual of a certificate of loss of nationality by the United States Department of State.
Now this is all well and good, namely with regard to item (B) above, which states that the expatriation date is the day that a person informs the State Department. But the question remains when did this law actually come into effect; for it cannot be applied ex post facto to those who committed an expatriating act before that date. One of the members of the Isaac Brock Society tracked it down: The answer is that if you relinquished your US citizenship before February 6, 1995, you were not required to have informed the State Department. My correspondent thus wrote to me (reproduced with permission):
As it turns out, the timeline of important amendments and changes to Section 877 of the Internal Revenue Code (26 USC) dealing with Loss of Nationality begins much earlier than the June 2, 2004 amendment which introduced the infamous IRS Form 8854. For our purposes (meaning those who committed relinquishing acts in the 60’s, 70’s and early 80’s), the truly significant date vis-a-vis the IRS is actually February 6, 1994, as referenced in the 1996 Amendment – the most important one for us to understand, I believe. In a nutshell, those of us who committed qualifying relinquishing acts before February 6, 1994 are absolutely NOT subject to amendments made after this date under the terms of a “special rule”. As a result, it appears that we have no requirement to provide any IRS-specific forms or statements to the IRS, including form 8854! It would appear that a simple notification letter from us (notarized and duplicated, I would suggest) indicating that the Department of State has processed and issued a CLN showing a relinquishment date prior to February 6, 1994 should suffice. This seems to be the means by which a back-dated CLN issued by State could be used to provide sufficient information to the IRS to not require any further action. Of course, while State eventually provides its own direct notification to the IRS, I think it is important that we provide a “good faith” letter as well.
I have found some important references to this date, within FindLaw notes and in the official IRS Code. I am providing links and screen shots to relevant portions of these references, as follows:
1. FindLaw notes for 1996 Amendment:
http://codes.lp.findlaw.com/uscode/26/A/1/N/II/A/877/notes
[I have bolded the most relevant text]
EFFECTIVE DATE OF 1996 AMENDMENT
Section 511(g) of Pub. L. 104-191 provided that:
“(1) In general. – The amendments made by this section [amending this section and sections 2107 and 2501 of this title] shall apply to –
“(A) individuals losing United States citizenship (within the meaning of section 877 of the Internal Revenue Code of 1986) on or after February 6, 1995, and “(B) long-term residents of the United States with respect to whom an event described in subparagraph (A) or (B) of section 877(e)(1) of such Code occurs on or after February 6, 1995. “(2) Ruling requests. – In no event shall the 1-year period referred to in section 877(c)(1)(B) of such Code, as amended by this section, expire before the date which is 90 days after the date of the enactment of this Act [Aug. 21, 1996].
“(3) Special rule. –
“(A) In general. – In the case of an individual who performed an act of expatriation specified in paragraph (1), (2), (3), or (4) of section 349(a) of the Immigration and Nationality Act (8 U.S.C. 1481(a)(1)-(4)) before February 6, 1995, but who did not, on or before such date, furnish to the United States Department of State a signed statement of voluntary relinquishment of United States nationality confirming the performance of such act, the amendments made by this section and section 512 [enacting section 6039F of this title] shall apply to such individual except that the 10-year period described in section 877(a) of such Code shall not expire before the end of the 10-year period beginning on the date such statement is so furnished.
“(B) Exception. – Subparagraph (A) shall not apply if the individual establishes to the satisfaction of the Secretary of the Treasury that such loss of United States citizenship occurred before February 6, 1994.”
Amendment by Pub. L. 104-188 applicable to taxable years beginning after Dec. 31, 1999, with retention of certain transition rules, see section 1401(c) of Pub. L. 104-188, set out as a note under section 402 of this title.
2. Another FindLaw reference:
The FindLaw reference is here (though the majority of the article is out-of-date as it was written in 1999):
http://library.findlaw.com/1999/Jun/1/129807.html
QUOTE: A special transition rule applies to any U.S. citizen who committed an expatriation act before February 6, 1995 and who did not submit such a statement.
3. Extracts from IRS Code Title 26, Section 6039G – Information on individuals losing United States citizenship:
Peter – this is fantastic news for lots of people. The Isaac Brock Society was a great idea. The Reagan quote I mentioned to you was:
“We can accomplish anything if we don’t care who gets the credit”.
Simply awesome – Calgary411 take special note!!
The sad story is that it shows that the border guards and the IRS are acting in a criminal manner in their attempts to apply citizenship to everyone ever born in the United States.
Interesting info
I am confused because in parts of the article you mention the date Feb 6, 1995 and in other parts of the article you mention Feb 6, 1994.
I am trying to apply this to a case of a person who became a Canadian citizen with the intention of relinquishing US citizenship on Nov 4, 1994. She recently went before the consulate to get her CLN.
Based on the date that she became Canadian, would she have been exempt from the requirement to notify State of her relinquishment? If so, would she also be exempt from any IRS obligations now (ie forms or returns or Exit Tax)?
Thanks for commenting. I’ve sent this inquiry onto the person who originally found the information.
Also, it seems that you have resolved the problem that you mention on the “join page” that you couldn’t comment on another post.
Thanks for checking into this.
Yes, I resolved the problem of commenting on the post
Petros,
Have you gotten anything on this date question from the person who originally found this information?
greyowl
I performed the expatriating acts in July 1994 — before the date stated in the title of this article, but after the date mentioned in the body of the article. I have already filed taxes and FBAR’s for 2005 through 2010 outside an OVDI. I have not yet filed the 8854. Is this information of any use for me?
I’m not clear about the meaning of Subsection A, quoted above:
“(A) In general. – In the case of an individual who performed an act of expatriation specified in paragraph (1), (2), (3), or (4) of section 349(a) of the Immigration and Nationality Act (8 U.S.C. 1481(a)(1)-(4)) before February 6, 1995, but who did not, on or before such date, furnish to the United States Department of State a signed statement of voluntary relinquishment of United States nationality confirming the performance of such act, the amendments made by this section and section 512 [enacting section 6039F of this title] shall apply to such individual except that the 10-year period described in section 877(a) of such Code shall not expire before the end of the 10-year period beginning on the date such statement is so furnished.”
What is the 10-year period about?
Thanks for the research.
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Hello, I’m another accidental American in Canada. I left the US when I was 10 yrs old, and became a Canadian Citizen in 1993. I have not lived or worked in the US since 1969.
I’m in the middle of filing, and I have started receiving threatening letters from the IRS – one (including a bill with interest) for having the wrong SSN on some forms and another for an outdated form for the year 2007 FBAR (all filing was done by a qualified cross border accountant).
If my becoming a Canadian Citizen in 1993 could possibly stop this nightmare I would be really happy. Can you advise? Thank you for the excellent information and support.
Sincerely
Lane
@ Lane
I’m not certain I fully understand the significance of the February 6, 1995 date but there are others here (Petros in particular) who will have helpful information for you. Make sure you post a little follow-up note here tomorrow when more people are around, just to make sure your question attracts some attention in the Recent Comments list. Good luck!
“The answer is that if you relinquished your US citizenship before February 6, 1995, you were not required to have informed the State Department.” — Maybe your becoming a Canadian in 1993 is a sufficient relinquishing act and all you need is to obtain a back dated CLN (Certificate of Loss of Nationality), if that is possible.
@ Lane The Reed Amendment (if I’m not mistaken), 1996, made it a requirement to inform the US Consulate of your relinquishment in order to prove to the IRS that you were no longer an American. The effective date is explained in the post you read.
You can relinquish typically if you have not (1) used a US passport; (2) lived in the US; (3) worked in the US; or used any of the other advantages of US citizenship. If you’ve filed your extra-territorial taxes, unfortunately, which you have obviously done, then that is really a trap for them that your intention was to keep your US citizenship. However, it may be possible still to insist that you were entrapped by the propoganda and that you intended to lose your citizenship but that you were unaware that you had the right to do so. I don’t know the rest of your circumstances.
Wow – thank you Em and Petros. I have already filed 4 years and now filing the 5th and will renounce immediately afterward. Do you know who I can contact in the US to try this relinquishing angle? I’ve never had a US passport and have never lived/worked in the US since I was 10.
You contact a US consulate. See my posts on relinquishing.
@Carpenter, To establish that you relinquished in 1993, your act would have to have been done voluntarily, with the intent of relinquishing your US citizenship, and your post-relinquishment behaviour must have been consistent with that intent. (INS 349(a)(1)(2)).
By 1993, the State Department’s administrative presumption on loss of citizenship was that a person taking on a new citizenship intended to keep their US citizenship. However, that presumption can be rebutted, the burden of proof being the balance of probabilities. No one factor is determinative (but some would obviously weigh more heavily than others).
Have you been filing taxes all along? It sounds like you just started recently. If you only started filing recently, check out Cornwall’s report in the Toronto section of the Consulate Report Directory, as the consulate did not feel that Cornwall’s having filed recently contradicted his having relinquished.
Paradoxically, it appears that one can be considered a USC for IRS purposes after one has ceased to be a USC for DOS purposes. IRS basically told Cornwall they consider a person to be a USC for IRS purposes until they notify DOS of their relinquishment (877(A)).
I don’t want to get into discussion here on if that IRS policy is constitutional or not (or even logical or not). I’m not advising anyone to file or not to file. I’m focusing here on how tax-filing applies to DOS determinations.
I want to point out that, because of that IRS policy, if you only filed recently in order to conform with IRS expatriation policy, and have done *no other act* consistent with US citizenship, it sounds like you would have been filing in contemplation of expatriating, not to maintain citizenship. Also, filing taxes is also not generally considered to be a “benefit” of citizenship.
So, if that’s the only thing you’ve done that could be considered consistent with US citizenship, the balance of probabilities is probably on your side as far as Dept of State is concerned.
As far as IRS, you’re already in the IRS system and that is definitely not my area of expertise. Others, more knowledgeable, have commented about that aspect on this site, though. So, I can’t offer any opinion if IRS would recognise your 1993 date in your specific case or what to do.
But as far as DOS, DOS would probably recognize your 1993 date, despite recent tax filing, which is good news if it’s important to you to see 1993 on your CLN for what I might call “moral” reasons (that was important to me, to have an accurate record of my life). I don’t know anything about IRS, though … hopefully someone will be posting a reply with details on that aspect … there’s a lot of knowledge at Brock.
@Petros & Pacifica777
Thank you very much. My concern now is tax and the moral issue of being treated like a criminal when I didn’t even know I was suppose to be filing. So, I’ll see if relinquishing will speed up things with the IRS. It is really nice to know that I’m not alone! Thanks again.
@ Carpenter: You wondered if becoming a Canadian citizen could help end your obligations to IRS.
Are you aware Canadian Finance Minister Jim Flaherty and Canada Revenue Agency have both said they will not collect any penalties for IRS for failure to file a form (FBAR) for any Canadian citizen or resident and will not collect any tax liability for IRS for any Canadian citizen if the liability arose at a time the person was a Canadian citizen, even if the citizen was a U.S. citizen at the same time.
We do not yet know what the fallout from FATCA will be, but FATCA may be in contravention of Canadian banking, privacy, human rights and constitutional laws. Flaherty says they are trying to negotiate an agreement acceptable to both countries with US. Unfortunately, as Tiger has said, Flaherty’s “silence has been deafening” in recent months. I don’t know if that is a good thing or a bad thing, but the best protection you have from IRS is Canadian citizenship.
Do you have a need to travel to US?
@blaze, thank you for your info. FYI something interesting: I am a financial consultant. Last month I did a life insurance application with Sun Life, and there were some new questions on the application: “Where were you born, and what year did you come to Canada?” I do not need to travel to the US, but I think the FACTA threat is very real and approaching quickly – ie. the technology is becoming functional and soon the major companies (banks, insurance co.’s etc) will be required by the US to withhold funds for the IRS (30% I believe ?) for non-compliant US citizens. They are gathering information now…..
I am very glad the Canadian Gov. is protecting citizens by not enforcing IRS demands, but, the US does not need the cooperation of the Canadian Government if they can force the companies to do their dirty work.
The silence from the Canadian Gov on this is deafening. Thanks again for your info. I will keep posting info on how the major companies are setting up for FACTA if I find more suspicious information gathering going on at my level (which admittedly is pretty small).
@Carpenter Lane
‘Where were you born and what year did you come to Canada?’
Are those questions even legal? I thought it was against the charter rights of Canadians to be asked ‘where were you born?’.
Absolutely shocking. And frightening.
Such questions are not legal in a job interview in Ontario–at least that’s what our pastoral selection committee was told. One wonders why it would be permitted of an insurance company. Immigration Canada does a medical physical exam of all immigrants. So it shouldn’t matter what country you’re from–we are all residents of Canada, are we not, who have passed kosher.
I agree with all of you……
*Can anyone confirm whether the IRS has yet acknowledged, either in public or to one or more individual relinquishers, that it has no claim on persons who relinquished US citizenship before 1995 but who did not report it to DOS until later? I can’t find anything on IRS or other US government web sites which confirms that. I am in the process of applying for a CLN to certify my relinquishment upon becoming a Canadian citizen before 1980. It would help me and, I’m sure, lots of others if we knew how to respond to the IRS in a uniform way. It seems that filing IRS form 8854 would be conceding their current position regarding the date of expatriation.
*Further to my preceding post, a partial answer to my question seems to be implicit in IRS form 8854 itself, and in its instructions. The instructions for 2011 ( http://www.irs.gov/pub/irs-pdf/i8854.pdf ) say “Form 8854 is used by individuals who have expatriated on or after June 4, 2004.” It makes no mention of what, if anything, applies to individuals who expatriated before that date. So it seems that (1) the IRS claims that there are no such individuals, which is patently absurd, or (2) the IRS does not claim jurisdiction over such individuals, or (3) some other form or procedure applies to such individuals, but the IRS does not say in the instructions for form 8854 what the alternative procedure is. In the absence of further evidence, (2) would seem to be the most plausible interpretation.
Perusal of the IRS list of all past versions of Form 8854 and its instructions provides some additional enlightenment on this vexing issue:
http://www.irs.gov/app/picklist/list/priorFormPublication.html?resultsPerPage=200&sortColumn=sortOrder&indexOfFirstRow=0&criteria=formNumber&value=8854&isDescending=false
For instance, the instructions for the 1999 version of Form 8854 clearly state that the date of expatriation is the date “that you, with the intention of relinquishing your citizenship, voluntarily took one of several actions. These actions include
* Obtaining naturalization in a foreign state;
… “
*This is a duplicate of a comment that I have just posted on the Phil Hodgen — Why People Expatriate thread. It follows up my previous two comments on this thread:
*@pacifica777: Thank you very much for calling our attention to IRS notice 2005-36:
http://www.irs.gov/pub/irs-drop/n-2005-36.pdf
It adds information to what I discussed yesterday and today on comments in
http://isaacbrocksociety.ca/2011/12/16/did-you-relinquish-before-february-6-1995-then-you-did-not-have-to-inform-the-state-department/#comment-21634
Specifically, notice 2005-36 makes it very clear that the revisions
to form 8854 in 2004-2005 were a result of provisions of the American Jobs Creation Act of 2004. It ends with a section titled EFFECTIVE DATE, which says that “This notice is effective for former U.S. citizens and long-term residents who lost their U.S. citizenship or terminated their long-term resident status after June 3, 2004. Clearly that acknowledges that there are persons who lost their U.S. citizenship before June 3, 2004 — which would have to be under the laws applicable at the time of their loss of citizenship — and that the IRS rules adopted after June 3, 2004, do not apply to them.