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:
*Anon
The way I read 8854 is that the IRS defines the date of expatriation to be the date you inform the State Department that you relinquished your citizenship, not the date of the expatriating act. I became a Canadian citizen (expatriating act) 45 years ago, but until I show up at the consulate I haven’t, in the IRS’s eyes, expatriated, even though the State Department will issue me a CLN backdated 45 years. They may have no claim on people who performed an expatriating act before 1995 and this has been confirmed by a couple of lawyers but they sure aren’t saying anything about that in any of their publications or instructions. It’s very very frustrating. I would like to relinquish too but it would be nice to know what the rules are before jumping into the system with both feet.
If the DOS issues a Certificate of Loss of Nationality backdated to the date of the expatriating act, which they have done (most recently reported for a relinquishment at the Calgary US Consulate), I believe you have no obligation to the IRS from that date. Who cares what they think. You are not a US citizen and have no obligation to the IRS as of XXX date. Am I wrong?
@Calgary: You are correct. The Internal Revenue code (IRC) defines those who are obligated to file taxes as “US persons” which are residents and citizens of the United States. If you haven’t been a citizen for 30-40 years and you didn’t require a CLN, which is just the State Department’s acknowledgement of your expatriation, nothing more, then you were and are still not a US person according to the IRC. The problem is that that the IRS has a different definition than the legal definition of a US persons, post Reed Amendment (1996). But the burden of proof is on them to make a person who has for decades lived consistently as non-citizens.
I think that those in this situation just need to stand up for their rights. You can waive any constitutional or international right that you want voluntarily, and the IRS is happy to see you do it. But if they want revenue from such a person, make it cost them something–i.e., an expensive legal proceedings with no co-operation on the part of the former citizen.
@Calgary: Who knows if you are right or wrong? As long as US changes the rules whenever they like, however it best suits them at that time, we’re right one day and wrong the next.
Of course, they think we’re wrong all the time because we actually dare to live and prosper outside US–and even (Gasp!) become citizens of other countries.
I will always maintain my US citizenship ended on April 27, 1973 and I had no obligation to US or IRS after that date. They can think what they want.
@Calgary411 — “Am I wrong.”
Unfortunately I think the only sure answer to that will come when someone pushes the argument in front of a judge and gets the right answer. And to do that, you’ll have to launch an action in the US, which puts you at extreme risk if the decision doesn’t go your way.
As with just about everything about the IRS, the rules are almost universally ambiguous. I’m one of those who thinks there’s no accident to that. The entire legislative process around citizenship, immigration, and taxation is deliberately unclear so they can interpret it to fit whatever the political mood of the day is.
Remember that 40 or more years ago, citizenship rules were designed to make it easy for the state to remove the citizenship because that was the prevailing mood of the day. People trying to prevent that automatic loss went to court and won their case (much to our dismay now I guess).
But it wasn’t until the last 5-10 years that legislators began waking up to the fact that the “hang ’em high” approach to citizenship was interfering with the IRS’s ability to collect money from all these traitors, and so they created a “tax” category for citizenship separate from the “state” category. Can they make that stick retroactively? Well, unfortunately I think they will indeed try to make it stick retroactively and it will be up to some brave soul to take them on in a US court. Frankly, it’s easier and safer just to give them the finger from this side of the border.
I still think the true value of the CLN will be its use in Canada (or any other country) to convince a bank manager that you are no longer a US person/citizen. It could also have some value at the border, but only until the IRS and border data bases are integrated.
Still waiting to hear back on the second appointment. It was my wife’s hope that she might actually have the CLN in her possession in time for a big Canada Day celebration and party. Something tells me it will be next year’s Canada Day.
@Hijacked: I hope Petros’ response gives you some reassurance that your citizenship ended 45 years ago. I’m doing like you–I’m staying off their radar. If I make an appointment to formally relinquish, that gives US ongoing control over me. It’s like admitting I didn’t fully give up my citizenship 40 years ago.
Have you gotten a copy of your signed Canadian citizenship oath through CIC? If you signed it 45 years ago, it should include an oath to renounce any former citizenship. Under FATCA draft regs, FFIs can accept alternatives to CLNs. That includes proof of non-US citizenship and a “reasonable explanation” of renunciation of US citizenship. I think any Canadian bank would have to accept a copy of a signed Canadian oath of renunciation of former citizenship as a “reasonable explanation.”
I know others are making different decisions, but staying away from US Consulate is the right one for me.
@Blaze — “It’s like admitting I didn’t fully give up my citizenship 40 years ago.”
I’m not trying to change your mind here — this is an intensely personal decision and only you can make it.
But when you front up with a relinquishment application, in fact you are just formally notifying the state department of the expatriating act you committed 40 years ago, and asking them to provide you with a formal document (the CLN) that confirms that decision. In fact, you are codifying the event of 40 years ago.
I understand your concern — it took my wife a long time before she decided to plonk herself on the US radar screen. I think what tipped her was the realization that “doing nothing” won’t help her at the border the next time an ambitious guard starts quizzing her about the US birthplace on her passport. The potential for bank duress just threw fuel on the fire. In other words, she had nothing to lose, and something to gain (the CLN) by going through the system.
And on that note — here’s an appeal. I need someone based in BC to have the guts to talk to me on the record about their trials and tribulations with their dualness. In particular, if there’s anyone out there who would talk about what happened to them as they tried to make peace with the IRS and actually filed tax returns — that would be ideal. My deadline for this article is June 28, so next week or two I’d need to have the conversation.
Here’s a phone number if you want to discuss the prospect: 604-924-3533.
*
@Arrow
I sure hope you are successful in finding that ‘someone from BC’ to speak to you regarding your article. I can’t offer to do that as I have not filed a US tax return since 1964 – the year I left the States. Sure look forward to reading the article.
And thanks again for helping to get the message out. Your Kenyan article certainly caught the attention of many people who knew absolutely nothing of what is going on with the U.S. and their tax jihad.
Arrow wrote:
Exactly right. With the CLN you can prove that you are no longer a citizen, and your tax status with the IRS is irrelevant–i.e., the FATCA regulations require the CLN as proof of loss of citizenship, not proof that you’ve filed 8854 or your final tax returns or anything else.
Also, if you want to solicit someone for the article, you should try in a separate thread. I’ll make sure I invite you as an author right away.
Nobody has yet convinced me that any person who now relinquishes or renounces is not required to file Form 8854 to satisfy the IRS.
This official document says that 8854 applies to anyone expatriating after 16 June 2008.
And this official document says at 2.A – unless I can’t read – that for practically all of the Brock crew, unless you have already done the US consulate thing, you have not expatriated yet. Backdate that precious CLN to 1776 if you want, but when did you actually visit the US consulate?
Principle Number One: Department-of-State and Department-of-Treasury/IRS are weird and separate fiefdoms – and you are a serf to both. How to escape those overlapping dark dominions seems a murky mystery.
Is there any chance we could get informed opinion on the Form 8854 requirement, rather than heartfelt assertion, raw speculation, desperate hope, wild wish, etc etc etc?
At the least, I’d love to see two “professionals” come up with diametrically opposed views. That couldn’t possibly happen, could it?
*Just so people that are in the same situation as me can know… I
was a born U.S.citizen and became a Canadian in 1971 …I went to a U.S. consulate last year and applied
for a CLN. It took 9 months for them to send it back to me registered mail…it was dated back to the 1971 date that i had become a Canadian.
@oldgringo
Congratulations on your CLN and welcome to this forum. Great to hear that your CLN was back-dated to 1971. At that time the Canadian citizenship oath, also, included a ‘renunciatory oath’.
IBS is tracking information on Renunciation and Relinquishment. Perhaps you could cross post to the “Consulate Report Directory” or the “Relinquishment and Renunciation Data”.
Hello, oldgringo and Congratulations. Thanks for joining Isaac Brock commenters and posters.
We are trying to collect information about relinquishments and renunciations of people on this site at http://isaacbrocksociety.ca/2012/03/14/draft-pdf-compilation-of-relinquishment-and-renunciation-data-as-reported-on-isaac-brock/ and stories at http://isaacbrocksociety.ca/2012/03/24/consulate-visit-report-directory/. Could you to help us on these threads — to help others who are looking for results at US Consulates throughout the world and for individual stories of the renunciation or relinquishment experience at which Consulate (as they are not all the same)?
On the database we are collecting:
Date (month/year) of first contact / which US Consulate
Date of first appointment
Date of second appointment (if it was required)
Date on the CLN (i.e., backdated for relinquishment to date of expatriating act? / or date of actual renunciation or other date used)
Renunciation, or
Relinquishment
Notes
Thanks for any help you can give to make the experiences of others a little easier, knowing a little of what they can expect.
I recently found this letter from a U. S. consulate in Canada The letter was issued in 1988. It was a generic photocopied letter. Any comments on this letter would be appreciated.
Consulate General of the United States of
America
Dear Sir/Madam:
Reference is made to your recent inquiry
concerning the possibility of retaining your United States citizenship in the
event that you become naturalized as a Canadian citizen. We would like to
provide you with the following information in this regard.
Section 349(a)(1) of the Immigration and
Nationality Act states that a U.S. Citizen shall lose his citizenship by
obtaining naturalization in a foreign country upon his own application. Such an
act is considered highly persuasive evidence that the person concerned wished
to relinquish his allegiance to the United States.
In 1967, the United States Supreme Court,
in the case of Afroyim v. Rusk, declared unconstitutional the section of the
law that provided for loss of U. S. citizenship by voting in a foreign
election. That decision also affected the handling of all citizenship cases
because it is stated, in part, that a citizen of the United States has a
“constitutional right to remain a citizen of the United States…unless he
voluntarily relinquishes that citizenship.” Consequently, in order for loss of
citizenship to occur under Section 349 (a) (1), it must be established that the
foreign naturalization was obtained voluntarily.
In January 1980, in the case of Vance v.
Terrazas, the United States Supreme Court held that a U.S. citizen cannot be
found to have expatriated himself by performing one of the acts listed in
Section 349 (a) unless he thereby intended to relinquish U. S. citizenship. The
Court added that any of the expatriating acts mentioned in Section 349 (a) may
be “highly persuasive” evidence of an intent to relinquish citizenship, but
cannot be “conclusive” evidence of such intent. Therefore, the facts of each
case must be carefully evaluated, with consideration being given to fair
inferences drawn from the person’s conduct and his statements, particularly
those made immediately prior to or contemporaneously with the expatriating act
in question
As a matter of law, the issues of intent and
of voluntariness cannot be evaluated until after a potentially expatriating act
has actually been performed. Therefore, it is impossible for this or any other
U.S. Government agency to state categorically in advance that you will or will
not lose U.S. citizenship if you become a Canadian citizen. There are also no
specific steps you can take in advance of a foreign naturalization that will
definitely guarantee retention of U.S. citizenship.
Nevertheless, a written statement from you
that you fully intend to maintain your U.S. citizenship and will continue to
respect the obligations of such citizenship notwithstanding your plans to
obtain naturalization in Canada would be accorded substantial weight in any
loss of nationality proceedings that may be subsequently be conducted in your
case. Other factors that would be taken into consideration as evidence of an
intent to retain U. S. Citizenship include continued use of a U.S. passport,
continuing to file U.S. income tax returns as a citizen, voting in U.S. elections,
etc. You should not, of course, make or sign any statements in connection with
a foreign naturalization that reflects renunciation of present citizenship.
On the other hand, you may wish to bear in
mind that while professional and financial considerations can occasionally
provide compelling reasons for obtain a foreign citizenship, these reasons do
not in themselves constitute sufficient countervailing evidence of intent to
retain U. S. citizenship.
In cases where loss of U.S. citizenship
does not occur as a consequence of a foreign naturalization, dual nationality
results provided the other country concerned permits that status to exist. It
is our understanding that Canada does allow its citizens to possess other
citizenships. The United States does not officially recognize or approve of
dual nationality as a matter of law, but accepts its existence in individual
cases as a matter of fact.
I trust that you will find this information
helpful. If you do proceed with your plans to obtain Canadian citizenship, it
is requested that you subsequently file an application for registration with
this office so that your citizenship status under U.S. law can be adjudicated.
Sincerely yours,
United States Consul
@Clint
Welcome to the Isaac Brock Society. I have not seen any prior posts from you.
The above letter from the consulate confirms information available regarding the change in immigration law over the years and information that can be found elsewhere. It is nice to see it confirmed in writing by a U.S. consulate.
Briefly, the U.S. Immigration and Nationality Act (INA) had a 1986 amendment. Prior to the amendment, it was assumed that anyone performing one of the five expatriating acts (taking citizenship out in another country being one of them), did so voluntarily and with the intent to relinquish their U.S. citizenship. It would have been up to the Department of State to prove that the person did not intend to relinquish. They could have done so by showing perhaps that they voted in a U.S. election, applied for a U.S. passport, filed tax returns etc. The 1986 amendment basically puts the burden of proof on the individual to show he intended to relinquish his U.S. citizenship.
There is an interesting case you could look up – I believe 9th circuit court case – Richards vs Secretary of State. In this case, Richards (an American), while working in Vancouver, becomes a Canadian citizen. (I believe it is in the early 70’s). At a later date (late 70’s, early 80’s), he tries to prove that he did not ‘intend’ to relinquish his U.S. citizenship, had in fact only taken out Cdn. citizenship to obtain a job. He lost his case and was not allowed to reclaim his American citizenship.
Believe me, there are many on this site, who would love to be in Richards shoes.
@Clint
One more thing, I should mention. Many of us who became citizens of Canada decades ago (back in the 50’s,60’s,70’s), never heard of CLN. I certainly informed the U.S. consulate in Toronto in 1972 that I was going to become a Canadian citizen. They said loss of U.S. citizenship was irrevocable. They never mentioned a CLN.
However, the US seems to believe they can change the rules and make the new rules retroactive. This is the reason that many on this site are now applying for backdated Certificates of Loss of Nationality.
@ tiger
I became a Canadian citizen in 1991, some 15 years after moving to Canada. How does one prove their intention to give up their U. S. citizenship after becoming a Canadian in 1991 (burden of proof).
This is assuming no tax returns, US passports, no voting in US elections after becoming a Canadian.
*@Clint –
If you say that your intention was to lose your US citizenship when you became a naturalized Canadian, and you’ve done nothing since then to assert US citizenship, then that’s a pretty straightforward relinquishment, with no tax implications.
*Clint You would have to fill in form DS4079 from the US state depart. The form is ass backwards because it is purported to be for those trying to establish their US citizenship rather than lose it but you fill it in anyway. Try it out- you will see that in your case, the evidence is that you intended to lose your USCitizenship. There is no reason for them to contradict you. The state dept is not supposed to concern themselves with why you relinquished.
You are almost home free.
@Clint
Broken Man is correct. It sounds like you have done nothing to indicate that your intent was to retain US citizenship. There are state department forms DS-4079 is one of them that you would need to fill out and I think DS-4081 is another. You can access them on the Department of State website. You would have to book an appointment at a US consulate – some consulates like Vancouver seem to require two appointments – and then complete the process of applying for a CLN. Broken Man is also correct regarding IRS tax implications. There is a lawyer who has posted on this site (Michael K Miller) who states in a post that anyone who expatriated prior to 2004(your act was 1991) is not liable for tax forms.
There are those of us on this site, who have not yet applied for a CLN. I am one of those. Not sure I want to get into the crosshairs of DOS or IRS. Each person must make their own decision.
One thing you might want to do is apply for a copy of your citizenship file. I did that and it took about 5 – 6 weeks. You apply through “Access to Information – Canadian Citizenship and Immigration”. I just sent a letter to the Ottawa address. I now carry that file with me when I cross the U.S. border. However, the real proof is a CLN.
Good luck with your decision
One complication to my story. In 1988, after receiving the letter posted above, regrettably I sent a notarized letter to the Consulate stating that I intended to retain U.S. citizenship. However, by 1991 when I became a Canadian citizen,, I no longer cared if I lost U. S. citizenship. No subsequent letter was sent to the Consulate.
Somehow I doubt that the 1988 letter I sent is still on file anywhere, but who knows?
My take on it is that you changed your mind in the three years between 1988 and 1991, while you were a permanent resident. That’s a fair amount of time. (Might be problematic if you’d sent such letter a week before. But even then, bear in mind that the evaluation of loss of citizenship is based on the balance of probabilities.)
The operative factor is your intent at the time of acquiring your Canadian citizenship. The actions to be considered in evaluating loss of citizenship are those taken beginning the day you acquired Canadian with the intent of relinquishing US citizen.
@ all
Thank you for your valuable input.
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