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:
*Lagoon. Attaboy. You picked the right course of action.
*Lagoon and others. If you think IBS has saved you a ton of money or hours of work or a lifetime of worry may I suggest you link to the bottom of the website under ‘financial contributions.’ You will note that the founder is probably a few thousand dollars out of pocket.
*Thanks, and yes I will make a donation.
The case worker is now on track under statutes 7 FAM 1220, s. 349(a)(1) thanks to Brock and @pacifica specifically:
I believe I understand now. Please allow me to confirm the next steps. I will reply as soon as possible.
He hasnt answered whether my documents are sufficient but I’ll wait for him to get up to steam.
However he wants to know, in the interim, about a US passport and my full name, birth place and date. Should I stall? Or give him something to nibble on?
@msd,
I don’t understand why you would stall. If you don’t answer their questions, wouldn’t they just ‘stall’ the process on their end?
@ msd,
Darn, it’s hard to know. Did he say he won’t give you an answer about your documents until you identify yourself? Or did you get the impression that although he wants that information, he is continuing to analyse what you’ve sent him (“confirm the next steps”) in the meantime.
If you can wait til you hear what he has to say about the “next steps” and your documents, that would be good. But if he wants to know now, I don’t think I’d have a problem identifying myself. It puts you on DoS radar, of course – on the other hand, if you’re sure you’re going to do this I don’t see it matters when they find out, and the US does know you exist because of the passport, so you’re not completely under the radar now.
As for the passport, if you’ve been asked about if you have one and have to reply, then I think it’s best to be up front about it from the beginning. You have your arguments ready. It sounds like this case worker is taking this seriously, so I’d assume that if he were to balk at the passport, he would be receptive to following up on that and learn from DC, as the Vancouver consul did, that under certain circumstances, such as yours, it does not invalidate a relinquishment.
Of course, I can’t be sure of any of this, but based on what I do know and the impression I’m getting, that’s my take on it.
@tiger
You could be right. However, I want them to respond about my documents, specifically this letter from the Registrar of Canadian Citizenship that indicates when I naturalized. If they dont accept it I have to apply for some sort of Naturalization Certificate from Canada that could take up to 10 months to get. I want the US consulate to assume, for the moment, that my case is straight forward without them being prejudiced about me having a current US passport. If this US passport jeopardizes my request for relinquishment under statutes 7 FAM 1220, s. 349(a)(1), I want to know if I can still pursue it despite them and that all my documents are in order. I figure it will only be a short stalling action, probably after the case worker’s next email or two.
Does that make sense?
@pacifica,,, yes I want to let it all out and I am determined to relinquish. Renouncing is not an alternative. He already knows my first and last name and my place of birth, I guess he cant collate the data without my middle name and birth date. Interesting.
The case worker seems to be suggesting I supply more information while he studies the statute, rather than insisting I supply it before any other action. I’ll know what I will do after the weekend, I just need to get my thoughts in order. Can the consulate decide on their own that I cant relinquish the way I want because I have a US passport?
@msd,
I was just away from the computer and thinking about your earlier comments and now see your latest one. Interesting — I was thinking about Canada too, using a consulate that is a known quantity.
Re the last paragraph of your 9:02 comment, I see what you’re saying. You’re trying to get an answer to one question — are these documents acceptable? — so you can act according to that, and he’s asking for other information, which is not relevant. I can see why you’d prefer not to get into the whole story right at once.
Although DC has the final approval, it’s really the consul you meet with who decides, and DC acts on their recommendation. They’re in a position, if there is a question, to seek clarification from the person, obtain further information, if needed, before the person signs the documents. And if it’s a legal point, they’ll check with DC before you sign the documents, in preference to sending on an application they’re not sure of.
I think they can’t actually stop you from proceeding, but they prefer not to send on files they know will be rejected. If they feel you don’t have a bona fide case, they’ll tell you. Basically the consul doesn’t want his work rejected, so, for all intents and purposes, if they feel your file is in order, it’s a done deal.
UPDATE 9:59. I see you edited your comment as I was writing mine. I’ll leave the previous paragraph up anyway.
Re, your edited comment. If the consulate disagrees with a person, and the consulate is acting in good faith, they should seek guidance from DC before telling the person they can’t apply under (a)(1). It looks like DC is on your side on the passport issue (and your experience was exceptionally intimidating to boot).
I would think if the consulate was in bad faith and refused to seek guidance or, worse, pretended that they had and said that DC said it was a no-go (eg what they were saying conflicted with what is apparently DC’s policy), then the person should then contact DC themself instead of giving in and just renouncing. But, of course, you want to avoid all that. From what we know, the consulates almost without exception are on the up-and-up. We only know of one that was trying to prevent bona fide relinquishments; apart from that, relinquishment problems have been that the consulate didn’t know the law but were not opposed to finding it out and following it.
I’m aware of three cases where people attempted to relinquish but did not. In two cases, the consulates felt the person did not have a relinquishment case. I recall that one, and possibly both, of these people thought it was dicey to begin with. They renounced. The third case, the consulate felt the person did not have a relinquishment case but said they could go ahead with it but they doubted it would be approved, and that person just dropped the whole thing.
Okay,,, I can see that this case worker will continue to ignore my questions in favour of his own. I could ignore his questions in favour of mine in the hope he’ll answer mine first. But so far the communication is congenial and I dont want it to turn sour on whose questions should be answered first. I’ll concede to his sequence, and open up the second front on explaining the US passport. I’ll have to do it sooner or later,,,
@pacifica,,, Sorry for radically editing my previous comment. re my trepidation of initiating this fight from Mexico. It is a very trying situation and I dont want to confuse the issue with too much emotions. But thank you so much for your advise and comments, it is greatly appreciated…
@MSD…interesting you are having difficulties…I had to convince the Jerusalem consulate that I relinquished when I obtained Israeli citizenship over 10 years ago. They seemed very unfamiliar with the concept. It’s true I spoke to two clerks, but they both were bewildered and told me to come back next week. My feeling is they never have done a backdated relinquishment before, and I’m pretty sure renunciations, in general, are pretty rare there. So they told me to come back next week. I already dumped the completed (but unsigned) DS-4079 and DS-4081 in their laps, so hopefully they will be up to speed next week. For now, I’m playing along with their “rules” of making more trips, but I still want a backdated CLN since it would make things so much smoother, (and not just to save the $450 fee).
Still waiting for a reply, the relevant paragraph:
In 2011 in SF airport I was on my way to Canada to enroll my three dependent children in schools (non eligible US citizens). My Canadian passport indicates my US birth place so US Customs informed me I had to get a US passport, and effectively made my CDN passport useless for in-transit US travel. A few months later I had to bring my children through a US airport back to Canada. I felt in jeopardy if I was to not be in compliance when I arrived in-transit through US Customs. I therefore applied and received a US passport in Mexico City in 2011. So this is the situation: I felt compelled to get a US passport to be able to travel, not to practice US citizenship. My wish is to surrender the US passport and make my status clear and be able to travel on my Canadian passport as a Canadian citizen.
@Lagoon
re: exit tax form 8854: You might choose to submit 5 1040NR forms (much easier than 1040s since they only ask about US sourced income). Your grounds for 1040NRs would be you were not a US citizen for the preceding 5 years (because you relinquished your US citizenship .. what, was it ~30 years ago?
Or even just put zero’s in the 8854 where it asks for your past 5 years ‘ tax obligations on the same grounds (identifying that while you notified the consulate on , you received a CLN backdated to acknowledge you gave us your US citizenship .
Just – other strategies to consider.
Thinking about how to deal with what I had to sign on the DS-4081 form that “I understand that I must contact the United States Internal Revenue Service”, I have drafted the following letter template, which others might find helpful also. I haven’t sent such a letter yet. Because I am not a lawyer, I would appreciate comments from any knowledgeable lawyers regarding the wording of the letter and the advisability of sending it:
Draft template for letter from a pre-1995 relinquisher to Internal Revenue Service, complying with requirement of form DS-4081:
I am a former United States citizen, born in [year of birth]. I immigrated to [country] in [year of emigration from U.S.] and became a [country] citizen in [year of new citizenship]. Until I became a [country] citizen, I filed annual income tax returns for both countries, never owing anything to the United States because of credit for taxes paid to [country].
After I became a [country] citizen, I ceased all behavior as a United States citizen. Since then I have not worked in the United States, lived there, held a U.S. passport, voted in a U.S. election, or filed tax returns there. When I have entered the U.S. for visits, I have always declared my citizenship to be [country]. In my mind I have been just a [country] citizen since [year of new citizenship].
[Approximate time] ago, it came to my attention through press reports that my status as a U.S. citizen could be ambiguous as far as the United States was concerned. Subsequently I made an appointment at the U.S. consulate in [city] to apply for a Certificate of Loss of Nationality of the United States (CLN), which I have now obtained. A copy of the CLN is enclosed with this letter. It affirms that I relinquished my United States citizenship, with intention, when I became a [country] citizen in [year of new citizenship].
As part of the process of obtaining the CLN I was required to sign a form, DS-4081, part of which said that “I understand that I must contact the United States Internal Revenue Service.” So with this letter I am hereby contacting you.
I assume that, because I have not lived in the United States for over [number of] years, and I ceased being a United States citizen over [number of] years ago, I have no further obligation under any applicable law to report to you. I will appreciate your confirmation of that assumption. In the absence of such confirmation, I will conclude that my assumption is correct.
Sincerely,
@AnonAnon
Like you, I am not a lawyer. i could certainly see myself using the above draft, if/when I obtain my back-dated (1972) CLN.
tiger, you’re welcome to use it. If enough of us send such letters, maybe we can get the IRS to clarify its position regarding pre-1995 and pre-2004 relinquishers.
@AnonAnon
I am not a lawyer, but I have now consulted with three US tax lawyers, one in Calgary, one in Seattle, and one in New York. All have expertise in the issues related to relinquishment and renunciations.
I fall into the relinquishment category (I was born in the US in 1956, moved to Canada for school in 1975, became a landed immigrant in 1978, and a Canadian citizen in 1985. Since becoming Canadian I have used a Canadian passport, paid Canadian taxes, and never gone back to live in the US).
First, I can now say that 3 of of 3 US tax lawyers provide the same advice: I have a case for relinquishing. Interestingly, in one of my previous posts, I said the 2 out of 3 lawyers gave the same advice. I had a call today from the 1 lawyer who have different advice to say they had examined things further, and concur that I can file for relinquishment, and have no further obligations with regard to the IRS.
I specifically asked about the wording on DS-4081 with regard to contacting the IRS. As one lawyer put it, it is a legal theory issue as to the requirements for those of us who relinquished long ago. (I am a university professor, so contacting 3 lawyers from different firms, was a triangulation exercise that helped me to feel comfortable with what I should or should not do – ultimately these are personal decisions, which as each lawyer noted is about our individual levels of risk tolerance). Nonetheless, all lawyers gave me the same advice. I have a good case for relinquishment, and the changes to the US tax laws over time are problematic with respect to past cases. So, I will follow the advice given by the 3 lawyers, and not send a letter to the IRS, with the understanding that the reference to contact the IRS does not apply in my case of having relinquished oh so long ago.
Hope this is helpful.
Very helpful. Moderators- can this be kept? It confirms 6/6 lawyers agree that relinquishers do not have to contact IRS
What it means is that Anon anon ae al don’t need to bother writing.
@Lagoon, thank you very much for your report on the three lawyers’ advice. I think I will follow that advice and let the sleeping dogs lie. I suppose that writing a letter could just prompt them to ask me for more paperwork.
Thanks, Lagoon, for this very positive information!
Duke, I think that would actually be a good post, one focusing on current opinions on this matter. Something I would find particularly useful and interesting, even more than the number of lawyers consulted who came to the same conclusion (which although very impressive is a pretty small sample), is what led them to this conclusion (eg, related jurisprudence, conversation with IRS employee, etc.). Lagoon, would any or all of the lawyers you spoke with like to be quoted?
Duke, who are the other lawyers you refer to? 3 must be Lagoon’s lawyers. I know that Michael Miller and Steven Mopsick have both written espousing this view – I don’t know if they’re in your count.
Michael Miller, btw, will be having an article on this topic coming out soon. It’s called “Expats Live in Fear of Malevolent Time Machine.”
I’m intrigued by the comments about writing to the IRS to notify them of them of the relinquishment. I can understand not filing, but I’m a bit puzzled about why a person would write to tell them they’re not filing.
A confirmation of this from IRS would be super. But if IRS were to reply, “Thank you for bringing this to our attention. We want you to file anyway,” would a person ignore that reply, and if so, would the IRS ignore that the person ignored it? (Or, of course, in this scenario, a person could be considering filing, but were wanting confirmation from IRS to be sure that they had to.)
I don’t see a requirement for “notification” in the 4081 (not that what I see matters, it’s just my 2c) as I read the 4081 as a CYA document for the consulate’s benefit – that the consulate officer made the person aware of the consequences of expatriation.
In that context, I read 4081(10) “With regard to US taxation consequences, I understand that I must contact the US IRS” as meaning “To find out what my tax obligations are, the consulate told me I have to contact IRS,” as opposed to “I must contact IRS to let them know I renounced/relinquished.” Dept of State is supposed to notify them anyway, according to 7 FAM 1240.
At any rate, some practitioners contend that IRS’s position is that 877A applies even if a person relinquished before HIPAA (1994), and that has not yet been challenged in court. However, we’ve also been hearing from pretty reliable sources that, in practice, if you’ve been off IRS radar that long, they’re not interested in you.
But sending a letter to say “I relinquished but I’m pre-1994 so I don’t believe I’m required to file” sounds like putting yourself into the picture. So I’d be really curious, if someone does that, to find out if anything came of it and, if so, what.
When I filed my last IRS return, along about 1975 and after becoming Canadian, I enclosed a letter saying that I was no longer a US citizen and would not be filing US returns in the future. I did get a reply from them – saying that the situation was under review (or something similar). Never heard anything more from em.
Ah, yes, pacifica777, it’s the ambiguous meaning of “contact”. I took it to mean “get in touch with”, but maybe browsing their web site is enough, in which case I have satisfied the requirement.