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:
@ msd
You don’t need PayPal. Just e-mail Petros and he’ll give you an address to send a cheque to. It’s about time for me to send another cheque too.
http://isaacbrocksociety.ca/financial-contributions/
@MSD and Tiger…Congratulations! I go for my relinquishment in Toronto on July 15th…I will as for it to be backdated to 1993 when I became a Canadian Citizen. I will let you all know how it went.
How does a person who gets a back-dated CLN prove to anybody (such as a boarder guard) that he is done with the IRS? For that matter, how does anybody, even a tax-compiant person who renounces, files the 8854, the whole 9 yards?
@WhatAmI
I’ve never had a border guard or Homeland Security ask about my tax status. And it is my understanding that if your CLN is before a certain date (like pre 1995) you have no IRS reporting obligations). In any case, I will be passing through the border in July by land from the south with my CLN. I expect no problems whatsoever…
Starting June 30, when you cross the border with your Canadian passport, your stay in the US will be tracked by both governments. The US for tax & residency purposes, Canada for health care coverage, tax residency, etc.
It’s surely just a matter of time before IRS checking is built into the system.
@WhatAmI, I agree. An Electronic Curtain is descending along what used to be celebrated as “The World’s Longest Undefended Border”. It will make NSA-style invasion of privacy routine for people traveling between Canada and the U.S. Ironically, the Electronic Curtain is being lowered not to “defend” each country’s government from the other country’s government but from each country’s own citizens.
mdean says
February 6, 2014 at 2:21 am
Just for the record, mdean and msd are one and the same…
Badger put this up in the general renunciation and relinquishment thread. It’s fairly recent and written by tax experts, but still maintains the date of notification of the expatriating act as the effective date of expatriation. Has anyone any knowledge of IRS trying to assess someone with a CLN backdated before 1995?
canadian tax journal / revue fiscale canadienne (2013) 61:1, 1 – 40
http://www.ctf.ca/ctfweb/CMDownload.aspx?ContentKey=4fa01c65-281b-437c-8099-bae25c4fbca6&ContentItemKey=11eb8ece-4a53-4f1a-a676-cb888fe67ed5
@ Petit Suisse,
All I’m seeing is that the authors quote s. 877A under the “Date of Relinquishment” section of their article. Are the authors also putting forth the opinion this applies to pre-1995s? We’ve got several legal opinions that it does not apply (though I know of one (Phil Hodgen) who feels it does). In any event, if I’m missing an opinion by these authors, please point it out – I’m always interested to read about this topic.
@Petit Suisse says: I think that matter has been covered by Michael Miller in his paper referenced here: http://isaacbrocksociety.ca/tag/michael-miller-exit-tax/
Note that he suggests that type of a scenario would be absurd. Also I recall he had actually contacted the IRS about this point twice and received verbal responses that it would be ridiculous for them to go after someone in the situation you describe.
With that in mind, I think you would have a very difficult time finding a case of the IRS trying to assess someone who relinquished before 1995.
Here’s Michael’s comment about his conversation with the IRS people
• Michael J. Miller says Aug 25, 2013 2:12 pm http://hodgen.com/relinquishing-u-s-citizenship-and-expatriation/
“For persons whose CLN shows a loss of citizenship date that is on or before June 3, 2004, section 877A should not apply. Even if the CLN is received today. I’ve discussed this with people at the IRS and they’ve informally stated that they agree.”
Pacifica777 and Michael Miller are correct. IRC S 877A does not apply prior to June 3, 2004.The problem with this approach is that under a law that applied until June 17,2008, an individual continued to be considered for tax purposes a US citizen until notice was given to the IRS of the expatriating act. [IRC S 7001(n), as it then read].
If you committed an expatriating act in, say, 2003, but didn’t report it to the IRS, you’re still considered a citizen for tax purposes to at least June 17, 2008. But what happens then? Do you remain treated the same way? Do you file an 8854 effective 2003, or 2008? If anyone wants to hire me to undertake this research project, I’d be happy to do so.It won’t be cheap, and it may require an IRS ruling.
I have not found out how far back this last provision [S 7701(n)] was effective.
It is unclear how the expiry of this provision interacts with the introduction of the new rules [S 877A], or with the treaty provision that restricts how long the US can tax former citizens.[Canada-US Income Tax Convention Art. XXIX(2)(b)]
Kevin Nightingale, CPA,
You have to be paid to do this? It is not that would be part of your continuing education for your expertise to be able to charge persons for your services?
@Kevyn, a person’s citizenship is a right intrinsic to the person. We don’t need the tax code to tell us whether we are a citizen of the US or not. We need the guts to stand on our feet and stand up for our rights.
@Calgary, people like Kevyn don’t do things out of the goodness of their heart or for mere educational purposes. To be sure, they hang their shingle here in Canada and expect to be paid to lead innocent Canadians as sheep to the slaughter.
Kevyn Nightingale, you cited
“[IRC S 7001(n), as it then read]”, and a few lines later you said
“I have not found out how far back this last provision [S 7701(n)] was effective.”
I assume one of those is a typo. Is it 7001(n) or 7701(n)?
Thanks in advance for the correction.
What should my husband and I do if/when we receive a CLN backdated to our becoming Canadian citizens in 1974? We’re preparing the relinquishment forms now for the Calgary Consulate. Should we send anything to the IRS once we get the CLN? Should we include the legal references on this site citing the date when notifying the State Dept.. became mandatory,, and expect them to agree that we had no obligation to report in 1974 and therefore no obligation to file the IRS form now? What have other people done? We don’t want our IRS non-compliance to affect our child who is married to an American and is now living in the US on a green card.
@Queenston, those are good questions. I, too, relinquished in the 1970s and received a CLN attesting to that last year. After thinking it over a while and considering advice from others here at Isaac Brock, I decided not to contact the IRS, because I believe I have no obligation to do so. So far I haven’t heard from them, and I don’t think I ever will. Contacting them would probably result in them telling me that I should file more pointless paperwork to prove to their satisfaction that I don’t owe them any money. Or worse, they could claim that I owe them penalties for failing to file pointless paperwork in the past. I would never have owed them any actual tax under their laws since I relinquished; so they could only claim that I owed them penalties, which is absurd.
Concerning your child, I don’t see how your status with the IRS could affect them in any way. So I wouldn’t worry about that.
My advice: Let the sleeping wolf lie.
Best wishes from one in similar circumstances.
Queenston,
AnonAnon’s advice seems to me another of the lessons to learn from this site, along with the support it gives to you and others. We must all make our own decisions based on lots of research, but that may be the wise choice for you. Think carefully and get your mind in a good place.
Caution re date of expatriation (NB – if you are thinking of these matters, you should consult a US lawyer at some point and not rely on chat room threads beyond arming yourself with good questions to ask):
I have reviewed this thread and would caution readers to differentiate between citizenship and the the Tax Code/IRS. The INA governs citizenship and sets forth clear rules which are automatic in their application – subject to no notification or other requirements vis a vis the Secretary of State or the IRS. It is a binary test: you are or are not a citizen. If you became a Canadian with the intent to relinquish, you are not a US citizen thereafter. Period.
Taxation is another matter. Citizenship based taxation was upheld by the US Supreme Court in the 20’s in a very brief decision almost devoid of reasoning. Post 1996, Congress has enacted a number of punitive rules that were embedded in the Tax Code primarily which impose an exit tax, 10 years of post-expatriation taxation etc. These rules – which not amusingly have eerie parallels to exit taxes enacted by a certain middle-European country in the 1930’s – cannot create citizens out of non-citizens and are certainly of no application outside the United States They are of dubious validity domestically since the Supreme Court ruling that validated citizen taxes did not consider former citizen taxation and the failure of a non-citizen (post un-notified expatriation) to file a tax return outside of the United States would seem to offer no jurisdictional footholds to apply US fiscal or penal laws. That being said, these punitive laws have not as far as I know been challenged in the United States and are simply ignored by literally millions outside of them. I can’t see how, for example, they could be applied to US Canada tax treaties which grants the US limited rights in respect of its citizens in Canada).
The distinction may appear a fine one, but it is worth keeping in mind. You can be a non-citizen for US law purposes and live in the grey zone as to the post-expatriation applicability of exit taxes and the like. Personally, that appears more favourable than submitting to an immoral and very possibly illegal “name and shame” regime. The downside of doing nothing of course is that the ten years never starts running if you don’t notify. Not easy choices.
Anne Frank,
Thank you for your comment on date of expatriation issue. The grey zone my family is in is explained here:
http://isaacbrocksociety.ca/2014/03/03/jim-jatras-in-the-toronto-star/comment-page-1/#comment-1176139
I moved to England from the US in 1985 as a graduate student. In 1989 I married a British citizen. I became a British citizen in 1992 with the intention of relinquishing my US citizenship. In 1993 I became an English Justice of the Peace. This required swearing two oaths of allegiance to the Queen which were administered and witnessed by two Crown Court judges. I can produce both my naturalisation certificate and my commission as a JP, the latter of which has the oaths printed on it and the signatures of both judges and me.
Before taking up British citizenship I consulted the US embassy about the effects of dual citizenship. Though the UK does not require relinquishing/renouncing birth citizenship in order to become British, I was informed that if I were to join the military or take up a government position which required swearing allegiance to another country, I would automatically lose my US citizenship. After becoming a JP in 1993 I believed that I had lost my US citizenship and destroyed my US passport. I travelled everywhere, including to the US on my British passport. There was never any problem entering the US on it until 2005.
Unfortunately my mother had become terminally ill. When I went to visit her in early 2005 I checked in at Heathrow airport on my British passport with no problem but at the gate I was informed by airline staff that because I was born in the US (indicated on my UK passport) I had to travel into the country on an US passport and could not board the plane. Eventually they gave in when I showed them the stamp on my passport from the same trip only 2 months earlier.
Knowing that I might have to travel to the States on urgent notice, I reluctantly obtained a new US passport at the embassy in London on my return. I have only ever used it to travel to the US. As my widowed father is in failing health, I have maintained the US passport, even though I believe that I voluntarily relinquished my citizenship in 1993 because I have had to go to him at the drop of a hat several times since 2011.
Where do I stand? I do not believe that I am American nor do I want to be. My life, ie children, and friends, has been in the UK for 30+ years. I do not have a SSN because at the time I left the US they were only required for employment purposes and not the identity card they have become. I was a full time mother with no income, supported by my husband and have not had any earnings to report.
Murdo. This is a fascinating story. Firstly because the airline was clearly exceeding its’ authority. (The same thing happened to Boris Johnson). Secondly because you haven’t had a nasty letter ( computer generated) from the IRS. We know that when you renewed your passport, the IRS was supposed to have been informed. We haven’t had any reports of what happens after that.
You relinquished your US citizenship. Unfortunately you were bullied into renewing your passport. We have had 2 or 3 reports of Canadians who successfully obtained a CLN for a prior relinquishment in spite of having renewed their passport because they were forced to do so.
You have quite a few options- none of them ideal.
a) carry on as is until something changes
b) try to obtain a ‘backdated’ CLN based on your perfectly legitimate relinquishment.
c) if that fails, renounce your so called citizenship in order to obtain a CLN.
At that time you will be told to ‘contact’ the IRS. This means you are supposed to file form 8854. If you do not also file 5 years of back taxes, you become what is known in IRS speak a ‘covered expatriate’
It is unknown at this time how big a problem that would be for a J. P. who has lived in England since 1985. I suspect it would be less of a problem than filing 5 yrs. of US tax returns but I have been accused of being naive at best and irresponsible at worst. I believe I’m
just being sensible.
“KalC says
June 1, 2014 at 6:59 pm
Murdo. This is a fascinating story. Firstly because the airline was clearly exceeding its’ authority. (The same thing happened to Boris Johnson). ”
This is rule from US government on ex green carder. I assume rules applies to US born people you need to travel to USA with a USA passport or a British Passport with a CLN.
“Whenever you travel to the United States, you will need to make sure you take a copy of the processed I-407 with you to the airport. Although the port of entry inspector will see electronically that you have abandoned your status, the processed I-407 is mainly for the airlines. If you show up at the airport without the processed I-407 and your passport shows that you have previously been admitted as a ‘LPR’ (Lawful permanent resident) or “ARC” (Alien Resident Card); the airlines will not allow you to board the aircraft.”
http://london.usembassy.gov/dhs/uscis/abandon.html
@ Murdo,
Unfortunately passport use is iffy. Loss of citizenship determinations are to be made on the balance of probabilties. That’s a relatively low burden of proof for the person– but it still gives DoS room in their evaluation.
Some people who have used a US passport and/or applied for a US passport after their relinquishing act, for reasons such as bullying or misinformation/misunderstanding, have received CLNs based on their relinquishing act, but some haven’t.
Here are links to passport-use-after-relinquishing-act reports.
Halifax
Baird: 2012/10/28
Baird: 2012/12/17
Relinquishment-based CLN received
Vancouver
David: 2012/12/20
Relinquishment-based CLN received
Ghost66 2014/04/20
Told could only renounce
BC Doc: 2014.05.16
Told could only renounce
Toronto
Muy Linda: 2014.04.01
Told could only renounce
Canada
2013. Person reported receiving positive recommendation
but has not yet received CLN.(CLNs to Canada tend to take a long time.) Update: person has received CLN 2014.Jerusalem
2013. BenPloni in Consulate Report Directory, page 136
After lengthy exchanges between BenPloni, the consulate and DC, was told could only renounce.
Consulate in Western Hemisphere, but not in Canada.
2013. Person did not post publicly. They had been given a very hard time entering the US on non-US passport, so got a US passport. Relinquishment-based CLN received.
Some persons who were told they could only renounce chose to do so and some chose to do nothing.
Thank you all for your comments and help. I have looked at Form DS 4079 which certainly gives an indication of the criteria used. There are two questions about passport use, viz which is used to travel to and from the US and which is used to travel elsewhere, which give me the opportunity to explain. Otherwise I think that the rest of my evidence is preponderant. Everything that I have read about section 349, including the FAM, says that the standard of proof is preponderance of evidence. If it is truly balance of probabilities, then I think I am going to be fine.
I shall take the plunge and consult the consulate in Amsterdam, where I have been living for the past 3 years. As I understand it, loss of nationality cases are individually determined on the facts. I shall just hope for an understanding and sympathetic officer.
I want to do this before I turn 65 next year. I have no intention of enroling in medicare, which I think is another indication of intention not to be an US citizen.
Thanks again.