Ask your questions about Renunciation and Relinquishment of United States Citizenship and Certificates of Loss of Nationality.
Please note that the guidelines for this discussion are published here.
Ask your questions about Renunciation and Relinquishment of United States Citizenship and Certificates of Loss of Nationality.
Please note that the guidelines for this discussion are published here.
@ a broken man
… not to mention the job descriptions they want. Wheeee. Anyone who has worked for a federal or provincial department and learned how to pad/bullshit a CV or a job description for salary classfication purposes knows what fun and games that can be, padding the importance of the work … and who is going to check this, if ever? They’re going to start putting in access to info questions for work records of present never mind retired government employees in Canada, to verify any of this? Under our privacy legislation, a foreign government thinks that’s gonna work? Not to mention the staffing levels and budgets of departmental access to information offices. Dream on … not gonna happen. I know, I worked for decades in the federal government, and I had lunch and played cards regularly for our department’s access to information coordinator for several years; we had adjacent offices. I know whereof I speak.
They’re asking for more information than they’re entitled to ask for, they can’t require the documentation, don’t have the staff or resources to begin to process it if they did get it.
And where’s their authority for asking for that level of detail? 8 USC 1481 specifies clearly what acts can result in loss of nationality, but it doesn’t go into details about job titles or descriptions, military ranks, or what wording was or wasn’t in the oath or affirmation or declaration of allegiance, nor does it grant any State Department bureaucrat the authority to pass judgments on those things. A half-sober lawyer could rip their throats out in a court challenge to any of this, if it ever came to that …
They want a list of military ranks held, then ask you to identify the most senior. Why not just ask for the most senior? Le mind boggles.
I have a friend who works for a cross-border tax lawyer. She has been concerned about my situation and has kept me up to date somewhat. She mentioned to one of the lawyers in her office that I had relinquished my U.S. citizenship in 1972 and was thinking of requesting a CNL from State Department, back dated to the date of my Canadian citizenship. He stated that although State may issue the CNL, stating I have not been a citizen since 1972, IRS Code 877A:(g)(4)(B) states they will treat me as a “non-citizen” only from the date my CNL is issued. In other words, I might get the CNL but the IRS would probably still expect me to file tax returns (5 years worth). Now I can’t help but wonder would those 5 years be 2007 through 2011 (supposedly when I already was a “non-citizen” or 1968 through 1972. If the latter, well I was not working and therefore did not have to file in Canada for those years. In fact, I did not have to start filing tax returns in Canada until 1989 when I went to work at the time my youngest son was in high school. I get more confused by the hour.
If “CLN backdating” exists, it has no effect on anything?
See below. My guess – and I could be wrong – from the gobbledygook below is (1) That your “earliest date” for tax purposes is whenever you now renounce or relinquish. (Take your pick of the two, no difference for tax treatment.) There seems to be nothing here about CLN backdating having any effect. Consequently, assuming relinquishment = expatriation, then (2) it is five years back from when you now renounce or relinquish.
Ergo, no time travel backward to some distant action not yet certified by State.
Corollary: Every relinquisher/renouncer must file Form 8854 if they want to be free of the US tax regime, ie not “covered” automatically.
Any experts out there? This guessing around could be all wet.
The following two extracts are quoted from Internal Revenue Bulletin: 2009-45 – November 9, 2009 – Notice 2009-85
Guidance for Expatriates Under Section 877A
* * *
SECTION 2. INDIVIDUALS COVERED
A. Definitions
Relinquishment of citizenship. Section 877A(g)(4) provides that a citizen will be treated as relinquishing his or her U.S. citizenship on the earliest of four possible dates:
(1) the date the individual renounces his or her U.S. 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)), provided the renunciation is subsequently approved by the issuance to the individual of a certificate of loss of nationality by the United States Department of State,
(2) the date the individual furnishes to the United States Department of State a signed statement of voluntary relinquishment of U.S. 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)), provided the 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,
(3) the date the United States Department of State issues to the individual a certificate of loss of nationality, or
(4) the date a court of the United States cancels a naturalized citizen’s certificate of naturalization.
SECTION 8. FILING AND REPORTING REQUIREMENTS
C. Form 8854
Certification of compliance with tax obligations for preceding five years. All U.S. citizens who relinquish their U.S. citizenship and all long-term residents who cease to be lawful permanent residents of the United States (within the meaning of section 7701(b)(6)) must file Form 8854 in order to certify, under penalties of perjury, that they have been in compliance with all federal tax laws during the five years preceding the year of expatriation. Individuals who fail to make such certification will be treated as covered expatriates within the meaning of section 877A(g) whether or not they also meet the tax liability test or the net worth test. For more information about the tax liability test, the net worth test, and the certification test, see section 2 of this notice.
I believe this has been discussed elsewhere on this forum. The wording above was introduced in either 1994 or 1995. Before 1994 the date of expatriation was the effective date. Since laws cannot be made retroactive without a big fuss those who performed their expatriating acts before 1994 are not involved with the whole tax thing.
@tiger, johnnb, usx
The current policy is not what it was before. So Johnnb is right and the cross-border tax specialist is incorrect. This is what I think is brilliant about the Isaac Brock Society, is that we have dozens of people doing research, and that exceeds the capacity of a law office to know what’s going.
The Constitution forbids Congress from passing ex post facto laws. This is a case of creating a requirement that would affect decades of people. Therefore there is the exemption of people before Feb 1995. See http://isaacbrocksociety.com/2011/12/16/did-you-relinquish-before-february-6-1995-then-you-did-not-have-to-inform-the-state-department/
The problem with the folks in the government in the United States is that they have near zero regard for the Constitution. The People have the right to no ex post facto laws being foisted upon them. AARGH
@Petros,johnnb, usx
Thanks for responding to my post of last evening. My “old” brain is having trouble absorbing everything. It helps to have people like yourselves to comment. I am so grateful that I have joined the blog.
Petros – I recall the case that you made for ex post facto. But does this case amount to anything more than how you read things? Specifically –
A. Has this interpretation been confirmed by any lawyer expert in the area of practice?
B. Do you know of any completed cases that exemplify what you describe: (1) relinquishing act performed before the 1994/1995 date (2) but only recent notification of relinquishing act to State (3) and CLN provided with no requirement for any tax paperwork
(4) PS Would pre-1994 status not at least throw the claimant into that older set of tax rules, like needing to seek a private letter ruling?
Further to all of this: (1) Must intent locate at a specific point in time, or is a pre-1994 relinquishing act indefinitely available for citation in formal written notice to State? (2) To what extent is a citable relinquishing act affected by continuation of habit, like filing annual tax/FBAR or holding passport?
Are there any case examples here, or does everything amount to speculation on the froth of the gobbledygook?
@usx , “froth of gobbledygook”? I understand your desire to pin this down, but the United States government is not playing fair. The State Department tells some people (johnnb) one thing and then tells another person something else. They are confusing the hell out of everyone. But the question of the rights of the people is quite another thing. It is not that hard to understand.
If the USA offered citizenship to people who relinquished it before 1995, it would be no problem. However, forcing it upon people whose intention was to relinquish is another thing. And furthermore, setting up a requirement in 1995/6 to inform the consulate for people who relinquished before that date is ex post facto by definition.
If we understand the basic concept of ex post facto we don’t need a fancy lawyer. We just have to understand how it impacts the person negatively after the fact. This is unconstitutional and a violation of the rights of the people.
It would be nice to have some certainty or case law as usx asks, but unfortunately as far as I know there are no cases one way or the other as yet.
The earliest relinquishment case I’m personally aware of (other than my own which was 1975 and got me a CLN in 1976 which arguably isn’t relevant to cases in 2012, though it ought to be in principle) is someone who applied for a determination of relinquishment last April. Last I heard this person hasn’t received a CLN, and my understanding is that case isn’t based on pre-1994 expatriation but a much more recent one, anyway.
The next cases I’ve heard of are those good folks who came forward to the Toronto consulate last October in the famous group meeting, but again AFAIK they were all renunciation cases not relinquishment, and I haven’t heard of any of them getting a CLN yet. In 1976 my CLN took 4 months to process, and we’ve heard reports of folks now being told it could be up to 12 months! The Group of 22 in Toronto was only 3.5 months ago, from the group meeting, and probably most of the actual applications weren’t handed in until 3 months ago. So still early days for them, if my own 1976 experience and the forecasts are anything to go by. The nine-ten-months-and-counting for the April 2011 case is longer than it ought to be, but still within the “parameters” sometimes mentioned by consular officers, from what I’ve read or heard.
Maybe there is some lawyer out there somewhere who knows of an actual case in recent times, and maybe someone will hear about it from that lawyer and report it on this thread at some point. But don’t hold your breath.
Unfortunately, anyone who wants to get moving on their situation right now is taking a bit of a gamble. And if you wait for a year for the results to start rolling in, whatever they are, some of the “reasonable-cause” penalty waiver options (if you want to apply for them) may be long foreclosed by then. Or not. Who knows?
A very nasty Catch 22 situation. The IRS must have Joseph Heller or his ghost (is he still alive?) on contract, writing their user’s manual for what they’re doing. Or, as a favourite poster on another forum used to say, “1984 is not supposed to be a user’s manual” (ref. George Orwell). The IRS isn’t listening to that message, obviously.
The $450 fee is now payable at the ceremony:
http://www.gpo.gov/fdsys/pkg/FR-2012-02-02/pdf/2012-2075.pdf
Here is a great site for anyone seriously interested in renunciating their U.S. citizenship:
http://renunciationguide.com
I would be interested to hear some opinions on the famous IRS form 8854 (the one you are supposedly obliged to fill out in order to complete the renunciation process). I find it very odd indeed that in the documents the embassy sent me, nowhere does it state specifically that I have to fill out this form. In fact, their only allusion to the IRS is that I agree to contact them. Contact them? To say “Have a good day?” They also give me the URL link to have a look at. Hm.m.m.m. So, looking at this closer, it appears that the Form 8854 is a kind of logging-out procedure. But if one is not logged in, is it not a bit like poking a sleeping mama bear with a stick?
So I asked a lawyer friend of mine, who contacted a colleage in New York, and he wrote me,
“I have asked a lawyer, friend of mine, in New York about the form 8854 that the authorities ask people who renounce to their nationality to file. He tells me that it is a bit stupid to have this form filed, because for most people like you, there is no exit tax. The exit tax begins only if you have more than US$ 100’000.- of income per year during the last five years or if you have more than 2 million dollars in assets.
However, this guy says that it might be a good idea to file the form because he does not know if there is a penalty if it is not filed. Finally, things are going to change in 2012. It seems that there will be a new form to be filled by US citizens abroad which will ask a list of their foreign assets if they are together more than US$ 200’000.—.This thing will never finish.”
Does anybody wonder why we are slightly frustrated to put it mildly?
I would love to know whatever became of this if anything, it’s kind of like a get out of jail free card for Canadians:
http://www.snclaw.com/cgblog/15/87/Offshore-Voluntary-Disclosure-Initiative-OVDI-Update
“The letter is addressed to President Obama, Secretary of State Clinton and Ambassador Jacobson.
The letter purports to advocate the following relief for US Citizens residing in Canada for X years provided they are compliant with Canadian tax filing and reporting obligations:
– Full abatement of the penalty regime under the IRS Amnesty Program;
– Penalty relief for those who missed participation in the Amnesty Program; and
– Ability to renounce US Citizenship without the imposition of the Exit Tax.”
“Nobody can give you freedom. Nobody can give you equality or justice or anything. If you’re a man, you take it.”
– Malcolm X
@omg
This is from last November. I hope this really is going on behind the scenes, a diplomatic conversation between two countries, in this case Canada and the US. I have said all along that I hate to think that my Canadian government representatives are ignoring my correspondence in not giving me replies, rendering me (us) collateral damage.
But, then, I believe there has to be justice for US citizens worldwide. Perhaps Canada can set the precedent.
The last news I saw was from December 7th, when Jim Flaherty said he was still negotiating with the Americans. The wheels of government turn very slowly…
Flaherty said right from the start that senior citizens in Canada were not the intended targets of FATCA. I guess somebody forgot to tell the IRS and cross border accountants and lawyers.
It’s supposed to be about Americans who use jurisdictions as tax havens. Not sure how you could use Canada as a tax haven but anything is possible.
@omg and others: I wonder if the December IRS fact sheet was meant to be the response to that. Based on some letters others have received from Flaherty and posted elsewhere, he seems to think that went a long way to solving the probems-which it didn’t.
Also, considering that Canada is not the only country affected by this, I don’t know how they could be an exemption for Canada only. I would hope all counties where there would be a similar exemption for other countries as well. Better yet, scrap citizenship based taxation and tax based on residence like everywhere else (except of course Eritrea).
Despite statements that seniors are not the target, I think seniors and near-seniors are definitely the line of fire. We are the ones who have savings and investments, which we have put aside for our retirement from money earned–and taxed–in Canada. We are nearing or in early stages of drawing on that money for our retirement, but have not yet begun to deplete those assets in any significant way. Of course, our neighbours to the south want to try to grab that $ while they can.
250,000 young Americans came to Canada in the late 1960s and early 1970s. Most stayed, became Canadian citizens (with the full knowledge, intent and understanding that they were renouncing American citizenship) and have been productive and contributing citizens of Canada.
US didn’t care about our money 40 years ago. Now that we’re close to retirement with assets, the US suddenly pops us and says “You’re still ours. So’s your money Gotcha!” Coincidence in timing? I don’t think so.
OOps, That should be 250,000 young Americans came to Canada (not 50,000!). Big difference!
A movie that every American should watch, Expats and Homelanders alike:
@avowd – they kept the renunciation fee the same, but wow.. all the other fees are REALLY going up a lot percentage-wise. US Consulates, I believe, appear to be big money makers for the US.
Well there’s the US government’s greed and then there’s financial realities and fundamental human rights. There has to be something in international law that says the country that provides you with all your services, deserves all your tax dollars.
The Canadian government cannot be left holding the bag if the US government runs off with all our seniors’ money.
Seniors have the highest healthcare costs. Who pays for that? Not the US government that’s for sure. Maybe Canada should show them a list of all healthcare bills they pay on behalf of seniors. Will the US reimburse Canada for that?
Billions of dollars is worth fighting for. If the US government will not be reasonable and accept the fact that they don’t have a moral right to your money there’s going to be trouble in Canada.
Elections can be lost over issues like this. If the Canadian government can’t prevent the US from taking our citizens’ money then we’re not much of a country. This story is not over.
The US has a history of violating people’s fundamental human rights. I hope they won’t embarrass themselves again by victimizing seniors.
OMG: This fight is only just beginning. In terms of seniors and near seniors living in Canada, US needs to remember these are the boomers who stood up against one war 40 years ago. We may be older now, but we are also wiser. We are prepared to fight the war the US is now directing at us–and at others who choose to live outside their borders.
@blaze That’s the fiery talk I like. The greatest worry I have is that people will take the advice of lawyers and join the OVDI and handover 27.5% of their wealth. I have no worry for people who will listen to the very specific words of the Canadian government, that they will not help the Yanks with this shake down. This is Tony Soprano telling the New York mob to get out of New Jersey and stop shaking down our people.
“I have not yet begun to fight!”
– John Paul Jones