Cross posted from RenounceUScitizenship (where there is an updated version)
Learn why many U.S. citizens living outside the United States view the renunciation of U.S. citizenship as the only patriotic option.
Renouncing U.S. Citizenship as Self Defense – The Life Of A U.S. Citizen Living in Canada
I appreciate the help and I am on my way to start my letters tonight, coffee is brewing. I really hope we can open some eyes and the Canadian Government will help us with this issue as its really a huge concern for our innocent children, they need to be left out of it and our government needs to protect them and tell the US to back off with seeking them out. If people want to be US Citizens and assert their claim, the US will be the first to know with a passport application and SSN application on their desk, then our children will of course file and be subject to report to the IRS (like the rest of us who are registered and confirmed citizens now we know!). (Till I get my CLN this year!!!).
I wish I didnt have to go to that extreme with renounciation, its sad to come to this. I don’t make a large income or have dazzling assets, I live in a fixer-upper home and drive a rusted old beater truck….rather hard trying to make ends meet in our family…so I have nothing to hide from the US and I am not renouncing to evade taxes, I am just your average working mom trying to support two kids. But, the cost of just being compliant has made it impossible to do yearly, H&R block charged me 2500 to file back 6 years (as many of you), I dont have that kind of cash and with Christmas that was fast approaching after learning of this, sure made it tight for our family. I am not a tax evader or criminal as we are all being portrayed. I am a law abiding canadian citizen as our my children and husband who do not deserve to be dragged into this.
This has consumed my life and soul since the day I became aware of this, Sept 3, 2011 is a day I will never forget and that terrible knot as been in my stomach since. The endless hours spent searching frantically on the interent for learning how to become compliant with the IRS, calling them to find out answers (although, never getting any answers) searching through US website after website to determine the fate of my children and on top of that …trying to live my life and focus at my job/home and maintain some level of a normal life has been impossible. This has greatly affected my health and family life. I am not sure if the government cares, but do they realize how much this affects people…how its destroying families…hope..dreams..freedom. People like us, just trying to legally do the right thing, be honest people…and in turn…its killing us, physically and mentally. I will continue to do the right thing, being honest to the US government, IRS etc as I have been to this point. I will hopefully be able to regain the joy I had in my life once this is all said and done and try and find the peace I had before…I am not sure if I will ever step foot again across that US border now….not because I am a criminal, but because they have made us to feel like we are less of people, all because we have chosen to give our loyalty and allegiance to our great country of Canada and hold one citizenship. I am sure the CLN will cause huge issues for us crossing that border…and with my kids by my side, I can only imagine what questions may arise. I think we will stay far and clear from there….thank goodness we have done the Disney trip!
Yes, this is for real!
The obvious is finally being reported. The renunciation of U.S. citizenship is a growth industry. In 2011 1781 were reported to have renounced U.S. citizenship. (This article generated a number of comments that made it clear that far more that 1781 actually renounced.) The number of renunciations is poised to explode. People inside the United States see renunciation as unpatriotic. Many U.S. citizens living outside the United States view the renunciation of U.S. citizenship as the only patriotic option. It has become almost impossible for a U.S. citizen to live outside the United States and comply with the obligations of U.S. citizenship. U.S. citizens are renouncing their citizenship to protect themselves from the U.S. government. Here is why.
U.S. Citizens Living Outside The United States
Renunciation is an “act of self defense” for U.S. citizens living outside the United States. A recent renunciant wrote an interesting account of her experience of renouncing U.S. citizenship in Toronto. To put it simply U.S. citizens living outside the United States are under attack by their own government. Check out the following threads on the Isaac Brock Society blog. Pay special attention to the comments. They will reveal the extent of the IRS assault on hard working honest people. What was their mistake? Being ignorant of the FBAR and income tax filing requirements. For the most part the recent IRS assault is affecting older people near retirement. Why? The answer is simple: They have accumulated assets that can be taken by the IRS by imposing fines. Although the law applies to all, it can only effect those who have accumulated assets – making them victims of Obama Class Warfare. Furthermore, U.S. citizens living outside the U.S. have already paid tax on this money to the countries in which they reside!
“The law in its majesty prohibits both the rich and the poor from sleeping on the park bench.”
What follows is an excerpt from the NewAmerican.Com:
Two years ago Brian Knowlton, writing in the Wall Street Journal, noted the paradigm change taking place even then among wealthy Americans increasingly frightened about the economic and social situation in the country. He quoted Jackie Bugnion, director of American Citizens Abroad (ACA): “What we have seen is a substantial change in mentality among the overseas community in the past two years. Before, no one would dare mention to other Americans that they were even thinking of renouncing their U.S. nationality. Now, it is an openly discussed issue.”
One of the reasons given for considering renunciation is the increasingly onerous rules invading privacy and personal finances. The Patriot Act has made it more difficult for Americans living abroad to keep accounts with international banks. If those banks cannot verify an American address, the accounts are closed. Daniel Flynn, an American citizen who lives in Belgium, wrote a letter to the ACA:
It seems the new anti-terrorist rules are having unintended effects. I was born in San Francisco in 1939, served my country as an army officer from 1961 to 1963, have been paying U.S. income taxes for 57 years, since 1952, have continually maintained [my] federal voting residence, and hold a valid American passport. [And yet my bank] said that the new anti-terrorism rules required them to close our account because of our address outside the U.S.
Another American living in Canada had the same problem. Kathleen Rittenhouse said, “I did not know that the Patriot Act placed me in the same category as terrorists, arms dealers and money launderers.”
The United States is the only industrialized country that requires citizens to pay income taxes on earnings abroad that are also being taxed by the country where they live. Some are calling this, properly, double taxation and are sick of it. And the IRS began investigations into foreign accounts, calling it a “voluntary offshore disclosure program,” that threatens the privacy and financial security of those with legitimate offshore accounts. Joe Field, a partner in a law firm in Hong Kong that caters to American citizens seeking to renounce their U.S. citizenship, says his firm is experiencing an “exponential increase” in the number of American citizens wanting to get out. He said:
Many people who looked to America as the protector now see America is bent on coming after them. We’re getting a whole new class of client who is someone who says, “I want to go into the [IRS] disclosure program and as soon as I complete it, expatriate.”
Their numbers are likely to increase as a loophole allowing wealthy Americans to move their monies and wealth offshore closes at the end of the year. Americans with a net worth of at least $2 million will have to buy their way out of the country by paying hefty exit fees and taxes, even on assets that have unrealized gains. The loophole allows them until the end of the year to give away up to $5 million without the fee being applied, saving enough in taxes to pay the fee that is levied.
Check out the following posts and articles – which in way or another are examples of how difficult it is to be a United States citizen living outside the United States:
IRS News Room – Do You See Anything Wrong Here?
U.S. Passport Specifically Informs People About Taxes but is Silent on FBAR
Americans renouncing citizenship over onerous tax code – includes a great video!
Renunciation and Relinquishment of U.S. citizenship
Red, White and Through – Reasons to renounce U.S. citizenship
Andrew Mitchel – Number of Expatriates for 2011
Although Mr. FBAR was the number one news story of 2011, U.S. citizenship renunciations will be the number one story of 2012. U.S. citizens living outside the United States must choose one of the two choices:
1. Have a life
2. Be a U.S. citizen
Only the very rich or the very poor are able to remain U.S. citizens. The poor have nothing for the U.S. to take. The rich have the money to defend themselves. It’s Obama’s “Middle Class” that is being destroyed – the direct result of Obama “class warfare”. This week the American Thinker published an article which noted that U.S. citizenship renunciations are soaring under Obama. U.S. citizenship has been priced out of the market – it is too expensive both financially and emotionally.
The author comments that:
“Increasingly” is an understatement. In Fiscal Year 2008, George W. Bush’s last year, 146 Americans renounced their citizenship to avoid paying U.S. taxes. In FY 2010, that number soared to 1,534, an increase of 950% – and no, that is not a misprint. 950%.”
Andrew Mitchell notes that:
According to the I.R.S., an estimated five to seven million U.S. citizens reside abroad. Many of these individuals have never lived in the U.S. and never expect to live in the U.S. However, these U.S. citizens must annually file U.S. tax returns.
For example, I spoke with a Canadian the other day who was born to two U.S. citizen parents in Canada. This individual therefore is a U.S. citizen. However, he has never lived in the U.S. and never expects to live in the U.S. Despite that he has never lived in the U.S., he will have to file U.S. tax returns for his entire working life. In addition, his U.S. tax returns are quite complicated because he pays income taxes in Canada and because he has financial assets located in Canada.
Failing to disclose offshore assets to the I.R.S. can create huge potential penalties. The potential penalties can be so large that they can bankrupt even the wealthiest of taxpayers. Further, the cost of preparing a U.S. tax return for a U.S. citizen living abroad can be significant.
The I.R.S. has recently been doing a lot of “saber rattling” with respect to the potential penalties for failing to disclose offshore assets. The National Taxpayer Advocate, in her recent annual report to Congress, criticized the I.R.S. with respect to how it has handled recent offshore voluntary disclosure programs.
Lastly, with the recent enactment of the FATCA provisions, many U.S. citizens living outside the U.S. are unable to even open regular bank accounts. Foreign banks simply don’t want to deal with what they perceive as U.S. complicated and overreaching tax rules.
Speaking of tax – the IRS is hunting U.S. citizens living outside the United States while many U.S. residents pay no income tax. Yet a recent article on Allgov.com suggests that those who renounce U.S. citizenship are tax cheats. Go figure.
Ronald Reagan commented that he had never left the Democrats. Rather the Democrats had left him. In the case of many of those renouncing U.S. citizenship, there position is:
I never left the United States, the United States left me. As a result, I am forced to renounce U.S. citizenship.
Two footnotes to go along with the last paragraph of the extract from NewAmerican.com:
The U.S. gift-tax gift: a $5 million exclusion
How the IRS is probing the rich
“Is life so dear, or peace so sweet, as to be purchased at the price of chains and slavery?
Forbid it, Almighty God! I know not what course others may take; but as for me, give me liberty, or give me death!”
– Patrick Henry 1775
Gosh, I would soooo like to see the REAL numbers. 1700’ish seems a little small.
I had my first appointment today, told they were doing lots more renunciations there and 11 so far this year at another consulate. Need to wait one month for second appointment.
Congrats on being so much closer now. I am very surprised they are making you wait a month. Toronto had no timeframe, originally, my appointments were a week apart. Seems unfair that it is not the same everywhere….
So curious to know what the other consulate was. Any hints?
@all – I wonder if the reported numbers are low due to the way IRS counts them…..they wouldn’t consider anyone renounced until the 8854 was filed/finished. Maybe that’s why the folks we know of from last year, wouldn’t be included….because they won’t file until April/June of this year…….? Notwithstanding all the other factors, that probably come into it but are ignored, etc……..
Just a thought……….
i posted the info in the forum
also gave info for this website to her
would be nice to have comments from someone
inside the system
What is not accounted is silent green card discards? I have a feeling this will be a lot more. Unfortunately those who discarding GC’s and Citizenship may be the productive us persons and i hope we find a way as a country to keep these who are being collateral damage to the capricious enforcement
“And then there are those who are just disappearing altogether without a fare thee well. John Gaver, editor of Action America, wrote that there is a “vast and increasing number of wealthy US citizens who are just ‘dropping out’ — taking all of their wealth and leaving the US without renouncing. They just disappear off the US tax rolls and appear on some other country’s tax rolls.”
from the article above
That is sad.
Interestingly enough my “buddy” Patrick over at Townsend’s blog blog thinks is clearly a good thing because all of these people who are renouncing are clearly criminals who are trying to cover their tracks before the IRS catches up with them.
“No body of men will be argued into slavery.”
– Edmund Burke
“The question isn’t who is going to let me; it’s who is going to stop me.”
– Ayn Rand
@Tim, please tell Patrick that some us fear getting our bank accounts closed!! There are more reasons to renounce than just taxes, even though I think having to file every year, even though you make no money there, is just plain silly.
This article is a treasure trove of information – Thank you renounceuscitizenship for posting this! I particularly enjoyed the exchange between Petros and “Jim in Houston” that was mentioned in the linked article. Really sums up the problem: total lack of understanding (or even caring about our problems?) from those in the US.
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People should stop playing their games if they refuse to let you leave. I bet getting together and dumping a box of signatures at the gates while on TV would make the point very well.
I would like to renounce my citizenship and the citizenship of my minor daughter. I understand that in general a minor is not allowed renounce unless they can convince a consular official which is found in Section 349(a)(5) of the Immigration and Naturalization Act. However, my daughter is both physically and mentally unable to renounce and will be unable to do so when she is 18 as well. Will I have to spend thousands of dollars on experts and lawyers in order to do this or is there a precedent already? I could not find anything on the subject of renouncing for the mentally disabled anywhere.
@Deutsch-American: Please see Calgary411’s story and several posts she has made on this issue. Both she and Recalcitrantexpat are experiencing the same issue with their adult developmentally disabled children.
@Deutsch-American: Your story sounds quite similar to calgary411’s:
There’s been a decent amount of discussion on this topic around various threads here. Reading through them might give some idea of what to expect. From what I’ve seen, it seems you might be in something of a bind if you really want to follow US rules strictly. Sorry.
I now know and have met with two other parents in Alberta who were not allowed to renounce upon their developmentally disabled family member’s behalf.
Here is the exact information given to me from the US Consulate in Calgary.
“Basically, even if you have a court document to act on your son’s behalf, you cannot renounce his U.S. citizenship for him, as explained in the excerpt below.
… However, in the meantime, here is an excerpt from the Foreign Affairs Manual (FAM) that may be of some assistance to you.
7 FAM 1293 MENTAL COMPETENCY
a. Because loss of U.S. nationality occurs only when a would-be renunciant or person signing a statement of voluntary relinquishment has the legal capacity to form the specific intent necessary to lose U.S. nationality, cases involving persons with established or possible mental incapacity require careful review. This includes mental disability, mental illness, developmental impairment, Alzheimer’s disease, and similar conditions. It may also include cases of substance abuse.
b. A formal finding of mental incompetency by a court of competent jurisdiction, whether in the United States or abroad, precludes a finding that an individual has the requisite intent.
c. The requisite intent may also be found lacking if there is evidence that due to mental incapacity or impairment the individual does not understand the seriousness of renunciation, including its irrevocable nature and the major consequences that flow from it.
d. Voluntariness may also be an issue with persons who suffer from mental incapacity or impairment, as such individuals may be especially susceptible to the influence of others.
e. Parents, guardians and trustees cannot renounce or relinquish the U.S. nationality of a citizen lacking full mental capacity: A guardian or trustee cannot renounce on behalf of the incompetent individual because renunciation of one’s citizenship is regarded, like marriage or voting, as a personal elective right that cannot be exercised by another. Should a situation arise of the evident compelling need for an incapacitated person to relinquish citizenship, you are asked to consult CA/OCS/PRI for guidance.
I have engaged an immigration / nationality lawyer from Washington, DC on this very matter, to determine if there have been other successful cases in the past where a parent or guardian or trustee has been able to renounce on the dependent person’s behalf — or if it could be possible.
In the meantime, I have written several letters to government representatives in Alberta and Canada and have submitted this at the TAS (Taxpayer Advocate Service) Office of Systemic Advocacy, on February 26, 2012:
Parents/guardians/trustees of developmentally delayed dependent adult children cannot renounce US citizenship on their family member’s behalf. That dependent adult does not have the capacity to understand either the benefits of US citizenship or consequences of its renunciation.
Parents/guardians/trustees make all day-to-day decisions, some of life or death, for their family member’s well-being. They need to live in the same country as their family, without the prohibitive stress and monetary cost of yearly US tax and reporting compliance.
Most countries have better rights for developmentally disabled persons, better health care benefits, better tax-assisted savings plans for retirement. They are discriminated against by the persons looking after their well-being not being able to renounce their US citizenship on their behalf to end unnecessary administrative costs (by their government funding) for US tax returns with $0.00 owing and possible prohibitive penalties resulting regarding FBARs.
Because of additional health problems most of these developmentally delayed persons have, it makes no sense for them to live in the US where they would not have the health care insurance or benefits they have in their family’s country.
Who will administer the responsibilities of their US citizenship when the US parent is either incapacitated or deceased? To have an executor carry on this pointless yearly exercise is a further expense charged to their government disability benefits.
This is discrimination on the basis of citizenship, i.e. our dependent children have additional compliance requirements, additional expense of administration, all for $0.00 owing to the US, because they are considered US citizens in addition to the citizenship of their birthplace.
These dependent individuals are denied health care assistance from the US in the country where they live. It appears they are denied access to benefit of legal tax laws provided by their country to save for retirement in their resident country.
Let those of us who look out for our developmentally delayed dependent family member’s well-being EVERY DAY be allowed to renounce that US citizenship on their behalf and continue in the important things like ensuring the quality of life for our sons, our daughters.
Thanks for all the information folks! It was how I expected and now I have to consider the options if there are any at all. I will update as I find out more about how they handle this in Germany.
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