Reuters ran an interesting piece on St. Kitts’ economic citizenship programme today, which inevitably touched on the issue of renunciation of U.S. citizenship. However, I was disappointed that the author missed the opportunity to fact-check the U.S. government in the following paragraph:
Adam Bilzerian, a professional poker player and the son of former corporate raider Paul Bilzerian, said he worked through Henley to get citizenship in Austria. But put off by the cost and exclusivity of Austria’s program, he purchased property in St. Kitts, filled out some paperwork, and within a year, became a Kittitian. Then, he became one of 231 Americans to renounce his U.S. passport in 2008. In 2011, government records show, the number of Americans renouncing their citizenship reached 1,788 – the highest number since the government began keeping track in 1997.
Except that Bilzerian’s name does not appear in those “government records”. Though the journalist does not mention the Federal Register by name, it’s clear that it’s the ultimate source in question, given the claimed numbers of renunciants and the statement that “the government began keeping track in 1997” (a reference to provisions in the Health Insurance Portability and Accountability Act passed the previous year which directed the IRS to begin publishing the names of renunciants) — though she may have got the number from a secondary source. Anyone who knows about this obscure “name and shame” list can confirm that Bilzerian’s name was not one of the 231 published in 2008. If you search the Federal Register for “Bilzerian”, you will not find Adam Bilzerian’s name listed. The only result whatsoever for that name is unrelated to loss of citizenship — a Federal Trade Commission notice which makes a passing reference to the Securities Exchange Commission’s case against Mr. Bilzerian’s father. (If you mistrust the search function or suspect his name may be present with a spelling error, you can visually inspect the lists for Q1/Q2/Q3/Q4 2007, Q1/Q2/Q3/Q4 2008, and even Q1/Q2/Q3/Q4 2009.)
There are three legitimate reasons I can think of why Bilzerian’s name might not appear:
- his legal name differs from the name he uses in public (e.g. he uses his mother’s surname);
- he mistakenly assumes that ceasing the use of his U.S. passport is the same as renunciation, and did not go through with the renunciation procedure; or
- he did not actually intend to renounce, but simply took out a second citizenship and moved abroad while continuing to pay U.S. taxes
I don’t see any evidence for the first possibility. The only other Adams listed as losing U.S. citizenship between 2007 and 2009 were Adam Aitken, Adam Cooper, and Adam Lee Ohlstein. No one named Steffen (Paul Bilzerian’s wife’s surname) is listed at any time. (Someone who sought to avoid publicity and knew about the Federal Register list might have changed his legal name entirely before renouncing — but then you wouldn’t find him giving interviews to a Reuters journalist on the topic of renunciation!) The second possibility is equally unlikely; Bilzerian was advised by the costly expert citizenship lawyers at Henley and Partners, and it’s very doubtful they would have failed at such a basic part of their duty to a client as not making him aware of the difference between losing a passport and losing nationality. And as for the third possibility, you can judge for yourself from Bilzerian’s tweets (@AdamBilzerian), his book, and his comments to Reuters whether he sounds like a man who wants to keep his U.S. citizenship:
Many Americans give up their citizenship to escape US taxes, but Bilzerian says his desire to leave was different. As a child, he saw his father go to prison for a panoply of financial crimes. In 2001, he watched as FBI agents raided his house. Then, while studying at Vanderbilt, he says he grew more politically conscious. “When (George W.) Bush was elected for the second time, I felt that the country was going to be in such a downward spiral,” Bilzerian said. “They were eliminating freedoms, restricting the bill of rights. It’s so hard to keep yourself out of trouble. If the IRS thinks you’re doing something wrong and audit you, they make your life a nightmare … they run you to the ground.”
Which means that we have yet another name which should appear in the Federal Register and yet does not. And here’s where it starts to get really interesting. The most common theory among those who believe that the Federal Register list of renunciants is incomplete is that it ignores the minnows and only includes whales — “covered expatriates”. But Bilzerian almost certainly meets the net asset test to qualify as a “covered expatriate”, given that he previously considered citizenship-by-investment in Austria (which allegedly requires millions of dollars). And yet his name did not appear. Perhaps next quarter, we’ll see the Federal Register scrambling to include it, like they belatedly did with stateless man Mike Gogulski’s name after he wrote publicly about its absence. (Gogulski is also a “covered expatriate”, though due to his failure to file tax returns rather than his wealth.)
A final snippet from the article:
Demand for a second passport is “way up,” says David Lesperance, a Canadian immigration lawyer. Among his recent clients: an Egyptian pro-democracy activist who worries about instability in his country, and a Chicago businessman who is convinced that the Occupy movements will lead to riots.
On the whole, the article is worth a read, though once again it leaves the American newspaper-reading public with a mistaken impression of the renunciation issue as one of people renouncing and then leaving the country with their riches, rather than than the far more common case of people leaving the country with little or nothing, finding they can make a good living outside the US, settling down in their new country, and then renouncing. And on top of the number of Americans naturalising in EU countries which do not allow dual citizenship, we have yet another piece of evidence that the Federal Register understates the true number of renunciants.
I do have to respect someone who really goes out of their way to make a point, and then continues to stay active long after having left Hotel California. His book even has good reviews on Amazon, so its probably an interesting read.
I’ve been saying for awhile that the Federal Register is bogus. The US Congress mandated the list and I think that the IRS views it as a total waste of their time to compile. They probably just take a sample of all of the renunciants’ names and choose a good mix, make sure that the number is a bit higher than last year to go with the FATCA publicity, add in a celebrity or one extremely rich person to generate increased negative publicity for US citizens abroad and then publish it.
I don’t understand. Who decides what is in this federal registry list? I would think it should be State not International Reaming Service, as State is responsible for decisions related to nationality.
I also agree with Don that the Federal Registry is bogus. With so few people renouncing, they never would have started with the $450 fee. My suspicion is hundreds or even thousands are renouncing every month, and they wanted to make money from it. The US will never tell the truth; if they did, it would make them look very bad. The fee speaks for itself.
Last year there was an article stating that ten billionaires wanted to outright purchase Icelandic citizenship:
http://www.guardian.co.uk/commentisfree/2011/apr/07/icelandic-citizenship-golden-geese
I bet that they were all US residents/citizens wanted to get out asap. I never heard what happened here though. Anyone know if they were granted citizenship? I guess that there wouldn’t be a huge press release, but still…I mean, somebody would likely notices billions of dollars flowing into a tiny country like Iceland.
@Don Pomodoro
Aren’t Icelanders give full EU Citizenship rights through the European Economic Area?
@Don Pomodoro — Interesting. And coincidentally (or not?) the lawyer who gets smeared in that piece (” Prominently displayed on the page is a helpful video that can only be interpreted as propaganda for tax exile, and which in a mildly creepy fashion seems designed for a child”) is the same one quoted by Reuters above — David Lesperance.
http://www.flightofthegoldengeese.com/
@Tim
Yes, they’re already in the EEA like Switzerland and Norway (so they can work everywhere) and they have an application open for full EU membership. I don’t understand why the billionaires didn’t just invest in Austria though, since there is an scheme there like the Reuters article above mentions.
@Eric
Indeed! I have noticed this as well – The same 3-4 lawyers (mainly in the UK and Switzerland) always seem to appear on different articles relating to renouncing US citizenship. There is definitely a specialist market forming here in the EU for just that.
@Don – too cool! If you look in the comments and see their names and then google them to see what they do. One of them is a hedge fund manager!
And in another example of how small the world is … the journalist who wrote this piece follows Just Me (@FBAR_Compliant) on Twitter: https://twitter.com/#!/atossaaraxia
Eric – Big thanks for spotting this case and assiduously nailing it down as an unlisted renunciation – as far as any renunciation can be nailed down. Without even lifting the lid on the pail, the U.S. listing of renunciations smells real bad. Question to ponder: When a liar goes on and on talking about cheaters, is that a diversion tactic?
I renounced in 2007 and do not appear on the list. I have a CLN and even wrote to the IRS and received confirmation of my 8854 filing. But my name is not there. A friend of mine renounced in 2009 and also does not appear on the list.
@USX, I was thinking about this last night. So far, the US/IRS/DOJ press releases are all about US Residents. I would love to see a few cases where US Citizen-FAT CATS overseas are busted while they are sipping wine on the beaches, living it up. I doubt that will ever happen, or if it does, they won’t mention names and details. to “protect” their interests. Yeah right, I doubt very few REAL fatcats overseas are still US citizens.
In my situation it seems that my name didn’t make it into the Federal Register simply due to bureacratic miscommunication or lack of communication. I phoned up the person who at the time was “Manager Team 103, Examinations Operations–Philadelphia Compliance Services”, inquired as to why I wasn’t yet listed, and followed up with some documentation via email. She got it sorted for me — but then, I *wanted* my name plastered there, which may be a different situation to that of a lot of folks.
I have direct and reliable knowledge of three first interviews for relinquishment/renunciation of US citizenship that have taken place in February 2012. Two of the petitioners could see that they were following in the immediate footsteps of two other persons seeking severance. Extrapolate. Winnow the anecdotal evidence scattered across the I Brock site. Exactly how worthless is that “official” data?
Oopsie. Bad question. Nothing is exact. US authorities seem to prefer the boogey function of data – like raking in $4.4 billion from the 33,000+ sucked into “voluntary disclosure” so far. Maybe that has been a good deal for criminals. 33,000+ criminals? Wow.
Minimize on the downside, hype on the upside. All proportion gets lost in the nofunhouse.