GENEVA, SWITZERLAND – This is the day when Americans back home are scrambling to get their tax forms to the IRS, but outside the US the difficulty of remaining tax compliant is leading a growing number of citizens to hand in their passports: on average, 7 Americans a day took the oath to stop being a US citizen in 2011.
Americans meet in Lausanne as tax filing day raises new questions
Thanks for posting the link to a most interesting article.
Another excellent international news article. Thanks for posting, renouncecitizenship!
@ 30 year IRS Veteran.
You are so absolutely correct. If the US is to survive it must repeal this crazy citizenship based taxation and adopt the same residence based taxation of every other civilized country on the face of the earth. I presume you have seen the ACA proposal at http://www.aca.ch/residencetaxproposalapril2012.pdf.
How do you suggest, and how can we proceed to get this enacted?
I think that the Town Hall model of getting together stakeholders as disparate as embassy officials, advocacy groups and overseas political party groups is something we could repeat and amplify worldwide. It is now especially time for we Canadians to step up to the plate on this since we have the largest single population of Americans abroad. Surely we can figure out a way to pool our resources and book a room for such an event. I recognize, however, that geography and distance poses a challenge, so I would suggest incorporating some form of audio or videoconferencing, perhaps through Skype, to ensure greater participation. We simply have to become more public in our efforts.
Ellen Wallace from genevalunch.com does some great, well balanced reporting.
I read her “Editor’s Notepad” blog all the time.
You can bet some ACA members were in attendance.
Readers of this article should be warned that it contains a lot of misinformation both important and trivial about such matters as the renunciation process, eligibility, etc.
This article was not written by someone with much in depth knowledge so rely upon it at your own risk.
We need your help, it seems. Our business at GenevaLunch.com is to provide accurate information and news, so I’m always happy if people send comments and corrections. In this case, your grumpiness with us insn’t very helpful because you don’t say why you’re unhappy with the article. Please list the mistakes, here or in a comment on the article itself, and we’ll check them and correct where necessary.
As for “This article was not written by someone with much in depth knowledge”: I researched and reflected for two years before renouncing in The Netherlands a year ago. My son renounced in China. I’ve since spoken to people who have given up their citizenship in Switzerland, France, Britain and Germany, comparing notes. And since the US government will not allow my non-verbal adult severely developmentally delayed daughter to give up her citizenship (to protect her rights) I’ve had quite a bit of contact with the US government, in particular the US ambassador to Switzerland and through him the State Dept., about the loss of citizenship process.
I agree: “rely upon it at your own risk”, but I would argue the risk is pretty low. More to the point, no one should be relying on any one article, which is why I put 4 links at the end, to other articles. Please, everyone, read as widely as possible, inform yourselves and draw your own conclusions. This is too important a step to do otherwise.
And thank you for the other very supportive comments, much appreciated. We are a group of experienced, professional but volunteer journalists at GenevaLunch.com, who provide a free community service newspaper online for the international population in Switzerland and neighbouring France. Kind words always give us a boost 🙂
I really like your article. Thank you!
@ Ellen Thanks so much for your comment. I don’t have any particular beef with your article, and I think your response to Todundsteuer is very constructive.
However, I have a question. You wrote:
I’ve seen that the United States Consulates discourage people from becoming stateless upon renouncing; they even required my cousin to get a Canadian passport–as if a travel document were necessary to renounce! But the State Department also issues a warning about becoming stateless. It would seem to me that under certain circumstances, State will allow a person to renounce and become stateless, otherwise there would be no point in issuing the warning. Could you comment on that?
Also, please inform us how international law does not a allow a person to become stateless. If that’s true, then why are there so many stateless people around the globe? Can you explain that particular point and give some details. Much appreciated.
I think Michael Gogulski renounced with having only permanent residence.
@all, Stateless persons are likely to have problems traveling outside of the country where they live. Some countries will issue a “Salvoconducto” safe passage document which some others may recognize to be able to enter another country, but this does not seem to be very common. Perhaps others can comment on this.
You wrote that “the oath taken by those who renounce makes it clear that if you do so for tax reasons the renunciation can be considered invalid.”
That is not correct.
The “Oath/Affirmation of renunciation of Nationality of United States”, State Dept. Form DS-4080 does not even contain the word “tax”. Nor is the renunciant required to state his/her reasons for renouncing.
The reluctance of renunciants to admit to the possibility of tax motives may have to do with the Reed Amendment that authorizes the Attorney General to initiate proceedings to bar a tax-motivated renunciant from entering the US. Although the renunciation packet provided prospective renunciants warns of that possibility, in the roughly 20 years of its existence that authority has not once been exercised by any Attorney General.
“a key factor in renouncing US citizenship is that the person must already hold another nationality; international law does not allow a person to become stateless.”
As another poster has already suspected, this statement is false.
It can indeed be unwise to renounce one nationality unless you are assured of having a second. But if you don’t, you will simply be stateless. There is nothing in “international law” to prohibit that result. Indeed, the renunciation packet provided by the consulates warn that if the prospective renunciant has no other nationality or immediate expectation of acquiring one, they will be stateless upon renunciation of US citizenship. The possibility of statelessness is among the facts (No. 5) the renunciant is required to acknowledge on Form DS-4081.
Awareness, for many in this second group, of new US tax and citizenship obligations began to surface only in about 2009, although some of the requirements, such as the FBAR, date back to post-911 anti-terrorism legislation and new rules, about which little information circulated publicly for several years.
That, too, is erroneous.
The FBAR is not a recent requirement. It dates from 1970. Information about its requirements were available publicly throughout that time. The possible obligations to file the FBAR and all the other assorted obnoxious information returns (Form 5471, 3520, etc. etc.) are clearly set forth in IRS Pub 54 “Tax Guide for U.S. Citizens and Resident Aliens Abroad”. The earliest version of Pub. 54 available to me is 1994 but Pub 54 and the FBAR warning has been around a lot longer than that. Indeed, I have been filing this idiotic form since 1986.
“Given that renunciation involves promising to fulfill IRS obligations, [US citizens interested in renunciation] are afraid to move ahead on renunciation.”
If that is their stated reason for not moving ahead, then they are misinformed.
Renunciation does not require any promise to fulfill IRS obligations. (Such a promise would be legally meaningless anyway – one either has a legal tax obligation or one does not.) The prospective renunciant is required to do no more than sign DS-4081 Statement of Understanding Concerning the Consequences and Ramifications of Reliquishment or Renunciation of US citizenship.
No. 10 on the list deals with taxation and (besides a reference to the “dead letter” that is the Reed Amendment) it basically requires the applicant merely to acknowledge that renunciation “may not exempt me from US taxation.” The next sentence says, basically, if you have any tax questions don’t bother the State Department; contact the IRS.
With its disgracefully inadequate budget the State Department cannot afford to waste manpower doing the IRS’s dirty work for it. All the consulate’s want is the renunciant’s $450 and (in fairness to the consular officers) a clear conscience that the renunciant knows what they’re doing.
I do not doubt you mean well but you need to be careful that you don’t make matters worse by disseminating incorrect information or passing on third party accounts unchallenged.
I agree with todundsteuer’s comments immediately above, but I also thank you for the article and the information in it about your meetings in Lausanne (a fantastic city which I had the joy and privilege of visiting on a holiday for four lovely days last June).
I think we all look forward with great interest to hearing about the meeting yesterday with folks from the US Embassy, ACA, and both political parties overseas. That sounds like it could be interesting, provocative and potentially productive, depending on how it went.