Here’s the story of a renunciation from 2002. What I found especially interesting was the Consul’s rather unprofessional response to the renunciant’s report of his experience. The Consul even scoffs at the renunciant’s claim that “The U.S. does not like people giving up their U.S. citizenship — for taxation purposes.”
How To Lose Your American Passport, by Arudou Debito
I remember this post. I stumbled across it the internet a very long time ago, definitely pre-FATCA days. It was first introduction to the entire concept of citizenship renunciation – I was still looking into renouncing back in 2008/09, because even then I remember having problems with financial services not wanting to deal with me. FATCA didn’t create all of the problems we see today, but it definitely exposed all of the old baggage that has been hauled around for decades along with the new draconian regulations.
I wonder if this gentleman will be classed under the “Ex-Patriot Act” as a tax evader and thus ineligible to be admitted to the US under the illegal post fact clauses in the new bill.
@Don: The ex-patriot act, as I understand it, only applies to “covered expatriates” (people who would actually have owed taxes) whom the IRS determines have renounced to avoid taxes. Even if it passes I think we’re only going to see it applied to people with a net worth over whatever the covered expatriate amount is. And those are the people who have the resources to challenge the thing in court. I seriously doubt regular renunciants like us have anything to worry about. We haven’t evaded taxes; we just want to live normal lives abroad.
@rødgrød, “I seriously doubt regular renunciants like us have anything to worry about. We haven’t evaded taxes; we just want to live normal lives abroad.”
You haven’t evaded taxes, but you have renounced to avoid future unfavourable tax treatment by the US. Same with Eduardo Saverin, and ex-patriot is designed to punish him for perceived future avoidance. Aside from poor timing on renouncing, his only ‘crime’ is having more assets than you.
Ex-patriot reveals congress to be capricious and unstable. There’s simply no predicting what stupidity on stilts they’ll come up with next. I think it would be mistake for non-“covered expatriates” to be complacent. That it was even proposed virtually screams “get out now, while you can!!!” to anyone of any asset level who would benefit from renouncing.
Alec Wilczynski is not too bright. While it is his job to know the law, he obviously fails to make the distinction between “renunciation” and “relinquishment” (see Relinquish US Citizenship don’t renounce, if you can). The action causing expatriation of Mr. Aldwincle is the becoming of a naturalized citizen of Japan. I.e., the author of the essay relinquished his citizenship. Yet Wilcynski says in his response to the essay that Mr. Aldwincle “renounced” (italics mine):
The moral of the story is that when you go into a US Consulate, you must know the law and your rights. Don’t expect a consular official to know them. I don’t know whether it is just the personality of certain consular officials or if it is in the operations manual, but our experience is that some, not all, or obstructionist.
It is a curious thing that the United States has become so arrogant that its functionaries and magistrates are no longer expected to know and enforce the laws of the United States, for they often act in whimsical manner with apparent and absolute impunity. I’ve personally seen border guards taunt a line of truck drivers (is that in the manual?); I’ve also heard a testimony from someone of how a consular official made a simply renunciation into an Inquisition. The United States has to work on this one. We must insist that its functionaries know and carry out the law, or otherwise we will expose their actions publicly, as this Wilczynski bloke does to himself. The problem is that we the victims are afraid to expose these government employees, despite their violations of our rights and their obstructionist methods.
@Petros, it’s probably not worth expending too much effort analysing this essay. Storm in a tea cup. Firstly it’s nearly ten years old, and much has changed since then. And secondly, it’s hardly an impartial third-party account of the process. I’m sure it’s heavily edited in places and embellished in others. Or slanted. Or maybe largely fictional. It’s certainly a confused narrative, and could be much better written and presented. The consulate staff behaviour throughout seemed pretty professional and measured. Any renounce/relinquish muddle on the part of the consul is far more likely to be a slip of the pen than a conspiracy!
Amusingly, he eventually seems to have ended up emigrated from Japan. Apparently he went to Canada and then Hawaii. I guess it really is possible for ex-citizens to get residence visas.
http://www.japanprobe.com/2011/11/22/has-arudou-debito-left-japan/
http://hoofin.wordpress.com/2012/02/06/brief-note-tepido-org-gang-finally-realizes-that-debito-arudou-is-in-hawaii-which-most-associates-already-knew/
Well, if he’s living in Hawaii now as a permanent resident I hope that he’s been filing his FBARs for whatever he might still have in Japan or Canada, because otherwise I bet that the IRS would love to pounce on an ex-citizen!
It’s my hope that by the time I renounce, my consulate will have the process so streamlined that I’ll just breeze through. Cheque please!
@ Watcher, I thought that the article was interesting. The author obviously has strong views and is an activist. So far so good. The article could have skewed in every manner you mention. But please note, that my criticism was with the response from the US consulate’s Alec Wilczynki. Comparing his statement with the CLN that the author provided, shows that the subject relinquished his citizenship by become a Japanese citizen, whilst Wilcynski says that he renounced. This is legally imprecise language coming from a consular official who is paid to know the difference.
Eduardo Saverin gave an interview to Brazilian magazine Veja, with new details about his renunciation of US citizenship. As I supposed, it looks like the reason was really the restrictions on foreign investment by US citizens, not taxes: “But he did this not because he wanted to, but because he had no other
choice as a foreigner living in Singapore, where financial transactions
are more restricted and bureaucratic for those who hold a U.S. passport“. Sounds like FATCA.
Original article, in Veja (Portuguese): http://veja.abril.com.br/noticia/vida-digital/eduardo-saverin-o-brasileiro-do-facebook-conta-sua-historia
Summary, in Forbes (English): http://www.forbes.com/sites/andersonantunes/2012/05/27/eduardo-saverin-finally-opens-up-no-hard-feelings-between-me-and-mark-zuckerberg/
Also, because of the drop in Facebook’s stock price, Saverin has
probably paid more taxes than if he had remained a US citizen:
http://www.siliconbeat.com/2012/06/04/did-eduardo-saverins-bid-to-save-taxes-on-facebook-windfall-by-renouncing-his-citizenship-backfire/
The Ex-PATRIOT Act has now lost its argument.