Lagoon, a pre-1995 relinquisher, recently sought the opinion of three lawyers in the expatriation field, all of whom felt that it is not necessary for relinquishers of that era to file with IRS. Lagoon’s account first appeared as a comment on the Did you relinquish before February 6, 1995 thread, but due to its detail is worthy of a post of its own.
Lagoon writes:
More information about my consult with three lawyers. I am not comfortable posting their names without their permission. I can tell you how I found them though.
One lawyer is quoted on this site. I contacted him for a personal consultation and gave him the details of my case. The lawyer is very conversant with the issues related to relinquishment vs renunciation and the changes in tax law over time. We spoke about risk, and that the issues for relinquishers are like a double low probability combination. If I wanted certainty, the lawyer could, if I wanted to spend between $5-10,000 go forward to get an opinion letter from IRS. If I did that the first consult they would have with IRS would be on a no names basis, to ask questions about whether or not IRS would issue an opinion letter (or something to that effect, they are my lay person words). While I would like to do this, so that there could be something in writing from IRS on this matter, I really don’t have that kind of money to spend. However, going this route would give the ‘certainty’ that we are all seeking about the issues of concern related to the need to contact IRS after relinquishing.
The second lawyer was referred to me by an accounting firm here in Victoria BC where I live. When I took my elderly mom, who is a US citizen and landed immigrant to the accountant, they asked me about my own status. I later had a consult with them about my own affairs, no notes taken during the meeting. They will not take on clients in situations like mine unless the client has consulted with a tax lawyer. The law firm they recommended is in Seattle. The lawyer I spoke with in Seattle is one of the owners of the firm and she is dealing with people from all sorts of nationalities around the world on the issues discussed on this forum. She is the one who said the changes and differences between the state department and IRS differences in the date of determination of reliquishment are a legal theory matter. She essentially said the same thing as the first lawyer – I have a good case for relinquishment, and there should be no need to contact IRS.
The third lawyer is someone in Calgary. I googled to find someone who had spoken about FATCA and was a tax lawyer. Their advice during my initial consult was that I did need to clear taxes, and needed to file for 5 years etc. Upon later reflection, I came to appreciate that their advice was based on a ‘literal’ interpretation of existing law/regulations as they are written. While they acknowledged the evolution of these laws, they did not support my arguement that I had no obligation to the US on tax matters after becoming a Canadian citizen in 1985. It was their office that called me yesterday to say they had done further investigation on the matter, and that all I needed to do was to file for a CLN. They also told me the appointment process I used to book my appointment in Calgary was the wrong process. (Calgary and Vancouver use different processes for booking for relinquishment appointments – I have posted elsewhere on this site about these differences). I did not take detailed notes during the conversation, but I recall them saying they had talked to someone at IRS about the matter. Given they they have changed their advice to me, I am quite happy to go back and to confirm whether this was based on a conversation with IRS or something else. This law firm has several people who for years had worked with IRS.
So…if one had the resources, it seems that getting a good lawyer to go the route suggested by the first lawyer, that is getting an opinion letter from IRS, or at least a consult on a no-names basis, might be the way to go. However, I am not sure you’d get IRS to put something in writing.
So, given the 3 + hours of conversations I have now had with 3 lawyers, I am very comfortable in understanding that the form for advising on the consequence of relinquishment/renunciation is something that did not take into account the fact that so many people technically relinquished long ago – and are now only realizing that documentation of this relinquishment is something that is needed.
Hope this helps.
What is the argument (even if wrong) that someone who relinquished in 1985 has to file back taxes with the IRS? How can the law that is applied be anything other than the law on the date of the relinquishment?
Remember that prior to 1986 the INA did NOT require that the relinquishing act (becoming Canadian) be done with the intention to relinquish. In other words the US government was just stripping people of their citizenship. This was NOT an Exit/Defection. This was the US taking your citizenship.
@Pacifica777
This is an extremely useful post, especially for those who fit the category. I’m encouraged by three legal opinions that appear to agree that there’s no need to talk to the IRS if the relinquishment was pre-1995.
I appreciate Lagoon’s reluctance to lay out $10k to a lawyer seeking a definitive letter from the IRS — I’d be leery of that as well. But I wonder if the lawyer would do it for a group of individuals for the same price. If you got 10 people to fork over $1k, is that worth pursuing? I’d have to discuss this with Mrs. Arrow before I could make a commitment.
I realize there’s no guarantee the IRS would provide a written response that’s worth the paper it’s written on — they do seem to specialize in obfuscation — but is it worth the gamble?
It seems to me, that practically,speaking, the IRS isn’t even really interested in anything that happened more than six years ago. Even when they ask for compliance, they only ask for this year and 5 years previous returns. Nor have we really seen a case of the IRS contesting the date of expatriates or pursuing them. Anyone know of 8854 auditors? It seems to me, until they do *and* someone challenges a case in court, we’ll never know for certain.
@Arrow, wondering what Phil Hodgen would say about the utility of any such ruling or response by the IRS. Perhaps those like him, who have pursued private letter rulings for things like RRSPs and Fidelcomisos might have some insight into what you might expect? He did have some interest in this re earlier blog posts.
@Arrow:
Attached is an example of an IRS private ruling letter which concerns whether the taxpayer would be considered to have expatriated to avoid taxes. Possibly of some relevance:
http://www.unclefed.com/ForTaxProfs/irs-wd/2005/0510001.pdf
If anyone is interested in my article on this topic, it can be found at http://www.robertsandholland.com/siteFiles/News/03-05-13_Expats%20Live%20in%20Fear%20of%20Malevolent%20Time%20Machine_MJ….pdf
I will share this with a few people.
Michael J. Miller —
Nicely done. That’s the best analysis I’ve read on this topic. It is tragic, however, that we still must rely on the IRS using the same legal interpretation and I suspect this is not on the top of their “to do” list to provide written certainty. I wonder if it will take a trip before a judge to get that certainty — a very risky proposition indeed.
My wife’s circumstances parallel your John Doe, and she did indeed get her “1974” CLN just before Christmas. Ask her, and she’ll tell you where the IRS can stick it should they send her a letter of any kind.
Michael J. Miller,
Excellent article. Thank you very much for writing it and sharing it with us. We can only hope it prompts an appropriate clarification from the IRS, but of course we won’t hold our breath.
Arrow,
There’s no need to tell me. I think I can guess.
This is great, Michael. I’ve been looking forward to this article since you mentioned it a month or so ago. I just gave it a quick read now, but I’m going to print it out and read it really thoroughly. It means so much to long-ago relinquishers like myself trying to get a handle on this weirdness. Thanks very much to you and co-author Ellen Brody for your work on this matter!
I add my thanks for pursuing this subject, Michael J. Miller.
Even for those of us who screwed up our chance to claim relinquishment, understanding what we thought we understood so long ago is important — to know we were not completely off base thinking decades ago we had relinquished US citizenship (because we were warned of just that!). We lived our lives BELIEVING we were no longer US citizens as we made our lives in the countries of our choices — until our incredulity in the absurdity of these times.
@Michael J. Miller,
As a long, long ago relinquisher (1972), I add my thanks for publishing the article. I will soon have my 2nd (and I hope, final) appointment with the Vancouver consulate to obtain my CLN. At that point, I really hope to put this whole nightmare behind me. I am happy to pay my share of taxes to my own government, the Government of Canada, as it is the Canadian government that provides me services. I certainly do not believe the IRS has any claim on my money.
It is good to have someone like yourself, confirm what those of us who relinquished years ago, believe to be true. So thank you again.
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Dear tiger,
Tomorrow, we who know your story will all be
May your Vancouver Consulate appointment be your last — a success, with your CLN received soon after!!
Good luck, tiger … and when you walk out this time you will be smiling I’m sure. 🙂
@Calgary,
Not being a ‘techie’ person, I would not be able to ‘make’ the above card. But from the bottom of my heart, I thank you.
P.S. Just got an email from the consulate, confirming my appointment so it is a go. Yeah!!!
@Em,
Thanks for your kind thoughts.
@Tiger
I was just this morning wondering when your appointment was! Best of luck tomorrow – you deserve it to go smoothly after all that you’ve gone through. I’ll be thinking of you.
@Tiger,
I am so happy this day is finally here! Argh, what you went through, after not being a citizen for 40 years. You are going to feel so great tomorrow — I remember at Toronto last year, I felt, “I’m me again!”
I’ll be thinking of you for sure. Have a great day!
@Tiger, Finally, This will put a big smile on your face.. You can celebrate on the weekend and for the rest of your life!! Yeah!! Congratulations!!
@all
A big thank you to all of you for your kind thoughts. Tomorrow afternoon when I am in that dreary, dreary place I will know that many of you Re there with me in spirit.
I thought of hitting the wine bottle tonight, but a friend pointed out that arriving there ‘hung over’ was probably not a good idea. So I will save the wine for tomorrow night.
I will be sure to post. Report.
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What if you were naturalized as a minor and never “formally” relinquished citizenship of the US but did intend to live as a Canadian ever since attaining adulthood as demonstrated by acquiring a Candian passport and continuing to live and work in Canada for life? How would I be able to prove my intent was always to relinquish and what year would it be considered to have been done? I travelled on a Canadian passport at the age of 23. Could I ask for a CLN dated to that year? That would be 1984. I have never, nor ever would, consider myself a US citizen, as I was born to one Canadian parent and have lived in Canada since I was 5 and I have never obtained any US documents (other than a birth certificate) and never worked nor filed taxes in the US.