In a post last week, I pointed to a San Buenaventura/Santa Barbara immigration lawyer who goes around on Yahoo! Answers scaring would-be renunciants with tall tales about how they’ll be banned from the United States. But he’s hardly the only immigration lawyer giving bad advice to emigrants, merely the most malicious one. These “answers” sites are full of answerers whose worldview is professionally skewed by their daily diet of people who want in to the United States; they are not qualified to give any advice to people who have got out, regardless of their good intentions — in particular due to the potential tax aspects of the situation. Some are merely not well-informed of those tax consequences; others — especially migration consultants in China — deliberately seek to downplay the tax consequences in order to move as many clients as possible through the door.
In the latest iteration of this recurring problem, a Canadian man asks over on JustAnswer.com whether he should get a U.S. passport or renounce U.S. citizenship:
I have been a landed immigrant since March, 1970 and a Canadian Citizen since 1978, having come here from the US. I did NOT renounce my US Citizenship but would like to know what the ramifications are to me as a Canadian citizen, if I choose to do so now,as I am now being pressured to get a US passport. I travel to the states once per year for pleasure and have had no difficulty using my Canadian passport for the past 15 years. I have no desire whatsoever to move back. I have never earned money in the states since coming to Canada and have no criminal record. Are there any negative aspects to renouncing?
He signs off with his real name, which I have omitted here because I do not want this post to be a Google hit for his name without his consent.
This gentleman is in quite a similar situation as the hundreds of commenters and thousands of lurkers who have come to the Isaac Brock Society looking for peer advice since 2011. The normal answer we give to these kind of questions: do not apply for a U.S. passport. You can easily argue to the U.S. State Department that you relinquished your U.S. citizenship in 1978 by naturalising as a Canadian. Your exclusive use of a Canadian passport since then to enter the U.S. would be a strong argument in support of your relinquishment, especially since you have not earned any U.S.-source income (meaning you have not used your Social Security Number since you moved to Canada — if indeed you ever had one). The only difficulty would be if you did something else after 1978 indicating a positive intent to retain U.S. citizenship, like applying for a U.S. passport or registering to vote in a U.S. election.
There are no U.S. tax consequences for someone who relinquished in 1978. Getting a U.S. passport today when you have no intention of working in the U.S. and you are nearing retirement — with much of your savings likely in a Canadian RRSP and/or TFSA — would be a bad idea bringing U.S. tax & paperwork misery to your golden years. As a Canadian you will continue to enjoy visa-free travel to the United States, and in the unlikely event you really wanted to move to the U.S. in the future you could probably even get a U.S. work visa after you have your Certificate of Loss of Nationality of the United States in hand.
Unfortunately for our questioner, he got the following response from a not-particularly-clued-in Miami immigration lawyer, for which he is apparently being charged CA$39:
Why wouldn’t you want a U.S. Passport? Who is pressuring you to get one?
As all the friends of Isaac Brock (even those of us in Asia and Europe and South America) may guess, and some have even experienced personally, the questioner is probably being pressured to get a U.S. passport by U.S. Customs and Border Patrol agents. When he crosses the border, they threaten to disrupt his holiday and refuse him admission to the U.S. with their bureaucratic, one-size-fits-all approach to enforcing the law that “U.S. citizens must use a U.S. passport to enter the U.S.” — because they cannot understand the concept of people who were born in the U.S. emigrating from the country and changing their nationality. And of course, the reason you would not want a U.S. passport is because it is far more advantageous not to be a U.S. citizen when residing permanently outside of the United States.
Update: the Canadian gentleman added more details to his question confirming exactly what we all guessed — he’s worried about harassment by U.S. border guards — and in response the Miami immigration lawyer updated his answer with the following howler:
By just spending a little more than what you have already spent on this question, you could get a U.S. Passport and have done with it. You use the U.S. Passport to enter the U.S. and the Canadian passport to enter Canada. That’s it. Neither country has any issues with a person having both. It’s just a benefit to having both.
And I don’t even think there are any major issues because there are treaties between the U.S. and Canada so that you aren’t taxed twice.
CA$39 for one paragraph of horrible advice and one paragraph of blatantly incorrect speculation without any legal citations whatsoever.