I am putting this informative comment into a post where it will garner more attention.
I wanted to share my brother’s and my experience today of applying for US citizenship at the Toronto Consulate. We are both Canadian born children of a US parent who is now deceased. Given the information we have taken from the internet, IRS and US citizenship sites, we came to believe that we had to obtain US citizenship (we were never registered as born abroad by our US parent). We completed all the paper work, obtained the documents and booked the appointment and attended for that today. We were to be granted US citizenship, however when we advised them that we actually did not wish to obtain the citizenship and in fact the only reason we had come was because we believed the US required it of us they were dismayed. We were told by the consulate officer and her direct superior that they cannot force anyone who is born outside of the US to acquire citizenship – it is a choice. When we pressed her further stating that this is not the information we are getting she advised clearly that we are not US citizens unless we willingly apply for and accept the citizenship. She stated we can say unequivocally that we are not US citizens unless we wish to be. We respectfully declined the offer of citizenship (to their amazement) and left with our refund and documents in hand. I will certainly sleep better and breathe easier! I hope this helps other Canadian born who are concerned about this.
@ calgary411
You are absolutely right to want an official document of some kind to present to the bank which shows your son is Canadian only, with no obligation of any kind to the USA. (I tried and failed to do something similar with my lost/ignored I-407 application.) Your son deserves to have his Canadian only status recognized officially by the USA and you deserve the peace of mind. I don’t have any qualifications to help you resolve your son’s citizenship conundrum but thankfully there are Brockers who do. I know how much you want to put this worry behind you and I hope you know that I EMpathize with you. This sibling consulate encounter really looks quite promising and it’s so typical of your fighting spirit to take it and run with it. Good luck!
I just e-mailed Consul Kirk Smith about this since it affects my kids too…specifically I want him to verify that the DOS policy is that citizenship of kids born abroad is a choice.
Dear Consul Kirk,
I saw a comment posted below online of someone who was the born outside the U.S. to U.S. citizens. They said the Toronto U.S. Consulate told them that U.S. citizenship for them was a choice…that is, until they applied for U.S. citizenship (and if approved), they aren’t U.S. citizens (even if their parent(s) meet/met the transmission requirements. Doesn’t this mean if my kids needed to visit the U.S. (and aren’t registered), they can travel on their UK passports through the VWP? Or are they required to to register as U.S. citizens and obtain U.S. passports. It seems to me based on what the Toronto Consulate said to the person below, they aren’t required to claim it–it’s a choice.
Thank you,
[Ben Ploni]
“I wanted to share my brother’s and my experience today of applying for US citizenship at the Toronto Consulate. […]”
@Em
Just as expected, FATCA will require many to prove a negative!
What else will customers have to prove? After showing this kind of proof, and CLN’s, will the banks require us to prove we didn’t subsequently obtain a green card? Once we confirm by producing a CLN or other documentation that the US indicia of birthplace does not indicate US citizenship, how will those methods by which the bank uses to indicate US citizenship be useful to them in those cases? Will we be subjected to constant and more invasive scrutiny?
BenPloni, thank you for emailing Consul Kirk Smith (Department of State), asking about your kids’ US citizenship status. As many of us as can should be asking this question — and as bubblebustin indicates we need to get a straight answer from the IRS on the direct question:
How is it justifiable that Accidental Americans can be assessed any kind of penalty for not filing tax returns or FBARs until they have made a choice that they wish to claim US citizenship by the quite long procedure it takes to prove? Their birth to US Citizens is purely by accident they had no decision in. It follows, to me, that until they make a claim of US citizenship, they have no US tax return or reporting obligations. It is similar to those who claim their relinquishments from decades ago when warned that they would be relinquishing US citizenship by becoming Canadian (or other country) citizens.
Em, thanks for your EMpathy. What I continue to discuss, now ramped up with the Toronto US consulate statement, is not just for me and my son. It should be the same for many, many, many.
Thanks, schubert. I believe it is very important to have clarification on this. Perhaps BenPloni will receive that on Department of State stationery from Consul Kirk Smith, the US Consulate in Jerusalem.
(After making what should be to us many troubling comments about expatriation to BenPloni, Consul Smith admitted that it was a steep learning curve for him regarding renunciation and relinquishments.)
See BenPloni’s answer to therapist604 on this subject — and the resulting comment stream, starting at http://isaacbrocksociety.ca/consulate2/comment-page-9/#comment-356193
tdott says:
Let’s once and for all get a straight non-convoluted answer. Who will give us that important answer?
Thank you SueBee for letting Brock know this and Calgary411 for posting it.
@BenPloni
Great letter. I hope you get a satisfactory response.
Calgary 411. You included this line:
Therefore, SueBee and her brother are, in fact, responsible for US income tax and FBAR compliance, right?
I’m not sure if it was a statement, a question or a reply to someone else.
We already know that Sue Bee and her brother are not USCs and are not responsible for US income tax and FBAR compliance. Why confuse the issue for them and others? It’s confusing enough.
Why oh why do some of you want to make it so complex? The US has enough on its’ plate without bothering Sue Bee, Em, or me.
@KalC, I don’t know — perhaps a question thrown to the universe.
I think it would be a positive to have this question answered for so many Accidental Americans. At least a segment of US Persons Abroad could have better peace of mind. Why should they have to go to lawyers with this question, feel like criminals because they were born to US citizens? They have done nothing wrong. For those that were not registered with the US, it would be a relief to know – for sure. For those who were registered as children with the US, makes me sad that parents were sort of coerced into it. After all, shouldn’t it be a person’s choice when that person can make an informed decision in adulthood? All of the gobbledygook terminology drives me crazy. Plain English please! I’m cautiously optimistic but, really, I’m ducking around corners with my son’s situation.
Your level of risk and others’ with FATCA is different than mine. Why should we have to guess? Why should we have to resort to “Don’t Ask / Don’t Tell”? For myself and others, I just don’t want to leave it so loose, convincing myself that the US has too much on their hands to find and go after every US Person Abroad (I do think they can’t, but I don’t know that for sure). It’s like winning the lottery if we hide behind enough corners and are able to escape notice.
Of course, the real problem is US citizenship-based taxation. But until that is ever changed to residence-based taxation, I think we all need straight-forward, easier to understand information all round, in this case about who really IS a US citizen. I don’t see how the IRS can tax or require compliance of anyone born in a country other than the US who has not claimed US citizenship by whatever means, the same as it should not be able to require compliance after the date of a person’s successful relinquishment.
Perhaps there is a definitive answer to the rhetorical ‘Is a child born to US Citizen(s) in a country abroad automatically a US Citizen if never registered with the US?’ and ‘Are persons born abroad who merely qualify for US citizenship considered USP’s for tax purposes? questions.
What — Me Worry?
It will take months if we hear anything at all because it will take that long for the USG to digest the idea that some people might actually feel less than ecstatic about having US citizenship. This is uncharted territory for them.
http://isaacbrocksociety.ca/2011/12/14/about-the-isaac-brock-society/comment-page-4/#comment-366457
aaa123 says
You’re likely correct on that observation, bubblebustin.
@calgary411
Once again, this is a sensible practical shorthand explanation of something that can be made more complicated, but doesn’t need to be.
The problem here is that there is little clarity on this (intentional or not) and people are basing their decisions on possible misconceptions or worse case scenarios. When it comes to taxes, one should error on the side of caution especially when dealing with our friends south of the border.
American Citizens Abroad Position on Children’s Citizenship
It is so haunting and sad:
http://isaacbrocksociety.ca/2012/09/01/andy-sundberg-passes-away/comment-page-1/#comment-51329
and
http://isaacbrocksociety.ca/2012/09/01/andy-sundberg-passes-away/comment-page-1/#comment-51363
Acquisition of US nationality based on facts of birth is not by choice but by proof of the relevant facts. When a case is brought to the attention of the relevant authorities (State, USCIS, IRS, DOJ…) they may lack standing, wherewithal or interest in proving facts (in the case of foreign-born or -adopted or -IVF births the citizen status and qualifying US residence of the individual. There is already a rule relating to those expatriated under old law who had nationality restored by the SCOTUS (if they don’t avail themselves subsequently of an attribute of US nationality it will not be forced on them. It remains to be seen how much treaty partner countries will cooperate with the IRS in matters of enforcement, collection and extradition where the target, claimed to be a US Person, is (also) a citizen of the requested country. When a case depends on IRS proof of doubtful facts of parents’ prior US residence there are issues of standing as well as access to facts to consider.
@Calgary411
Yes, it is profoundly sad to realize that the US is not, and may have never been, the country it purports itself to be…
I thought I would try to address the FATCA implications of this discussion. My comments are based on the UK-US IGA (http://www.treasury.gov/resource-center/tax-policy/treaties/Documents/FATCA-Agreement-UK-9-12-2012.pdf). I haven’t checked the 544 pages of FATCA rules to see if there is additional or conflicting guidance there. I also haven’t read through the rules not relating to personal accounts (entities, trusts etc.). As we know, US indicia (p. 21) include:
a) Identification of the account holder as a U.S. citizen or resident;
b) Unambiguous indication of a U.S. place of birth;
f) Currently effective power of attorney or signatory authority granted to a person with a U.S. address;
c)-e) and g) various clauses about US addresses, US telephone numbers, and standing instructions to pay to an account maintained in the US
I’ll focus on a) and f) as I don’t think b)-e) and g) would apply. Thankfully, clause f) says “Currently effective power of attorney or signatory authority granted to a person with a U.S. address”. Note that it doesn’t say “signature authority granted to a US person”. It says signature authority granted to a person (whether a US person or not) with a US address. So an account with power of attorney granted to any person (US person or otherwise) without a US address is not a FATCA “US reportable account” according to the US-UK IGA. This might have been a mistake.
Clause a) is more ambiguous. It says “identification of the account holder as a US citizen or resident”. The clause is talking about the account holder and not anyone else connected to the account holder whether parent, guardian, trustee or holder of a power of attorney. The key question will be how an account holder is “identified” as a US citizen and how this might be interpreted by a bank. Note that the clause does not say “reason to believe” or “suspicion” that the account holder is a US citizen. To me, “identification” strongly suggests documentation. The Oxford Dictionary lists amongst its definitions of the US-English definition of identification the following: a means of proving a person’s identity, especially in the form of official papers (http://oxforddictionaries.com/definition/american_english/identification). For a bank to make the link between a US person parent and a child born outside the US seems to me a big stretch and requires a judgement call on the part of the bank on US citizenship rules that doesn’t appear warranted under the terms of the US-UK IGA.
I also find it interesting that clause a) “identification as a US citizen” is the only clause that does not have a potential remedy. For instance, if you were born in the US, then providing a W-8, a non-US government issued ID and a CLN should make an account not US-reportable. The fact that clause a) doesn’t have a remedy suggests to me that clause a) is intended not to be disputable. In which case it suggests that a person will have presented unambiguous and indisputable evidence of US citizenship ie a US passport.
Calgary411, I have to laugh at your posting of the ACA viewpoint – as what they say is totally wrong. They state that the US, UK and others use “jus soli” as their criteria, yet it’s clearly obvious when reading the two descriptions that “jus sanguinis” is also applied by them. If it weren’t the US would have no claim on any person born of US parents outside the US. Nor would I have been able to claim my British citizenship via my parents being British. Germany used to be only “just sanguinis”, but recently changed their laws so that “jus soli” is also applicable. So all 3 countries use both types to determine nationality and there are probably others who do too.
I don’t know how old that article on the ACA website is as it isn’t dated, but they really need to update their ideas/knowledge about citizenship and how the US applies it.
I’m going to post a link to this over at the English Forum and see what views, if any, are discussed there. Also very tempted to e-mail it to the Bern embassy and the Department of State.
The ACA viewpoint used to be the standard, or a desirable view. It was considered to be a natural and good thing and most Americans probably still see it this way. Yet, times are sadly changing.
@Edelweiss:
The following was posted in 2012 on IBS.
“To open/ maintain a current account at one of the major banks in Switzerland (UBS), the following master data is now required (translated). Please see bullets 1. to 5. below:
Bank Relationship Basic Data Declaration
Type of Bank Relationship: Single-Owner in Person’s Name
Document Status: First Declaration
Owner of Bank Relationship:
Title, Name, First Name, Street/ Nr., Postal Code/ Town, Country
Date of Birth, Nationality
Telephone Home, Telephone Business
Declaration of Status of Customer as Non US-Person or US-Person (ID)
1. Are you a US Citizen? Yes/ No
(You must answer with “Yes” in the event that you possess more citizenships including US citizenship)
2. Were you born in the USA (or in one of the US Territories)? Yes/ No
3. Are you in possession of an American “Green Card” (independent of expiry date)? Yes/ No
4. Do you have residence in the USA from a US tax perspective? Yes/ No
5. Irrespective of the above Substantial Physical Presence Test are you resident still in the USA? Yes/ No
The customer is obliged to inform the bank immediately if his status as a Non-US Person changes per US tax law. The customer acknowledges and accepts that the neglect to inform the bank immediately of any change in his status as a Non-US Person, respectively, any misrepresentation in connection with his status as a Non-US Person, is justification for the bank to cancel the bank relationship without notification.”
Yes, that’s what I received just after I renounced. Now I’ve presented UBS with a copy of my CLN the whole matter has been dropped. I could only answer yes to question 2 anyway, but of course it’s the most damning one from the bank’s point of view as there’s no question over nationality. I was just lucky that’s I’d renounced only a few days before so was able to tell the bank so; they agreed to give me more time for the CLN to arrive as the form was supposed to have been returned in about 3 weeks from receipt.
@Innocente
I expect different FFIs will use different procedures depending on how “active” they want to be in their search for US persons. The UBS questionnaire is from an FFI which is likely to adopt a very active stance. Hopefully, we can take some comfort from the UBS questionnaire because, while the questionnaire is exhaustive, it does rely entirely on self-identification as a US citizen (if born outside the US).
By way of contrast to UBS, Fidelity in the UK has inserted something into their customer terms and conditions that says that by accepting the terms you warrant that you are not a US citizen. I’m guessing this is probably their solution for new accounts and they may take other, more active, steps for existing accounts. In Fidelity’s case, they are relying on a US person to a) read the customer terms and b) call Fidelity to tell them they are in breach of the terms.
I think the question I was trying to answer, given some of the concerns expressed, was whether the procedure for searching for US indicia as outlined in the US-UK IGA posed a risk for the offspring of US citizens born outside the US and who had not “claimed” US citizenship that they would be “guilty” by association. I can’t see anything that suggests that an FFI could or should have to try to make that association. Usual caveats about not being a lawyer apply.
@Edelweiss,
I appreciate your analysis. There is so much on this thread that I can ‘take to the bank’ should push come to shove (which I may never have to do!). With clarification of the questions and the coming of FATCA:
and
perhaps the opaqueness for everyone will disappear and this segment of the “supposed” US Persons Abroad will know where they stand instead of constantly wondering.
@Calgary411
Speaking of technicalities, I mentioned a U.S. birth certificate as proof of U.S. citizenship to Consul Smith, and he said–“no, it’s not absolute proof”…I said “What do you mean?–I thought if you are born in the U.S. you acquire U.S. Citizenship automatically (Jus Soli)..he said…”not always…technically, only if you are subject to U.S. law.” i.e. the example of such–i.e the child of a foreign ambassador or other embassy/consulate staff immune to U.S. Law etc. does not acquire U.S. citizenship if born in the U.S.
@Calgary411
I came across this website that explains how someone born outside the US may obtain “derivative” citizenship after moving to the US. The physical presence requirements aren’t necessary for the parent as in our children’s cases, in fact for the parent to pass US citizenship on to their child they need only to be a naturalized US citizen.
One line in particular caught my attention:
This to me means that the child is deemed a US citizen whether they apply for it or not under those specific circumstances. By my interpretation, they would be required to register for Selective Service regardless of whether they applied for citizenship or not, and would be required to continue filing US taxes as expected of a citizen if they left the US”
I could be wrong in this interpretation, so if others know differently, would you please explain what it means?
http://www.us-immigrationvisa.com/citizenship/derivative-citizenship
I haven’t come across the same term being applied to children of US citizens born abroad, but it would still go a long way for us to see it in writing that the same doesn’t apply to our children.