50 thoughts on “American Citizens Abroad (@ACAvoice) Proposes “Interim” Comprehensive ‘Streamlined’ #IRS Compliance Program”

1. ACA to USA: Can you make these chains a little more comfortable please?

2. It bothers me that ACA only considers 2 groups: Tax cheats US residents who have accounts overseas, and Americans living overseas.
   The 40 million immigrants, most of which are not compliant with FBAR are screwed.

3. ACA really gets to the heart of the problems with this letter. For FBAR in particular there isn’t a good reason to file them if you may be accessed penalties you cannot pay on this piece of paper they are well aware most never heard of. In some cases where those high fines would come out of a foreign spouses income “abroad” this issue is very sticky indeed. My spouse WON’T pay any fines accessed on his income since he reasons “I’ve never been American, I work hard for my money and pay my taxes to the country I am a citizen of.” It’s hard to argue with that.

   The Treasury and IRS say I must file FBAR, I cannot file it since their own threat prevents me from doing so. ACA is right that nobody who would owe them no taxes sees their threat system as a motivator to come into compliance with what they want. They have set up a system which supposedly is meant to encourage compliance. But threatening honest expats abroad and our families with fines and criminal action isn’t motivating anyone. They have created a catch 22 for so many families abroad that leaves people with the best option being to try and renounce. Especially when you realize that they know the hardships they have put on your family and simply have “too much invested” to correct the issue.

   RBT is the only fair and decent way to achieve what they claim they are trying to accomplish. Instead of them “coming forward” with an admission of the issues and problems and a reasonable way to deal with it they just push forward with this unworkable and punitive approach. ACA clearly keeps stating what is wrong and offers up so many solutions over and over again.

   My first thought when I heard of the Streamlined was that it was so restrictive and still offering up threats , the list of who they deem low risk or not is so long. For instance, I am due a refund one year…that opens me up to further scrutiny and perhaps penalties. I would owe no tax but, because they would owe me one year Streamlined may be punitive. Good god who would want to come forward under such a system? Clearly not most expats as the numbers of who came forward and who did not are telling indeed.

4. Right on Johnson. CCP? I’m sick to death of three letter inventions, particularly when the word “compliance” is involved. This would not even move the CBT handcuffs from the back to the front. Take the RBT key and free us damn it! We don’t want namsy-pamsy interim “solutions”. To switch metaphors, ACA’s CCP is 16 lines of bandaids over bandages. It’s time to rip the whole compliance dressing off, apply the RBT balm and let the wound heal.

5. Much though I admire Ms Serrato and Ms Bugnion for their tireless efforts, this one just seems doomed to me. US citizens abroad have heard the message from the IRS over the past four years loudly and clearly, and the cat is out of the bag.

   My guess is that it is too late to fix it now with anything less than RBT. Always assuming that the IRS does want to fix it, something that seems unlikely given recent revelations. Even full RBT may not be enough any more. It is clearly alien to congress’ way of thinking, so anything they might do in that direction they could easily undo again when the next ‘crisis’ comes along.

   If I were a USC expat deer caught in these particular car headlamps I would not let the arrival of CCP, RBT, or any other ‘fix’ for the problem of US citizenship interrupt my plans to get out now. Too late.

6. Hear here.

7. Which is why this deer will be GTFOing once compliant.

8. Chris. Wish we could unite with the immigrant groups. If only immigrants and emigrants actually realized that they were getting screwed. Neither have any organization—or do they? What about the many immigrant religious orgs, the ethnic clubs (most of whom immigrated 90 yrs ago, but want contact with new immigrants), ie Italian club, Serbian club, Scandinavian club, German club, Irish club, Budhist temples, Muslim mosques, Phillipine community, Spanish speaking community, etc. If they realized what was happening, they could actually mobilize.

9. Instead, we have immigration reform, where it is impossible because it requires full tax compliance — only youths can actually take advantage of it.

10. What a waste of time! The only thing this ‘interim’ proposal will do is give a whole lot of ‘US slaves’ the opportunity to become ‘compliant’ for a brief moment in time, as they quickly move their butts out the IRS door. Of course we won’t be renouncing for tax purposes though.

    Sheesh, give up the insistence on CBT already! It will be a win win.

11. @Mark twain, the only group that I know tried something (i.e. meet with the IRS about the situation) is the Americans of Indian Descent.
    http://www.jdsupra.com/legalnews/americans-of-indian-descent-meet-irs-ove-67284/
    The response from the IRS: Enter OVDI and opt out. They were stonewalled just like the NTA.
    Indians (also Mexicans) are actually in worse shape from a perception of tax evasion than other immigrants, as a lot of them send lots of money back home to support family.

12. The ACA should be sending the USG instagrams of every middle finger of every USC living outside the borders that they can gather.

    And I agree with Chris that the immigrants in the US are being completely left out of all the FBAR and tax cheat talk and I have to wonder why b/c the USG has access to their finances now and could dump a load of hurt on them so much more easily and scoop up a helluva a lot more cash in the process, so why haven’t they? There are things going on that we don’t know about but if I were the ACA, I would have already brought this topic up b/c there is nothing more fun, when your opponent thinks he has you pinned, than mixing his oranges and your apples with a 3rd party’s grapes. The more this situation stinks. The faster it’s going to attract attention from people living inside the US, who have the access to Congress that we don’t.

13. @Chris, I agree that even US residents may not have heard of the FBAR – and in trying to distinguish those of us abroad apart from US residents actively trying to hide money and evade US tax, the wording in one section of the ACA proposal seems to imply that most or all US residents with non-US accounts are likely to be culpable.

    How many of us living abroad have tried to tell our US resident friends and family about the FBAR and FATCA situation – only to find that they have never heard of the FBAR either?

    And those US residents who visit Canada and have cottages, or visit other vacation property ‘abroad’ regularly for part of the year would logically have ‘local’ accounts to pay for their local expenses, etc. just as Canadian ‘snowbirds’ who regularly spend a portion of the year in Florida and Arizona do. I have known people whose US relatives regularly came up to visit for extended periods – and did that every year (and vice versa) – and so had a small local account. Sometimes those US relatives were actually born and originated here, but later moved to the US and just kept an old existing account for convenience.

    Those living along the border are used to the old days pre-9/11 and some small towns have one side of the street in the US and the other is in Canada. I remember in the past when US banks wouldn’t even cash Canadian money, and Canadian banks would only cash US money if you were at your own branch.

    I thought that the statement about non-US accounts held by US residents was far too broad although I understand that it is designed to make meaningful distinctions between those who ‘should’ have known, and those who were unlikely to have known and been willful. It has been acknowledged that even large accounting firms inside the US were giving incorrect advice. Why would ordinary individuals inside OR outside the US know what US tax and accounting practitioners did not?

    And current US residents who were immigrants who moved to the US but had pre-existing accounts in Canada or India or elsewhere are unlikely to have known or understand about the FBAR and what it includes – which goes far beyond personal bank and savings accounts, into employer and other accounts where co/signatory powers exist.

    And then there is the US resident who goes abroad as a student, or travelling, etc. and needs a ‘foreign’ local account to live, pay tuition, rent, etc. And some US residents go ‘abroad’ on a regular basis to stay with family for extended visits.

    The problem is with the BSA FBAR law itself and how it was given to the IRS to apply and to enforce, in addition to the post 911 climate, the inherent and in-grained suspicion of everything outside the US, the creation of the more recent penalties even for NON-willfulness, the very low reporting threshold (unchanged since the ’70s), and the urgency of the insane US national debt. It is so much easier and more lucrative for the US, IRS and Treasury to just say every non-US account is to be punished and harvested for penalties than for them to make the effort to make any meaningful distinctions. They don’t have any incentive or motivation to do that. They are not concerned with justice, fairness, logic or being reasonable or flexible.

    That is what you get for using a law designed for an entirely different purpose (ex. against criminals money laundering) and misapplying it liberally against ordinary people. Then giving the enforcement and a confiscatory non-willful penalty to an agency who promised to ‘educate’ people, but who can reap larger revenues through keeping it obscure. There is NO incentive for the IRS to assist us. They realized the potential of mis/using the FBAR as a revenue raising mechanism levied against our non-taxable or already taxed assets, and in lieu of the taxes that they could not by law assess against us abroad. This is an extraterritorial asset tax in disguise.

14. @Chris, this is the sentence that I can’t agree with;
    …”Americans resident in the United States who are hiding assets
    and related revenues in foreign bank account are
    most likely evading taxes….”

    Maybe in this instance they meant the verb ‘hiding’ literally, but since the IRS used that wording on threats and statements about the OVD that didn’t distinguish between us who live abroad and US residents, and since the IRS chose to conflate the mere fact or existence of an account located outside the US with the active verb ‘hiding’. So I am necessarily wary of any mirror usage of the IRS favourite phrasing. If the ACA had said ‘more likely to be’, then that would strike me as more reasonable.

15. First comment – thoughts on the ACA proposal – CCP.

    Assuming one wants to come into compliance this is obviously an improvement over the current options. If accepted it would provide more certainty. CCP also addresses the question of the other information returns (5471, 3520, etc.) Furthermore, CCP also allows for people who have filed 1040s and made mistakes (which is everybody) to clean up their mistakes. These are good things.

    Was there anything in this CCP proposal that would allow those who have already filed amended returns, used OVDI or streamlined compliance to take advantage of this program? In other words what about the problem of fairness to those who have already attempted to be compliant? There are two possibilities:

    1. CCP does NOT allow for OVDI or Streamlined Compliance types to move into this program. In this case the IRS will NOT see this as fair to taxpayers who paid far more by trying to become tax compliant earlier. Therefore, they will reject it.

    2. CCP DOES allow for OVDI or Streamlined Compliance types to move into the program. In this case the IRS will NOT see this as fair to the IRS which would have to give back significant penalty revenue – meaning they will reject it.

    As Watcher suggests “the cat is out of the bag” and it is probably to late to fix this. I doubt the IRS will receive this favorably (partly because it didn’t originate with them).

    That said, I believe this latest ACA proposal has value as another message to Congress explaining why the U.S. must move to RBT.

    Seems to me the problem is that:

    1. If the message is to the IRS, we know perfectly well that the IRS doesn’t want compliance. The IRS wants penalties. The IRS has been and continues to be the single biggest obstacle to tax compliance for Americans Abroad. The IRS is nothing but a school yard bully who wants people to be in violation of their rules. You want to play in the school yard (try to be tax compliant, you will live in terror of the bully). It’s particularly frightening if you attempt to play by the bully’s little rules (OVDP, Streamlined and the rest of their BS). My suggestion for those want to be tax compliant is very very simple. You obey the law. What this means is that you:

    A. File your tax returns

    B. File your FBARs

    Let the IRS explain why you have to go through one of their stupid programs to comply with the law of the land. That is if you want to be tax compliant. It’s clear that only a small percentage of U.S. citizens abroad are filing. Hmmmm, that’s food for thought isn’t it. Could it possibly be that U.S. people are NOT compliant because it’s impossible to be in compliance?

    2. If the message is to Congress – they don’t care anyway.

16. Second comment – Thoughts on the ACA proposal, Revelations in Yates interview, etc.

    Both the Yates post and the ACA proposal appeared as posts at IBS yesterday. The combined effect of these two posts upset me to the point where I was completely unable to sleep last night.

    It’s time for a reality check. I have been blogging on this topic for almost two years. I went back and reread one of my first posts – October 20, 2011

    http://renounceuscitizenship.wordpress.com/2011/10/20/reasons-you-may-not-be-an-american-citizen/

    The post concluded with three points:

    “1. For many it would be advisable to investigate the “state (no pun intended) of your U.S. citizenship.” You may not be a U.S. citizen. If so, thank your luck stars.

    2. If you are a U.S. expat, your continued residence abroad may leave you no alternative but to renounce your U.S. citizenship. Furthermore, patriotism and a belief in the original ideals of U.S. freedom and democracy, may leave you with no moral option except to renounce your U.S. citizenship.

    3. If you are an expat who has lived outside for many years and your assets are outside the U.S. you should rejoice. Both you and your assets are already outside the U.S. FATCA has created a “Berlin Wall” designed to keep U.S. citizens and their money in involuntary servitude in the U.S. You are already gone! You are the lucky one!

    Renounce and rejoice!”

    Two years later, the injustice continues. But, we now know that the IRS is deliberately inflicting pain on U.S. citizens abroad. We now know that those who try the hardest to be compliant will be the ones who will suffer most.

    Although I respect the work and efforts of ACA, I believe that when they propose compliance options, they fail to address three important points. These points are:

    1. For many U.S. citizens abroad it will destroy them to come into compliance. Why? Because they have investments in foreign mutual funds and other PFICs. They have sold a principal residence. They have set up their own business. The list goes on and on. In other words, many U.S. citizens abroad are simply involved in activities and investments that are “UnAmerican”. You see, what the U.S. calls citizenship-based taxation is really a series of punishments for NOT living the way a resident Homelander should live. Example: No Homelander should buy a foreign mutual fund! Therefore no American abroad should buy a foreign mutual fund. To do so, is simply UnAmerican. No self respecting Homelander would have a bank account outside the United States (remember good old Warren Buffett telling us there are many perfectly good banks in the U.S.). Therefore, why should Americans abroad have bank accounts outside the U.S. Come on people. We are Americans! We don’t engage in UnAmerican activities. Therefore no foreign mutual funds, no foreign bank accounts, spouses, businesses! When in Rome, you must NOT do what a Roman would do. No! You must do as a Homelander would do.

    (In the U.K. one drives on the left side of the road. I’m surprised Congress doesn’t try to force U.S. citizens in the U.K. to drive on the right side of the road. It makes perfect sense. All Homelanders while in the U.S. drive on the right side of the road. Therefore, U.S. citizens abroad should drive on the right side of the road. Yes?)

    Anyway, “To be perfectly clear” (as Barack Obama would say) the U.S. is run by people who have no consciousness of the world beyond the U.S. borders. None.

    The simple fact of the matter is many U.S. citizens abroad simply cannot come into U.S. tax compliance. It will bankrupt them. Why? Because they didn’t live like a good Homelander while they were living outside the U.S.

    2. The U.S. does NOT “tax” U.S. citizens abroad. It simply confiscates their assets. I hate to keep coming back to the PFIC thing, but it is huge. The PFIC rules when applied to Americans abroad means that they can say bye bye to their retirement savings if they attempt compliance? Why? Because they invested in non-U.S. mutual funds. The purpose of the Yates 8938 form is to identify your assets to the IRS so that they can confiscate them later. Basically, what I am saying is that there is no way to talk about the “coming into compliance question” without addressing the issue of confiscation of assets.

    The bottom line is this:

    For many Americans Abroad, coming into tax compliance is to commit financial suicide. The question them becomes:

    Would you commit suicide to avoid dying?

    For any sane person, the answer is:

    No can do.

    3. It’s high time to address the immorality of the application of U.S. tax law as applied to U.S. citizens abroad. Citizenship-based taxation has nothing whatsoever to do with taxation. Nothing whatsoever. The U.S. doesn’t even get enough tax revenue to justify the time. This is about:

    A. Residence based life control – if you want to leave the U.S. you better live EXACTLY like a good Homelander would live.

    B. And if you don’t live exactly like a good Homelander lives, we are simply going to confiscate your assets.

    Sorry everybody, but points A and B describe the reality of this situation.

    So, although (see my comment number 1), I think the ACA proposal is an improvement, it doesn’t address the realty of life as a U.S. citizen abroad. Therefore, whether accepted or not, it is basically irrelevant.

    All of this leaves U.S. citizens abroad in a position where (as I have said time and time):

    The only thing worse than NOT being in tax compliance is to be in tax compliance.

    The rate of low compliance means that most people have figured this out.

    At this point, any U.S. citizen abroad who has not begun their renunciation process (recognizing your personal circumstances) has only themselves to blame. Get out now!

17. @USCitizenAbroad

    I don’t mean to interject here…but I have a link you may find interesting…this was a TREASURY DEPT proposal made by someone who understood the issues back in 1998. Maybe after reading it, someone may want to contact the author “Donald C Lubick, Assistant Secretary, (tax Policy)” for an updated opinion as to whether it was implemented and/or why not…
    http://www.treasury.gov/press-center/press-releases/Documents/tax598.pdf

    I draw your attention to this part in particular…(bolded where I consider important)

    (ii) past statements indicating a belief that he or she is not a U.S. citizen (e.g., applications for employment, applications to educational institutions, financial transaction documentation, foreign tax returns, requests for a visa for travel to the United States, and entering the United States on a foreign passport).

    Once an individual becomes aware of his or her U.S. citizenship or, based on objective facts,should have become aware of such status, the individual could under this regime have a period of time (e.g., six months) to abandon that status without U.S. tax consequences (including the effects of section 877), so long as he or she does not utilize the benefits of citizenship during that period. Cf. 8 U.S.C. § 1483(b) (a U.S. citizen who commits a potentially expatriating act prior to his or her eighteenth birthday is not deemed to have lost citizenship if he or she asserts a claim to U.S.citizenship within six months after attaining the age of eighteen).

    Similar criteria could be applied to grant “restored” citizens an exemption. A restored U.S. citizen is an individual who was treated by DOS as having lost U.S. citizenship under certain statutory provisions that were subsequently held to be unconstitutional by the Supreme Court, as discussed above. See Afroyim v. Rusk, 387 U.S. 253 (1967); Schneider v. Rusk, 377 U.S. 163 (1964). The term also includes an individual who was treated by DOS as having lost U.S. citizenship on the basis of an evidentiary standard of intent that was held impermissible by the Supreme Court. See Vance v. Terrazas, 444 U.S. 252 (1980) (the United States must prove that an individual had specific subjective intent to relinquish citizenship).

    In general, these cases, as well as lower court cases addressing the issue, retroactively restore U.S. citizenship to affected individuals (including children born to these individuals that would have been citizens by reason of the citizenship of the parent with restored citizenship). In so doing, the courts apparently assume that all affected individuals prefer to be U.S. citizens, without considering the adverse tax consequences that may result from the
    reinstatement of citizenship status. DOS estimates that several thousand individuals may be restored citizens who have not yet applied to DOS to have their CLNs vacated.

    As discussed in Section IV.A.1.a, supra, IRS and the judiciary have attempted to provide relief from retroactive taxation for restored citizens for those periods when the individual’s citizenship was not contemporaneously recognized by DOS.

    See United States v. D’Hotelle de Benitez Rexach, 558 F.2d 37 (1st Cir. 1977); Revenue Ruling 92-109, 1992-2 C.B. 3; see also Revenue Ruling 75-357, 1975-2 C.B. 5; Revenue Ruling 70-506, 1970-2 C.B. 1. However, the guidance and cases do not provide reliable relief for any citizens whose citizenship is restored after the issuance of the guidance or the judicial opinions, even for those persons who genuinely thought that they had ceased to be U.S. citizens and who have conducted their lives accordingly. For example, Revenue Ruling 92-109 states that an individual who applies after 1992 to DOS to have his or her CLN administratively reviewed and whose CLN is vacated (and whose citizenship is thus restored retroactively) is entitled to retroactive tax relief only for pre-1993 taxable years. Furthermore, if an individual expatriates upon learning of his restored U.S. citizenship status, he or she could be subject to tax under section 877.

    The extent of the relief granted by the just-cited revenue rulings is based on Code section 7805(b)(8), which allows IRS to prescribe the extent to which a ruling shall be applied without retroactive effect. The rulings state the longstanding general rule that during any period a person is in fact a U.S. citizen for nationality law purposes that person is subject to U.S. taxation as a U.S. citizen, regardless of whether the person knows he is a citizen or whether the DOS would contemporaneously regard him as a citizen. The rulings then provide, however, that with respect to the specific factual patterns being addressed, the general rule will be applied prospectively only, pursuant to IRS’ authority under section 7805(b)(8) of the Code to limit the retroactive effect of rulings.

    Because the connection between the nationality law definition of citizenship and the tax law definition is both clear and longstanding and in light of the inherent limitations of providing prospective relief in this situation through administrative rulings, it is Treasury’s view that further relief, if any, for restored citizens be effected by explicit statutory amendment.Specifically, the Code could be amended to provide that an individual who (i) committed an expatriating act under a provision that a court later held to be unconstitutional, and (ii) has not availed himself or herself of any benefit of U.S. citizenship since the occurrence of that act, will not be taxed as a citizen unless and until the individual applies to DOS to have his or her CLN administratively vacated or otherwise seeks to take advantage of the benefits of citizenship. In effect, such an amendment would allow individuals who genuinely thought that they had ceased to be U.S. citizens to decide whether to accept the benefits and burdens arising from the availability of restored citizenship. There may be other potential solutions that should be considered. Treasury is putting this idea forward as one possible solution to the problem identified.

18. @USCitizenAbroad and Benedict Arnold,

    I’ve just sent another email to Sylvia D. Johnson, General Consul, Ottawa Embassy, as a follow-up to my unanswered question: http://isaacbrocksociety.ca/2013/06/29/accidental-americans-born-abroad-to-us-parents-and-not-registered-with-the-us-are-they-automatic-us-citizens-or-do-they-have-a-right-to-claim-us-citizenship-when-they-can-make-that-decision-as-an/comment-page-5/#comment-436597.

    Good morning, Ms. Johnson.

    Disappointingly, I have not heard back from you on the question of “Is a person born abroad to US parent( s ) automatically a US citizen (even though never registered with the US, never lived in the US, never had any benefit from the US) or does that person have the option to claim US citizenship?”. This is in regard to advice, which may or may not be correct for them, that a few have reported from US consulates / embassy abroad, including Canada. This discussion is ongoing at Isaac Brock Society and it is extremely frustrating that we cannot get a definitive answer from the Department of State. The correct or incorrect answer will seriously affect many “Accidental Americans” with no connection at all to the US.

    In that you cannot give an answer, would it be possible for me to get email contact information for Director Edward Betancourt Office of Legal Affairs and Donald C. Lubick, Assistant Secretary, Tax Policy, in another attempt to get the important answer from some US official competent to give a definitive answer? If you cannot, can you then direct me to someone who could give me this contact information. I would be grateful for that help.
    
    Below is a US Treasury Department proposal from 1998 that I would like to follow up on.
    …

19. Further to my comment and correspondence above, I have received an immediate reply…

    From: calgary411
    Sent: Wednesday, July 24, 2013 10:14 AM
    To: Johnson, Sylvia D
    Subject: Re: Follow-up to previous query on advice given by US Consulates / Embassy regarding US citizenship “never claimed”…

    Ms. Johnson,

    I really appreciate that you will provide information and other contacts regarding this by end of today. It is so very important.

    Another Canadian disaster. I presume it affects US citizens as well as Canadians, likely some employees of Montreal, Maine & Atlantic Railway. Our hearts go out to all affected in that horrendous incident.

    Regards,
    calgary411

    From: Johnson, Sylvia D
    Sent: Wednesday, July 24, 2013 9:49 AM
    To: calgary411
    Subject: RE: Follow-up to previous query on advice given by US Consulates / Embassy regarding US citizenship “never claimed”…

    I apologize – I am just back in the office from Quebec and the train disaster. I will provide the information and contact information before the end of the day today.

    This email is UNCLASSIFIED.

20. Calgary411, one thing is for sure, the USG certainly knows that it is going to have to clarify its position at some point or risk people simply defaulting to “I am not a citizen unless I was registered or have made an active claim”.

    I still think that since this question falls under Immigration that it is primarily unenforceable outside the US. That is, if you never go there, they can’t really touch you. Even with FATCA, and presumably the burden of proof falling on the individual to prove to banks that they aren’t USC’s, if you were born outside the US there is no way that your USC’s parents status can hurt you if you simply say, “no I didn’t inherit status from them.” There is no way to prove or disprove it from a banks standpoint b/c of the flip-flopping that’s gone on in terms of how the US determines this. Banks simply won’t have the time or resources to do anything but take a person at their word.

    I wonder if the USG has a file on you somewhere with all your emails and thinks, “Google is her friend, not ours.”

21. @YogaGirl,

    Another thing pretty ‘for sure’ is the USG may have a file on this trouble-maker. It’s all very interesting the flop-flopping and the obfuscation. All we ask for is common sense (as well as for those born to Canadian or other country parents “accidentally” in the US when the birth took place). Anything less is punitive.

22. The only acronym I like right now is KISS: Keep It Simple Stupid. End citizenship based taxation and put an end to our SNAFU!
    We don’t need another bandaid or half-measure, we need an apology and a switch to the only sane way out: RBT.
    That being said, the more hemorrhaging we do, the more likely they’ll get the medics out. We just don’t want CBT put on life support as a result, which this latest proposal would do.

23. Calgary411, I doubt that the USG can appreciate the irony in what they are doing in terms of forcing citizenship on people rather than taking the more logical approach of allowing people who may have claims to actively pursue them. This kind of predatory behavior on their part is exactly what led to the expatriation act of 1868 b/c other countries were refusing to recognize the rights of their former citizens to emigrate and naturalize in the US. What goes around comes around, I guess.

    The USG knows that it can’t really defend its default practices and the last thing it wants is for some of these issues to become more widely known and questioned. There is power and money at stake. Two things that are very high on the important list of our creepy old Uncle.

24. @calgary411 –

    FWIW I think the problem is that while in principle USC status is conferred automatically to children of US-born USCs abroad (mostly) in practice, unofficially, it’s an opt-in system.

    SDJ is likely to give you the by-the-book answer, but as a practical matter there are many, many people crossing the border every day with their Canadian passports and Canadian birthplaces who are legally US/Canadian duals, but the US doesn’t have a way of knowing about it.

25. @Calgary411

    Good for you…I didn’t highlight this part as I find blockquote doesn’t allow bold inside for some reason…but note this from the above proposals: (AN EXEMPTION – ie: post-Oct10,1978 `restored` citizens.).. I think he understood the injustice of the retroactively restoring citizenship unilaterally…

    Similar criteria could be applied to grant “restored” citizens an exemption. A restored U.S. citizen is an individual who was treated by DOS as having lost U.S. citizenship under certain statutory provisions that were subsequently held to be unconstitutional by the Supreme Court, as discussed above. See Afroyim v. Rusk, 387 U.S. 253 (1967); Schneider v. Rusk, 377 U.S. 163 (1964).

    The term also includes an individual who was treated by DOS as having lost U.S. citizenship on the basis of an evidentiary standard of intent that was held impermissible by the Supreme Court. See Vance v. Terrazas, 444 U.S. 252 (1980) (the United States must prove that an individual had specific subjective intent to relinquish citizenship).

    In general, these cases, as well as lower court cases addressing the issue, retroactively restore U.S. citizenship to affected individuals (including children born to these individuals that would have been citizens by reason of the citizenship of the parent with restored citizenship). In so doing, the courts apparently assume that all affected individuals prefer to be U.S. citizens, without considering the adverse tax consequences that may result from the reinstatement of citizenship status. DOS estimates that several thousand individuals may be restored.