Confirming reports passed on by commenters at the Isaac Brock Society, DiploPundit points to a State Department interim rule just placed on public inspection for printing in tomorrow’s Federal Register, which raises the fee for renunciation of U.S. citizenship (but apparently not relinquishment) to US$2,350, more than twenty times the average level in other high-income countries. As they state:
[D]emand for the service has increased dramatically, consuming far more consular officer time and resources, as reflected in the 2012 Overseas Time Survey and increased workload data. Because the Department believes there is no public benefit or other reason for setting this fee below cost, the Department is increasing this fee to reflect the full cost of providing the service. Therefore the increased fee reflects both the increased cost of the provision of service as well as the determination to now charge the full cost.
The Universal Declaration of Human Rights states that “No one shall be arbitrarily deprived of his nationality nor denied the right to change his nationality”, while the Expatriation Act of 1868 says that renunciation of citizenship is “a natural and inherent right of all people” and that “any declaration, instruction, opinion, order, or decision of any officers of this government which restricts, impairs, or questions the right of expatriation, is hereby declared inconsistent with the fundamental principles of this government”.
As of press time, the State Department has not yet commented on whether it sees “public benefit” in other human rights such as freedom of election or freedom of marriage, or whether anyone seriously believes that charging people a month’s salary to get a ballot paper or a marriage certificate would not restrict or impair those rights.
Practical effects
Because this fee hike apparently does not apply to relinquishments, ex-Americans who naturalise in most other countries will still be able to obtain a Certificate of Loss of Nationality from the U.S. government for no more than the cost of taking a day off work and driving or flying halfway across the country to the nearest consulate which isn’t backed up for months with renunciation appointments. (“Most other countries” means those which allow dual citizenship, like Canada and France, or those which forbid dual citizenship but allow new citizens to submit proof of loss of their former citizenship after the naturalisation ceremony, like Japan.)
However, Americans seeking to naturalise in countries which require new citizens to give up their former citizenship before the naturalisation ceremony, like Taiwan, or those who have been foreign citizens for decades or all their lives and never exercised any benefits of U.S. citizenship but now need to acquire a formal CLN (for example because their bank will discriminate against them if they don’t have one), will feel the full impact of the new fee hike, and also have to wait for months or even longer than a year for the State Department to give them a CLN before they can get on with their lives.
What changed?
The State Department has always claimed that processing renunciations has a high cost, but four years ago when they first introduced the renunciation fee, they at least pretended to take a very different attitude to the cost:
The CoSS demonstrated that documenting a U.S. citizen’s renunciation of citizenship is extremely costly, requiring American consular officers overseas to spend substantial amounts of time to accept, process, and adjudicate cases. A new fee of $450 will be established to help defray a portion of the total cost to the U.S. Government of documenting the renunciation of citizenship. While the Department decided to set the fee at $450, this fee represents less than 25 percent of the cost to the U.S. Government. The Department has determined that it must recoup at least a portion of its costs of providing this very costly service but set the fee lower than the cost of service in order to lessen the impact on those who need this service and not discourage the utilization of the service, a development the Department feels would be detrimental to national interests. See 31 U.S.C. 9701(b)(2).
They also note the per-hour cost they use to calculate the new fee:
The Department previously charged a consular time fee of $231 per hour, per employee. This fee is charged when indicated on the Schedule of Fees or when services are performed away from the office or outside regular business hours. The CoSM estimated that the hourly consular time charge is now lower. Accordingly, the Department is lowering this fee to $135 per hour.
This implies that they take about seventeen employee-hours to process each renunciation (assuming that none of the fee goes to other expenses such as travel or printing). Oddly enough, in their 2012 Paperwork Reduction Act filings on Form DS-4079 (which is filled out by both renunciants and relinquishers), the State Department indicated that the cost for processing the form was just $33 per hour. I don’t understand how these two estimates relate to each other.
To explain the new fee hike, the State Department point to procedures (such as the pointless and repetitive double in-person appointment system) which are required neither by the Immigration and Nationality Act nor the Foreign Affairs Manual, nor used by any other countries:
For example, consular officers must confirm that the potential renunciant fully understands the consequences of renunciation, including losing the right to reside in the United States without documentation as an alien. Other steps include verifying that the renunciant is a U.S. citizen, conducting a minimum of two intensive interviews with the potential renunciant, and reviewing at least three consular systems before administering the oath of renunciation. The final approval of the loss of nationality must be done by law within the Directorate of Overseas Citizens Services in Washington, D.C., after which the case is returned to the consular officer overseas for final delivery of the Certificate of Loss of Nationality to the renunciant. These steps further add to the time and labor that must be involved in the process.
As demonstrated by the experience of other countries, the State Department could greatly lower their costs by simplifying their procedures, but apparently such a common-sense step has not occurred to them.
But look on the bright side! 31 USC § 9701 says that “[e]ach charge shall be … based on … (A) the costs to the Government; (B) the value of the service or thing to the recipient; (C) public policy or interest served; and (D) other relevant facts.” Given how valuable a CLN has become these days, imagine how high a fee they could charge for it if they set the price based on its value.
Timeline for fee hike and comments period
The State Department ends with an excuse for why they can’t be bothered to tell us about the fee hike more than two weeks in advance, while keeping renunciants waiting for dozens of times that long to get the CLNs in the first place:
The Department intends to implement this interim final rule, and initiate collection of the fees set forth herein, effective 15 days after publication of this rule in the Federal Register …. The Department is publishing this rule as an interim final rule, with a 60-day provision for post promulgation comments and with an effective date less than 30 days from the date of publication, based on the “good cause” exceptions set forth at 5 U.S.C. 553(b)(3)(B) and 553(d)(3). Delaying implementation of this rule would be contrary to the public interest because the fees in this rule fund consular services that are critical to national security, including screening visa applicants.
You have until 4 October to submit a written comment on this rule. I will update this post with a link to the docket page on Regulations.gov once the fee hike is officially published.
Those of you who have recently renounced–do you remember whether the fee is charged BEFORE the Oath of Renunciation is administered or after? Obviously, I am wondering whether, if it is after, a refusal to pay can somehow affect the fact that the individual has actually renounced–even if that renunciation is not “approved” by the State Department and no Certificate of Loss of Nationality is issued.
That won’t work, of course, if payment is a precondition to seeing the officer to swear or affirm the Oath of Renunciation. If payment is a precondition, or if State Department makes it a precondition, I think that, given the size of the new fee, there is an unlawful “chilling” effect on the exercise of the right to expatriate.
I would not be surprised to see counterfeit CLNs start to pop up, especially with the price increase for renunciations.
Luckily, CLNs can easily be verified by checking the list in the Federal Register. So anyone who has a CLN but is not on the list may wish to make a complaint.
I seem to recall reading about a guy (anarchist type) who renounced USC and became stateless. Permanent Resident status in EU was sufficient for him. He later became angry because his name was not in the Federal Register so he complained to State and eventually got on the list.
Imagine that, people complaining to get on the Name and Shame list.
@qm
Pretty much the first thing that happens is they take your money.
@FromTheWilderness:
Yeah, that was Mike Gogulski; here’s his brief blog post about that incident:
http://www.nostate.com/4089/at-long-last/
@qm
When I renounced it was the very first thing. I was told to go down the hall to the cashier, pay and bring back the receipt. Without that receipt, they wouldn’t have lifted a finger.
@FromTheWilderness
Good point. I’ve never made it on the list, so if push comes to shove it may be worth considering filing a formal request.
Just posted this morning about this on the Flophouse with my take on it. After reading your really fine post, Eric, I’ve added a link to it at the bottom of mine.
In the Diplopundit post, he/she says:
“In any case, Americans who will be upset by this change in renunciation of citizenship fee can contact Congress to complain about this. Their elected representatives, presumably will be super-helpful to the soon-to-be non-voters.”
Probably true but then Congresscritters hardly pay any attention to those who WANT to stay US citizens.
So apparently we can send comments. If that doesn’t work this would be one that I would happily go out and picket the US embassy here over. Whether an individual wants to stay a US citizen or not, there is a basic human right at stake here. Maybe I will never exercise the right to expatriate but I’ll be damned if I will let them take away that option.
@notamused:
That’s probably next. Relinquishment itself may even remain technically free, but the paperwork processing fee if you want a CLN will be $2,350.
At some point the Soviet Union charged citizens for the ability to leave the USSR. Does anyone know what the charge was in certain specific cases?
Complain to Congress? That’s almost as funny as when I called the IRS for assistance to fill out their renunciation tax form, and they told me they were barred from providing assistance on that form, and if I wanted to complain, I (already an expatriate) should complain to my Congressperson.
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Divorcing the US is like people who jumping ship from a failing company, it’s usually the good people who leave first.
The US abusing its ex-pats won’t change that fact.
I don’t understand the effective date for the fee increase.
It says: “This interim final rule becomes effective September 6, 2014.”
But it also says: “The Department intends to implement this interim final rule, and initiate collection of the fees set forth herein, effective 15 days after publication of this rule in the Federal Register”
So which is it? Sep 6 or 15 days from publication in the Federal Register on August 28.
If it is 15 days from Aug 28, does Aug 28 count as the first day, and if the rate goes up on the 15th day, would that be September 11?
I have an appointment to relinquish on Sep 11. Hopefully they are lumping relinquishment in with renunciation. They do not specifically say that relinquishment is still free, but since they only talk about RAISING the $450 fee to $2350, and relinquishing was previously free, I assume that relinqusihing is still free.
@Foo, “That’s probably next. Relinquishment itself may even remain technically free, but the paperwork processing fee if you want a CLN will be $2,350.”
Because a CLN is not required for a Relinquishment, I can now see how they can justify charging for one.
Former Pat: I have relinquished and my bank does not like my “reasonable explanation” so I need a CLN.
State Person: We can sell you one of those for $2,350.
Former Pat: Why should I have to pay for that!!
State Person: Its not required under 8 US Code so take it up with your bank.
@dax: I asked IRS tax law on their website about determining an expatriation date…their response;
“The Answer To Your Question Is:
Thank you for your inquiry and we do apologize for the delay in responding to your questions.
However, in reference to determining your applicable expatriation date and all the other related issues our basic Electronic Tax Law Assistance is designed to assist the general public in complying with their Federal tax obligations. Our goal is to provide complete and accurate responses to as many taxpayers as possible. With that goal in mind and to maximize our resources, we are unable to provide assistance on highly technical and complex issues that involve lengthy research. Due to the technical or complex nature of your inquiry we are unable to provide a response via this service. You may utilize our web site http://www.irs.gov/, or a private research service to supplement the information provided within the IRS publications.
You may also want to consider the use of a tax professional to address the specific issue, for further guidance, we strongly recommend that you visit with an Expatriation tax practitioner (Attorney or CPA) who has considerable experience in this field.
The expatriation tax provisions under Internal Revenue Code (IRC) sections 877 and 877A apply to US citizens who have renounced their citizenship and long-term residents (as defined in IRC 877(e)) who have ended their US resident status for federal tax purposes may, perhaps, be helpful to you.
Thank you for using this service.
“no public benefit” Well, they don’t see that there is any public benefit in having citizens abroad at all. There’s sort of a which came first thing going on here. If we were seen as a public benefit before, FATCA could not have happened the way it did. Perhaps the fee will help the processing of these more in demand services to go a lot faster.
@Victoria
“Probably true but then Congresscritters hardly pay any attention to those who WANT to stay US citizens.”
I think given the choice, a great many of us would like to keep our US citizenship. I was kind of holding out that the State Department might somehow tilt in our direction, but it’s clear now that they too wish to wage war on us. This’ll be a game changer for many, but unfortunately a great many more will be unable to do anything about it now. It looks like our value is solely in our ability to pay.
Remember Phil Hodgen’s words, “get out while the going’s semi-good”? The going’s gotten a lot less good today.
@somewhere:
That’s just taking the piss. There is nothing technical or complex about your request. They are simply under orders to make life difficult for taxpayers abroad. I got the same run-around when asking straightforward questions about how to fill out Form 8938. “We’re not allowed to answer questions about that.” Then WTH is your job anyway? If I can’t get an answer from the IRS of all places, how am I supposed to be able to fill out these stupid-arse forms?
But of course, if they simply answered your question, they would lose out on the chance to collect much larger penalties.
Ambassador Heyman needs to be called in by Ottawa to explain this. Why is it harder and more expensive for Canadians with a birth only, or American one parent only, to get out of a US system IMPOSED upon them, than someone that grew up in the US and chose to leave as an ADULT!
Perhaps its time that governments who have signed IGA’s and unleashed this nightmare on their own populations step in to help. After all, their rationale for signing the IGA was that anyone who doesn’t want to be American can just “denounce” and be done with it. The due diligence provisions in the IGA’s adopted by Canada and many others permit FI’s to establish the non-US Personhood of somebody by asking for a CLN or “reasonable explanation” why there is no CLN. It should be open to Finance to amend its implementation guidelines (or even pass a Regulation) directing that unwillingness to pay US$2,340 to exercise a UN-guaranteed human right is a reasonable explanation and that a sworn oath of allegiance to the Queen of Canada with stated intent to confirm or effect relinquishment, if provided to the Bank for its files, must be accepted as a reasonable substitute.
US law (s. 349 INA) permits relinquishment by oath of allegiance and the post-WWII treason cases requiring oaths to be “meaningful” did not contemplate the current situation nor the UN Declaration of Human Rights which were not argued nor in effect at the relevant time. American Nazi’s who took an oath in favour of the Reich or the Fuhrer before taking a microphone to make propaganda broadcasts very likely gave not a thought to s. 349 of the INA (or its predecessor) – indeed, most were fervently hoping that their own country would “see the light” and join the Nazi revolution. In other words, they expected or hoped to be American citizens of a Nazi America allied with Germany. Their oath-taking likely wouldn’t have satisfied the test in Affroyim v Rusk in any event. Someone who, for the sole and deliberate purpose of shedding an unwanted and usually tangential or slight US connection that has resulted in citizenship who then takes an oath intending to comply with a domestic law (FATCA having been enacted by Canada via C31 and the IGA) surely satisfies all the prerequisites and is taking a meaningful oath for a deliberate purpose. There is no requirement for a consular visit in the statute nor does its plain meaning exclude this path. The older cases in a radically different context did not consider this nor are the principles followed in this cases applicable to this situation. If the USG wants to plug its ears and refuse to receive that oath absent payment of $2,340, that is their problem.
I suggest Finance be pressed to have that put down in black and white somewhere and see how the USG responds to that. What are they going to do? Cancel the IGA because Canada is not helping them turn back the tide of renunciations that they unleashed upon themselves but don’t feel like paying for?
This would be funny if real people weren’t being hurt by it.
You have to marvel at the irony of the U.S. Government’s position.
Independence was fought for so hard in terms of no taxation without representation.
Now they impose rules which can effectively tax foreign nationals married to U.S. citizens, even if they themselves are not citizens and have no representation.
Then we quite peacefully exercise our basic human right to renounce or relinquish citizenship, and they make an effort to prevent this from happening.
#Look in the mirror. #Evil, oppressive empire. #Americans take your country back.
Eloquence is simply beyond me this morning as I try to describe how livid I am over this utter trampling of our rights under the Expatriation Act and the14th Amendment! A right is not a privilege. It is something to which we are entitled and now they have priced it beyond what an ordinary person can possibly afford. Renunciation is now the prerogative only of the well-to-do. The rest of us might have to choose between renunciation and replacing a broken refrigerator!
Renunciation paperwork only costs the US government so much because they insist on doing it. Any American should be able to walk into a US Consulate anywhere on earth, any time, take the oath and have their name typed into a computer database, the information thereby shared in an instant with all other government agencies that require it. Done! The convoluted and expensive process they have created is nothing more than a “make work project” for consular officials and “you and me, brother” get to pay the tab. The process doesn’t have to be so complicated particularly in this computerized age. There is no excuse for the bureaucratic inefficiency that these fees reflect. Even the $450 was an attack on our rights but $2350.00 is out and out war. I think it’s time to start picketing outside US consulates.
As Eric has pointed out, this action against us is in clear violation of the United Nations Declaration of Human Rights. On August 7 we filed a formal Complaint with the United Nations Human Rights Commission and we are currently awaiting its response. Perhaps we should send them an “addendum”.
Is there anyone on board that has computer graphics experience? I would like to use a graphic like Canada at NATO used to get the message out to Russia…the map that labels “Russia” (in red), and Ukraine (in blue) as “Not Russia”. This would need to be a world map with the US labelled “US”, and the rest of the world labelled “Not US”.
It needs to be tweeted to State, Consulates, IRS, and Ambassadors.
@bubblebustin, I had a long conversation with someone I respect and this person explained to me the post 9/11 context that State operates in right now. Many people sympathetic to Americans abroad (hell, they saw us as their natural constituency) got tossed out. The ones who are left, and frankly State itself, have much less power. Who really handles foreign policy for the US these days. State? Or the US military? The latter surely. So even if there were (and I think there still are) people who would like to help us, they just aren’t in a position anymore to do so.
So does anyone know if the effective date for the fee increase is actually September 6?
Or is it 15 days after publication in the Federal Register on August 28?
Come on guys! $2350 is cheaper than getting your taxes done. You will get back your investment easily after a year. Yes it’s a scam to try and reduce those leaving. If you can’t scrape together this amount of money (as a large number of people can’t) then the IRS isn’t going to do anything to you as you don’t have anything to take.