The U.S. Department of State (DOS) recently increased its renunciation fee from $450 to $2350 because DOS and the U.S. Congress hold in contempt any U.S. citizen who would renounce citizenship. One argument used is that the fee increase is necessary for national security.
The Alliance and our attorney, Jim Butera of Jones Walker, believe that the fee increase violates both the United States Administrative Practices Act and the Expatriation Act of 1868 and consequently filed a complaint (see below) with DOS.
Some of you also complained to DOS (thank you!) by responding to a request for comments on the fee increase at the Regulations.gov website. However DOS made the decision (after the submissions?) not to post any comments that were emailed to the government site. I enclose below some comments that one of Mr. Butera’s colleagues discovered for us on the website. I also show a submitted comment (from @EmBee) that will never be published, and a “response” from DOS.
My understanding is that U.S. courts prefer that, when there is a dispute, both sides attempt to resolve the dispute without going immediately to court action. That is what we have all done, by submitting our complaints and rationale why the fee increase is unreasonable and violates U.S. law.
During the next few months I expect either no response, or a negative response from DOS.
Assuming a negative response, the NEXT STEP would be to initiate litigation. There is zero possibility that any U.S. political party would litigate to make it “easier” for U.S. citizen-voters to renounce citizenship, so we would have to come up with the money ourselves.
The ballpark (don’t hold me to this) cost of getting to the first court would be about $50-$75k AND the odds do not appear to be in our favour that we would be successful. What is obvious to us may not be obvious to the courts — but there is some chance of success.
If there is any potential donor reading this, and willing to fund a very high risk venture aimed at freeing humans from unwanted U.S. citizenship, let me know.
THE COMMENTS CAN BE FOUND HERE:
[BUT FIRST, I post below a comment submitted by @EmBee that was NOT allowed by DOS to be published: and follow this by a RESPONSE of the DOS TO EmBee’s point that renunciation is not an “easy” process.
“It’s plain for me to see that someone at DOS took note of the rising number of renunciations and decided to make renouncing one’s US citizenship even more difficult by hiking the fee to 5 times what it had been before.
This appears to be a case of some unfriendly dissuasion going on here. Now many Americans will have to scrimp and save, borrow if need be, to come up with the $2350 fee to renounce.
I feel sorry for those who will find it hard to raise this amount. Imagine a family of 4 or more trying to come up with around $10,000 so they can all share the joy and simplicity of being one nationality only — the nationality of the nation they choose to live in and have sworn an oath of allegiance to.
Please abandon this outrageously high renunciation fee and while you are at it do a serious rethink of the whole renunciation process. Nobody should have to journey to a US consulate to officialize their renunciation.
This could easily be done by registered mail with notarized copies of essential documents and one’s passport enclosed. Canada, in fact, uses that method and incidentally it only charges a $100 fee for processing.
Just ask Sen. Ted Cruz because he simply, efficiently and inexpensively renounced his Canadian citizenship this year.}
Submitted Anonymously Sept 15, 2014″]
DOS argues that renunciation of U.S. citizenship [and associated obligations to the IRS?] is quite simple:
“I won’t comment on the rightness or wrongness of the law, but as an American consular officer serving in Europe, I’d like to assure Mayor Johnson that the process is not in the least “very difficult.”
Basically, you make two appointments at the consulate. At the first one, the consular officer hands you a bunch of paper and ticks off the ramifications of renouncing U.S. citizenship.
At the second interview, two weeks later, you pay the fee ($2,350), review the bunch of papers one more time, assure the consular officer that you are taking this step voluntarily and without duress, take the oath (or affirmation, if you prefer) of renunciation, and that’s it.
I’m sure my colleagues in London would be happy to take Mr. Johnson’s money and fit him into the schedule.
He won’t find it difficult at all.
And in my experience, there are several hundred others who are lining up to take his place as U.S. citizens.“
THE FEW COMMENTS THAT WERE POSTED ON THE REGULATIONS.GOV WEBSITE:
“The excuses given in this change of fees is farcical, but it’s the level of service I have come to expect from the State Department. Treating citizens abroad as criminals has been the entirety of my experience for the last 12 years.
The claims that the government performed expatriation service below cost is ridiculous on its face. The US Government has never done anything at below cost. Asking for a breakdown of fee is pointless, since the claim of “national security” is a catch-all for “this doesn’t concern you, citizen”. The service consists of checking 3 databases and then signing off on a letter. These fee increases are punitive, plain and simple.
Regardess, what message does it send when I was given a written quote for $450 by the State Department for service on 7 Sept 2014, only to have the fees change, while I was being processed less than a week later? That’s your word, your commitment! That the US Government does not honor its written commitments to its citizens? Yet if I as an individual try to not fulfill my required obligations? Ha. Well, that says it all.
Terrible contingency planning for those already in the system, vindictive actions and lack of integrity all in one action? Good riddance.”
“I find it outrageous that a fee can be increased by 422% when the precise reason that most expats are considering renouncing US citizenship is the new and increased legal requirements, which puts US expats in a very difficult situation. Recent legislation has made it increasingly difficult for US expats to secure their financial future, particularly for retirement savings, by prohibiting us from partaking in private retirement savings programs outside of the US, while at the same time putting severe restrictions on which types of funds we can save in in our US IRAs. It gives many of us no other option than to seriously consider renouncing US citizenship, to ensure that we are financially protected in the future (and hence avoiding reliance on the US government in our old age). Therefore, I find this increase of the renounciation fees a huge injustice and an attempt to doubly penalize a group of law abiding citizens. In my opinion, this is contradiction in itself and a trend in the wrong direction.
I strongly oppose this increase and urge the Department of State to not only rethink the fees, but also the treatment of US citizens living abroad, the large majority of which are law abiding, regular people with no other wish than to be able to keep their citizenship, while being able to work abroad.”
3. Marc Schmid:
“On August 4, 2014 I got in contact with the US embassy in Berne, about renouncing my US citizenship. I was then told that I have to wait at least 3 weeks before I could renounce my citizenship because everybody is given a waiting period to rethink their decision. I was not told, that the fee of $450 would be increased to $2,350 by mid September!
On September 23, 2014 I told them that 3 weeks had well passed by now and I still stand by my decision to renounce my citizenship. That’s when they sent me the fine prints about the renunciation with the new fee.
I demand the opportunity to renounce my citizenship for the old fee. Why do you people have no moral values? How can you go home at night and face your children when you are treating people this way?
Apart from that I just want to let you know how heart broken I am about how US citizens are being treated abroad. I am 25 and I grew up in Switzerland. I only ever spent one year in the USA as an exchange student. I automatically became a US citizen when I was born in the USA while my Swiss parents lived there for half a year.
All my life I was so proud of being an American citizen and it was a dream of mine to some day emigrate to the United States. But instead the US government is constantly making my life difficult. We have to pay taxes in the US, even though, we do not live there. No other country’s citizens have to do that. The embassies and consulates are always rude and never make our lives easier.
Hoping that a miracle will happen and my message will be heard by someone.”
4. (We are not liked by) Jean Public:
“all of the fees are so low that American taxpayers are gouged to make up the difference so that the state dept is in effect servicing foreigners who should be paying their full bills on the backs and wallets of the American people. these fees are much too low in view of the high salaries and benefits of the employees of the state dept. none of the fees in any way fully cover the full costs of this agency. IN ADDITION, WHY ISNT IT TIME TO ADD EXTRAS TO COVER EXTRA COSTS OF OUR GOVT TO THIS SERVICE THAT WE PROVIDE TO FOREIGNERS. WHY ARE WE ALWAYS KOWTOWING TO FOREIGNERS AND SPITTING ON AMERICANS? ADD CHARGES TO THESE FEES TO MAKE A PROFIT FOR OUR TREASURY AND TO PAY FOR THE UNKNOWNS THAT COST US MORE THAN IS BEING CHARGED. THE STATE DEPT SEEMS TO HIRE DEAD BRAINS THAT SEEM TO ]NOT UNDERSTAND THAT AMERICA IS BEING OVERWHELMED BY FOREIGNERS. L/3 OF BUFFALO IS SOMALIS.WHY? 1/3 OF PASSAIC NJ IS PUEBLA MEXICANS? WHY. WHY THIS ENORMOUS INVASION OF AMERICAN IS BEING ALLOWED TO TAKE PLACE. WE DONT NEED THESE FOEIGNERS HERE TELLING US HOW TO RUN AMERICA AND HOW TO BANKRUPT AMERICAN CITIZENS SO WE CAN GIVE MORE WELFARE TO THESE IMMIGRANTS. THESE IMMIGRANT KIDS ARE COSTING US $1 MILLION DOLLARS JUST FOR THEIR EDUCATION COSTS. NOW AGRICULTURE DEPT IS THROWIN FREE FOOD AT THEM. WHEN DO THE COSTS STOP FOR AMERICANS. ITS TIME FOR OIUR GOVT TO FIGURE OUT HOW TO MAKE MONEY OFF FOREIENERS, NOT BANKRUPT AMERICANS FOR THEIR COMING HERE. THEY COME HERE TO ENRICH THEMSELVES, NOT TO HELP AMERICA. REMEMBER THAT. THEY WILL LIE AND STEAL TO DO THAT. AND THEY ARE DOING THAT ALREADY.”
5. Alliance for the Defence of Canadian Sovereignty (submitted by our attorney Jim Butera). This is a PDF which can be found here.
6. Kathleen Conway:
“I think it is bad enough that the FACTA is screwing me over, making my life tough to live in Germany.
But now when I try to renounce my US citizenship, you want a fee of 2,350 $.
Are you all nuts?
I have been living in Germany since 1989. I have been paying German taxes which are high enough, but now you want some of the little cash that I have left!!
Banks will not work with me because I am an American! They have cancelled my retirement plan and now I have nowhere to invest it!!
I cannot invest in a American bank, because I do not live in the states.
Go after the corporations that hide Money and leave us little guys alone!!
No wonder the US is broke!! My 10 year old daughter handles money better than you!
7. Catherine Hoover:
“I am commenting on the increase in the fee for Renunciation of Citizenship, which has changed from $450 to $2350. I am totally shocked that this fee was increased by more than 500% in a matter of days. As a retiree and a widow living on a small pension this change is devasting to me and my plans. What angers me especially is that when I prepared my application to renounce, it was with the understanding that the fee was $450. I emailed my application on September 2 and was told there were no appointments available for 2 weeks and that I should re-submit on September 15. I did as instructed. The response containing my appointment date (Feb., 2015) included the notice of the astronomical increase in the consular fee, with the note that it is effective September 14.
I feel that those of us who, in good faith, began the application process of Renunciation before the fee was summarily “jacked up”, should not be charged the fee of $2350. We were not given the necessary information when we made our decision to apply and it is unfair to charge us the new rate.
Although I realize my submission may have little impact on the Regulations, I would wish to make a personal appeal that I not be charged the new consular fee. Given my low income, it would cause extreme hardship. Thank you”
“This increased fee to renounce citizenship is ridiculous and oppressive. It’s bad enough that the US taxes worldwide income and requires me to reveal all my foreign accounts. I would prefer to stay a citizen. Despite living overseas for the last 17 years, I still feel an emotional attachment and loyalty to the US. However, I’ve been working toward renouncing my citizenship SOLELY based on avoiding the burden of filling out so many difficult tax forms every year for no purpose (My income is less than the exemption.) and avoiding that intrusive FBAR form. Now the government is raising the fee far higher than it can possibly cost to process the paperwork. It’s outrageous.
What’s going to happen is as follows:
–People like me will stay citizens and struggle with complying with all the ridiculous rules (FATCA and FBAR).
–The wealthier expats will simply pay their way out. Yet the US government will LOSE money in the long run: they would earn more money in taxes from the wealthy expats by streamlining things, keeping them happy so that they wouldn’t renounce citizenship.
With all of the oppressive tax rules and the difficulty in complying, we expatriate citizens feel like we are being punished and treated as suspected criminals for living in another country, even though for many of us this decision was based on a job or on a relationship, certainly not on disloyalty or criminal intent. Please reconsider the fee hike, as well as other oppressive measures such as FBAR enforcement and FATCA. Thank you.”
“Up goes the Iron Curtain — Consular fees for expatriation go from $400, to $450, to $2350 in one year!
Did you know there are all kinds of American citizens living abroad, the vast majority of whom are honest. Many became Americans under accidental circumstances.
Expatriation is a right of all US citizens under law. Other consular services are provided for minimal or no charge (even when there are high costs for the State Department). Why single out American expatriates?
The new fees are a cheap shot targeted at the American Community abroad and represent a shameful attitude to the very people to whom you have pledged yourselves to serve.
To think that people immigrated to the US, and risked their lives, to get away from this kind of exploitation. The new regulations are simply apauling.”
10. Albert Russell:
“International law and US law have in the past recognized a human’s right to leave one nation and become a citizen of another. It is sad and pathetic to see the US try to build a wall (ie: Berlin) to prevent people from leaving. How much does it really cost to forward a signed paper to the Department of State?”
“The fee is being justified by the US government as the cost of administering renunciations. It is however the US government which has decided on the overly burdensome process to renunciate. A streamlined program (e.g. postal submission or web-based) would cost much less. If the US government thinks a streamlined program is not suitable, then it should be the one to shoulder the difference in the cost between the lengthy and streamlined process, not the renunciant.
This new fee really is an attempt by the US government to render as difficult as possible the basic human right to expatriate. As such the US government is abusing a fundamental, and cherished, right – to vote with one’s feet to leave a country’s laws and jurisdiction.”
“It is understandable that the US Department of State seeks to cover the costs of any administration required for a variety of services–either the individual pays or all taxpayers pay, but the money must come from somewhere. Fees for the renunciation of citizenship are, however, a unique case. ‘Freedom’ is considered to be a defining feature of the United States. Americans cannot really be said to be free if there is a barrier to their ability to shed their citizenship, making the right to renounce extremely important. The new fee–$2,350, said to represent the full cost of administering the renunciation of a single citizen–is a substantial barrier to the individual seeking to exercise this particular right of citizenship. The burden shared is substantially less.
For example, in 2013, nearly 3,000 Americans renounced their citizenship. Had they been charged the new fee to cover all administrative costs, exercising their right to renounce citizenship would have cost–of course–$2,350 per renunciant and nothing to the taxpayer. Some of those 3,000 Americans may not have had the financial means to renounce. (Despite media rhetoric, not all those who renounce are wealthy tax-dodgers.) Had this same fee been shared amongst taxpayers–presuming all 319 million US residents are taxpayers*–the cost would have been $0.02 per taxpayer**. That’s a very small cost to protect this absolutely integral right.
It’s unfortunate that anyone should feel the need to shed their citizenship. But if Americans genuinely believe in ‘freedom and justice for all’, then this must be supported in practical terms. Two cents per person per year is a small price to pay for keeping the exit clear for those who wish to use it.
Furthermore, the $2,350 fee is regressive: it penalises Americans abroad who may not have a lot of money (they cannot exercise this right of citizenship if they don’t have the money) whilst providing no particular barrier for exceptionally wealthy Americans abroad–those who are far more likely to be dodging taxes.
I hope the US Department of State will reconsider the fee charged per person. The $2,350 fee as proposed is an unfair barrier to the exercise of a basic right to those on modest incomes, an ineffective means for preventing tax evasion by the ultra-wealthy, and is an cost that can easily be shared by taxpayers to protect this essential right of citizenship.
* Of course not all US residents are taxpayers, but due to US tax law many non-US residents are taxpayers, so we have to assume this blunt tool is accurate enough for illustrative purposes.
** $2,350 fee x 3,000 renunciants = $7,050,000 total cost of renunciation in 2013. The total cost of renunciation was then divided by the 319 million US residents resulting in a cost of $0.02 per US resident per year.”
13. Peter Geddes:
“Creating a finance based Iron Curtain.
Its not fare to the everyday working guy.
The WEALTHY are already way ahead of the game and the little guy who can least afford it will suffer”
“I am writing to express my concern over the increase in fees to renounce my American Citizenship (RIN) 1400-AD47. I am Canadian. I was born and raised in Ontario and have never owned any property or collected a salary from any job in the United States. I have no off shore accounts except two checking accounts with the Royal Bank in Ontario. I am a retired teacher with 4 children and 9 grandchildren whose mother happened to be born in Rocky Mountain, North Carolina. After her death in 2000 I decided to apply for dual citizenship as a memorial to her. I never intended to use it in any way. I was just missing my Mom and this made me feel a little closer to her. Since that time I have realized that I am 100% Canadian and I feel I would like to return to my former status and renounce my American citizenship. When I die it will make things much easier for my children.
When I made my first appointment in July I received a notice stating that my fee would be $450.00 payable at the time of the appointment. I made an appointment and arrived at the Consulate Aug. 18th. I was instructed on how complete my forms and make the actual appointment. That day I was assigned an appointment for January 13th, 2015. At that time the fee was still $450.00. On August 29th, 11 days later, I received notice that the fees had gone up to $2350.00!!! I was shocked!!! I had been given no prior warning of this increase. I am on a teachers pension and Im presently financially assisting my youngest daughter who has returned to school. This increase is huge.
I have lost sleep over this and tried to figure out how to respond. It seems to me that since my application is already in the system and was at the time of the announced increases that I should be grandfathered and pay the agreed upon fee of $450.00. My file will not take very long to review as I have had very little dealings in The United States and should more accurately reflect the $450.00 cost of processing. Another possible solution is to charge each applicant in accordance with the amount of time it takes to process their file rather than charging the same huge fee to everyone.
I am hopeful a more palpable solution can be reached.”
The fee for renunciation includes the cost of any future litigation involving statutes. Wow.
In the Final Rule of the US DOS on the five-fold increased fee for renunciation there is this extraordinary statement:
“In raising the fee to process renunciations, the Department has not restricted or burdened the right of expatriation.”
In contrast, our (ADCS) U.S. attorney, Jim Butera, said this in part to DOS on our behalf:
“….In addition to the Interim Rule’s questionable predicate as to the scope of U.S. citizenship, the fivefold increase in the processing fee for renunciation of citizenship is not just disproportionate, but now constitutes a significant burden to the exercise of a right of citizenship.
This individual right was explicitly recognized by Congress in the Expatriation Act of 1868 which provides in the following terms: “Whereas the right of expatriation is a natural and inherent right of all people, indispensable to the enjoyment of the rights of life, liberty, and the pursuit of happiness … Therefore any declaration, instruction, opinion, order, or decision of any officer of the United States which denies, restricts, impairs, or questions the right of expatriation, is declared inconsistent with the fundamental principles of the Republic.” 15 Stat. 223; R.S. § 1999; 8 U.S.C.A. 1481 notes….”
I suspect that the DOS Final Rule could be helpful in litigation against the U.S. DOS re: unwanted United States citizenship imposed without consent.
I think the assumption is that the fee isn’t a barrier for us FATCATS.
“.. suspect that the DOS Final Rule could be helpful in litigation against the U.S. DOS re: unwanted United States citizenship imposed without consent….”.
I hope that the State Dept. has now shot itself in the foot while trying to pretend that the fee increase was reasonable and justifiable rather than greedy, unconscionable and meant to raise revenues through abusing/extorting those seeking to exercise a protected right, while at the same time discouraging those who could not afford it, and thus keep even the underreported embarassing numbers down.
Even based on those willfully understated numbers, times 2350. is an awful lot of revenue raised by extorting renunciants.
@bubblebustin, I hope that this DOS presumption comes back to bite them in their assumption.
@bubblebustin, re; “@Badger
“The fee for renunciation includes the cost of any future litigation involving statutes. Wow.”
Means they were planning ahead because they already knew they were willfully choosing to go even further down the path of exploitation of ordinary people entitled to exercise a legal right.
The crime is premeditated – consciously meant to burden and extort those living outside the US.
America, the Land of Bilk and Money.
Bubblebustin: “land of Bilk and Money”! Indeed!
You must be right. There is the idea that people who renounce are doing so to shield millions of dollars from the homeland of fair taxation. So might as well hike the fee, they can afford it. Never mind middle class ordinary US citizens abroad. They may well not be able to afford it. So this basically punishes the poor, while being totally meaningless to the real FATCAts, who, of course, live in the US and pay 15% tax.