The Q2 2015 Quarterly Publication of Individuals Who Have Chosen to Expatriate has been placed on public inspection for printing in the Federal Register for 31 July 2015, one day later than required by law. This is the seventy-fifth list to appear since the passage of the Health Insurance Portability and Accountability Act, or maybe the seventy-fourth. (That depends on whether you count the 52-days-late Q3 2000 list, which was an exact duplicate of the Q2 2000 list.)

The list this quarter contains 460 names. This is the smallest quarterly total since the absurdly-small Q4 2012 list, which contained just 45 names. On the other hand, it’s also the second-fastest publication time since then too (the fastest being the Q3 2014 list, the only one to appear on time since then). During the same period covered by the newest list, the FBI’s NICS gun control database went from 28,646 renunciant records to 30,117, an increase of 1,471 renunciants — similar to the number added to NICS during the first three months of the year.

Working from the (possibly outdated, and if so probably too low rather than too high) estimate of four or five relinquishers for every six renunciants, the NICS figures suggests that at least 2,700 people gave up U.S. citizenship during those three months. On top of that, perhaps 4,500 ex-permanent residents cancelled their green cards during the same period (based on USCIS statistics from 2013).

Table of contents

1. Media articles about specific relinquishments
2. Comparison with NICS
3. Who shows up in the expat honour roll anyway?
   • Former long-term permanent residents?
   • Uncovered expatriates
   • Other theories
4. Conclusion

Media articles about specific relinquishments

Here’s a table of people mentioned by name in media reports as having given up U.S. citizenship since the beginning of 2013. Only one person from the table showed up in this quarter’s list: Camillo Gonsalves, a diplomat and politician from Saint Vincent and the Grenadines who says he renounced citizenship back in September 2013. I have no idea what took State & the IRS so long to get his name printed, seeing as some people who gave up citizenship in late 2014 already showed up in last quarter’s list. On the other hand, some folks like Shere Hite took six years to get their names printed back in the early 2000s, so I guess the IRS is getting better at this after decades of practice.

Back to table of contents

Comparison with NICS

On 31 December 2014, NICS had 27,240 renunciant records, according to the FBI’s 2014 NICS operations report. The below table lists the monthly additions to NICS since then, compared with the quarterly lists in the Federal Register. The FBI has the bad habit of uploading the new NICS report each month at the same URL as the old one; the only way to keep a verifiable collection of old reports is to save old ones in the Internet Archive each month, and unfortunately we didn’t remember to do this for all months. As a result, the January and February links go to Innocente’s comments, rather than copies of the FBI’s PDF files.

Back to table of contents

Who shows up in the expat honour roll anyway?

There’s two major disputes over the contents of the Federal Register lists: is it required (and does it bother) to include (1) former long-term permanent residents, and (2) non-covered expatriates? Both of these disputes revolve around some horribly-ambiguous wording in the last sentence of 26 USC § 6039G(d):

Notwithstanding any other provision of law, not later than 30 days after the close of each calendar quarter, the Secretary shall publish in the Federal Register the name of each individual losing United States citizenship (within the meaning of section 877(a) or 877A) with respect to whom the Secretary receives information under the preceding sentence during such quarter.

877(a) doesn’t define what it means to lose United States citizenship at all; it only defines what it means to be subject to the tax in 877(a). However, 877A(g)(4) does define what it means to “relinquish citizenship”.

Former long-term permanent residents?

Beginning from the Q1 2012 list, the IRS began to claim that “For purposes of this listing, long-term residents, as defined in section 877(e)(2), are treated as if they were citizens of the United States who lost citizenship.” However, those who believe this claim, or who repeat it without fact-checking it (e.g. most of the media), have never provided the name of single person who was verifiably a non-citizen long-term permanent resident and who appeared in the Federal Register.

The one country in which it is easiest to find media reports of named people giving up U.S. green cards is South Korea, because of the legal requirement there (soon to be abolished) for people who obtain foreign permanent residence to cancel their South Korean resident registration, and for them to prove cancellation of their foreign permanent residence to regain that domestic resident registration. None of the people named in those reports showed up in the Federal Register list (and all of them were pop stars, suggesting they had sufficient assets to meet the “covered expatriate” threshold, in the event that’s relevant at all to the list).

The question of whether the list is supposed to include ex-LPRs is a bit more challenging. Even after the most recent revision to Form I-407 in February 2015, USCIS still doesn’t collect Social Security numbers or length of time since the person obtained the green card from the 1,500 or so people who cancel their green cards each month. This means that the data they provide to the IRS on green card cancellations probably remains as useless as it was back in 2000.

Furthermore, Virginia La Torre Jeker, in comments at AngloINFO, disagrees that 6039G(d) even gives the IRS the authority to print the names of green card holders in the first place:

Frankly, the law in Sec 6039G states per below that the name of each individual “losing United States citizenship (within the meaning of section 877 (a) or 877A)” should be published in the Federal Register. First, it is not clear to me that United States citizenship is the same as holding a green card! Second if one refers to the referenced Code sections of Section 877(a) and 877A – these refer to those persons who are deemed to have a tax avoidance motive / fail to make the tax certification and either lose US citizenship or long term lawful permanent resident status (i.e., after having such status for 8 tax years out of the preceding 15 tax years). As such, certainly not all green card holders should be listed in the Fed Reg. and further, I wonder if ANY should be listed at all given the wording in 6039G, to wit — “losing United States citizenship”.

877A definitely does not include abandonment of a green card under the definition of “relinquishment of citizenship”; it only includes it under “expatriation”, and since, as Ms. La Torre Jeker mentions, the statute only permits publication of the names of people “losing United States citizenship”, it’s doubtful the IRS has the authority to print the names of ex-green card holders. So if you do happen to know the name of an ex-green card holder appearing in the Federal Register, it could indicate that Treasury Secretary Jack Lew is in violation of 26 USC § 6103. Try dobbing him on Form 211 for your whistleblower reward!

Back to table of contents

Uncovered expatriates

David Lesperance and several others have suggested that the list only contains covered expatriates.

From Bill Yates’ earlier interview with Virginia La Torre Jeker (discussed by Brockers here), we know that in the early 2000s the U.S. government was thinking of trying to enforce the Reed Amendment by comparing names of arriving travellers to the expat honour roll and making them waive their Section 6103 privacy rights so the IRS could release their records to the Justice Department and the Attorney General could determine whether or not the person “renounced United States citizenship for the purpose of avoiding taxation by the United States”.

Similarly, William J. Krouse of the Congressional Research Service wrote back in 2000, in the context of Reed Amendment enforcement:

As required by HIPA, IRS publishes a list quarterly in the Federal Register of the names of persons who have renounced their U.S. citizenship (expatriates) and who, by having renounced citizenship, may have done so to avoid taxation and may meet tax liability or net worth tests under 877(a). The IRS, however, does not make a preliminary determination based upon its records whether these expatriates meet either test and, thus, would be inadmissible into the United States. Consequently, these lists include expatriates whose motivation may not have been tax avoidance, and whose exclusion might be an embarassment to the United States.

Both Yates’ and Krouse’s statements seem to imply that non-covered expatriates are supposed to be in the list. This would also square with the previous observation that almost all ex-citizens of 2006-or-earlier vintage showed up in the Federal Register — even South Korean apple farmers supporting a family of five on US$25,000/year.

Obviously, the biggest relevant legislative change since Krouse wrote that quoted passage was the American Jobs Creation Act of 2004. Before it passed, there was a definite procedure for deciding that an expatriation had avoidance of taxation as “one of its principal purposes”: people who met the “covered expatriate” test of 877(a)(2), and who didn’t fall under any of the statutory exceptions, could apply for private letter rulings about the “principal purposes” of their expatriations. Afterwards, however, Congress took away the IRS’ authority to make judgment calls, and there would be no more investigations of the “purposes” of an expatriation; if you met the asset, tax liability, or missing tax forms test, you were subject to the expatriation tax.

However, if Mr. Krouse accurately described the IRS’ procedures for compiling the Federal Register list, I don’t see why the AJCA would have spurred the IRS to change those procedures. Besides, if the IRS were trying to restrict the list to covered expatriates, they would have to wait until each expatriate’s tax return due date — as late as October in the year following the loss of citizenship or green card — before publishing the name. Without a Form 8854 in hand, the IRS usually has no way of knowing whether a person is a covered expatriate (unless & until they become one by passing their tax return date without having filed that form), but as the table above demonstrates, some lucky people appear in the expat honour roll during the same year in which they relinquish citizenship.

There might be one case in which a person who has not yet filed a Form 8854 could already be known to the IRS to be a covered expatriate: if the IRS receives the person’s CLN, the person did not file U.S. taxes in the past five years prior to the expatriation date, and the IRS has proof that the person had sufficient income to generate a filing requirement. The third condition in particular should have been rather rare up until now, unless the person had U.S.-source income; FATCA might change this situation, though.

Back to table of contents

Other theories

Some folks think that non-renunciant relinquishers do not appear in the Federal Register. We’ve discussed this idea in the comments section here a few times, and John Gaver once advanced this theory on his blog and specifically predicted that Tina Turner would not appear. According to the Washington Post, Turner confirmed to the U.S. consulate that her acquisition of Swiss citizenship was performed with intent to relinquish U.S. citizenship under 8 USC § 1481(a)(1). Turner’s name showed up in the Q1 2014 list. The Post also claimed that relinquishers don’t pay the exit tax, and had to issue a correction a few days later, so maybe they’re wrong about everything else they said too; however, other people whose publicly-posted CLNs show that they relinquished instead of renouncing (e.g. Petros) have also appeared in the list.

Robert Wood wrote last year that the list does not include “[w]hat is often called consular expatriations, where people don’t file exit tax forms with the IRS”. I’m not quite sure what “consular expatriations” are; these days, all expatriations involve showing up at a consulate in person, unlike the good old days when you could get rid of your unwanted citizenship by mail (something which you can still do in civilised countries like Ireland — and without paying an absurd fee, either).

Back to table of contents

Conclusion

The list has some names in it. They belong to people whose names the IRS decided to publish. There are other people whose names the IRS accidentally forgot to publish, or deliberately decided not to publish, or whatever. Ex-green card holders probably aren’t in the list. Everything else is a toss-up. Even lawyers can’t figure it out. Caveat lector.