Accidental American — from Wikipedia, the free encyclopedia
…Not to be confused with the book The Accidental American…
An accidental American is a citizen of a country other than the United States who may also be considered a U.S. citizen under U.S. nationality law but is not aware of having U.S. status, or has only become aware of it recently during adulthood. Accidental Americans’ U.S. citizenship arises due to their parents’ ties to the United States rather than their own choices: they may be born in their own country but to one U.S. citizen parent who emigrated from the United States, or they may be born in the U.S. to parents residing in the country temporarily for work or study and then return to their own country in their early childhood, with few if any memories of the United States. The term may also sometimes be applied to people who definitely are not U.S. citizens but have some other sort of connection with the country, for example green card holders who moved back to their country of origin and let their green cards expire without formally cancelling their U.S. immigration status, or non-U.S. citizens married to Americans abroad. Such tenuous connections to the United States began to become a more salient issue in the late 2000s due to Internal Revenue Service crackdowns which were ostensibly aimed at tax evaders hiding assets in secrecy jurisdictions but ended up having much broader effects on people with U.S. citizenship who resided in other countries, as well as their families.
- 1 Nationality law
- 2 Awareness of U.S. citizenship
- 3 Tax consequences
- 4 Giving up U.S. citizenship
- 5 Proposed remedies
- 6 References
- 7 Further reading
I can see a few minor glitches, but whoever entered this subject into Wikipedia knew his or her stuff.
This Wikipedia article, though, makes no mention of http://isaacbrocksociety.ca/ OR any other blog (like http://maplesandbox.ca/) NOR does it have anything about Alliance for the Defence of Canadian Sovereignty (ADCS-ADSC), the Canadian litigation on behalf of two Canadian Accidental Americans: http://www.adcs-adsc.ca/ OR http://citizenshipsolutions.ca/ — that site should be a first stop for anyone to determine whether or not he or she actually WOULD BE considered a US-defined US citizen subject to US citizenship-based taxation and FATCA laws in the countries they are resident.
“The Nuremberg test or the Harry Potter test”
Brock commenter, George, asked for a front page article so we can all contribute on who escapes the FATCA web and who does not in order to show how it is so DISCRIMINATORY.
This Wikipedia article touches on some of the ways this happens, how some are identifiable and how some are now (and may go under the scattered and thus unfair FATCA radar, *though I say good for them !for the consequences of such are dire!) …
Under a strict reading of U.S. nationality law, consular registration is not required in order for a child born outside of the U.S. to a qualifying parent to “become” a U.S. citizen; the child is a U.S. citizen from the moment of birth. However, for practical reasons, if a child’s birth is not reported to a U.S. consulate or United States Citizenship and Immigration Services, the child would not have any proof of U.S. citizenship and the U.S. government might remain unaware of the child’s citizenship status. Retired U.S. State Department official Andrew Grossman wrote in 2007 that in cases of “doubtful nationality” in which a child’s derivative U.S. citizenship remained undocumented and unreported to the U.S. government, the child was not regarded as a U.S. citizen either for tax or other purposes, and he expected that it would be quite difficult for tax authorities to make determinations of jus sanguinis citizenship on their own. Karen Christensen, also of the U.S. State Department (Deputy Assistant Secretary for Overseas Citizens Services, Bureau of Consular Affairs), stated that “it is the process of being documented as a U.S. citizen that would result in official government recognition of the child’s U.S. citizenship status”. This ambiguity has resulted in American emigrant parents, particularly those married to people of other nationalities, choosing not to report the births of their children born in other countries to U.S. consulates, in the hopes that this would allow the children to escape notice by the U.S. government. Mark Matthews of Caplin & Drysdale stated, “When clients who have lived abroad for years come in, concerned about whether they have an obligation under FATCA, they sometimes react to the suggestion that their kids might be American the way one might react to a horrible medical diagnosis.“
Yep, *we’ve come a long way, baby*. Thanks to this IsaacBrockSociety.ca forum that Petros provides and the people it has brought together.
You’re right that, without the internet, this great accomplishment could not have happened back when either you or, even further back, I were struggling single parents. Today, even some struggling single parents have gotten support here and have donated what they could toward their own and their children’s (and all of our) freedom from the consequences of US CBT.
Another half baked Homelander idea – build a wall between the US and Canada.
What Homelanders don’t realise that walls can be used to keep people in as well. That’s a bad choice in this rapidly changing world
“I spoke yesterday evening with a American woman who has no sympathy for accidental americans in Canada. She says the parents should have kept up with the citizenship obligations of their child if they were going to have them born in the US (border babies).”
Ask where her ancestors came from, tell her to file her delinquent tax returns to her ancestors’ countries, and pay 150% of her net worth in penalties to each of those countries.
“Another half baked Homelander idea – build a wall between the US and Canada.”
But then how would they be able to bully Canadians, and how would they be able to operate Harper?
@star, re; “When clients who have lived abroad for years come in, concerned about whether they have an obligation under FATCA, they sometimes react to the suggestion that their kids might be American the way one might react to a horrible medical diagnosis”
Exactly. When I found out about US extraterritorial CBT and FATCA, I looked up the UScitizenship transmission rules and was overwhelmingly relieved to find that though I was bound, my child was not. Before 2011, I didn’t know that my child wouldn’t qualify to inherit the US citizenship part of my heritage to go along with their Canadian one, but luckily I never even tried to register their birth – and then in recent years, as I learned about the unconscionable burden that would have created for them without their consent, I rejoiced that I didn’t in the end qualify to saddle them with the lifelongUStaxablepersonserf burden. I was later shocked and angered when a UScompliance condor seemed to be trying to convince me that despite the resulting lifelongtaxablepersonburden and the US confiscation of a Canadian grandparent funded RESP as a “taxable foreign trust” and potentially penalizable FBAR reportable account – the US streets were paved with golden opportunities for my child IF their parent “abroad” might possibly have the requisite total months of US residence. Despite what I had totalled up and found to fall short of the magic number to qualify to pass on US status, the UScompliance condor showed an unusual depth of reaction when I said my child didn’t meet the requirements – he continued to dwell on some nebulous future US opportunities where the streets were pave with gold – should they qualify. It seemed to be that he was urging me to “misremember” my US residence in order to have my child turn out to be a UStaxablecitizen. His comments were weirdly and urgently delivered.
So glad I didn’t have that guilt to add to the guilt I felt in bringing the US taint into my Canadian family’s home and financial affairs – and the useless needless price we paid in compliance fees – sums we could not afford and which mainly came from my Canadian-only spouse’s earnings. Instead of using those funds for our child’s education, and family well being, our legal local post-CRA taxed savings went to US accountants and lawyers.
Knowing what I now know, even IF a child born ‘abroad’ qualified for US citizenship I would advise them not to claim it, and not to acknowledge even the possibility that they might qualify via a parent. And I would not condemn any parent who chose to obscure their ability to transmit such a burden to their children in order to protect them.
@Norman Diamond “Ask where her ancestors came from, tell her to file her delinquent tax returns to her ancestors’ countries, and pay 150% of her net worth in penalties to each of those countries.”
I have been writing both Irish and Greek MPS in their respective countries that because of the exceptional cisrcumstances facing their nations that they need to impose a “Patriot Levy” which would be a reciprocal CBT against those nations that are taking their own citizens in Ireland and Greece.
To be honest the rough math shows that both nations would be helped immensely.
Having done that now, when I speak to homelanders and I do run into those like Petros, I tell them point blank that I am urging the Parliaments in the Republic of Ireland and Greece to begin CBT of those in the USA.
Guess the response I then get? That would be wrong, immoral….evil.
I would urge others around the world to pressure their MPs to adopt reciprocity CBT. The dirty little secret is it would affect a multitude of nations…….two.
It would be fun to watch the US become outraged when the EU started to register US financial institutions and demand that the US Govt send detailed tax data concerning all EU citizens and “persons” residing in the US, and threatening 30% withholding on EU funds transferred to the US.
You have to give it to the US, it would never stand for it, whereas the EU, as usual, was not united and bowed to US bullying (but of course also salivated naïvely at the “illusory” promise of reciprocity).
This is an excellent way of explaining the situation to homelanders. I will try it.
@Fred and @All
We have discussed this a long time ago. Most particularly using the example of President Obama who may be called on to “regularize” his tax AND ASSET filings with Kenyan, Irish and other nations.
In addition Brock has references to news links re (relatively) new Colombian law to tax Colombians with assets (including residences) in the US …. as I recollect 30% of asset values if declared immediately or 70% of asset values if “discovered” later by Colombian authorities. There were also news reports of Ghana considering a similar move.
August 29, 2015 at 2:43 pm
I think we should acknowledge another type of Accidental American, actually more of a “Taxidental American” – someone who’s renounced but hasn’t taken the necessary steps to end their tax-filing obligations to the US.”
19. Does the agreement require Canadian financial institutions to report to the CRA on any individuals who relinquished their U.S. citizenship?
This the case in Canada. Other countries may not have his rule.
No. Canadian financial institutions do not have to report on any individuals who have relinquished their U.S. citizenship and are not residents of the U.S.
Financial institutions may ask individuals who have relinquished their U.S. citizenship for documentation to this effect. ”
What do you think IRS can do to you in Canada?
I too realized my error after I’d posted it and should have made a correction – so thanks for mentioning it as I wouldn’t want to be guilty of fear-mongering. You’re right – AFAIK banks under FATCA are under no obligation to forward CLN’s or any “reasonable explanation” as to why an individual account holder doesn’t have one. Your guess is a good as mine though as to what will happen when the IRS discovers the high rate of non-compliance related to the issuance of CLNs. What CAN they do?
‘It would be fun to watch the US become outraged when the EU started to register US financial institutions and demand that the US Govt send detailed tax data concerning all EU citizens and “persons” residing in the US, and threatening 30% withholding on EU funds transferred to the US.’
Not just the EU, each individual country because many individual countries grant citizenship to descendants of emigrants, no matter how many generations have passed. That’s why Ireland can penalize Obama’s children for failing to file Irish FBARs, and Kenya could do the same if they reinstate a former law. And it wouldn’t just be 30% of funds transfered, it would be 50% of assets per year per country, minimum 10,000 euro[*] per year to Ireland and some other minimum per year to Kenya. Indonesia can play too, if Barack didn’t file a form to cancel his orange card.
[* Not 9,000 euro because the US doesn’t set the rate and it doesn’t have to be equivalent to US$10,000.]
Just a quick question.
For all those “accidental Americans” who have no birth ties with the US, in order take advantage of all the “benefits” of full US citizenship they would first need to get a US passport, social security, TIN number, etc.
So, my question is: In order to gain these documents are they required to attend a US consulate and swear their allegiance to the US?
No birth ties to the US? Not born in the US and not born to a US-citizen parent? Then what was the method for being an accidental American? The only example I can think of was residence in some territories at the time the US acquired them from previous owners. Those had to be territories that were primarily occupied by races that weren’t alien and that understood Anglo Saxon principles[*], such as Puerto Rico, Hawaii, and Guam; not Philippines, American Samoa, and Okinawa.
There were some Americans who lost citizenship under laws existing at the time but later changed, such as by marrying non-Americans (of any race), or by marrying non-Americans whose races were ineligible for naturalization, or by voting in another country’s election, etc. When such people wanted to regain US citizenship, they probably had to attend a US consulate and swear allegiance. But I don’t think those people were accidental Americans — they had it by birth or intent and they wanted to keep it.
If someone is an accidental American, then they’re American and don’t have to swear anything, except of course if they want to lose that status.
[* criteria written by the US Supreme Court, publicized by John Oliver]
What do you think IRS can do to you in Canada?
Per the CRA link he provided, here’s the answer:
22. If I am assessed tax or a related penalty by the U.S., will the CRA assist the U.S. to collect it?
While the Canada–U.S. tax treaty says that Canada may assist the U.S. to collect certain taxes, it also says that the CRA will not assist the IRS to collect your U.S. tax liability if you were a Canadian citizen when the liability arose. This is true whether or not you were also a U.S. citizen at the time.
23. If the U.S. assesses me a FBAR penalty, will the CRA assist the U.S. to collect it?
The IRS cannot use the information it receives under this agreement to administer non-tax laws such as the U.S. Bank Secrecy Act. The CRA will not assist the U.S. to collect non-tax related penalties such as those for failing to file the FBAR.
One more nugget from Newsy’s link:
7. Will my financial institution ask me if I was born in the U.S.?
A financial institution does not have to ask its account holders about their place of birth.
If a financial institution, applying the due diligence rules of the agreement to its accounts, finds records that have an unambiguous indication of a U.S. place of birth, the financial institution must treat the account as a reportable account or follow up with the account holder to obtain documentation that shows he or she is not a U.S. resident or a U.S. citizen.
The CRA is quoted as saying “The IRS cannot use the information it receives under this agreement to administer non-tax laws such as the U.S. Bank Secrecy Act.”
Did the CRA forget about the “Last In Time” rule? The US can renege on that part of the treaty any time it wants. Maybe it has already done so. The IRS can use the information however it wishes, including publishing the information and providing it to other countries that also don’t honour treaties.
How misleading! Do they think we are stupid?
18. I am a U.S. citizen living in Canada and was not aware that the U.S. wants me to file tax returns. Does the agreement mean that I now have to pay U.S. tax?
The agreement is strictly an information-sharing agreement and does not involve any new or higher taxes.
Unlike Canada, the U.S. taxes its citizens who reside in other countries on their worldwide income. The U.S. citizenship-based tax regime has been in place for many years and the agreement does not alter it. For more information, see the IRS web site.
Translation…. we are just sharing information about you. What the IRS does with it is not our business. The taxes are not “new” because you should have been paying them all along. Just go to the IRS website.
20. I am a U.S. citizen and I understand that some of my accounts (including my RRSPs, RESPs, and TFSAs) are excluded under the agreement. Does this mean that I do not have to consider them when fulfilling my reporting obligations under U.S. law?
The agreement is strictly an information-sharing agreement. How an account or product is treated under the agreement has no effect on your U.S. filing or reporting requirement.
Translation…. once again, dumb-ass, we are just sharing some information. The information we share or don’t share has nothing to do with your filing requirements!
There is now also a French-language Wikipedia article about accidental Americans: