When it comes to compliance there is a lot of confusion as to:
- what day does loss of citizenship occur and
- what roles do f8854 and a
- Certificate of Loss of Nationality play?
The filing requirements are explored in two posts by John Richardson.
BRIEF SYNOPSIS
Before June 3, 2004 (before the creation of the “Tax Citizen”)
The date of your “expatriation”was determined solely by the provisions of the Immigration and Nationality Act.
June 3, 2004 – June 16, 2008 (after the creation of the “Tax Citizen”)
You continued to be treated as a “U.S. person” for tax purposes UNDER THE INTERNAL REVENUE CODE until you gave “notice” of your “relinquishment” to a government agency. For this period part of the “notice” was filing Form 8854 with the Internal Revenue Service. In other words, there was no way to cease to be a “U.S. person” for tax purposes until you had notified the IRS.
After June 16, 2008 –
A.The issuance of a CLN is confirmation that the State Department has agreed that you have relinquished U.S. citizenship. A CLN is a confirmation that you have met the “notice requirement” under the Internal Revenue Code.
B. The CLN is one way (a self-certification is also possible) to satisfy “foreign banks” that you are NOT a U.S. person for tax purposes under the Internal Revenue Code. (In other words, a CLN is a “sufficient” but not a “necessary condition” to prove non-USness.
Read more HERE
*****
1. Is the loss of U.S. citizenship for nationality purposes dependent on having a Certificate of Loss of Nationality (“CLN”)?
The answer is absolutely not.
349(a) of the Immigration and Nationality Act specifies conditions under which one relinquishes U.S citizenship.
2. Is the loss of U.S. citizenship for tax purposes dependent on having a Certificate of Loss of Nationality (“CLN”)?
Prior to June 3, 2004 – NO for either immigration or tax purposes
June 3, 2004 – June 16, 2008 – NO for either immigration or tax purposes.
After June 16, 2008 – No for immigration purposes – It is necessary as a confirmation of having met the “notice requirement” to end U.S. citizenship for tax purposes
3. What is the role of a Certificate of Loss of Nationality (“CLN”)?
For Immigration and Nationality Purposes – no relevance whatsoever
For Tax Purposes – The Internal Revenue Code
The accusation of U.S. citizenship is triggered by various indicia (U.S. place of birth, U.S. residence, U.S. phone number, etc.). The U.S. “place of birth” is the most dangerous indicia. Those with a U.S. place of birth can rebut the accusation of U.S. citizenship with either:
A. The CLN; or
B. A “Self Certification” (that must meet specific requirements) documenting why:
– the person has relinquished U.S. citizenship; and
– does NOT have a CLN.
A denial of U.S. citizenship will generally require proof.
In general, those who have relinquished U.S. citizenship under the Immigration laws of the United States prior to June 3, 2004 are more likely to be able to “self certify” that they are NOT U.S. citizens even though they do NOT have a CLN. This position is consistent with the August 2015
4. Why is the Certificate of Loss of Nationality (“CLN”) of value?
It’s simple. Unless you live in the United States, life as a U.S. citizen abroad, in a FATCA, FBAR and CBT world, will be an endless source of anxiety and difficulty. A Certificate of Loss of U.S. Nationality is becoming one of the most sought after documents in the world today.
5. What is the role of a Certificate of Loss of Nationality (“CLN”) in a FATCA inquisition?
June 16, 2008 – Present
IF (you relinquish U.S. citizenship under the Immigration and Nationality Act) THEN
You continue to be treated as a “U.S. person” for tax purposes UNDER THE INTERNAL REVENUE CODE until you give “notice” of your “relinquishment” to a government agency. The “notice” requirement is NOT to the IRS, but to the State Department. (See S. 877A(g)(3) and S. 877A(g)(4) of the Internal Revenue Code.) Once “appropriate” notice is given to the State Department you cease to be a U.S. taxpayer from the date the notice is given (on a prospective basis).
Read more HERE
@plaxy
Nope, its definitely a 2012 relinquishment so the pre-2004 rules don’t apply. Also there’s no way I’m going to cough up $2350 to get a back-dated CLN from the bastards. Not having a CLN is working out just fine for me, thank you very much.
The question in my mind is how would their system react to the filing of a Form 8854 if there is no corresponding CLN? I certainly wouldn’t want to be the one responsible for blowing up their system, LOL. My best guess…..the system would react exactly the same way it reacts when one files a current, timely-filed 8854….i.e. no response whatsoever. They don’t seem to have much of a system when it comes to expats. But no guaranties.
As far as revealing assets goes, I’ve already told the IRS about all the institutional assets because of previously filed FBARs. Some of those accounts are long since defunct. The only significant new information I would tell the IRS would be the 2012 value of the house that I once owned. (That and the fact that I was so far below the threshold for covered status there’s absolutely no point in them bothering with me.) Naturally, filing a 2012 Form 8854 I would use my long defunct 2012 address.
I still don’t know if I would actually do this, but its fun to contemplate. It amounts to baiting the lion so it might be wiser to just leave well enough alone because right now I seem to be well off their radar. The only point of the exercise would be to try to extinguish my “tax citizenship” which is nothing but an imaginary obligation anyway.
In the end would filing a Form 8854 with no CLN increase my risk or reduce my risk? Hard to tell. Hodgen says do it, but he’s assuming people who late file already have their CLN.
Hodgen is a big help on a lot of stuff but he’s definitely a clean-exit proponent.
As I see it, the main difference between having a CLN and not having a CLN is that you could get treated as a US citizen. If that hasn’t happened in the past, filing 8854 probably wouldn’t make it any more (or less) likely to happen. Is my guess.
Entering on a Canadian passport should help with not being treated as a US citizen, but in the end once they’ve got you, they’ve got you; it may not matter. Regardless of what position the US authorities might take, one could at least request Canadian Consular assistance. I like to think (and it may well be a fantasy) that waving a Canadian passport around might make them more likely to just back off and send you home instead of running you through the gears.
The thing is, producing a CLN might infuriate them, whereas a claim of relinquishment based on the acquisition of Canadian citizenship (“it just seemed like it would make things simpler”) might be viewed as less insulting to their “the US is the greatest country in the world” mentality. Who knows?
“Regardless of what position the US authorities might take, one could at least request Canadian Consular assistance.”
Maybe not, if you’re a (deemed) USC in America. But if they were going to make an issue of citizenship, I would think it’s likely it would happen on the Canadian side of the border – objecting to the Canadian passport.
“producing a CLN might infuriate them,”
Surely not. No one has reported border guards having a fit of rage over a CLN have they? I’d much rather have one than not, if I was attempting entry.
” But if they were going to make an issue of citizenship, I would think it’s likely it would happen on the Canadian side of the border – objecting to the Canadian passport.”
That actually happened to me one time. The guy noticed the US birthplace on my Canadian passport and told me that I should be entering on a US passport. I told him that I didn’t have a US passport because I wasn’t a US citizen. He then asked me if I had appeared at a US Consulate to renounce my US citizenship. I told him no, I hadn’t visited a Consulate, but had lost my US citizenship by other means.
He then informed that if I hadn’t renounced at a Consulate then I was a US citizen because that was the only way one could lose US citizenship. I informed him right back (while getting a bit nervous that the conversation was taking a decidedly confrontational turn) that he was wrong, appearing at a Consulate was not the only way one could lose US citizenship, and in fact there were multiple ways one could lose US citizenship. He was young and inexperienced and I think he was a bit nonplussed by my firmness and possibly started to doubt his own knowledge of the law. At this point I was fully prepared to be turned back but I figured it was better to be turned back than to allow him to impose unwanted US citizenship on me.)
He then suddenly dropped the conversation, gave my vehicle a cursory check and said, “OK, you can go”. Only God knows what he typed into his computer, but I haven’t been hassled since.
US law about US citizenship is perverse, but unfortunately when it comes to entry an individual has no rights, and a US-born individual has even less.
A non-US-born individual can’t enter the US on a non-US passport unless they can get a visa or other form of permission.
A US-born individual can’t enter the US on a non-US passport unless they can:
(a) prove loss of citizenship or a diplomatic parent; AND
(b) get a visa or other form of permission
It’s confusing, god knows; and that’s before we even get to the question of how the individual can prove loss of citizenship.
(Answer: only with a CLN: https://www.justice.gov/sites/default/files/olc/opinions/2002/06/31/op-olc-v026-p0056.pdf#4)
If he has lost US citizenship he has no right of entry. So it’s lose-lose, for a US-born individual who wants to enter the US on a non-US passport; it doesn’t matter (under US law) whether the person has got a CLN or not.
Corrected:
US law about US citizenship is perverse, but unfortunately when it comes to entry an individual has no rights, and a US-born individual has even less.
A non-US-born individual can’t enter the US on a non-US passport unless they can get a visa or other form of permission.
A US-born individual can’t enter the US on a non-US passport unless they can:
(a) prove loss of citizenship or a diplomatic parent; AND
(b) get a visa or other form of permission
It’s confusing, god knows; and that’s before we even get to the question of how the individual can prove loss of citizenship.
(Answer: only with a CLN: https://www.justice.gov/sites/default/files/olc/opinions/2002/06/31/op-olc-v026-p0056.pdf#4)
If he has lost US citizenship he has no right of entry. So it’s lose-lose, for a US-born individual who wants to enter the US on a non-US passport; it doesn’t matter (under US law) whether the person has got a CLN or not.Once a renunciant has got the CLN and has got the visa / permission to enter, s/he is not subject to most US tax law, provided s/he doesn’t stay too long.
But s/he is subject to the sections of US tax law in which the US pretends s/he is still a US citizen. And consular assistance couldn’t protect the person from US law while on US territory.
That’s why I suggest that a renunciant who expects to be seeking entry to the US might want to file a minimalist 8854 – to protect himself/herself from any risk of being hassled about whether s/he has or has not complied with those sections of US tax law. The risk is small at present and disappears altogether ten years from R-day, so it may not be worth bothering with.
Plaxy, You repeat the same info over and over. ‘ A US born person can’t enter the US without a US passport’. as if repeating it often enough will make it true. As the dotard would say Fake News. Thousands of accidentals and duals have been entering the US with other passports for generations without problems.
I will readily admit there have been occasional problems and that the process may be worse from countries other than Canada (where a visa is not required.)
“Plaxy, You repeat the same info over and over. ‘ A US born person can’t enter the US without a US passport’ “
You’ve misquoted.
“A non-US-born individual can’t enter the US on a non-US passport unless they can get a visa or other form of permission.”
Oops – I’ll try that again. I said:
“A US-born individual can’t enter the US on a non-US passport unless they can:
(a) prove loss of citizenship or a diplomatic parent; AND
(b) get a visa or other form of permission”
I perhaps should have said:
“A US-born individual can’t enter the US on a non-US passport unless they can get a visa or other form of permission; to get permission to enter, they may be required to prove loss of citizenship or a diplomatic parent.”
“the process may be worse from countries other than Canada (where a visa is not required.)”
As I understand it, there are differing degrees of rigour depending if you’re coming
a) by land from Canada
b) by land from Mexico
c) by air from anywhere.
Coming by sea – I haven’t seen any reports about that.
“A US-born individual can’t enter the US on a non-US passport unless they can:
(a) prove loss of citizenship or a diplomatic parent; AND
(b) get a visa or other form of permission”
I agree with your comments above but have a few of my own:
1. Actually a US-born individual can enter the US without a US passport or a CLN; I’m living proof of that! Every time I enter the US customs agent either doesn’t notice or chooses not make an issue of my US birthplace. But the situation could potentially pose a conundrum: What if one day they actually tried to deny me entry because I didn’t produce a US passport? They would, in effect, have just agreed with my contention that I was no longer a US citizen because if I WAS a US citizen they couldn’t deny me entry. (They certainly could fine or arrest me for breaking US passport law but they couldn’t flatly refuse entry.) They would, of course, have to have concrete grounds to refuse me entry as a Canadian, not just some general “we don’t like the cut of your jib”. So I think that’s why they continue to let me in; it represents such a vague, undefined area of law that most border agents choose not to make an issue of it. I hope I never run into one who does decide to stir the pot just because he’s having a bad day!
2. We here in Canada enjoy an advantage because we are a visa-waiver country. It is, I believe, a reciprocal courtesy which is normally automatically afforded a citizen of one of the countries when s/he visits the other country. I think that unless otherwise stated, its 6 months going either direction and its definitely at the discretion of the agent in the booth. I guess that qualifies as “other form of permission”.
3. There’s a lot to study in the link you provided (I downloaded it to read later) but upon a quick skim, one line jumped out at me: Expatriation occurs “at the time the expatriating acts were committed, not at the time his alienage was judicially determined.” I couldn’t find where it specifically states that a CLN is the only way to prove loss of citizenship, but for border crossing purposes its probably a moot point because its only necessary to convince (bamboozle??) the border guard! If they handed out CLNs for free, I’d definitely get one, but $2350US? No way.
“What if one day they actually tried to deny me entry because I didn’t produce a US passport? They would, in effect, have just agreed with my contention that I was no longer a US citizen because if I WAS a US citizen they couldn’t deny me entry. ”
Yes I agree it’s tricky for a border guard on the Canadian border. Refusing to let a citizen enter could probably lead to much bigger trouble than letting a citizen enter on a non-US passport, so it’s small wonder if they usually plump for the latter.
“its definitely at the discretion of the agent in the booth. I guess that qualifies as “other form of permission”.
Yes.
“I couldn’t find where it specifically states that a CLN is the only way to prove loss of citizenship,”
It doesn’t – sorry if I gave that impression. It says (p. 59) that any party claiming that a person has abandoned his US citizenship must establish three elements:
a) must take one of the statutorily enumerated acts of expatriation (one being renunciation before an appropriate US official);
b) must act voluntarily;
c) must act with the intention of relinquishing US nationality.
The only way for a would-be relinquisher/renunciant to establish the three elements is to submit the evidence to the DoS for assessment; for which, as you say, the DoS nowadays charges an outrageous fee.
Not having a CLN may not be a problem for a Canadian; for USCs elsewhere, and for Canadians who want legal immunity from US hassle, paying the price and getting a CLN may be the lesser of two evils.
“Expatriation occurs “at the time the expatriating acts were committed, not at the time his alienage was judicially determined.” ”
Yes. You lose citizenship at the time you do the deed – not at the time the DoS agrees that you’ve “established” the three elements.
“Refusing to let a citizen enter could probably lead to much bigger trouble than letting a citizen enter on a non-US passport, so it’s small wonder if they usually plump for the latter.”
Refusing to let a US citizen enter the US leads to big trouble for the US citizen, but not for the government.
http://www.syracuse.com/news/index.ssf/2010/07/report_hundreds_of_us_citizens.html
http://stateswithoutnations.blogspot.jp/2012/01/us-citizen-deported-to-jamaica-in-2007.html
https://www.npr.org/sections/thetwo-way/2017/08/01/540903038/u-s-citizen-held-by-immigration-for-3-years-denied-compensation-by-appeals-court
http://articles.latimes.com/2000/sep/03/news/mn-14714
Sure, she’s suing. See previous article about how victims of US government wrongdoing fare in US courts.
‘Expatriation occurs “at the time the expatriating acts were committed, not at the time his alienage was judicially determined.”’
Sure, but if the court rules that it lacks jurisdiction then his alienage remains unprovable. Your Youtube video of your expatriating act could get ten million views and the US would still FATCA you to death.
I found something in my files that I printed out a few years back when this was all starting to become an issue. I think its an excerpt from the Foreign Affairs Manual and when I have some time I’ll see if I can find it again on the ‘net. (There’s a logo at the bottom which says “Authenticated US Government Information”.) But anyway, here’s the “money” quote that I highlighted at the time:
“There is no obligation for an individual to obtain a CLN or otherwise notify the Department of State of relinquishing one’s citizenship.”
The rest of it goes on to describe the details of how one would go about obtaining a CLN. There’s no doubt a CLN is the best way to prove loss of citizenship but for border crossing purposes usually all that’s necessary is to convince the guy in the booth, not present an iron-clad legal proof.
Who knows, maybe someday this will land me in so much trouble that the $2350 looks cheap in comparison but so far I’ve managed to muddle along. I did self-relinquish with the knowledge that I could be prevented from ever setting foot in US again but I fully accept that possibility, however remote it may be.
“Refusing to let a US citizen enter the US leads to big trouble for the US citizen, but not for the government.”
No – big trouble for the border guard. Though I’m only speculating. I don’t actually know what the consequences might be for a borgder guard who refused to let a USC into America and I can’t say I care.
“Sure, but if the court rules that it lacks jurisdiction then his alienage remains unprovable.”
If the DoS doesn’t certify loss of citizenship the relinquisher/renouncer/ can’t prove loss of citizenship – correct.
“There is no obligation for an individual to obtain a CLN or otherwise notify the Department of State of relinquishing one’s citizenship.”
I’d be interested to see that, if you ever track it down.
I don’t exactly understand what it means. There was no obligation for me to get a CLN, but I wanted one so I could protect myself from US interference in my life.
Here: https://books.google.co.uk/books?id=0l6ihqsQSCgC&pg=PA51&lpg=PA51&dq=no+obligation+for+an+individual+to+obtain+a+cln&source=bl&ots=wHfhfs92Lc&sig=B1-wmsDRKYq7pLk3lFwqw1_7mGM&hl=en&sa=X&ved=2ahUKEwivw-yvpeXZAhVICMAKHe1uAeoQ6AEwAHoECAkQAQ#v=onepage&q=no obligation for an individual to obtain a cln&f=false
1997. History, sadly.
I don’t know how to fix that link but if you google
“no obligation for an individual to obtain a CLN”
it should come up in the results.
@ND
My fallback is that at any time I can decide to pay the $2350 for a CLN and that CLN will be backdated to the date I committed the expatriating act. No court involved. I have done absolutely nothing since that could even remotely be considered to be something a US citizen would do.
A US courtroom is the last place a person should look for justice, particularly if you are black or poor. Also, we know that all of the US is now pretty much a Consitution-free zone, but especially in the vicinity of the border. We all travel there at our own risk.
“at any time I can decide to pay the $2350 for a CLN and that CLN will be backdated to the date I committed the expatriating act. ”
Exactly.