BC Doc says…
@JC says
“@Calgary411 I suggest for consideration that blog from Rachel Heller for an IBS feature.
As part of renunciation, one must sign a statement that they have not done it under duress ! I suppose US goverment duress is not to be considered!”
+1 JC. Many of those who renounce or relinquish are doing so with a metaphorical Smith and Wesson revolver held to their temple by the USG.
I will use myself as an example. I am a naturalized Canadian citizen here for over two decades. I have Irish citizenship via my parents and grandparents. Their is no disincentive which has forced me to give it up. My Irish passport sits in a lock box and generally gathers dust save for the odd trip to Europe. I was a US citizen by birth– Boston will always be my home town. Given that I still have family in the US and right of return was my birthright, even though I had no intention of living their again, Citizenship Based Taxation combined with FATCA made retaining my US citizenship untenable. The result? US citizenship destruction, under duress.
Good for Rachel for throwing a wrench in the US citizenship destruction machine.
From Rachel’s Ruminations, January 8, 2016, *THE IRONY OF RENOUNCING UNDER DURESS*
When Americans renounce their citizenship, as I did, we are required to sign a form called “Statement of Understanding Concerning the Consequences and Ramifications of Relinquishment or Renunciation of U.S. Citizenship” (Form DS-4081) that includes the following:
I am exercising my right of renunciation/relinquishment freely and voluntarily without force, compulsion or undue influence placed upon me by any person.
…
Renouncing Under Duress
‘Under duress” means that you were somehow forced or pressured to renounce citizenship, and I agree that no one should be forced. However, many people who have renounced recently, or are planning to renounce, state that they have to do so: they are forced into it by circumstances.
For some, it’s a matter of being unable to find a bank to do business with because the banks don’t want the expense of complying with the new FATCA disclosure rules.
For some, renunciation is necessary because otherwise, according to their adopted country’s IGA with the US, they’ll be double-taxed on sales of property or pension payments.
For some, including me, it’s a matter of the cost of paying an accountant and dealing with a resentful non-US spouse who ends up handing his financial information over to the US government.
You could, then, interpret our reasons for renouncing as being an example of acting “under duress,” except the pressure comes from the US government itself!
While I’m very flattered that you felt this worth sharing, I must make one correction: it’s “Rachel’s Ruminations,” not “ramblings,” though I admit that “ramblings” might be a better description of how my mind works!
Very few would renounce if they didn’t feel they had to. Of course there is duress involved but its not from a person so one can sign DS-4081 with a clear conscience. Consulate people know perfectly well what’s going on but in the twisted logic of the US government renouncing doesn’t relieve one of any tax obligations so that can’t possibly be the reason. Don’t ask; don’t tell.
The truth is that the tax issue is virtually the ONLY reason. We know it and they know it. Ironically, that US$2350 fee is the only money the US government is ever likely to receive from most expats because most wouldn’t actually owe any tax. Its the life control via your tax system, stupid.
See http://www.state.gov/documents/organization/120546.pdf
(3) Was the act performed “voluntarily,” i.e., as a product of the
individual’s free will (free of the undue influence of another) with an
understanding of the nature of the act and a good general knowledge
of its consequences? While difficult choices generally do not rise to the
level of duress, in situations of genuine economic or other duress
where there is no alternative course of action, voluntariness might be
negated.
UNCLASSIFIED (U)
U.S. Department of State Foreign Affairs Manual Volume 7
Consular Affairs
7 FAM 1220 Page 2 of 37
UNCLASSIFIED (U)
NOTE: Economic duress involves the genuine inability of an
individual to make a living for him/herself and/or for
his/her family, or subsist in a foreign country, by any
means, due to U.S. nationality. It does not mean the
inability to secure foreign government employment, or
indebtedness due to mortgage or loan obligations or
difficulty opening or maintaining a bank account. An
individual who alleges economic duress as the basis for the
commission of the expatriating act must also show that
his/her personal circumstances abroad made it
unreasonable for him/her to return to the Unites States to
provide support for him/herself or for his/her family.
FATCA is the only reason I renounced. It certainly places one under duress even if no tax is owed. This duress is direct from the US government and IRS. The renunciation fee is the only money the US government will ever get from me. I will never vacation south of the border and have learned that I am entitled to social security. So in my case, as in others, money will now be exiting the US and not entering.
Rachel, thanks.
I will change to the correct title! Haste makes waste.
OK, this is not spot-on the subject of persons renouncing, but can anyone deny the signing of these “IGAs” by all those countries was under duress? Damn, the USA as we know it today is a jerk!
Correct, PierreD…
Terry Campbell, President Canadian Bankers Association: http://isaacbrocksociety.ca/2012/08/02/new-comments-from-cba-president-terry-campbell-on-fatca/
Jim Flaherty, Minister of Finance: http://business.financialpost.com/news/read-jim-flahertys-letter-on-americans-in-canada
and, let’s not forget, from negotiations in Washington, DC, Mike Allen, PC, said, http://www.parl.gc.ca/HousePublications/Publication.aspx?Language=e&Mode=1&Parl=41&Ses=2&DocId=6597204
What if the U.S. Govt decided to be even nastier by declaring all our renunciations void and restoring U.S. Personhood and, thus, retroactively imposing U.S. tax obligations? After all there has already been a case of an issued CLN being subsequently rescinded. I don’t think I will ever feel completely free of this possibility, however remote.
@Mona lisa..mona lisa…… our paths have similar bits and bobs.
There is part of me that desires to document my former relinquishment with a CLN even though I am satisfied with my existing documentation.
The other part of my mind says that getting a CLN could mean eventual restoration!!
I am serious when I state that a US Court could invalidate all these CLNs in this time period as being under duress.
The Court has ruled that the State can not forcibly destruct a persons USC. Yet this is what has been done!!!
@George, exactly. All I can think is that I’ve tried my best. If the worst happened, I would file in a simple way (no pfics or 8938), or hopefully have the guts not to file at all! The USG can’t have it both ways, especially from those who’ve already paid painful exit taxes to be free from this slavery.
Mona Mona Mona, Will you ever be able to relax? You’ve done all the right things. You have your CLN. You are free.
I read about a judge who was stunned when asking the defendant the ususal, routine questions about his guilty plea. Has anyone made and threats to you? He said YES, of course: He was threatened with a longer sentence. The judge lectured him about what is meant by “threats”.
“I am exercising my right of renunciation/relinquishment freely and voluntarily without force, compulsion or undue influence placed upon me by any person.”
By any PERSON. In my first interview I told US consular officials that I was compelled by IRS practices[*] which force me to commit perjury[**] every year that I remain a US citizen. Although corporations are people too, I haven’t heard anyone say that the IRS is a person.
In my second interview a different consular official asked if I really want to renounce because she couldn’t let me do this if I don’t want to. I replied “I have to do this.” She looked at me but didn’t ask anything further. Afterwards, I mentioned that I used to write declarations of known problems on tax returns instead of committing perjury. She interrupted me to say “Good.” I continued, “I get penalized for it.” She was speechless and looked shocked. I guess that was the moment she understood why I was renouncinig. Well that was in 2011. I don’t suppose she gets shocked any more.
[* By that time, the IRS had told me about their policy to hold frivolous any return which has an honest declaration signed under penalty of perjury instead of the preprinted jurat, but I did not know yet that laws do the same.]
[** Later I learned that 26 USC section 7206 only punishes willing perjury. Other laws punish honesty. So you are allowed to commit perjury as long as it’s unwilling, under coercion by the IRS and other laws. But I didn’t know it at the time. And for those of us who have consciences, being allowed doesn’t mean it’s OK. As the IRS’s Taxpayer Advocate reported to Congress in 2011, thousands of honest taxpayers were forced to renounce.]
@George: The question is not so much what the US courts have done and can do, unless one has substantial assets, income or has heirs in the USA. While the IRS deemed Terrazas and Afroyim to be retroactive, it enforced that rule only against those who brought themselves to its attention. And AFAIK no foreign government accepted the notion: to do so would have expatriated those of their citizens who became, again, dual-nationals. (Anyway even the IRS accepted that there might be true (subsequent?) expatriating act in addition to that one now ignored.)
If, as international law seems to suggest, a nationality cannot be attributed in the present era to a person involuntarily except at birth or adoption (and sometimes at marriage), then the US cannot retroactively restore or impose nationality whatever its so-called right to determine exclusively “who are its citizens”. As in the days of “dominant” or “effective” nationality, thought irrelevant if nationality was to be a mainly a source of rights, other countries need not give effect to an exorbitant claim by the USA.
Already countries are fearful that other states will claim the allegiance of their ethnic kin abroad: think of how South Asian countries view China or the tropes about Israel and Jews. This was a persistent sore in Eastern Europe after WW I: the Minorities Treaties failed and really the Great War never ended but turned into WW II. Indeed it re-started in ex-Yugoslavia after that country broke up.
Note that on recent exchanges of territory and movements of frontiers (indeed even under the Treaty of Paris incorporating Puerto Rico in the USA) the inhabitants (or some of them, depending on ethnicity) have had a right of option. For example, the Rio Grande Treaty (1970) http://www.uniset.ca/other/cs6/23UST371.html
In real life — as we know because if there are 8+ million Americans abroad the statistics (as I say, ceaselessly) show most are noncompliant because only a few hundred thousand tax returns are filed from overseas — conflicts of nationality tend to be resolved quietly on an administrative basis, or ignored. Where governments have forced issues into the courts (as Micheletti and Rush Portuguesa in the (then) European Court of Justice) they got results opposite of that they expected. Better as with the Greek Muslim Hussein Ramadanoglu whose Greek citizenship was revoked while he was working in Germany under his EU rights — and then quietly restored, presumably on European Commission intervention. And indeed Art. 19 of the Greek Nationality Act was later abrogated.
The US Government does not necessarily know who are its citizens. And the IRS does not have standing to bring an action against someone to establish citizenship if there is doubt: it would have to attach assets or an income stream, if it could. The IRS cannot act against foreign assets and income of a person who doesn’t set foot in the country, which reflects the advice I am seeing given by many: that compliance is expensive, that resolving doubt about citizenship may also be expensive and certainly has risks. And that staying abroad is free. (Sort of like the choice between visiting a psychiatrist and popping bubble wrap: you choose.)
I couldn’t agree more!!
@Andy, “(Sort of like the choice between visiting a psychiatrist and popping bubble wrap: you choose.)”
Touche… 🙂
Andy: The sad thing is that while staying abroad may be free, *I* am not. My situation has forced me to accept permanent exile from my native land. Compared to what others on this blog have faced and are facing it is perhaps a small thing. But to be denied the guarantee of safe passage to visit the places of my youth and heritage is a profound blow to my personal freedom and my life’s well-being.
Coming up next: So SCOTUS changed the laws and made you a USA citizen. Why didn’t you register for the draft? Or worse yet: An arrest warrant for failing to register.
@Tom: You (i.e. the class of people you refer to) were pardoned by Jimmy Carter on Jan. 21, 1977 http://www.encyclopedia.com/doc/1G2-3401804848.html As for the citizenship of those who were pardoned, perhaps relevant to this forum, see http://digitalcommons.law.villanova.edu/cgi/viewcontent.cgi?article=2134&context=vlr
The fact that renunciations are on the rise proves that the cost of renouncing is still good value for many. The impetus to renounce won’t change for the many who can’t afford it – they’ll just find some other way to tell the US ‘thanks but no thanks’. What a shameful waste of human capital.
As Prof Christians said, rather than making it harder to leave, why not make it easier to stay?
http://taxpol.blogspot.ca/2015/11/fatca-citizenship-based-tax-and.html
I guess I am one of the few who did not renounce under duress. I am awaiting my CLN. Someone said to me recently “If they went to residence based tax tomorrow, I suppose you would want your citizenship back?” Uh, no! For some of us, the citizenship didn’t mean anything. How could it when we left as a child? When you believed for decades that you weren’t an American?I did not provide a statement with my paperwork, but I was still asked at the Consulate. I looked at the Consulate General replying “I am a Canadian!”
Why does anyone allow a foreign government to decide who they are? I do not recognize the USG claims on me as a citizen, so any of their threats and shouting will fall on my deaf ears. What I care about is forcing MY government to recognize MY RIGHTS in MY OWN country!
But Gwevil, were you not told repeatedly throughout your life by anyone who heard where you were born that you are very lucky to have the option to just up and move to the greatest country in the world? Surely such privilege must come with a price. Time to pay up. It doesn’t matter that you never exercised your right to live in the USA. You could have.
Not all of us have had the experience of being told repeatedly through our lives in Canada how lucky we were to have the option to move to the greatest country in the world (most I knew didn’t necessarily think it the greatest country in the world).
I am sure in my work life I worked with lots of *US* tainted persons, some of them US homelanders / permanent residents in Canada who would return to the US, but many who had taken Canadian citizenship and were individuals and families who were committed to this country and contributing to the betterment of the community they lived in. I also worked with others from many different parts of this big world — I don’t recall conversations with any of those persons with whom I worked who clamoured for an opportunity to be able to live in the US — though some did move back and forth in their work lives (a USC not a factor). Conversations for the most part did not go there / most I knew were very glad they were here. I really don’t recall anyone telling me how lucky I was — if anyone knew my situation, they knew that I was in Canada by choice, had become a Canadian citizen by choice, had not registered my Canadian-born children as US Births Abroad, by choice, had no plans to return to the USA (though I would want the right to visit family there without difficulty as it was in my early life my home). Anyone of those who might feel jealous about me or anyone with some US-ness handed to them could, as I and my husband did, go through the process of immigration to the US. I always considered my family Canadian, all by choice.
The biggest insult to me and for my children born in Canada was being defined, after the fact in the Bill C-31 negotiations, *a US citizen who happens to abide in Canada*. That is why I was so hungry to hear Justin Trudeau state *A Canadian is a Canadian is a Canadian*. If he has changed his tune on that, I and so many others of us are, again, easily thrown under the Canadian Charter of Rights and Freedoms bus that must now have US licence plates.
Whitekat, you’re right! Now, why didn’t I think of that? 😉