82 thoughts on “US Passport application links Citizenship @StateDept to Taxation @USTreasury to enforce “Taxation based Citizenship””

1. I see the term “potentially relinquishing act” is used in s. 349(a) Immigration and Nationality Act because the enumerated acts are not “automatically” relinquishing acts. These acts only result in a relinquishment if two conditions, those being voluntariness and intent, are present.

   If those two conditions do not accompany the act, the act is meaningless in terms of a relinquishment occurring.

   If those conditions accompany the act, relinquishment occurs by operation of law.

   There is nothing in the law says that a CLN is required for a relinquishment to occur.

   As for the purpose of the CLN, I see something of an analogy with a contract.   I had a contract of citizenship with the United States and I cancelled it according to its out clause (INA s. 349(a)).   Legally, end of contract.

   With the CLN, I have it in writing that the other party also agrees the contact is ended. It resolves any possible ambuigity if I need to prove my lack of citizenship. The CLN doesn’t end the citizenship, but it provides clear proof that it’s ended.

   Much as if you exercised the out clause of a business contract – that act would end the contract, but if the other party signs an acknowldgement of this, it makes it a lot easier to prove if necessary.

2. @WhatamI – “The fee of course isn’t for the piece of paper itself, it’s for the alleged cost of accepting, investigating and approving the claim. ”

   That is indeed what they allege, but don’t you believe it. Until a few months ago, relinquishing (which supposedly involves investigating the person’s claim) was free, while renouncing (which does not involve any investigation) cost US$2350.

   If investigation costs were anything to do with it, it would be the other way round.

   Personally I think that when the numbers wanting to lose citizenship started increasing so dramatically, most people were maybe opting for renunciation. So the USG started charging $450 for renunciation, but not for relinquishment, to try to drive people away from choosing renunciation – hoping, perhaps, that many would not be able to prove relinquishment and would decide it wasn’t worth paying so much money to renounce.

   When $450 didn’t stem the flow, they put the fee for renouncing up to $2350. Now they were charging thousands to renounce (processing costs = zero) and $0.00 to relinquish (processing costs unknown but presumably not zero). Which did have the effect of driving more people to try to relinquish – and many could not be refused. So now they were still having to let a lot of people walk, and doing it for free!

   The illogic of the pricing structure was embarrassing, so they equalized upwards. Proving what many suspected – the charge bears no relation whatever to the cost of processing the application. If there was any connection, renouncing would cost less than relinquishing.

3. Mona You CAN enjoy complete certainty that you are out. Be realistic instead of fearful.

4. @pacifica777

   My post was quite long. I’d like your (and other’s) thoughts on a specific point.

   I see the term “potentially relinquishing act” is used in s. 349(a) Immigration and Nationality Act because the enumerated acts are not “automatically” relinquishing acts. These acts only result in a relinquishment if two conditions, those being voluntariness and intent, are present.

   If those two conditions do not accompany the act, the act is meaningless in terms of a relinquishment occurring.

   If those conditions accompany the act, relinquishment occurs by operation of law.

   There is nothing in the law says that a CLN is required for a relinquishment to occur.

   Agreed, there is no mention of the CLN in “The law”. The CLN is just a confirmation receipt, nothing more.

   People keep saying “The law”, “The law”, “The law”. I guess nobody considers government web pages or even the FAM itself as “The law”. Fine, the law is INA 349. I’m pointing out that according to The Law, according to INA 349, there are _3_ conditions that must accompany the act: voluntariness, intent, and approval by the DoS.

   INA 349(b)–Whenever the loss of United States nationality is put in issue in any action or proceeding commenced on or after the enactment of this subsection under, or by virtue of, the provisions of this or any other Act, the burden shall be upon the person or party claiming that such loss occurred, to establish such claim by a preponderance of the evidence.

   I’m saying that relinquishment does NOT “occur by operation of law”. Unless you submit your claim to them, the law defaults to assuming you did not intend to relinquish. The operation of The Law on its own is therefore that you did not intend to relinquish by performing a potentially expatriating act. The INA 349 acts are _potentially_ expatriating, and the “operation of law” cannot decide if they are expatriating, only you have that right. The default is that you did not intend to expatriate. To change the default, you have to notify them otherwise. Relinquishment occurs by the operation of developing a loss claim and having it approved by the DoS. It says that right in The Law, INA 349(b), and several web pages, and the FAM. If approved, then after the fact of loss of nationality, you get a confirmation receipt called a CLN. It’s just a piece of paper. It’s just a receipt. Mine was printed out and mailed by the local consulate staff a couple days after the DoS in Washington DC approved my claim that I relinquished 40 years ago.

   People’s view on The Law INA 349(b) indicating 3 conditions are required?

5. @ WhatAmI,

   I don’t see that 349(b) is saying that a CLN is required to effect a relinquishment. My read is it’s saying that the party claiming that a relinquishment has occurred has the burden of proving that the act was performed, was done voluntarily and was done with intent. If you prove that, doesn’t matter if you have a CLN or not.

   So, I see the CLN as having a practical purpose in attesting to the relinquishment having occurred – as proof goes, it’s as inconvertible as you can get – but not as having played a role in the relinquishment having occurred.

6. If you look at the comments of the Joint Committee on Taxation (prior to 2004), you will see that the whole reason for the creation of the “tax citizen” in 2004 was because, Treasury realized that it was possible for people to relinquish U.S. citizenship without notifying either the State Department or IRS/Treasury. I.e. without getting a CLN.

   S. 349(a) MANDATES loss of citizenship WITHOUT notification of any kind AND without having a CLN.

   S. 349(b) which reads as follows:

   INA 349(b)–Whenever the loss of United States nationality is put in issue in any action or proceeding commenced on or after the enactment of this subsection under, or by virtue of, the provisions of this or any other Act, the burden shall be upon the person or party claiming that such loss occurred, to establish such claim by a preponderance of the evidence.

   has NOTHING to do with the conditions for relinquishment of citizenship, but has to do with proof AND proof within the specific context of an “action or proceeding”.

   1. In the event that there is AN ACTION OR PROCEEDING (including an application for a CLN) than the party alleging relinquishment of citizenship has to prove that the conditions in S. 349(a) have been met by;

   2. by an evidentiary standard of “preponderance of evidence”.

   S. 349(b) is about HOW you must prove relinquishment NOT what the conditions for relinquishment actually are. (You may or may not have to prove relinquishment.)

   If you want to avoid the S. 349(b) issue then don’t apply for a CLN.

   The requirement of a CLN is a requirement NOT under S. 349(a) the Immigration and Nationality Act, but a requirement under S. 877A(g)(4) of the Internal Revenue (loss of tax citizenship) and ONLY for relinquishments after June 16, 2008.

   Finally, the FAM is NOT law. It is a manual developed (presumably) by State Department lawyers that is a guide for what consular officers should do. It is of course interesting reading, and helpful to understand, but it is not the law.

   To repeat: There is NOT and has NEVER been a requirement of a CLN to relinquish U.S. citizenship under the INA. That was the sole reason for the creation of the “tax citizen” under the Internal Revenue Code and notice requirements mandated under that section.

7. @WhatamI –

   The notice in the Federal Register which announced that the fee for relinquishment would be increased to $2350, stated as part of the justification for the increase:

   In the past, individuals seldom requested Certificates of Loss of Nationality from the Department to document relinquishment. Although the Department was aware that an individual relinquishment service was among the most time consuming of consular services, it was rarely performed so the overall cost to the Department was low and the Department did not establish a fee. Requests for a Certificate of Loss of Nationality on the basis of a non-renunciatory relinquishment have increased significantly in recent years, and the Department expects the number to grow in the future, causing the total cost of this service to increase. At the same time, the Department funds consular services completely from user fees. The Cost of Service Model continues to demonstrate that such costs are incurred by the Department when accepting, processing, and adjudicating relinquishment of nationality cases; therefore, the Department will collect a fee from all individuals seeking a Certificate of Loss of Nationality. Taking into account the costs of both renunciation and non-renunciation relinquishment processes, the fee will be $2,350.

   https://www.federalregister.gov/articles/2015/09/08/2015-22054/schedule-of-fees-for-consular-services-department-of-state-and-overseas-embassies-and#h-15

   This seems to confirm that the DoS does not consider a CLN to be an essential element of relinquishment. It’s just a way of documenting that the DoS agrees that the citizenship has been relinquished. Something which former citizens seldom needed before FATCA and “tax-citizenship” were invented.

8. @WhatAmI

   For what it’s worth, I agree with you. That’s why I jumped through the hoops and shelled out the $2350 — I believe that CLN is the only true acceptable and unambiguous proof that I am no longer a US citizen.

   Given how increasingly aggressive the USG is getting, my prediction is that soon the USG will clearly state the CLN is the only means to officially break ties; furthermore, I can also see USG changing the policy to only issue a CLN to the tax-compliant (so as to ensure that individuals are not expatriating in order to dodge taxes).

   And, no. I don’t think any of this is reasonable or just. Nor do I have a crystal ball so I could be way off base with my predictions, but the USG tends to stack the deck in its favour and that’s unlikely to ever change.

9. @WhatAmI. I am sorry to have touched a bit of a firestorm because I believe in the end we are both on the same side. At worst we may just have to agree to disagree. Everybody caught up in this fiasco has to take whatever action they are most comfortable with.

   As one who moved to Canada during the Vietnam era I’m not willing to take any crap from the US government, including paying them $2350 extortion money or jumping through their stupid hoops. I was targeted by them in far worse ways many years ago. (A nationwide FBI warrant for my arrest, for example.) No doubt they would still consider me to be a “tax citizen” even though I’m confident I’m no longer a real citizen. My net worth makes it extremely unlikely I will ever have a problem with the IRS; it would cost them more than they could ever collect. If they ever come to their senses and offer CLNs online for 100 bucks (not likely) then I’d get one. Or maybe a nice forgery (way cheaper than a real one).

10. @WestCoaster. You are right; the US is continually rigging the game. That’s why I break their rules. Playing by the rules only guarantees that you will lose.

11. I like the term “tax citizen”. Too bad I didn’t use that throughout my recent posts above. It’s all about taxes. That’s why most people are here: to shed “US Tax Citizenship”. All my ranting about self-relinquishment was for the purpose of getting to the point that self-relinquishment does not get rid of tax citizenship, especially in recent years.

    As @USCitizenAbroad mentioned, there was a long-standing loophole where US citizens abroad would take a foreign citizenship and stop filing US taxes but not notify the DoS. This left them a safety net for decades. They could (re-)apply for a passport, move back to the US, etc. It’s very clear and deliberate that the US closed this loophole because they figured people should continue to pay US taxes for the privilege of maintaining this safety net. That’s why you are a US tax citizen until you notify the DoS of a relinquishment.

    Maybe I’m wrong, but I think I’ve seen posts recommending to newcomers that self-relinquishment is good enough to be free and clear of the IRS. I don’t see anybody here now claiming that though.

    There’s also the issue of entering the US with a foreign passport showing a US place of birth. Pulling that off will mostly depend who’s on shift that day.

12. @maz57

    There’s an old George Carlin clip about the American Dream I think you’d enjoy. It’s NSFW, due to swearing: https://www.youtube.com/watch?v=acLW1vFO-2Q

    Another funny video likens the USG to a bad boyfriend: http://www.collegehumor.com/video/7004217/how-america-is-like-a-bad-boyfriend

    Note to mods: I know this isn’t exactly on topic, but I think we could all use a laugh to break the tension!

13. @maz57

    I tried twice to reply to your comment, but for some reason my reply didn’t appear — maybe because I included some links to two videos that are a bit off topic?

    Anyway, Google “George Carlin on the American dream” (contains some salty language, but very funny) and “America bad boyfriend” — given a choice between laughing and crying, I opt for the former whenever possible!

14. @WhatAmI says: “There’s also the issue of entering the US with a foreign passport showing a US place of birth. Pulling that off will mostly depend who’s on shift that day.”

    I am presently in the US for a professional conference. My spouse and two of my children passed through pre-clearance in Vancouver. My spose presented her US passport. Canadian norn minor children travelled on soon to expire US passports. I travelled on my Canadian passport with Boston, USA listed as place of birth. Border guard was the jacked up, cocky type. No questions asked about place of birth. If questions were asked, here’s where the Catch 22 occurs– If the agent were to conclude I were a US citizen, how could he refuse me entry into the US? A US citizen has the right to enter. I made no such claim– I entered as acCanadian citizen on a B2 visa.

15. @WhatAmI – That’s a good point. The banks are supposed to ask for a CLN or a “reasonable explanation” as to why the person hasn’t got one. I guess it’s up to the individual bank to decide whether an answer such as “I couldn’t afford to pay the fee” is a reasonable explanation. So the account might get reported.

    But it’s because of FATCA, I would say – not because the CLN is necessary to end tax citizenship. I wasn’t able to relinquish, so I renounced, and received a CLN, but if the CLN had never arrived, I don’t see any reason to think the IRS would have rejected my 8854. For one thing, the name on my CLN is different from the name on my 8854. The consul assured me that that wouldn’t matter, which can only mean that the IRS doesn’t check the CLN copies it receives from DoS against the 8854s it receives from expatriating taxpayers.

16. PS– To clarify, I meant to say all four of us cleared customs together. I entered as the lone Canadian.

17. WestCoaster,

    I retrieved it — it was still in spam not yet deleted.

    PS: We need the raw wisdom of George Carlin!!!!

18. @calgary411

    Thanks for retrieving my original reply — agreed, George Carlin is the man!

19. For those who think a CLN necessarily ends it, welcome to Hotel California…

    “if a CLN has been issued, but the Department of State later discovers that such issuance was improper … the Department of State could initiate proceedings to revoke the CLN.”
    “To the extent that the IRS believes a CLN was improperly issued, the IRS could present such evidence to the Department of State and request that revocation proceedings be commenced.”
    http://www.gpo.gov/fdsys/pkg/GPO-CPRT-JCS-2-03/pdf/GPO-CPRT-JCS-2-03-7-2.pdf

20. @ Iota

    Re: @WhatAmI – That’s a good point. The banks are supposed to ask for a CLN or a “reasonable explanation” as to why the person hasn’t got one. I guess it’s up to the individual bank to decide whether an answer such as “I couldn’t afford to pay the fee” is a reasonable explanation. So the account might get reported.”

    On that topic, Canada Revenue Agency has addressed “reasonable explanation” in their Guidance on Enhanced Financial Accounts Information Reporting, s. 8.28. It doesn’t have “I couldn’t afford the fee” in it (which is unfortunate as the fee is impossibly high for some people), but it does have some points that will benefit some people. Definitely a document a self-documented pre-4-Jun-2004 relinquisher should have handy if challenged by their bank.

    “…. Generally, it is the CRA’s view that an explanation demonstrating a relinquishment of U.S. citizenship (other than by a renunciation before a U.S. consular or diplomatic official) before June 4, 2004, and in accordance with the U.S. Immigration and Nationality Act (Title 8 of the U.S. Code) as it existed at the time of relinquishment, is sufficient to demonstrate a reasonable explanation as to why an account holder does not have a CLN. Financial institutions are not expected to be experts in U.S. nationality law; any such explanation accepted by a financial institution is accepted for the purposes of Part XVIII and the Agreement only and is not finally determinative of tax or nationality status.

    Other reasonable explanations as to why an account holder does not have a CLN despite having relinquished U.S. citizenship include:
    • they applied for a CLN or formally renounced their U.S. citizenship before a U.S. diplomatic or consular official and are waiting to receive the CLN;
    • they applied for a replacement copy of a previously issued CLN that they lost and are waiting to receive it; or
    • they made and are waiting to attend an appointment with a U.S. consular office to apply for a CLN in respect of a relinquishing act performed after June 3, 2004 (other than a formal renunciation before a U.S. diplomatic or consular official). …”

    I’d be interested to know what guidance the Revenue Agencies of other countries, whose IGAs provide for “reasonable explanation,” are issuing.

21. @Shovel

    If you look though the archives on this site, you’ll see at least one instance of someone who had to mail her CLN back. If I recall correctly, she applied to relinquish based on the fact that she worked for a Canadian crown corporation.

    That’s one of the key differences between applying to renounce versus applying to relinquish; the former is not open to the same level of interpretation as the latter. For example, maybe you intended to relinquish US citizenship upon accepting a government job with the province of Ontario in 1987, maybe you didn’t. Etc, etc. Whoever goes over the DS-4079 has to make that judgment call.

    When you renounce, there’s no such ambiguity; you’re actually stating on the record, by swearing or affirming in front of a consul, that you absolutely, positively no longer want to be a citizen of the United States.

    Hence, a CLN granted for a renunciation is unlikely to ever be deemed to have been issued improperly, except under extreme circumstances, such as the USG subsequently receiving evidence that the applicant was not of sound mind and/or intending to evade taxes.

22. @Shovel

    There’s one more instance I can think of when someone might lose a CLN granted for a renunciation.

    I read a blog post by this lady who recently renounced and then subsequently voted in a US election. Her reasoning was that she was still entitled to vote because she hadn’t yet received her CLN yet. I suspect that if the State Department ever found out about this, that would be considered grounds for having her CLN rescinded. But, once again, this is what I’d consider an extreme circumstance.

23. @Shovel

    Clearly, I need more coffee today since I have a tendency to not finish a complete thought when I’m tired.

    Basically, the last example is of a woman who renounced but then did something only someone who considers themselves a US citizen would ever do (like vote in a US election), hence illustrating a lack of understanding of the full implications of expatriation.

24. Do you only appear on the Federal Register if you are issued a CLN?

    If no, would a copy of that showing your name be considered proof of loss of nationality?

25. “If questions were asked, here’s where the Catch 22 occurs– If the agent were to conclude I were a US citizen, how could he refuse me entry into the US?”

    There’s no Catch 22 in this case. The agent would have to let you in and jail you for violating the law that requires you to use a US passport.

    To make things worse, you won’t be able to renounce while you’re in jail in the US. You’ll have to apply for a US passport and declare on the passport application that you voluntarily, intentionally relinquished by performing whatever action on whatever date.