Here’s a fun story about a former U.S. citizen who early on ditched the U.S. millstone around his neck and then went on a shopping spree to acquire an extensive set of trophy citizenships.
Insider insights from Canadian immigration lawyer David Lesperance also include some account of a few other interesting cases, notably that of
Xiao Jianhua, the Chinese-Canadian-Antiguan billionaire who on January 27 was whisked away from the luxury Four Seasons apartments in Hong Kong and over the border.
Full story at https://www.biv.com/article/2017/3/curious-case-canadian-eight-citizenships/.
I have two questions:
1) can a U.S. citizen who has been resident outside of the U.S. for more than 10 years and has not filed tax returns of any kind with the U.S. during those 10 years relinguish U.S. citizenship and in doing so sever any financial claims the U.S. government may believe it has outstanding or going forward with that person?
2) levying taxes on citizens outside of the U.S. appears to go beyond the powers the Constitution gave Congress to levy taxes in Section 8 of the U.S. Constitution. This enabling paragraph ends quite clearly with the words “within the United States,” thereby limiting the powers the Constitution is giving the Congress to the national boundaries of the U.S.. I have heard that about 20 years ago someone brought a case to the Supreme Court making this point. I have heard from the same source that the case in this instance failed. I would like to know if anyone can tell me what the name of this case was, when it was filed and heard and where I might obtain a copy of the brief filed at the Supreme Court. I’d also like to know where I might be able to obtain a copy of the decision(s) in this case. It must have been a weak argument or the grounds on which the argument was denied can be circumvented by rephrasing the challenge. The only way to know is to see the original documents. I hope someone can help.
1. A US national (either US citizen or US non-citizen national) who is outside of the US (regardless of duration) and regardless of filing US tax returns or not can relinquish US nationality (including US citizenship). However, regardless of duration etc., it does not sever any financial claims the US government has.
2. Are you thinking of Cook v. Tait, which was more like 100 years ago than 20? One weak argument was made by a Supreme Court judge. Another weak argument has been made that it applies to US citizens outside of the US instead of just applying to property outside the US owned by US residents. Nonetheless it has been applied that way.
Personally I never had any idea of challenging the 16th amendment (which is not restrained by article 1 section 8), and did not know about and would not have thought of challenging Cook v. Tait. The only years that I recall actually having a non-zero amount of US tax were 1997 and 1999, where I overpaid and received refunds. The immense problems I have with the IRS concern years where the IRS even agreed I my US tax was zero. If I were a US citizen today I would argue that at boundaries where the 5th amendment stops the 16th amendment also stops, but I wouldn’t hold my breath hoping for a judge to understand the idea of “consistency”.
@Susan – A US citizen can renounce US citizenship, and obtain a Certificate of Loss of Nationality, by swearing an oath at a US Consulate or Embassy, and paying $2350.
It may be possible to relinquish, but the rules are a little more complicated. If you ask under the thread labelled “Relinquishment and Renunciation” (http://isaacbrocksociety.ca/renunciation/), someone more knowledgeable than I should see your question and explain about relinquishing. The fee is the same.
Once you’ve renounced you’re no longer a US citizen. Under US tax law, you’re required to file certain tax forms to exit the US tax system. Some do, some don’t. The IRS doesn’t seem to try to follow this up unless they think it’s worth their while ( i.e. if the person is quite rich ) and they think they can collect (for instance if the person has US assets that can be seized). Collecting overseas is difficult and expensive, fortunately.