As I just noticed, last week the State Department released one of the final missing pieces of their Report of the Visa Office for Fiscal Year 2016: Table XX, “Immigrant and Nonimmigrant Visa Ineligibilities (by Grounds for Refusal Under the Immigration and Nationality Act)”.
This latest update reveals that two out of the tens of thousands of people who have renounced citizenship since 1996 were denied U.S. non-immigrant visas last year under 8 USC § 1182(a)(10)(E) (colloquially known as the Reed Amendment) because they had renounced U.S. citizenship for the purpose of avoiding taxation by the United States. One was later able to overcome the finding of inadmissibility.
This is the first time the State Department have formally admitted to denying visas on that basis. However, for decades they have been denying visas to about a half-dozen ex-citizens or ex-green card holders per year whom they believe left or stayed outside the U.S. to avoid the draft.
The State Department acting on their own cannot legally find you inadmissible under the Reed Amendment, and the Foreign Affairs Manual warns consular officers against doing so. They need a determination of inadmissibility from the Department of Homeland Security. DHS have said they can only make such determinations if ex-citizens “affirmatively admit to renouncing their U.S. citizenship for the purpose of avoiding U.S. taxation” — the IRS cannot offer DHS any assistance, due to provisions protecting the confidentiality of tax returns, and State can only tell DHS what the renunciant tells State.
DHS revealed all these difficulties in a November 2015 report, which both myself and Patricia Moon have previously discussed. It is not clear whether the two individuals denied visas by State last year were the same two individuals mentioned in that 2015 report (to whom DHS had previously denied entry), though I suspect that may be the case.
In short, don’t tell DHS or State the obvious truth about why you want to stop being a U.S. citizen, and they — unlike the IRS — officially won’t treat you any worse than they treat other non-citizens. (Unofficially, there do seem to be a few reports of consular officers getting angry that anyone would dare apostatise from the American civic religion, and then using an outlandish finding of 8 USC § 1184(b) “failure to overcome presumption of immigrant intent” as an excuse to deny a visa.)
I think the key here is — if one really wants to visit the US again — to stress the issue of banking, employment, and business being difficult or next to impossible as a result of FATCA. CBT is a large part of the issue, but FATCA has destroyed the lives of people who where previously compliant. It is about taxes, but not just about taxes, there are plenty of other factors.
Since it is illegal for the IRS or anyone else to reveal a tax return, anyone denied entry into the U.S. has been treated unfairly by a criminal. The IRS simply ignores any law they don’t like and they don’t like anyone who has an ounce of backbone and dares stand up to them. They will someday get their due when they are disbanded and the FairTax becomes law.
Thanks for this post Eric, for keeping track of that last little tidbit for State to add and linking to my previous post.
There is almost nothing about our situation that drives me more insane than this persistent, unconscionable insistence by the tax compliance compliance community that one will be denied re-entry to the US if they renounce “for tax purposes.” One has to be either so principled they don’t care about re-entry OR unaware that they have to directly say they are doing so for tax purposes. Rarely do they bother to include the point that up until your post today, only 2 people have been denied re-entry and that was because they indicated that was the reason they renounced.
One thing that should be remembered:
My sense is we will be on overload for a while, given the news yesterday of Mr. Pomerantz, reminding people of the alternate-fact news that has been so effectively ingrained into the public awareness. What to speak of achieving the ultimate in fear-mongering among expatriates. And should anyone feel any guilt over omitting this when they renounce, don’t forget, what we are going through is certainly not limited to tax; it really is only a side issue, given how few owe or will owe anything anyways……..
Whether or not you are a former US citizen, the use of section 214(b) of the Immigration & Nationality Act (8 USC § 1184(b) “failure to overcome presumption of immigrant intent” as an excuse at the consulate, airport or border to deny a visitor’s visa or entry to the USA is not at all uncommon. Sometimes the denial by a consular or immigration officer is legitimate, but sometimes it is based on personal prejudice. If the official asks you what you think of Trump, beware. An approach that greatly reduces the risk of denial is to have with you what David Ingram, sadly now deceased, called a border kit. This is what he recommended 10 years ago the kit should include for someone from Canada. The list is 10 years old – your suggestion for updating are welcome..
1. A Copy of your rental agreement or ownership papers for the place you live – a property tax bill is nice
2. A copy of your Provincial driver’s licence
3. A copy of your Canadian Passport
4. A copy of your provincial medical plan and the bill or statement showing the address it is sent to
5. A copy of your telephone bill and the address it is sent to.
6. A Copy of car registration and licence and address registered to
7. copies of the assessments for your last three Canadian tax returns including the address they were sent to.
6. letter from your employer stating where you work, etc.
7. A statement about your business, its location and type if self employed.
8. A copy of the front of the telephone book and your current listing page from the book (the three past is really good)..
9. copies of invoices to your address from unions, clubs, banks, credit unions, etc..
10. copies of any membership cards you have such as health club, tennis club, archery club, etc.
11. copies of your doctor or dentist bills and the address
12. anything else you feel is relevant and will show your intent to return to Canada.
This list is mainly for visitors from richer countries who generally have an easier time getting approval and entry. Those from less well-off countries often have a harder time or find it impossible to get a visa. See http://visarefusal.com/214b/ for numerous situations that have resulted in denials, some legitimate and some not.
Coincidentally, the same day I finally got around to writing up this post, the Washington Post decided to publish an article about externment (internal exile) within the U.S.
https://www.washingtonpost.com/news/monkey-cage/wp/2017/03/16/this-is-why-some-u-s-judges-banish-convicts-from-their-home-communities/
Incidentally, the author lives in Canada (blurb at the bottom says she’s a McGill postdoc). Not sure if she’s a self-identifying dual or a Canadian or an international student or what.
@fn0: thanks for that link, useful advice (especially for those of us with non-VWP passports)
@Eric, Georgia has an interesting history of another type of banishment;
http://www.npr.org/2016/09/15/494063372/the-racial-cleansing-that-drove-1-100-black-residents-out-of-forsyth-county-ga
There’s an official presumption of intent to immigrate? How arrogant!
Well don’cha know? God Himself had blessed that wonderful land of opportunity, that fabled citadel on a hill. Of course everyone wants to live there, so they have to screen out all of the undesirables from dirtying their hallowed land.
And we know full well how they feel about those that leave, too. Why, you must be sick in the head, or a damn commie! We must punish you! Hmm…. Seems like behaviour more in line with a cult, rather than of a proud, and confident nation. Oh well. In the end, it will cost you less to renounce, than it will be to remain compliant, long term. But the sad irony of this, is that it has cost me less to become Canadian from nothing, than it will to cease to be a US citizen.
There. Now that I’m done with my rant…..
….I have to wonder, if you don’t disclose to the US consulate as to why you’re choosing to renounce, then how can they bar you from entry, due to the Reed Amendment? Of course, they can bar you for other reasons as they see fit, (notwithstanding the travel ban executive orders that keep getting quashed) but as for the Reed Amendment itself, you would basically have to declare that you are renouncing due to tax reasons. Otherwise, how can they prove it, or even know?
I know of a Chinese acquaintance in Hong Kong who was recently denied a visitor’s visa to the USA, after having taken up dual citizenship in the 1990s and renouncing a couple years ago. She and her family had truthfully, bitterly–and naively–declared FATCA and taxes as their reason for renouncing. When she applied for a visa to visit as a tourist a couple months ago, she was flatly denied. I referred her to a US immigration lawyer I know.
@Patricia Moon Re: the “compliance compliance community…”
You missed one. It should be “the compliance compliance compliance community” 🙂
Oh Shovel
That’s a good one! No idea I’d done it. Thanks for the laugh!!! 😉
@ Tricia
It’s okay we’ve all got double doubles on our brain, thanks to Jeffrey Pomerantz.
@Barbara
That is likely the Reed Amendment in action.
Truth be told, you don’t have to give a reason as to why you’re renouncing. I think that is ultimately your business, rather than theirs. Therefore, those that may want to visit the US, as a tourist, in the future post renunciation, (because they may have family there, etc….) are best served by keeping their mouths shut.
Remember. Your honesty will only be used against you.
Doesn’t the Reed Amendment supress our 1st Amendment rights when so many Americans lips are sealed as to why they are renouncing for fear of permanent banishment?
That wasn’t my reason for not mentioning tax, I just didn’t want to say anything that might cause the CLN to be delayed while they scrutinized my final filings hoping to find evidence of hidden wealth.
When visiting the US Consulate to renounce, I was actually asked for reasons why. I politely declined to give any, saying only that I lived in Canada now. It is much better not to give a reason, especially taxes, if you have US relatives to visit.
Now it’s easy, anyone renouncing can just smile and say “Trump!” if asked for a reason.
Saying you live in Canada now is giving an answer that is likely to be received better than a straight polite refusal to answer.
It’s up to the individual to judge what if anything to say, but if you decide to answer the question about why you are renouncing, you can give other valid reasons that have nothing to do with FATCA or taxes. As well as the “I live in Canada now” line, these could include things like:
– I have no desire to ever live, work or vote in the USA
– my life is permanently established outside the USA
– my spouse and children are not US citizens
– etc.
But If you have difficulty in being brief and think you might end up commenting about the tax system, relatives in the USA, or Trump, then politely declining and saying virtually nothing is going to be the best approach.
I don’t think that anyone need be concerned that what you say might result in the CLN being delayed until after a final tax filing has been made, as Iota was. The State Department does not wait for IRS approval before issuing the COLN to confirm renunciation or relinquishment.
How about reverse logic . Like…”I’ve lived fifty years here ,married here,had kids here,worked here, have my pension here, pay taxes for actual services that I receive here and I can’t think of any benefit in actually having US citzenship for myself,can you ?”
Being a follower here on Brock, when my time came to pull the plug, I was ready for the question (despite putting down on the form that I would not be giving a reason for renouncing). I even had it typed out to read to the consulate (who, FWIW, was actually quite nice and friendly). As I read my blurb, the consulate was diligently typing what I said. I was also ready for the question “Why now?”, which didn’t come, as I had read here that someone was asked that.
Basically, I gave reasons similar to what fn0 wrote, and topped it off with something like “so there’s no reason for me to be a US citizen”.
Anyone in Lethbridge? Familiar name spreading the usual FUD about “If not done correctly, residents may be subject to the U.S. Exit Tax or barred from ever entering the U.S. again.”
http://lethbridgeherald.com/news/lethbridge-news/2017/04/27/us-tax-lawyer-to-discuss-renouncing-us-citizenship/
Marino may have overstated the risk of renouncing, but at least he got one thing right: “FATCA is a snitching program”.
Yeah, there might be some small risk associated with renouncing US citizenship, but there is far greater risk if you remain a US citizen.
@Eric
I would be more charitable and say that strictly speaking he is correct. E.g., renounce without 5 preceding compliant tax years and you are automatically a covered expat and subject to the Exit Tax. Write down or mention to the consular that you are renouncing due to the heavy hand of US taxation and you could, in theory, *one day* find yourself barred from the US. This isn’t FUD, it’s fact. When renouncing one must do one’s homework in order to not get unexpectedly tripped up. Of course, Mr. Schnarr would likely prefer that you pay him to tell you these things, rather than read about them here or wherever, but that doesn’t negate what he wrote.