The Quarterly Publication of Individuals Who Have Chosen to Expatriate for Q3 2017 has just been placed on public inspection for publication in Thursday’s Federal Register, three days later than required by law. By my count, this list contains the names of 1,376 people who renounced or otherwise relinquished US citizenship under any paragraph of 8 USC § 1481(a), as compared to 1,004 people who renounced US citizenship (under 1481(a)(5) only) added to the FBI’s National Instant Criminal Background Check System (NICS) in July, August, and September.

Following Q3 & Q4 2016, this is only the second time since 2011 that we’ve had two quarters in a row of Federal Register numbers being significantly higher than NICS numbers, the way they should be every quarter. Even then, the Federal Register list is far from complete: contrary to some media reports, it’s basically impossible that the list includes people who give up their green cards, and no one has ever identified a single green card abandoner in the list, despite the message at the top claiming that “long-term residents, as defined in section 877(e)(2), are treated as if they were citizens of the United States who lost citizenship”.

The people named in this list probably completed the State Department’s painfully slow and expensive formalities to apply for a Certificate of Loss of Nationality around mid-year at the latest, but that’s just a guess. I can confirm that one name in this quarter’s list belongs to a man known to have relinquished in April 2016 or earlier. For the US government, that’s positively speedy — last quarter’s list had relinquishers from 2013 and 2014.

As always, after the jump you can find discussion of recent media reports about relinquishers, as well as a table of past NICS and Federal Register statistics.

Table of contents

1. Recent media reports about relinquishers
2. Comparison with NICS
3. Conclusion

Recent media reports about relinquishers

There have been a few recent media reports about public figures who have given up US citizenship, but none of their relinquishments actually seem to have occurred last quarter. Tao Yuequn, founder of contact lens manufacture OrthoK, who restored his Chinese citizenship at the latest by April 2016, is in this quarter’s list. I don’t know when others in the list made their final visits to US consulates to apply for Certificates of Loss of Nationality, because I’m not having much luck matching any of their names to media reports. Last quarter’s list had one name of a man who applied for his CLN as recently as March 2017 or later, so my best guess is that this quarter they might be starting to list the names of Washington-approved relinquishers from around mid-year.

The daughter of South Korean Minister of Foreign Affairs Kang Kyung-hwa is in the process of applying to get her South Korean citizenship back, but hasn’t yet requested a CLN; according to a report from last month (in Korean), she’s still waiting for a police certificate from the US before the South Korean side formally approves her restoration of citizenship. Once her citizenship is restored, she will have twelve months to give the South Korean government a CLN, or at least proof that she’s applied for one — see our previous post for an explanation of the procedure and a translation of the relevant South Korean regulations.

Jazz drummer Alvin Queen, who showed up in the Q3 2016 list, doesn’t seem to have spoken up last year about his decision to relinquish US citizenship after holding dual citizenship with Switzerland for three decades, but he was in the news last week when the Department of Homeland Security decided to deny him entry to the US over a half-century-old drug arrest which resulted in no charges. Mr. Queen states that he gave up citizenship “to make life simpler at tax time”. Mr. Queen’s manager Jean-Pierre Leduc apparently thought it would be a bright idea to call Senator Chuck Schumer to try resolving the situation, since Mr. Queen was born in Schumer’s state. That must have been a rather awkward phone call: Schumer sponsored the Ex-PATRIOT Act, which would have punished people who gave up citizenship to make life simpler at tax time by banishing them permanently.

Finally, Hermitage Capital founder Bill Browder, who relinquished in 1997 and showed up in the Q3 1998 list alongside Lithuanian president Valdas Adamkus and South Korean apple farmer Choi Yongtak, also briefly had his ESTA travel authorisation revoked due to an Interpol diffusion notice filed by Russia. He tweeted later to state that he got it restored; news reports say that someone at DHS manually reviewed the situation in response to the media coverage, suggesting that the original revocation was due to some automated process. Mr. Browder was born in Illinois, but apparently he was savvy enough to know that calling FATCA-natic Dick Durbin wasn’t the best way to get his problem solved.

Back to table of contents

Comparison with NICS

The below table lists the yearly additions to NICS from 2006 to 2010, and monthly additions for 2011 up through the present, compared with the quarterly lists in the Federal Register.

The FBI has the bad habit of uploading the new NICS report each month at the same URL as the old one; the only way to keep a verifiable collection of old reports is to save old ones in some archiving service each month, and unfortunately we didn’t remember to do this for all months, though we’ve had a good track record over the past year. If the month is set in upright type, the link goes to an actual Internet Archive copy of the FBI NICS report for that month. If the month is in bold type (for December), the link goes to the NICS annual operations report for the appropriate year. Finally, for months in italics, the link goes to a Brock post or comment.

Conclusion

Tomorrow we may get some good news about the US’ treatment of its diaspora, or we may not. Even if we do, there’s still a long, hard road ahead for US persons in other countries trying to live normal lives like their neighbours. Territorial Taxation for Individuals faces opposition from Democrats, and it’s unclear how valiantly House Republicans will defend it if their Homeland base, fed on a diet of mendacious coverage like this, objects to “expats getting huge tax breaks” while they suffer attempted repeal of the state and local tax deduction or the mortgage interest deduction. Also, any proposal offering even a hint of sanity for the diaspora, whether that proposal come from Republicans Overseas, American Citizens Abroad, or Democrats Abroad, will likely face bipartisan opposition from diaspora-hating Senate Finance Committee members such as Chuck Grassley, Bob Casey, and Bill Nelson.

Furthermore, as USCitizenAbroad points out in a comment, FBAR repeal does not appear to be under consideration. FATCA IGAs and all the bank machinery to enforce them will remain in place until someone explicitly burns them all to the ground. No one knows what will happen to things like the Section 2801 inheritance tax on US heirs of non-compliant expatriates (which House Republicans explicitly chose to retain during their unanimous vote two years to repeal the estate tax, and which unlike the estate tax does not have any $5.5 million exemption). The Reed Amendment lurks in the background, unenforced but also unrepealed.

It’s been eight years since the 2009 “Offshore” Voluntary Disclosure Program started the painful and intimidating audits which ultimately led to five-figure fines against minnows who had missed two figures per year of US taxes, and the FATCA hammer slamming every bank in sight in alleged pursuit of tax evaders. Some people have exhausted their reserves of energy, and don’t have the wherewithal to hang on for another year or however long this all takes. Some people have lost all faith in the US government, and don’t trust it not to yank the rug back out from under them once they’ve gotten comfortable. Non-Americans will continue to be wary of doing business with Americans abroad, after seeing how easily the US government used those Americans as Trojan horses to breach other countries’ sovereignty and invade their privacy.

A solution would be welcome, but the US has already done irreversible damage to its diaspora, shattering good will and taxpayer morale. The names in this list are a reminder of that.