Just Saying No: Not Renouncing/Relinquishing Nor Complying
Some people cannot afford to renounce (or relinquish and get a CLN) and some people will not renounce or relinquish because they do not consider themselves to be US citizens.
This thread is a place for people in this situation to share information and experiences. Thanks for sharing — your stories will be very helpful to others!
@ Margotte,
Re: “Is there a link to how to self-document relinquishment?”
Basically it’s possessing (and providing, if necessary) proof that the relinquishing act occurred and the date that it occurred (eg, certificate of naturalisation) and I’d keep a copy of Immigration and Nationality Act, s. 349(a)(1) with the certificate in case you need to spell it out to anyone.
Re:
Sending an affidavit or statement regarding one’s relinquishment to DoS will not change one’s citizenship status in regards with the US government. You’d have to formally apply for a CLN to do that. However, self-documented relinquishment may be accepted in other situations – in particular, the Canada-US IGA and CRA’s FATCA Guidance to financial institutions refers to it and I am aware of it being accepted in that context.
@ Margotte,
FWIW, Re using a US passport. Passport use is considered by DoS as a very strong indicator that the person themself believes s/he is a US citizen. So, if you use a US passport after the date of your relinquishing act, and then decide to get a CLN based on the relinquishment, there’s a very good chance the application would be refused (I can’t say it absolutely definitely would be refused because I don’t know your entire fact set, but passport use is very problematic to a claim of relinquishment), but you could of course renounce at any time.
@Margotte
So in light of that, you could take your proof of naturalization as a Canadian citizen in 2016 and bring it to a bank and say that you acquired Canadian citizenship with the intention of relinquishing US citizenship, and so therefore you should not be considered a US person for FATCA reporting, per the guidance cited above, even if you cannot produce a CLN.
Or you could just answer “no” if and when a bank asks about US citizenship. That is probably safer and definitely easier than getting into a long debate with a bank about relinquishment versus renunciation etc. You can always reserve the more complex argument as backup in the highly unlikely event that your simple “no” is ever challenged.
Remember that we are only talking about FATCA here. Self-documented relinquishment means nothing to the US government, and won’t remove your obligations with respect to US taxes or using a US passport. But as you now know, for Canadian citizens with no US assets, those tax obligations are quite unenforceable and can be safely ignored. (I assume you did nothing that would cause you to owe the US a huge sum of money prior to your becoming Canadian in 2016? That would be a different matter.)
I just realized my date was 2014, not 2016 (forgive me, I have kids and my brain is like an omelet). I didn’t have anything in the US until 2017 when I received an inheritance. Most of which has now been transferred to Canada. It’s not taxable in the States, and was already declared last year to both governments. It still doesn’t put me in a high earning bracket by any means.
My very concise advice then: stop wasting money on US tax filing; answer “no” if a bank asks about US citizenship. You’ll be fine.
Nononymous wrote:
Yeah, I agree with that. Keep life simple, and just have your ducks lined up and proof easily accessible in case it’s ever required. As Nononymous mentioned, it’s not very likely to come up. So far banking hasn’t been a major problem here in Canada as it has been in some countries. You might want to keep an eye on the Banking Experiences thread from time to time to see how things are going and if any changes occur in the future.
@Margotte. I’ve been following the above and am happy to see that you have been getting good advice from the experienced regulars at Brock. I’ll add the following from my own experience just to contribute to your peace of mind.
I filed US returns (and FBARs) for a number of years, but when I became a Canadian citizen in 2012 I stopped filing (with no notice or explanation to the IRS) and I have heard absolutely nothing from them since. I didn’t file a final return and I didn’t file a Form 8854. They know where to find me if they want to get in touch; they haven’t. I declined to spend the $2350 for a CLN but consider myself self-relinquished and answer no to the US citizen question if asked by a bank.
As Pacifica pointed out, you shouldn’t use your US passport going forward. I have had zero problems traveling by car with my Canadian passport with US birthplace (I can’t speak for air travel). As far as the US bank account is concerned, I wouldn’t worry about it; its proof of nothing one way or the other. I wouldn’t maintain a very high balance in it, but can see how it could be useful from time to time. I have a US dollar credit card issued by a Canadian bank that works well for my regular trips to the US.
One pitfall to watch out for is if they ask you about the purpose of your trip. When traveling on a Canadian passport they may take issue if the answer is for business. They seem to be concerned that people may go down and try to work. Of course, what sort of stuff you are taking with you may bear on that. It might be a good idea to research a little bit just to make sure exactly what is OK and what is not. Or just go visit your relatives.
Thanks for your reply. My US passport expired in 2017 and I don’t plan on renewing it. My business trips are only to pick up supplies over the border – they’re short day trips. I have an expat friend who was told that expats have to enter the US with their US passport. I don’t see how that is in any way enforceable. Anyway, I’m very happily NOT filling out a return this year, and saving that money for other things much needed. I’ll be looking for a USD account replacement that is outside of US. Best to keep it simple.
Margotte. Sounds like all you need is a US $ credit card
I am one of those people who cannot afford the $2350USD to relinquish.(retired and living on a small, fixed income) When I became a Canadian citizen in 1977, (after having lived and attended school in Canada since 1970) I was told that I needed to understand clearly that in becoming a Canadian citizen I would be giving up my US citizenship, something I knowingly agreed to.
With family still in the US I have traveled there many times by both air and car without incident using my Canadian passport, that is, until June 2017. At that time, I was flagged at the US immigration check-in at the airport and told I was violating US law by attempting to enter the US without a US passport. I have never had a US passport. The immigration officer agreed to let me enter to visit my new granddaughter but not before barking a condescending order to me to clear up my status – a status he surmised simply by seeing my US birthplace listed on my Canadian passport. I have not traveled back to the US since that time, but with my son and family now having to remain in the US for a much longer period of time, I feel trapped in Canada and unable to visit should that scenario play out unfavourably next time. Can anyone advise me here??
Your scenario is pretty common. In 1986 the previous rules about citizenship changed, and the US border officials began telling Canadians and other people who thought they had lost their citizenship that they were suddenly USA citizens again. Later they began insisting that they use a USA passport. It is good that you didn’t decide to go and get a passport. That would complicate matters.
However, if you don’t want to be a USA citizen then you aren’t one. That means that you really did relinquish your citizenship in 1977. They may insist that you have CLN but that is only a document that recognizes your loss of citizenship. Your relinquishing act is what makes you a non-USA citizen.
So this one is a bit tricky. You did intend to lose US citizenship when you became Canadian in 1977, but you have no CLN (certificate of loss of nationality) to prove relinquishment so the US still considers you a citizen unless you’re willing to pay a huge sum of money. But you also want access to the US for family reasons.
Three options here, as I see it.
1. Apply for a US passport. Pro: you can go to the US whenever you want. Con: Doing so makes it impossible to claim that you relinquished back in 1977. The advantage of having relinquished so long ago is that were you to pay for a CLN today, you’d be excused from any tax filing obligations upon exit. Also obtaining a passport would on some level put you on the US radar, so if you’re the worrying sort and the fact that you’ve not been filing US taxes is likely to bother you, then it’s not a good idea. If you’re not the worrying sort and travel is very important, the passport may be worth considering, as there is no real threat of the US being able to follow up taxes.
2. Buy a CLN for US$2350, showing that you relinquished in 1977. Pro: no tax issues, or confusion at the border when they see a US birthplace on a Canadian passport. Con: You can’t afford it, and there’s no guaranteed right of access to the US, in the highly unlikely event that you encounter a pissy customs officer (though that would be very unlikely for someone who naturalized as a Canadian many decades ago).
3. Do nothing. Probably the best course of action. The border folks are more bark than bite. While the law says that a US citizen must enter the US on a US passport yada yada, they’ve never defined a penalty for breaking said law. It’s not necessarily the case that you will be confronted the next time you cross – they don’t seem to read their own notes. (I have a Canadian passport with US birthplace, though I’ve been dual since birth. Maybe six years ago I was told to use a US passport, but I ignored them and have continued using my Canadian without ever being asked again. Also, and here’s a fun paradox, if they believe you to be a US citizen, they are required to let you in.)
I would recommend just keep on doing what you’ve been doing, and if asked again, play dumb or say you lost US citizenship when you naturalized in 1977, and if they tell you that you need to provide proof, smile sweetly and say thank you sir/madam, I’ll look into it just as soon as I return home from visiting my grandchild. If the hassles continue, then obtaining a US passport might be the least bad option.
PS Do not ever mention a US birthplace or possible US citizenship around banks or financial institutions. It’s no huge deal but best to avoid FATCA reporting if you can.
A vote for option 3, i.e. do nothing. This hassle happens only rarely and to the best of my knowledge nothing is entered into their system after they scold you and eventually let you proceed. Its happened to me a couple of times (at a land crossing) and I just ignore it and keep right on traveling with my Canadian pp with US birthplace. The problem seems to crop up more often when traveling by air.
Obtaining a US passport effectively blows your “I relinquished back in 1977” claim. Not having a CLN doesn’t mean you didn’t lose US citizenship just as not having Canadian citizenship certificate doesn’t mean you aren’t a Canadian citizen. (Most Canadians don’t have one.)
I have de facto opted for option 3 it seems because anything else just seems too fraught. Overzealous border guards don’t intimidate me but what does is not knowing where I stand legally and also where they stand. When putting my Canadian passport in a pre-clearance machine, the form it was spit out featured a very prominent X through my name and address etc. That earned me a personal encounter with Mr. Border Guy that none of my fellow passengers were subject to. I suspect that this will keep happening since that pre-clearance is digital, so will have to brush up on my “oh gosh I didn’t know” face and dazzling smile I guess. Thanks for the input folks!
@Karen, I’ve been thinking about applying for Nexus card to see how that would go. I wonder if you would be denied a card. Perhaps I will do a post on the subject.
@maz57, Getting a US passport doesn’t necessarily blow it. There was a case of someone who was still able to claim that he had relinquished and that it was only due to the pressure from the border guard that he got the US passport. That said, it is certainly easier to claim relinquishment without a current and used US passport.
There is the case of someone who got a US passport but was still able to relinquish, claiming he only did so out because of the pressure from the border guard. Of course it is much easier to claim relinquishment without a current and used passport.
@Karen Brazill
” the Immigration and Naturalization Act section 215, found at 8 USC § 1185, Travel control of citizens and aliens, subsection (b):
(b) Citizens
Except as otherwise provided by the President and subject to such limitations and exceptions as the President may authorize and prescribe, it shall be unlawful for any citizen of the United States to depart from or enter, or attempt to depart from or enter, the United States unless he bears a valid United States passport.
Source: https://www.law.cornell.edu/uscode/text/8/1185
1) The US can not refuse entry to a US citzen,since they assume you are one
2) The US requires a US passport from US citzens on reentry.
3) The noncompliance above has no legal consequences.
This is more of a oxymoron than a paradox
So one can ,at this point, when asked for for a US passport say that you don’t have one and, at which point ,he tells you to get one ,and at which point you just nod . Then you repeat this process ad infinitum every time you cross the border. Never argue, never give longwinded explanations ,never try to be smarter than they are,just provide a smile and an understanding nod of the head.
Frankly ,this is easy to do with an aggressive border agent since you will react ,instinctively ,cautiously as if he/she were to a rabid dog. It’ s the sly, quiet one’s that may lay your guard down.
I vote for option 3. Getting a US passport or buying your freedom should be unnecessary.
The odds of the next border guy giving you a hard time are very low. If it did happen, say ‘ When I became Canadian, I was told I was giving my US citizenship up.
Do you have a CLN? Answer. either ‘what’s a CLN’ or ‘nobody before ever mentioned that before ‘
My wife, born in the Usa crossed hundreds of times over 50 years with a Canadian passport. Her birth place was remarked on twice. Each time in a friendly manner as in ‘you could get a US passport if you wanted to’
I think many US border guards don’t have a good understanding of US citizenship law, in particular how a person loses US citizenship. During one encounter the guard asked me if I had gone to a Consulate and renounced. When I answered no, I hadn’t, his reply was “Well then you are still a US citizen”. I told him that renouncing at a Consulate was not the only way one could lose US citizenship and that I had lost it when I naturalized as a Canadian. I stood my ground and he eventually gave up and let me proceed. There was no way I was going to let him badger me into being a US citizen even if it meant I was turned back.
I’m 35 years old and live in Canada. I was born in the USA (Mississippi). I left the USA when I was under 2, and have never lived, worked, voted, or had anything to do with them otherwise. I have a Canadian corporation and want to buy and sell ETF, as well as use my tax free savings account. I do not, to my knowledge have a SSN.
Do I need to do anything about this? I will take years to clear this up, and cost me upwards of $40 000.
Not enough facts here to offer any useful advice. Are you also a Canadian citizen? If so, how did you acquire Canadian citizenship? (I.e. from birth or naturalized.) Do your financial institutions already know about your US birthplace? Any need to travel to the US?
Be careful what you do and say until you completely understand things. Spending lots of money (on lawyers, accountants, etc.) is not a cure all and often makes it worse, not better. Never tell the IRS anything they don’t already know.
Depending on your situation there may not be anything you need to “clear up”. Brock has a lot of really smart people and is here to help. Ask lots of questions. Good luck.
@Anonymous
Two questions:
1. Are you a Canadian citizen, and if so, naturalized or dual from birth?
2. Are any financial institutions aware of your US citizenship?
Yes I am a Canadian citizen. Both of my parents are Canadian and I do have a Canadian birth certificate (I think, I would have to look for it). I most certainly have Canadian citizenship as evidenced by my passport and also a Canadian citizenship card.
I don’t believe that I have told any financial institutions about where I was born, but in trying to open my EFT account it does ask if I am considered an American for tax purposes (I could just lie).
I like to travel to the US for holidays. I would like to continue to do this.
You have a Canadian registration of birth abroad, which isn’t quite the same as a birth certificate, but it means that you are dual from birth, which can be a good thing.
Right now, keep it very quiet around banks. Lie when asked, if you want to open an EFT account.
If you wish to travel to the US, be aware that at some point a border person may notice the US birthplace on your Canadian passport and tell you that you are a US citizen and that you need to be using a US passport (they won’t however ask you about tax compliance).
Otherwise you can go back to ignoring the whole situation. Keep quiet and don’t talk to any cross-border tax accountants, that will not end well. If you plan on making a lot of money one day you may want to consider renouncing, which can be done without tax compliance (though apparently the IRS is threatening to send letters to those who renounce without filing anything). For now, lay low and do nothing, and keep your US birthplace secret from any banks.