Renunciation and Relinquishment of United States Citizenship: Discussion thread (Ask your questions) Part Two
Ask your questions about Renunciation and Relinquishment of United States Citizenship and Certificates of Loss of Nationality.
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NB: This discussion is a continuation of an older discussion that became too large for our software to handle well. See Renunciation and Relinquishment of United States Citizenship: Discussion thread (Ask your questions) Part One
@Bubblebustin, yes, but let’s see what answer he gives to the born dual or not question first. I didn’t want to confuse him with too many options, just make the point that an attorney isn’t needed.
@Calagary poses a question on relinquishment on
BCBuziness thread and it is well placed here with answers for others…
Question
From a conversation that I had yesterday with another Calgary retiree, I want to pose a question as most here know the series of mistakes I made in having to choose renunciation over of my claim to relinquishment of US citizenship when I became a Canadian citizen in 1975. As you know, my telling my story and all the mistakes I made is so that others learn from my mistakes and don’t follow in my unfortunate footsteps.
If a person, as myself, who came to Canada decades ago, becoming a Canadian citizen and being told / warned that by doing so his/her US citizenship would be lost…
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in haste and advice from US tax professionals, enters into one of the so-called “amnesty” programs, thus back-filing requisite years of back US tax returns and FBARs…
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BUT has not made the other fatal *mistakes* (applying for and obtaining a US passport or voting in a US election), i.e. just wanting *to do the right thing*…
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Has that person now lost his/her right to CLAIM RELINQUISHMENT for that long-ago act of expatriation when he/she became a Canadian citizen — and lived his/her life as “only a Canadian”?
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We see persons able to claim their long-ago relinquishments even though they were “bullied” and intimidated at the border (as was I) into applying for and obtaining a US passport (as it is the US law that a US citizen must enter the US only on that passport, leaving aside the fact that this “law” was for the most part ignored by all but the most aggressive US border officials)…
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Is this unfortunate hasty decision, *in trying to do the right thing*, another act of ‘entering oneself back into the US’ with advice of a professional (as that is what we are told we must do by our Canadian government representatives to make our decisions: only with such such professional advice) that could be *excused* in claiming that long-ago relinquishment?
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i.e., persons like us who made a choice to come from the US to this country (or any other) and have lived our lives as Canadians, and without “professional US tax advice” would NEVER have otherwise made this *fatal* choice.
Answers
Petros says
February 10, 2014 at 10:06 am
@Calgary, you still have a case, yes because you were bullied.
What matters is your state of mind when you committed the potentially relinquishing act. Everything that has happened since has been egregious violations of your right to expatriate under US, Canadian and International Law.
pacifica777 says
February 10, 2014 at 10:32 am
@ Calgary.
They should still be able to get the correctly backdated CLN.
Kingston and Mrs. Kingston, who thought they were not USCs but entered OVDI on bad advice, got their CLNs correctly backdated 40-some years (and their penalty refunded), and have written here: http://isaacbrocksociety.ca/2011/12/14/about-the-isaac-brock-society/comment-page-4/#comment-519000
A few other long-ago relinquisihers (I think there’s 3) reported here that they’d filed US tax returns based on bad advice and/or confusion in 2011 and also got their correctly backdated CLNs. Burden of proof — balance of probabilities, no one factor necessarily fatal. Intent — taxes were filed due to confusion/misinformation, not filed to re-establish citizenship.
pacifica777 says
February 10, 2014 at 11:28 am
Yes, absolutely, claim the relinquishment (unless they want to stay under the radar). Based on the cases we know of, if the only “possibly-American act” they’ve done in all these years was filing US taxes recently because of bad advice, they should not have a problem getting their CLN backdated to the day their became a Canadian citizen.
Patrick W. Martin;
I see that you are a US tax lawyer.
A craft which requires a facility with choosing words very mindfully and deliberately, in order to achieve a desired effect.
I wonder about your closing statement as the intro to your first participation here at this website.
Closing with this statement (just before the link to your ‘Tax-expatriation’ and associated US law practice site):
“..To state the obvious, it is a decision that should not be taken lightly. It’s not like a tattoo that you can simply “un-do” what you did – by getting it removed after you have had lots of time to sleep on it.”
I think the IBS site and the resources we have painstakingly collected demonstrates ample evidence that participants and readers here have carefully and thoughtfully deliberated before making informed choices – given that the US throws up in front of us ever higher and ever more costly and punitive barriers to living any kind of normal lives in our homes abroad as US or dual citizens – affording us no real alternative but to renounce/relinquish our birthright.
We have many expatriation resources, documents and articles that we have painstakingly collected, as well as details of the personal and legal ordeals that we have undergone in the process of making our final decisions – whether we have chosen to remain US citizen-subjects or not.
There are also many firsthand accounts of expat experiences collected by the ACA (and even the Democrats Abroad) about the current burdens of the obligations we are forced to bear from the US, and the too-heavy to carry weight of US citizenship when coupled inextricably with US extraterritorial citizenship-status-based taxation as applied to those living and often born or naturalized ‘abroad’.
And those with (and often enough, without) means – have paid substantial portions of our NON-US family savings to a range of US tax law professionals and immigration advisors for the privilege.
Does that seem congruent with acting on a whim – like getting a tatoo on a drunken night out?
Whatever the case, the entire situation is far more nuanced than a bunch of people renouncing on a capricious whim.
I hope that your website offers additional resources that supplement the extensive ones we have already collected. Though I am wary of any webpage entitle in part: ‘Tax-patriation’.
@JustMe
@Badger
JustMe and Badger referred to Phil Hodgen’s seminars and services. I would like to point outthat he seems to be telling all relinquishers that the date of the relinquishing act is irrelevant and that they have to file five years of back taxes no matter when it occurred…no backdating exceptions, at least according to the Aug. 2013 post on his site:
http://hodgen.com/relinquishing-u-s-citizenship-and-expatriation/
He writes : “Relinquish vs Renounce
Back to where we began–what is the difference between renouncing citizenship and relinquishing citizenship? There is a simple answer: if you show up at an Embassy, fill in the paperwork they want you to fill in, and say the words they want you to say, you have renounced. You–by renouncing–relinquish your citizenship for tax purposes. All of the other methods described in this section have the same effect: you, by taking the indicated action (and, as required by the Internal Revenue Code, telling the Department of State about what you did), relinquish your citizenship for tax purposes.
People care about this because they are angling for an earlier expatriation date than “now”, whatever “now” is. It won’t work. If you are a U.S. citizen, you will not have an expatriation date earlier than an objective event involving paperwork. Invoking the time traveler exception again, this is impossible to do unless you have that special ability. Determine your expatriation date for tax purposes as of right now (whenever “now” is for you), and compute the tax consequences accordingly.“
Scratch Phil Hodgen off my list of people making helpful contributions to USPs abroad.
WhatAmI says: Scratch Phil Hodgen off my list of people making helpful contributions to USPs abroad.
Translation: Tell me what I don’t want to hear or believe, even if you are one of the practiced outstanding specialists who hands out a lot of information for free, and I’ll scratch you off.
Here manifests another version of the ostrich syndrome. And there is a Brock cabal that univocally touts a competing view as the only truth. The Hodgen approach involves no what-if-this-could-be-true uncertainty. Take your pick.
877A read literally reads like a conundrum (I think that’s the word?). Something interesting that resulted from that post by Phil is Michael Miller’s comment to it:
“Michael J. Miller says Aug 25, 2013 2:12 pm
For persons whose CLN shows a loss of citizenship date that is on or before June 3, 2004, section 877A should not apply. Even if the CLN is received today. I’ve discussed this with people at the IRS and they’ve informally stated that they agree.”
Thanks for that, Pacifica!
Associated Press writer @AdGeller is interested in speaking with #Americansabroad
http://citizenshipsolutions.ca/2014/02/10/associated-press-writer-adgeller-is-interested-in-speaking-with-americansabroad/
I wonder if it would be worthwhile trying to get the authors of the article in the Canadian tax journal to comment on backdated CLNs. Their article on expatriation was recommended earlier in this thread and I found it a good introduction, but it also makes no exception to the date of notification and five years back taxes rule.
https://www.ctf.ca/ctfweb/EN/Publications/CTJ_Contents/2013CTJ1.aspx
Click on Full text pdf to see the article (first in the list).
The authors give their email addresses. Maybe they would agree with the rule not applying if told of the basis for disagreeing.
@usxcanada
OK, my hasty flippant post was not a good idea.
There are many people who naturalized before 2004 who have obtained back-dated CLNs, and others who have obtained the same (not necessarily easily) based on foreign government employment before that date. Why wouldn’t Mr Hodgen include these facts?
In my shock I missed the clearly stated fact that this was an old post from last August. I thought it was something brand new.
I hadn’t read all the comments. I see Michael Miller commented:
“For persons whose CLN shows a loss of citizenship date that is on or before June 3, 2004, section 877A should not apply. Even if the CLN is received today. I’ve discussed this with people at the IRS and they’ve informally stated that they agree.”
To which Mr Hodgen replied:
“Thanks for the info.”
Not sure what that Mr Hodgen means by that though.
@Petit Suisse, sorry, I am not an expert in this. Pacifica and others at IBS know far more about this aspect of things. So I don’t even usually try to unravel or weigh in on this issue.
My circumstances did not involve obtaining a relinquishment based on an event years in the past – when the citizenship law in the US – was different than currently. So I highlighted Phil Hodgen’s offer because it appeared to be a chance to get some range of questions answered for free – and possibly posted on his website. He often has had useful information there – and been pretty generous about sharing it. Personally, I wouldn’t ignore all the rest of the information that is there solely because of that particular issue. But the problem you highlight is not one I am personally trying to resolve, so I was puzzled by it, but put it in my large ‘grey and fuzzy area’ file.
All we can really do is to compare all this advice and look at our own situations and decide what form of uncertainty or certainty we can tolerate. I myself wouldn’t even try to give advice on this issue – I know my limitations.
It is unclear to me exactly what he means. My interpretation of what he is saying is that he is referring to more current or recent relinquishers, not the ones who performed one of the possible relinquishing acts (chiefly swearing allegiance to another country in the course of naturalizing as a Canadian or other non-US citizen, or a dual consciously relinquishing by swearing out an oath to a foreign government – ex. in the course of taking up government employment) in years past when it was US law, and understood that engaging in those acts would automatically result in the US stripping one of status – resulting in involuntary loss of US citizenship – no matter what the individual’s intent (a time period when the automatic default in the law was the US presumption that the loss was inevitable – which was later struck down and which now hangs on the voluntary and conscious intent of the individual to reliquish at the time at which the act was performed). I won’t try to get into what changes took place in citizenship laws for what range of years in the past as I haven’t got a good grip on that.
In any case, you could always send him the question, citing those who have actually been able to get a qualifying relinquishment recognized retroactively, and see what he says.
Anyone at IBS want to add anything to help clarify further?
@ usxcanada
Got it! We’re a vomit inducing, delusional, ineffective cabal of ostriches who must NOT scratch off our list anyone/anything who/which expounds/exudes negative counter viewpoints. Okay, all bubbles are burst and it’s Phil Hodgen who will be our one and only true expert in all things related to USPs abroad.
@ WhatAmI
That’s another trouble with the IRS. Informally, off the record, they will tell you anything but then go all policy wonky when you act on their (mis)information.
Hence the bulletproof glass and high security screening at consulates…. 😉
I can’t add anything definitive to the 877A(g) discussion either. That law is a conundrum – it’s not surprising that even experts are not in complete agreement — so I’ve made the decision that I feel is logical and I am comfortable with. Because the law is so poorly written, I think it comes down to each person having to decide what feels most logical and comfortable to them. It would be interesting to know if Phil has changed his opinion on this, as I can think of two lawyers who have in recent years. As I see it personally, it’s not 100 percent definitively clear, but there’s uncertainty in other parts of life too.
Em –
I concluded with Take your pick. Unlike wish-junkies, I recognize diversity of viewpoints. I don’t push a single line, which means doing dead dialectic. Let the dead enshroud themselves in a comfy blanket that covers their own eyes.
Like a few people said, hop right onto that hot hearsay purportedly emanating from IRS, and glue your future to it. After all, what somebody once heard from a nameless somebody at IRS is bound to be more reliable than their written documentation that notoriously flaps any which way, depending on what they would like to do to you at the moment.
By the way, how many expatriations does guru Michael Miller do as compared with guru Phil Hodgen?
@Patrick W. Martin wrote:
Renouncing US citizenship was like removing a worn-out sticker that was already pealing off. The difference is that now the worn-out sticker isn’t sticking to my clothing anymore when I change and thus I don’t have to wonder if it will be removed.
US citizenship was like a distant memory. It was something that one knew that one had, but not something that one needed for one’s daily life. Renouncing means that the daily things that one does continue as usual, while the distant memory of US citizenship remains a distant memory fading into the past.
US citizenship only becomes an issue if one wants to live in America. For many people, such as myself, the idea of living in America was like the idea of living in South Africa, Iran, Russia or Malaysia. It meant living in a different place for a different experience with different risks. No US citizenship means that the idea of living in America gets scratched off of the list of many possibilities. The idea of living in America can be pealed off, like removing a worn-out sticker. One does not have to live in America. There is much more to the world than just America. Life is full of adventures.
My American heritage and American ancestry is priceless and will always be of great value to me. But, your US citizenship is unimportant and unnecessary. American heritage and American ancestry will always remain with me, while citizenship can be pealed off and forgotten. I will always love the American countryside and respect its people and appreciate what my ancestry has done, but I will not live where I am not wanted. Americans don’t want for me to live in America, so it would be stupid to live there.
I renounced to refinance my mortgage. So, if US citizens think that the act of renouncing US citizenship is a “decision that should not be taken lightly”, then those US citizens can only be ashamed and disgusted with themselves and their country for being responsible for creating a situation which forces expats to renounce so that they can continue leading normal lives.
If I were you, I would renounce US citizenship to remove the shame of being a member of such a government which creates unnecessary and undesirable problems for its diaspora. The US government made a wrong “decision that should not be taken lightly”. You really need to talk to your government and explained to it where it went wrong.
I guess it’s safe to say that the US’s treatment of its own citizens is alienating them?
This is a second try. Had trouble sending.
Just wanted to point out that Hodgen didn’t write that you couldn’t get a backdated CLN, only that for tax purposes it was the date of notification, not the date of the relinquishing act that mattered. WhatAmI notes that he received and took note of a contrary opinion on this site, but we don’t know if he chaned the advice he gives.
CRA is aware of this problem of old relinquishers wthout CLNs, as they allude to it in their FAQ concerning the proposed IGA. Personally, I would feel more reassured by a formal clarificationon on their part, that they will accept the fact of having taken Canadian citizenship at a time when the US told you you were automatically losing your US citizenship, as a sufficient explanation for FATCA purposes of not having a CLN.
How does one go about asking them for such a clarification? Does one have to go thru the Minister of National Revenu?
The problem is that so many people only voice the laws as they are today, which is not the whole story.
I have personally heard or read first-hand accounts of advice given by all of the following people opining, blogging, presenting in live seminars as if only the current INA 349 rules (last changed in 1986) we applicable, with no mention of the possibility of back-dated CLNs:
– tax professionals on web blogs
– tax professionals in free live presentations
– a $350/hr US Citizenship lawyer with whom I consulted
– US consuls in US consulates in Canada
– the DoS in Washington DC
Note that I’m talking about professionals, not media reports.
We’ve all read accounts here of people claiming relinquishment for INA 349A(4)(A) who were told by the consul (and maybe even DoS in DC? (not positive about the latter)) that they needed to provide the oath they took, when in fact it is perfectly clear in the distinction between 4A and 4B that an oath is only required in 4B (because those 4B people are not already citizens of the foreign country where they obtained government employment).
We’ve all read accounts here of people who were told by a consul in their relinquishment interview that they did not have a valid case. They stuck to their guns and insisted, and after the consul reluctantly submitted their claim to the DoS in DC it was in fact approved.
I’m tempted to tell anyone who asks: don’t do anything until you know more than the person who is helping you do it, or processing your application, or performing your interview.
@usxcanada
Trying to have Elizabeth May accept my twitter challenge to join us in front of the US consulate in Vancouver – think she’ll accept?
@WhatAmi, you make good points. Why not submit questions to Phil Hodgen and see what he says? Note the firsthand accounts of people who stuck to their guns re CLNs for decades past relinquishing acts – during the time before the Supreme Court rulings that changed the ability of the US to automatically strip US citizenship. Those are very important issues for those who naturalized in Canada decades ago (note, I am not clear about all the changes and the time periods without looking it up in past IBS threads). Cite and link the previous comments between him and Michael Miller and see what happens. Perhaps both will have reason and motivation to look into it further – there are substantial numbers of Canadians (and others elsewhere) who could potentially benefit from this information – and with FATCA there will be many more. Hodgen and Miller have more resources and experience than we do – if they are motivated, perhaps there will be further written on this one way or the other. If not, then we are at the same point we are now – and people will have to make their best choice in the grey areas – as they feel they can with what we have. Perhaps Hodgen errs on the side of what he feels is certainty. I don’t know, and I’m not making any recommendation. Just thought it was a cost free opportunity to get additional opinions.
I know from firsthand experiences over the last few years that it is crucial to be as thoroughly versed in this as much as possible when dealing with the ‘professionals’ – in US tax law and in accounting/US tax preparation. One US tax law professional I dealt with wanted me to err and include a child as a US person – an individual who CLEARLY did NOT qualify according to the letter of the US citizenship laws AS STATED. And I refused to budge – not only would it not be true, but it would have burdened my child and family even further – and needlessly.
Why would that expensive US tax law professional try to influence me to err on the side of burdening my child – as well as their family, if there was any doubt at all (which in my opinion the facts and laws showed otherwise)? Could it be that their personal allegiance to the US and worldview overrode their professional judgement and the duty they had to their client? Whereas I as the parent was in possession of the necessary facts of the circumstances and information – which I was very clear about – and which said the opposite? Not only would that professional have roped in a Canadian child and their registered and other savings into this mess, but it was clearly not the case by the letter of the US citizenship statutory requirements (thank the universe for that mercy!). I didn’t back down, even though they were one of those illustrious ‘professionals’ – maybe, but NOT in US citizenship and immigration. Either that or I think that they were willfully blind – and just couldn’t PERSONALLY as a US homelander get past the idea of a parent abroad passing up some future theoretical ‘US opportunities’ they believed would be available to offspring in the land of US streets paved with gold (or only golden arches MMM?).
Other ‘professionals’ in the same practice – comprising layers of team oversight and review (as detailed on the invoices) made obvious and egregious errors on an FBAR and several years of returns and reporting forms – flagged by me, not by the layers of professionals who handled them first.
If I had not tried to do everything I could to be informed, I would have been sunk in the morass even deeper – cost and compliance wise – due to their carelessness – as they processed clients on the assembly line.
It is definitely buyer beware. Paying a big chunk of our Canadian family savings to those professionals did not buy me the error-free state of perfect reporting compliance and US tax preparation done well that they advertise and that I under duress and in fear contracted for. Preparation for renouncing was at that time not a service they offered, and in consultation did not constructively respond to – though I see that has radically changed.
Unfortunately clarity is something that is in short supply.
There are two issues here:
1. Getting a backdated CLN based on an expatriating act committed before 1995
2. Having the backdated relinquishment date respected by IRS, rather than the date of notifying the DOS of it
From reading the IBS posts, one can see that the first is possible.
It is the second point that seems iffy.
Last night I wrote to the authors of the article published in the Canadia Tax Journal, vol. 61, no. 1 (a very well presented document on expatration and American taxes, except for the date of expatriation and five-years filing business for old relinquishers ) and asked for their comments on the case presented on this site for non-notification by pre-1995 relinquishers.
Since they are tax professionals I did not ask them for free personal advice, but for their general comments on a situation affecting tens of thousands of Canadians who thought they were no longer Americans. I also remarked that it was an opportunity to show publicly the expertise of their firm.
One reason I took this step is that their article clearly explained why it will be nearly impossible for IRS to collect in Canada from Canadian citizens, which meant to me that they were not trying to panic people into expensive compliance procedures.
The article: https://www.ctf.ca/ctfweb/EN/Publications/CTJ_Contents/2013CTJ1.aspx
@Petit Suisse,
That was a great idea. And will potentially assist so many people.
@WhatAmI and @Petit Suisse, FWIW, this is an article that I remember as exploring some of the issues of CLNs, actual vs. reporting relinquishing dates, and the intersection with US tax status:
http://www.robertsandholland.com/siteFiles/News/03-05-13_Expats%20Live%20in%20Fear_MJM.pdf
Originally published in: International Tax Journal, March 5, 2013
‘Expats Live in Fear of Malevolent Time Machine’
By: Michael J. Miller and Ellen S. Brody
This is not an endorsement or advice. Simply seemed like a good time to repost this here for information purposes as these issues continue to be relevant. What position the IRS might take or how they would react – who knows?
Perhaps the article might also be of interest to the CRA or whoever else you contact.