Liberty and justice for all United States persons abroad

The Isaac Brock Society

Tag Archives: Citizenship taxation

Americans Abroad Aren’t Renouncing Because They Want To. They Are Renouncing Because They Have To!

Posted on by Posted in Issues regarding US persons abroad Leave a comment

The January 6, 2026 anniversary and a summary of this post:

 

January 6, 2026  marks the three year anniversary of the State Department promise to U.S. citizens. Specifically, the promise was to lower the fee to issue a CLN from $2350 to $450. It is now three years later and the fee reduction has not been achieved. I am not suggesting that the fee will never be lowered. Maybe the fee will be lowered. The process of lowering the fee is still “in the system”. As of late December 2025, RIN 1400-AF61, titled “Schedule of Fees for Consular Services–Administrative Processing of Request for Certificate of Loss of Nationality (CLN) Fee,” was in the Final Rule stage. This suggests that the fee reduction WILL become a reality. Yet, the failure to have lowered the fee suggests evidence of a continuing animus and indifference toward Americans abroad and certainly strengthens the arguments for renunciation.

On October 2, 2023 the State Department began the rule making process as described in the Federal Register.

The “rulemaking” process generated more than 800 comments . Generally the comments emphasized that the fee to issue a CLN was NOT the dominant problem. Rather the problem was the need for Americans abroad to renounce at all. Comment after comment linked renunciation to the difficulties of complying with US citizenship taxation and FATCA.

The claim that Americans abroad are being forced to renounce because of U.S. citizenship taxation and FATCA raises the question of whether these circumstances violate the constitutional principle in Afroyim v. Rusk. The teaching of Afroyim is that Congress is prohibited from engaging in conduct that results in the “forcible destruction of citizenship”. It is clear that the specific rules of U.S. citizenship taxation do force some (but not all) people to renounce. At the very least, the circumstance of U.S. citizenship, makes it unreasonably difficult for Americans abroad to live freely outside the United States.

Is the difficulty citizenship taxation per se or the specific rules of U.S. citizenship taxation?

Could citizenship taxation be retained but be changed into a method of taxation that is more like “Eritrean citizenship taxation” – only an excise tax or possibly a passport renewal fee? Perhaps the United States could look to “Eritrea” for an acceptable means to tax Americans abroad.

Anecdotal evidence makes clear that some people have delayed renouncing U.S. citizenship in the hopes that the fee for issuing the CLN will be reduced. Would a fee reduction trigger a stampede to renounce?

Those who do NOT wish to read further should (at the very least) read the comments from Americans abroad about why they are renouncing U.S. citizenship.

For those who wish to read further …

The complete post is lengthy, comprehensive and organized into the following parts:

Part I – Introduction and purpose

Part II: “Rulemaking” and the comments it generated

Part III: “Rulemaking” and the comments it generated

Part IV – The $2350 fee is the first of three “Exit Taxes”

Part V – The “comments” to the notice and what those comments suggest

Part VI – U.S. “citizenship taxation”, Afroyim and the “forcible destruction of citizenship”

Part VII – Why does the United States continue to abuse U.S. citizens abroad?

Appendix A – AI generated podcast summarizing the “notice” to reduce the fee for a CLN

Appendix B – Two recent podcasts discussing Afroyim v. Rusk

Continue reading →

Non-partisan discussion set for London on efforts to end U.S. citizen-based tax regime

Posted on by Posted in TTFI 120 Comments

cross posted from AmericanExpatFinance.com

By Helen Burggraf, Editor – September 08, 2018

A panel discussion that will consider recent and growing efforts to convince U.S. lawmakers to end America’s increasingly-unpopular “citizenship-based” tax regime is set to take place at a venue in the Mayfair district of London, on the 18th of September.
Continue reading →

Taxation of #AmericansAbroad in the 21st Century: “Country of birth” Taxation vs. “Country of Residence” Taxation- Part IV

Posted on by Posted in Citizenship Issues 77 Comments

cross-posted from citizenshipsolutions

by John Richardson

Update January 2018: This post has been updated with some new links and discussion

Part I is here.

Part II is here.

Part III is here.

*****

PART IV

U.S. Citizenship law of the present – Breaking The U.S. Connection – Relinquishment

Relinquishing acts – How to lose U.S. citizenship – S. 349 of the Immigration and Nationality Act

Once upon a time, the U.S. would “strip citizens” of their U.S. citizenship for voluntarily becoming naturalized citizens of another country. Like many aspects of U.S. nationality law, this was considered to be a “punitive measure”.

Prior to the U.S. Supreme Court decisions in Afroyim and Terrazas, S. 349 of the Immigration and Nationality Act, mandated an automatic loss of U.S. citizenship for those who became citizens of another country. S. 349 now clarifies that, U.S. citizens who become citizens of another country, will lose their U.S. citizenship only if they intended to relinquish their U.S. citizenship by becoming naturalized citizens of the second country. In other words, U.S. citizens have the right to NOT (absent their consent) be stripped of their U.S. citizenship even if they maintain neither ties nor “connection” to the U.S.

U.S. citizenship law of the past – The requirement of a voluntary connection
Continue reading →

Taxation of #AmericansAbroad in the 21st Century: “Country of birth” Taxation vs. “Country of Residence” Taxation- Part II

Posted on by Posted in Citizenship Issues, Issues regarding US persons abroad 23 Comments

 

cross-posted from citizenshipsolutions

by John Richardson

Update January 2018: This post has been updated with some new links and discussion.

Part I is here.

*****

We are witnessing what McGill law professor Allison Christians once referred to as the “Story of The Century“. To borrow from Professor Christian’s post:

The US is right now imposing enormous penalties and unleashing general chaos on people living in other countries with US citizenship, both by newly enforcing long-ignored rules and by layering on top of these rules a new and more draconian layer of enforcement. The chaos comes in the form of fear-inducing, devilishly complicated and duplicative paperwork, and penalties, most of all penalties, and it is being piled on to millions of people around the world, many of whom, like Cruz, are very possibly only beginning to understanding that citizenship status is mostly conferred upon rather than chosen by individuals.

Ted Cruz should consider himself very lucky. The Canadian citizenship he claims he didn’t realize he had, doesn’t carry any punishment IN CANADA for his failure to recognize it. Moreover renouncing Canadian citizenship, if he really intends to follow through on that promise, will be relatively simple, cheap, and painless other than any damage (if any) to his US political career. (Interestingly Australian Green Party Senator Larissa Waters was forced to resign because she was born in Canada and still (although she was unaware of it) held Canadian citizenship.

Not so if Mr. Cruz he had lived his life in Canada with his current apparent dual status. US citizens abroad now understand that discovering ties to the US means discovering a world of obligations and consequences flowing from citizenship that one was expected to know and obey. Ignorance of the law being no excuse, the punishments range from the merely ridiculous–many times any tax that would have ever been due–to the infuriating: life savings wiped out and many future tax savings sponsored by your home government, such as in education or health savings plans, treated as offshore trusts and therefore confiscated by the US. Moreover there is no ready escape hatch for the newly discovered and unwanted US citizenship: five years of full tax reporting compliance must be documented, appointments must be made with officials, fees must be remitted, interviews must be conducted, and in some cases exit taxes must be paid. If some in Congress get their way, renunciation could even mean life-time banishment from the US someday soon.

In the grand scheme of things Ted Cruz’s citizenship is a non-story. But for what it illustrates about citizenship-based taxation, it could be the story of the century.

The Debate – Taxation Based On The “immutable Characteristic of Place of Birth”
Continue reading →

Tax Haven or Tax Heaven: Introduction – Were the “Panama Papers” about #offshore “tax evasion” or “tax avoidance”?

Posted on by Posted in Issues regarding US persons abroad 24 Comments

cross-posted from citizenshipsolutions dot ca


The above tweet references an article written by Tony Burman, which appeared in the Toronto Star (and other papers) on April 9, 2016.

The article included:

The global aftershocks of the so-called Panama Papers are only beginning to be felt. More revelations are expected in the weeks ahead, and this will only add to the uproar.

The prime minister of Iceland has already been dumped. Other government leaders have been embarrassed. Several countries have announced inquiries into the secretive world of offshore tax evasion. And public anxiety about the corrupt coddling of the world’s superwealthy “1%” is showing signs of turning into red-hot anger.
But we shouldn’t be surprised. It’s not as if we didn’t already know that the world’s political and business elites frequently cheat and steal, that our governments are swindled out of trillions of dollars of revenue and, as a consequence of this greed, the vast majority of people suffer from a painful culture of austerity so these freeloaders can get richer. We already knew that.

However, it is the disgusting detail contained in this week’s revelation of leaked documents that is so revolting — and, of course, the appalling fact that so much of this is technically “legal.”
With their own interests in mind, politicians and business leaders in many countries have worked quietly in the dead of night to make this so. The result is that, more than ever, taxes now appear to be primarily for the little people.
The documents come from an influential Panama-based law firm. They include 11.5 million internal records disclosing the financial secrets of heads of state, billionaires, drug lords, celebrities and others.

While expressing outrage at the part of the “Panama Papers” that represents tax evasion, Mr. Burman identifies that much of the revelations of the “Panama Papers” was the result of clear and deliberate government policies and laws. In other words, the story of the “Panama Papers” is mostly about “legal tax avoidance” and ” NOT illegal “tax evasion”. Therefore, it is entirely unreasonable and counterproductive to focus on “tax evasion” and exclude “tax avoidance” from the discussion.
Continue reading →

More #CookvTait: Why do some Homelanders believe that US taxation of non-US residents is okay?

Posted on by Posted in Issues regarding US persons abroad 68 Comments

 

On November 15, 2015 I wrote a post asking for your assistance with the following question:

How should Americans abroad address the Homelander attitude (and argument?) which I expressed as:

Assistance required. Many people defend (not justify) citizenship taxation on the basis that:

  • All U.S. citizens are subject to the same provisions of the Internal Revenue Code
  • Americans abroad are U.S. citizens

Therefore, Americans abroad should be subject to the same provisions of the Internal Revenue Code as Homelanders.

Or in Homelanderspeak:

All U.S. citizens are subject to exactly the same set of tax laws. What could be unjust about that? We are ALL citizens. Therefore, we should ALL be subject to the same set of laws.

Could you please address your mind to the following question:

What is the best response to this argument? How can one best explain that it is wrong to justify citizenship taxation on the basis that ALL citizens are subject to it in the same ways?

Thank you very much for the responses. Please keep this coming. I would now like to use the following comment by Barbara as the basis for this post:

Me again. I’m really interested in this topic, and trying to find answers, so let me put out this question:

What arguments, points or questions have you used that Homelanders actually responded to?

Just like most of us here, I have tried all the arguments. I get their attention by naming the Financial Crimes Enforcement Network. But the one point that almost always makes them stop and think, is the $10,000 non-willful FBAR penalty.

On just about every other point–Eritrea, double taxation, excessive fines, bank account closures, etc.–my Homelander buddies always have a retort, such as “Well, if you have nothing to hide…” or “Just use a US bank account…” But all take serious issue with the FBAR penalty. Sadly, that is not our core problem.

But maybe I’m just not wording my points right to them. If anyone has any debate “successes” to share, I’d like to hear them. Maybe then we can try to distill those arguments that do work into a workable short-n-simple platform.

Barbara raises an important question. How do we know what arguments Homelanders might respond to?  We need (I think) to understand what is going inside the head of a Homelander. Why would a Homelander  believe that those who live outside the United States should be subjected to U.S. taxation as though they live in the United States?

Therefore, the purpose of this post is to solicit your comments on the question of:

Why exactly do many (but NOT all) Homelanders believe that the U.S. should impose taxes on those who don’t live in the United States? What is their world view? What are the assumptions they are working with? Why do they believe that equality means that everybody should be subjected to the same rules?

There is often a difference between what people way and what their real motivation is

The question is NOT what they say. The question is why do they say what they say! In other words, what is their motivation? What is the “hidden issue” that they are not articulating?

Some possible suggestions …

– as citizens we all have an equal responsibility to support the U.S. government no matter where we live

– taxation is a punishment. Why should someone be able to escape punishment by leaving the country?

– what the f…? You think you are going to leave the USA and NOT pay any taxes? (In other words, I have the distinct impression that many Homelenaders don’t realize that Americans abroad pay higher taxes than they do, which is why you are generally better off with tax preparers in your country of residence)

My point is that:

In order to educate Homelanders and to address their arguments/responses we need to understand why they think/feel the way they do.

So, could you please comment on what is the motivation for Homelanders (those that do) to support the imposition of taxation on people who don’t live in the United States. Although, I am primarily interested in the thinking of “Everyday Homelanders”, you might find the following CBC Interview of Michael Kirsch interesting:

The interview referenced in the above tweet was the subject of a separate post on the Isaac Brock Society. See the comments as well.

Thanks very much.

 

 

 

 

Continue reading →

Opposition to #CookvTait requires one to address the argument: All citizens are subjected to the same tax laws

Posted on by Posted in Issues regarding US persons abroad 63 Comments

Cross posted from the Renounce U.S. Citizenship blog.

Assistance required. Many people defend (not justify) citizenship taxation on the basis that:

  1. All U.S. citizens are subject to the same provisions of the Internal Revenue Code
  2. Americans abroad are U.S. citizens

Therefore, Americans abroad should be subject to the same provisions of the Internal Revenue Code as Homelanders.

Or in Homelanderspeak:

All U.S. citizens are subject to exactly the same set of tax laws. What could be unjust about that? We are ALL citizens. Therefore, we should ALL be subject to the same set of laws.

Could you please address your mind to the following question:

What is the best response to this argument? How can one best explain that it is wrong to justify citizenship taxation on the basis that ALL citizens are subject to it in the same ways?

———————————————————————————————————————————-

Continue reading →

Help: Can the United States IMPOSE US citizenship on those born outside the US?

Posted on by Posted in Issues regarding US persons abroad 31 Comments

8 U.S. Code S. 1401 – Nationals and citizens of United States at birth includes:

The following shall be nationals and citizens of the United States at birth:

(c) a person born outside of the United States and its outlying possessions of parents both of whom are citizens of the United States and one of whom has had a residence in the United States or one of its outlying possessions, prior to the birth of such person;

 

 

The quest for  – “Form Free Living”

Defining the direction …

This issue has been recently raised in AT LEAST the following three contexts:

 

1. In a fascinating post,  WhiteKat introduces  the issue of:

 

…  another obvious battle to be fought, which is the fight to help set people free from the chains of unwanted US citizenship.

2. A recent comment (not restricted to the situation of people born outside the U.S.) noted that:

Facts are stubborn things. Why not focus on the those facts that are most clear

1. The United States is attempting to enforce it’s laws beyond its borders in other countries. These include but are not limited to U.S. “Extra-territorial taxation” and FATCA.

2. The United States and the United States only decides (according to its laws) who is or is not a “U.S. person” and is therefore subject to U.S. “Extra-territorial taxation”.

3. Because of point 2, the United States (with the help of the media and the tax professionals) is attempting to forcibly impose “U.S. personhood”on many who have never and do not believe that they are U.S. persons.

3. Leading to a recent comment on Facebook that:

In relation to point 3 (forcible imposition of US citizenship on people who don’t want it and who have lived their lives as nationals of another country) surely another law suit must be brewing? The more I read about US nationality laws, the more it seems to me that the State Department’s position is at odds with the fundamental principles that underpin the system. Probably one for accidental Americans. Just wondering if this has ever been given any thought.

Continue reading →

Cook v Tait 26: Help! What does this 1924 @USSupremeCourt decision really say?

Posted on by Posted in Issues regarding US persons abroad 73 Comments

Since 2013 I have been working on a series of posts about the 1924 decision of Justice McKenna (see his biography) in the 1924 decision of Cook v. Tait. As you know, Cook v. Tait is always cited as the justification for U.S. citizenship-based taxation. You will find the series of posts here. My goal has been to explore and understand what is the history, basis, and rationale for “citizenship taxation”. Even if it was justifiable in 1924, it is hard to justify it today.

The problem is that although, there is agreement that Cook v. Tait stands for the legal proposition that U.S. “citizenship-based taxation” is NOT illegal, the reasoning in the decision is (in my opinion) very unclear. I have read the decision may times and to this day and have never felt comfortable that I really understand the basis of the decision (if there is one). Of possible interest is what appear to be a summary by a law student of what Cook v. Tait is about.

Interestingly, in 1925 a law review article was written by a U.S. law professor (the Michael Kirsch of 1925) about Cook v. Tait. You will find a link to a CBC interview with Professor Kirsch (along with a large number of valuable comments) at a previous post at the Isaac Brock Society.

You will find the decision in Cook v. Tait from the link in the above tweet.

I invite readers of this post to:

 

1. Take the time to read the decision (more than once).

 

2. Try to understand what exactly is the basis for Justice McKenna’s reasoning.

 

What I am looking for comments are answers to the following two questions:

 

1. What is Justice McKenna really saying?

 

2. What is his specific justification for what you understand him to be saying.

 

Please think carefully about this.

 

Here is the decision in Cook v. Tait may be found here.

Thanks to the comment by @Publius, you will find the most interesting arguments advanced by the lawyers here:

 

 

 

Overseas Americans ramp up bid for tax relief – Good to see

Posted on by Posted in Issues regarding US persons abroad 11 Comments

The post referenced in the above tweet references another interesting article on the blog at the Hill. Excellent opportunity for comments.

It begins with:

Organizations representing millions of Americans who work abroad are storming Capitol Hill in a push for tweaks to tax and banking policy.

American Chambers of Commerce (AmChams) operating in various countries all over the world collectively represent about 6.5 million U.S. citizens living outside the country.

Some, such as the AmCham Abu Dhabi, are stepping up their Washington advocacy, visiting with business groups, lawmakers and administration officials, just as Congress grapples with tax reform.

Their message: Well-meaning policies aimed at stopping money laundering and offshore tax evasion have translated into unworkable realities for Americans overseas.

“Our intention coming onto the Hill was to educate and present our case — what we’re facing, in terms of challenges in living abroad,” said Sharief Fahmy, chairman of AmCham’s public affairs committee for the U.S. and the United Arab Emirates.