Cross posted from Citizenship Solutions

Boston, USA based Fidelity has grown to be a global bemouth in the world of investment management for individuals. Their UK division (and perhaps others) will NOT do business with individuals even “suspected” to be US citizens.https://t.co/x0r50l50DH

— John Richardson – Counsellor for US persons abroad (@ExpatriationLaw) October 31, 2025

The post is about Fidelity. It is also about the regulatory and penalty risk of allowing U.S. citizens (or suspected U.S. citizens) to be clients of non-U.S. financial institutions.To be clear, Fidelity U.K. is the U.K. affiliate of Fidelity in the United States.

Those of a certain age will associate Fidelity with legendary fund manager Peter Lynch author of “One Up On Wall Street“.

Those of any age, will know that:

There is an international trend of financial firms avoiding U.S. citizens. This post is specifically about Fidelity UK (1) refusing to accept U.S. citizens as clients and (2) proactively ridding their client base of those who they know are U.S. citizens or have reason to believe “may be” U.S. citizens!

Think of it: A U.S. based company, founded in Boston, Massachusetts, refusing to do business with U.S. citizens!!

I recently became aware of the following letter sent by Fidelity U.K. to certain undesirables who either are or are suspected of being U.S. citizens. Read it and weep!

Unconfirmed USP Sell To Cash Letter

The letter speaks for itself.

For those interested in the general context and discussion, here is the complete post from which this introduction was excerpted, click here.

Part 5 – Fidelity U.K. – Cleansing The Firm Of “Suspected” U.S. Citizens And The Problems They Bring

Happy Halloween! (It’s the evening of October 31, 2025)

If you want a “scary costume” tonight, just dress up as a U.S. citizen!

Should Australia be extraditing its citizens to the US without due process and legal fairness? These are some of the questions to be asked in the Canberra Federal Court when #FreeDanDuggan appears on Thursday.

Thank so much to all of you have already helped the Duggan family… pic.twitter.com/K8nUKK8Uvs

— FreeDanDuggan (@FreeDanDuggan) October 11, 2025

Introduction – “You Have To Know The Past To Understand The Present”

The 2011 creation of the Isaac Brock Society revolved around citizenship, taxation and citizenship taxation. The Brock community evolved into an important source of research on these issues. Most of the. discussion on Brock has focused on U.S. citizenship taxation. However, the question of citizenship is even more important. Citizenship laws in general and the law of U.S. citizenship in particular is lengthy and complex. It is a blend of history, statutes, court decisions and the constitution as stated in the 14th Amendment (those born or naturalized in the United States are U.S. citizens). The greater the complexity, the harder to understand and the easier to confuse. Confusion is toxic when one is experiencing the fear and uncertainty caused by the application of the U.S. tax system to Americans abroad.

Many readers if the Isaac Brock Society had moved to Canada as U.S. citizens and subsequently naturalized as Canadian citizens. Depending on the date of their naturalization as Canadian citizens, many had understood AND INTENDED their voluntary naturalizations as constituting a relinquishment of their U.S. citizenship. To be crystal clear: the U.S. statute governing relinquishment of U.S. citizenship prior to 1986 – INA 349(a) – stated that naturalization as a Canadian resulted in the automatic relinquishment of U.S. citizenship. Notably, a Certificate of Loss Of Nationality (“CLN”) was NOT required to lose U.S. citizenship. It was not until the 1986 amendments to the U.S. Immigration and Nationality Act that the requirement of “intention” to relinquish U.S. citizenship was added to INA 349(a). Regardless, a CLN was not and has NEVER been required to relinquish U.S. citizenship under the INA.

Until June 3, 2004 U.S. citizenship for purposes of taxation under the Internal Revenue Code, was U.S. citizenship for the purposes of immigration. Put another way: If one ceased to be a U.S. citizen for nationality purposes, one ceased to be a U.S. citizen for tax purposes. Because, citizenship could be relinquished without specific notification to the U.S. government, it was possible to cease to be a U.S. citizen for tax purposes without notifying the government. (Those interested in a “deeper dive” on this issue may find one of my 2015 posts – discussing the timing of relinquishment of U.S. citizenship – to be of interest.)

From June 3, 2004 a Certificate of Loss Of Nationality has been a requirement to lose U.S. citizenship for tax purposes. The issuance of a Certificate of Loss of Nationality (“CLN”) functioned as NOTIFICATION to the U.S. Government that the individual was no longer a U.S. citizen for either immigration purposes or for tax purposes. The requirement of a CLN to lose U.S. citizenship for tax purposes was introduced on June 3, 2004 (clearly stated to operate prospectively) and reconfirmed by the HEART Act which took effect on June 16, 2008.

My last post on Brock discussed the OVDI program that ran through the summer of 2011. During that horrible summer of 2011 many in the tax compliance community were (in my opinion) incorrectly advising ALL individuals born in the United States that without a Certificate of Loss Of Nationality, one was forever treated as a U.S. citizen for purpose of U.S. tax, reporting and penalties. Think of it! People who had naturalized as Canadian citizens in the 1970s were being told that the 2008 HEART Act operated retrospectively and that:

1. They never lost their U.S. citizenship for tax purposes; and
2. They were liable for taxes, forms and penalties going back to the 70s.

(The claim of the “retrospective/retroactive” application of the 2008 HEART Act was discussed in an excellent 2015 Brock post by Patricia Moon and Carol Tapanila which may be read here.)

My next Brock post will specifically discuss the claim – courtesy of a small group of “tax professionals” that people who relinquished U.S. citizenship prior to 2004 and do not have a CLN – were/are still subject to U.S. taxation.

My point is that:

Since 2004 there has been a difference in U.S. citizenship for nationality purposes and U.S. citizenship for tax purposes.

This distinction is important to understand at least one of the issues in the Dan Duggan extradition.

So, concludes my brief discussion of the past. Let’s see if that discussion helps us understand the present.

The Present – Introducing Daniel Duggan A Example Of Naturalizing As A Citizen Of Australia And Not Seeking A CLN Until Later – When Did He Lose His Citizenship For Tax Purposes And For Nationality Purposes?

Note: The issue with Mr. Duggan is when he relinquished U.S. citizenship for nationality purposes. Specifically: did Mr. Duggan cease to be a U.S. citizen for nationality purposes at the time that he naturalized as an Australian citizen in 2012?

An interesting podcast introducing Mr. Duggan is here. A brief overview of the facts from Wikipedia includes:

Daniel Edmund Duggan (born 1969) is a former U.S. Marine Corps pilot. He renounced his U.S. citizenship, became an Australian citizen in 2012, and was arrested in October 2022 at the request of the U.S. government seeking his extradition based on charges of arms trafficking, specifically training Chinese fighter pilots to land jets on aircraft carriers and laundering money.^[2] Duggan has denied the charges.^[3]

After more than three years of incarceration in Australia, the Dan Duggan extradition appeal is scheduled to take place on October 16, 2025. The issue is whether Australia should extradite Mr. Duggan to the United States. Mr. Duggan is a citizen of Australia. Article 5 of the U.S. Australia extradition treaty states that:

“Neither of the Contracting Parties shall be bound to deliver up its own nationals under this Treaty”

Therefore, Australia retains discretion over whether to extradite Mr. Duggan. Nevertheless, I expect that the hearing will focus on the process and Australia’s obligations under the treaty and not the fairness of the process to Mr. Duggan.

Why would this be of interest to U.S. citizens generally and Americans abroad particularly? There are at least three reasons.

1. One issue is whether Mr. Duggan was a U.S. citizen at the time that the (alleged) offenses were committed. In his own words, Mr. Duggan describes his voluntary relinquishment of U.S. citizenship by naturalizing in 2012 as an Australian citizen with the intention of relinquishing U.S. citizenship. He (apparently) did not seek a U.S. Certificate Of Nationality (“CLN”) until a few years later as also confirmed here. The question of the date of Mr. Duggan’s relinquishment of U.S. citizenship (with a variety of opinions) is also part of this Reddit thread.
2. As explained here, the United States uses extradition treaties as a mechanism to export U.S. criminal law into other countries. In Mr. Duggan’s case, the issues include whether his (alleged) conduct was a crime in Australia (dual criminality) and whether he was subject to U.S. jurisdiction (citizenship). Exporting U.S. criminal law into other countries is an example of the U.S. penchant for the extra-territorial application of its laws.
3. Extradition based on tax related issues is possible. As explained by journalist Taylor Hudak and subsequently discussed on IRS Medic, the United States used the U.S. Spain extradition treaty to arrest Roger Ver. The arrest and claim of extradition was based on charges of tax evasion in conjunction with his relinquishment of U.S. citizenship. The 2020 Tinkov case is a second example of extradition based (in part) on filing a false Form 8854. (Interestingly both the Tinkov and Ver cases have been settled.)

The Duggan arrest and extradition – The Basic Facts

Dan Duggan is a former U.S. Citizen and former U.S. Marine fighter pilot who served 13 years in the U.S. Military. According to this Wikipedia article (and additional commentary), he moved to Australia in the early 2000s, married and naturalized as an Australian citizen. According to the @FreeDanDuggan handle on X.com, he has a Certificate Of Loss Of U.S. Nationality stating that he relinquished U.S. citizenship in 2012.

Mr. Duggan has been indicted by the United States for conduct which includes violating U.S. Arms Control laws. Specifically he is alleged to have provided flight training to Chinese military pilots and money laundering. The indictment, which is interesting reading, is here.

The offences charged include:

18 U.S.C. 371 (Conspiracy), 22. U.S.C. 2278 (Arms Export Control Act), 22 C.F.R. Parts 120 – 130 (International Traffic In Arms Regulation), 18 U.S.C. 1956 (Money Laundering), 18 U.S.C. 2 (Aiding and Abetting and Causing An Act to be Done), 18 U.S.C. 981(a)(1)(C) and 28 U.S.C. 2461(c) (Criminal Forfeiture).

Clearly the charges were framed to meet the requirements of the U.S. Australia extradition treaty. Specifically, the charges must be “punishable under the laws of both contracting states by deprivation of liberty by more than one year“.

Notably the first paragraph (Grand Jury Sworn In on November 3, 2016) of the indictment reads:

Defendant Daniel Edmund DUGGAN (hereinafter “DUGGAN”) was a citizen of the United States of America, a former commissioned officer in the United States Marine Corp, and a Naval Aviator. DUGGAN was also a citizen of Australia.

The indictment assumes that Mr. Duggan was a U.S. citizen during the period that he was ALSO an Australian citizen. Was Mr. Duggan a U.S. citizen after his 2012 naturalization as a citizen of Australia? What was the date of his relinquishment of U.S. citizenship? Was the relinquishment of U.S. citizenship effective on the date that he naturalized as a citizen of Australia? Alternatively was his relinquishment effective only from the date that he applied for his CLN? Notably, a CLN is NOT required to relinquish U.S. citizenship under the Immigration And Nationality Act. A CLN is – since 2004 – required to cease to be a U.S. citizen under the Internal Revenue Code.

Significantly, at least some of the charges are based on conduct that occurred AFTER his 2012 relinquishment of U.S. citizenship. Apparently Mr. Duggan did NOT apply for a Certificate of Loss Of Nationality until 2016. The U.S. Government appears to be taking the position that he was a U.S. citizen until the CLN was issued. (In other words the U.S. is using the tax definition for loss of U.S. citizenship and not the immigration definition of loss of U.S. citizenship.) The issue of the date of loss of U.S. citizenship is an item of great interest to Americans abroad. This is true for both tax issues and for the ability to pass U.S. citizenship on to a child.

https://www.twitter.com/ExpatriationLaw/status/1820625132270067778

The Duggan Extradition Process

At the request of the United States (and based on the indictment), Mr. Duggan was arrested in Australia and has been held without bail for more than three years. Neither the U.S. Australia extradition treaty nor the Australian extradition statute requires that degree of inhumane treatment. Why has Mr. Duggan not been granted bail?

Understandably the Duggan family is in a desperate financial situation. Those inclined to donate to his defence may do so here.

The Duggan case matters to BOTH the Duggan family and to Americans abroad generally!

It’s obvious why the Duggan case matters to the Duggan family.

It’s less obvious why the Duggan case matters to U.S. citizens generally. For U.S. citizens it matters whether they have a constitutional right to relinquish U.S. citizenship and what the date of relinquishment is. In the Ver case the U.S. government took the position that there is no constitutional right to expatriate. In the Duggan case the U.S. government is clearly taking the position that relinquishment is dependent on the issuance of a CLN.

Further reading on the Duggan case

U.S. Australian Extradition Treaty: 1974 Original Treaty And 1997 – How Does It Apply To Dan Duggan?

Dan Duggan Part 2 – For The Sake Of Its Citizens And Sovereignty Australia Must Terminate The Extradition Treaty With The United States

Happy Canadian Thanksgiving!!

John Richardson

My last post was in early July 2025 and I ended with:

My next post will discuss the “Trauma” that continues to be experienced by individuals living outside the United States when they are forced to deal with the U.S. tax system. (In fact, as recently as yesterday I spent two hours talking somebody “off the edge”.)

Prologue – August 2011

Today is August 25, 2025. This coming weekend is Labour Day weekend. It was almost 14 years ago to the day that many U.S. citizens (and some former citizens) in Canada and around the world were feeling pressure to enter into the 2011 OVDI (“Offshore Voluntary Disclosure Initiative”). Additional information about the 2011 OVDI program is here. The deadline was August 31, 2011. Because of hurricane Irene, the deadline to enter OVDI (and the time to make the difficult decision) was extended to September 9, 2011.

What exactly was the decision to be made? The IRS, the Media and the tax compliance community were sending the message that:

• U.S,.citizens (regardless of where they live in the world and regardless of their filing history) were on the verge of receiving enormous, life altering penalties (and possibly more) for the failure to comply with laws that they didn’t know existed (example FBAR, Form 5471, Form 3520, etc.)
• They could save themselves from these enormous life altering penalties by agreeing to offer a substantial percentage of their net worth to the IRS in exchange for the IRS not imposing penalties that would facilitate the confiscation of a substantial percentage of their net worth.

To put it simply: Americans abroad were being offered the opportunity to commit suicide to avoid dying!!

The problem was that OVDI WAS a program for U.S. residents who had been hiding assets outside the United States to avoid U.S. taxation. The beauty of U.S. citizenship taxation is that it equates U.S. resident tax cheats with Americans abroad who pay full taxes to their country of residence. The only difference between Americans abroad and homeland tax cheats was that for Americans abroad ALL their assets were foreign to the United States (and therefore deserving of special punishment). Shockingly, many Americans abroad who entered the OVDI program agreed to penalties that were completely disproportionate to their noncompliance. (Interestingly, many who (1) entered the program and (2) used the opt out provision paid little or no penalties. Clearly, many people entered the OVDI program with NO IDEA how the program worked or what the cost to them would be.)

The obvious question is: how could something as ridiculous as this have happened? Why did individuals participate in the OVDI program?

The OVDI program was predicated on the generation of penalty threats from the IRS and the tax advisers delivering those threats to the individuals impacted. The nature of the threats evolved. Word of OVDI reached U.S. citizens living outside the United States. Although OVDI was clearly designed with U.S. residents in mind, the tax compliance industry quickly decided that the program was appropriate for U.S. citizens living outside the United States. When the news began to spread, the information that individuals born in the United States were U.S. citizens also began to spread. Large numbers of people living outside the United States, who were born in the USA (and therefore were U.S. citizens) were learning for the very first time about the extra-territorial reach of the U.S. tax system. Some of these people were, for the first time, understanding that they were U.S. citizens for tax purposes.

The “deals” offered to various groups evolved. Toward the deadline for entering OVDI the IRS offered “lower penalties” to nonresidents who didn’t know they were U.S. citizens. As noted by Robert Wood on August 11, 2011 writing in Forbes, the IRS agreed that individuals who didn’t know they were U.S. citizens would pay a reduced rate of 5% for the privilege of participating in the OVDI program. Mr. Wood describes this special offer to those who didn’t know they were U.S. citizens as follows:

Penalty Reduction?  Some taxpayers qualify for reduced 5% or 12.5% penalties.  See Q&A 52 and 53.  The 12.5% penalty applies for offshore accounts or assets that did not surpass $75,000 any time between 2003 and 2010.  See Q&A 53.  Taxpayers who inherited a foreign account and never withdrew money or foreign residents who didn’t even know they were U.S. citizens might face only a 5% penalty.

The IRS Voluntary disclosure initiatives as applied to Americans abroad was arguably one of the most unjust instances in the IRS administration of the U.S. tax system. As noted by various commentators, in many instances, the willful paid lower penalties than the nonwillful. In effect, OVDI operated to penalize virtually ALL of the assets of long term Americans abroad and ONLY the foreign component of the assets of resident Americans. Significantly, this IRS heist of the assets of Americans abroad was aided and abetted by the U.S. tax compliance industry, who supervised the entry of middle class Americans into this program. On a purely objective level, it’s clear that the IRS had absolutely no understanding of Americans abroad in general and how the U.S. tax system actually imposes a more punitive form of taxation on Americans abroad! (A more reasoned discussion form the professional community – “Article Analyzes Counter-Intuitive Effects of IRS Offshore Penalty Structure (2/12/14)” – appeared on Jack Townsend’s blog here.)

Mr. Townsend observes:

“As the authors note, “the GAO Report indicates [that] taxpayers with little or no criminal or civil fraud exposure were punished proportionately in higher amounts than those who participated and had true criminal tax exposure.”  The authors break these categories into Bad Actors and other actors, referred to as Benign Actors.  That Bad Actors would be treated better than Benign Actors is a counter-intuitive result.”

The 2014 article – “The 2013 GAO Report of the IRS Offshore Voluntary Disclosure Program” – written by Patrick Martin and Michelle Ferreira offers some explanation of how the unconscionable application of OVDI to Americans abroad occurred. The article includes:

“One key question that the GAO Report raises, is why would so many taxpayers enter into the Offshore Voluntary Disclosure Program if they were not at least as liable for income taxes or penalties under the law? The authors think the answer to this question can be simply answered. Neither taxpayers nor many of their tax advisors understand how tax penalties actually apply under the law, particularly because some penalties are not in the Internal Revenue Code. Instead of understanding what the requirements are under the law, taxpayers simply relied upon the Internal Revenue Service to inadequately explain how penalties could apply in and outside of the Program. Based upon only the Frequently Asked Questions (which were published subsequent to the Program’s announcement), taxpayers and their advisors had to make swift and uneducated determinations as to whether a taxpayer should participate on the Offshore Program at all and many feared all would be criminally prosecuted, as the IRS continuously led them to believe.”

(For more analysis I suggest reading the complete Martin and Ferreira article.)

From OVDI To The Isaac Brock Society

Arguably, the 2011 OVDI program planted the seeds that grew into the Isaac Brock Society. The history is detailed by a classic post by Patricia Moon titled “Never Forget What Happened In 2011“. Those who forget history are doomed to repeat it!! It would be a mistake to forget how the tax compliance industry and the IRS partnered in an extraordinary assault on U.S. citizens living outside the United States. There are many posts on Brock detailing the history of OVDI. A post of particular interest is here.

Present Day Time – August 2025

So, here we are – “The Trauma Of U.S. Citizenship Abroad” continues. The “trauma” experienced by people is far more damaging than any other aspect of living as a dual tax resident U.S. citizen outside the United States.. Many years ago I explored the trauma is a post titled “Men are not prisoners of fate, but only prisoners of their mind – RIP @Marciovp – @ADCSovereignty“. That post began with:

“Dr. Pinheiro was a “naturalized U.S. citizen” who was living in Brazil. There is NO DOUBT that the attack on Americans abroad, which was orchestrated and prosecuted by the Obama administration, made the last years of his life a “living hell”. Marcio Pinheiro was a victim of Obama administration policies that began in 2009. These policies  shaped the finals years of Marcio’s life. For those who are NOT aware of the origins of the fear and anger experienced by Americans abroad, I invite you to read: “Never Forget What Happened in 2011” and the comments (also by Trish Moon).”

See also the series of videos made in 2015 exploring trauma and Americans abroad:

https://www.vimeo.com/citizenshiptaxation

I am revisiting the issue of "trauma", @citizenshiptax, #FATCA and #Americansabroad. I remembered these incredible videos made about ten years ago.

The experiences are horrific!!https://t.co/usqtwlirkI

— John Richardson – Counsellor for US persons abroad (@ExpatriationLaw) August 25, 2025

LIfe Under Suspicion: The Anxiety, Trauma And Instability Of U.S. Citizenship Taxation Continues

This past week I have been on the receiving end of a tidal wave of U.S. citizenship induced trauma. Examples include (but are not limited to):

– a Green Card holder who feared he would become a “long term resident” because a line was not completed on a tax return;

– a U.S. citizen who inherited an IRA and was worried about IRS problems (in what universe is a large inheritance a bad thing?);

– a person who committed the cardinal sin of (1) having a TFSA and (2) having mutual funds in the TFSA;

– another person who had never heard of FBAR and was convinced he had committed a serious crime for not having filed FinCEN 114;

– a person who failed to report a pension on Form 8938 (the trauma of filing a U.S. tax return);

– a person frightened to set up a business as a U.S. citizen; and

– a person who was trying to decide whether a streamlined procedure should be filed for the estate of a parent.

This is a small number of examples that play out every day around the world. All of these people experience fear, worry, uncertainty contributing to trauma.

What does this mean in understanding U.S. citizenship abroad?

The first reality of “U.S. Citizenship Abroad”, is that U.S. citizenship taxation converts normal financial and retirement planning initiatives (and normal life events) into sources of fear and anxiety. Americans abroad are probably the only people in the world who:

• experience fear and anxiety associated with NOT investing and planning for retirement; and
• experience fear and anxiety associated with investing and planning for retirement because of their U.S. citizenship

The second reality of “U.S. Citizenship Abroad” is that the restrictive and punitive tax rules have turned U.S. citizenship into a disability. (U.S. residents won’t understand this unless they have attempted to live as a U.S. citizen abroad in a post FATCA world.)

Americans abroad live with the fear of CERTAIN penalty for UNCERTAIN conduct!!

Nobody can comply with the rules as interpreted by the tax compliance industry. Best efforts, sleepless nights and thousands paid to tax accountants lead only to various degrees of noncompliiance.

For many (but not all) Americans abroad, U.S. citizenship is largely about fear and trauma and living with the disability that U.S. citizenship has become. It is the fear, trauma and disability that causes them to consider renunciation.

The identity of many people is premised on being in compliance with the law. Those who desire compliance pay a particularly heavy price for being U.S. citizens. They are also the people most likely to renounce. After all, for Americans abroad who are dual tax residents, compliance with U.S. laws is somewhere between difficult and impossible.

Since 2011 the Isaac Brock Society has played an important role in providing comfort and a path forward to those who are anxious. It’s now 2025 and very little (if anything) has changed on the tax and anxiety front.

As goes the trauma of being a U.S. citizen abroad, so go the renunciations!

People are NOT renouncing because they want to. They are renouncing because they are forced to comply with a set of rules that they simply cannot comply with.

Renunciation and Voluntariness

As discussed in a previous post, on November 1, 2024 the DS-4079 was changed. Prior to the November 1, 2024 version, the DS-4079 was a form that was intended to be used, in a pre-FATCA world, to determine whether a U.S. citizen had committed an expatriating act (to strip people of their citizenship). Since, November 1, 2024 the DS-4079 has been redesigned to focus on whether the expatriating act (including renunciation) is performed voluntarily and with the intent to relinquish U.S. citizenship.

When completing Form DS-4079 you will be asked to answer Question 11 which reads:

11(c) Describe whether you feel/felt pressured by any person and/or circumstance to take the oath of renunciation.

Heads up: In Canada it is required that the answer to this question must be in a complete sentence! In other words, the word “NO” is not sufficient! (If you can find something in the directions to the DS-4079 that requires this complete sentence, please put it in a comment.) Those of you who are requesting appointments to renounce in Canada should put some thought into how to answer this question. Perhaps: “No I do not feel and have never felt any pressure from any circumstance, experience or person to take the oath of renunciation.” (Interestingly, for a renunciation to be valid it must be voluntary. Could it be that some people do NOT acknowledge that they are in effect “traumatized out of their U.S. citizenship?”)

It’s now 2025 – Has Anything Really Changed”

When thinking trauma, I remembered that in 2015 I did a presentation in London, UK. The presentation was for a group of U.S. tax return preparers. It was a two day conference. The presentations (although good) were dry, technical and compliance focused. (What would you expect?) I gave a different kind of presentation. The presentation was called:

Sacred Trust – Counselling Clients Through the “Trauma of U.S. Citizenship Abroad” in a FATCAesque world – Toronto – February 2015 1

I went back and found the presentation. Interestingly I would say exactly the same things today. The trauma continues on and is the reason that people are renouncing U.S. citizenship.

As a matter of interest I created an AI podcast based on my 2015 presentation. You might find it interesting. You can listen here.

In 2015 I delivered a presentation in UK called:

"Sacred Trust: Counselling Clients Through The Trauma Of U.S. Citizenship Abroad In An #FBAR @CitizenshipTax and #FATCA World"

An AI podcast on based on that presentation …

The trauma continues!https://t.co/PNs0DEFkVm

— John Richardson – Counsellor for US persons abroad (@ExpatriationLaw) August 25, 2025

I am interested in your comments and suggestions for my next Brock post.

Sleep well and “trauma free”!

John Richardson

P.S. As many of you know, for years I have been involved in advocacy to end U.S. citizenship taxation. Republicans Overseas continues their efforts and is asking for testimonials to explain how “double taxation” affects you. For more information see:

Seeking Testimonials From Americans Abroad Who Have Been Subjected To Double Taxation

John Richardson, who’s been working with and advising CLN applicants for many years, is currently advising Extreme Caution Should Be Exercised In Applying For Non-Renunciation “Relinquishments” Of U.S. Citizenship

He’s noted that, although renunciation-based CLNs continue to usually arrive to Canada in about two months, he’s aware of several CLN applications in Canada based on a prior relinquishing act (not renunciation) having been submitted in the past two years and none of these people have yet received a CLN.

For about a decade, we’d seen relinquishment-based CLNs taking roughly same time to receive as renunciation-based ones, unless there was an issue with it (renunciation-based CLNs generally do not have any issues because a consulate officer literally witnesses the act and has evaluated that they believe the person is acting voluntarily with intention. If not, they would not have allowed the renunciation oath to proceed.).

The DS-4079 (CLN application form) was revised, effective November 2024; and perhaps Dept of State also revised how they evaluate intent in relinquishment-based applications.  We’ll be keeping an eye on this and update you as we learn more and, as always, Brock welcomes hearing of your experiences.

*****

John Richardson writes: (reposted with permission):

Extreme Caution Should Be Exercised In Applying For Non-Renunciation “Relinquishments” Of U.S. Citizenship

“Keeping this short, sweet and to the point:

I recommend NOT applying for Certificates Of Loss Of Nationality (“CLNs”) based on a past relinquishing act. Past relinquishing acts include ANY form of relinquishment that is not a present day “renunciation” of U.S. citizenship. (See the appendix to this post.)

If you need help with this problem feel free to reach out to me.

This recommendation is based on experiences in Canada:

– knowing several cases where the Consular appointments documenting the past relinquishing act took place almost two years ago. The individuals have still, despite repeated inquiries, NOT had a response from the State Department! To be clear, two of these were based on naturalizations as Canadian citizens after June 16, 2008 (meaning they were clearly subject to U.S. taxation up to the date of the appointment and were in fact tax compliant!)

– I know people who submitted applications to renounce U.S. citizenship (in Canada) prior to November 1, 2024 (and therefore prior to the beginning of the new DS-4079), who are awaiting appointments to renounce. They have subsequently received messages asking them (in anticipation of their renunciation appointments) to complete the new DS-4079. The message to them also included the statement that:

– the new rules (using a new DS-4079) which took effect on November 1, 2024 make it VERY clear that the State Department is reviewing the evidence of voluntariness and intent to relinquish U.S. citizenship. The voluntariness and intent must be proven at the moment of the expatriating act!

The Department of State will only have a legal basis to approve a CLN in your name if the preponderance of evidence shows that you voluntarily performed a potentially expatriating act with the intent to relinquish U.S. nationality.

As the holiday season approaches, we’re getting together for dinner and drinks on Wednesday 11 December, 6 pm, at The Lieutenant’s Pump pub, 361 Elgin Street (two blocks North of Gladstone).  Good food and drink and, important for us, it’s a good place for conversation, quiet mid-week and comfortable.  Street parking, and also accessible by OCTranspo routes 5 and 14  http://plan.octranspo.com/plan?Culture=EN.

We’re currently expecting 8 people. Hope you can join us!  Please rsvp by leaving a comment or e-mailing pacifica@isaacbrocksociety.ca, so we know about how many to expect.

John Richardson reports on the new DS-4079 form (which now includes the former DS-4080 (renunciation oath), DS-4081 (statement of understanding of consequences) and DS-4083 (certificate of loss of nationality form), along with other additions/changes. (reposted with permission)

*****

The “Readers Digest” Version

Towards the end of October of 2024, the following comment appeared online:

‘Just renounced in Rome this afternoon. Very smooth, professional, friendly. I was asked why by the consular officer but the office person who did all the work was extremely helpful and did not ask why I decided to do it. It should take 2-3 months to get my CLN. Maybe even less. One thing the office guy mentioned was that I was just in time to do the standard procedure, because it is soon going to change. He said that if now there are two forms to fill out, soon there will be 13 pages of forms to fill out “to better identify and determine certain particular situations”. Does anyone know anything about this? I am thinking ( hoping) that it may be to facilitate accidentals? Anyway, all done, I am FREE! (No emotions. I remembered the podcast where someone said “just think of it as retirement “’

(The “think of it as retirement podcast was actually a podcast I did called “The Retired Citizen“)

ffective November 1, 2024 a new procedure has been adopted for individuals seeking a Certificate Of Loss Of U.S. Nationality (“CLN”).

Generally, the new procedure:

– is based on a newly designed Form DS-4079 (the old one is obsolete) which has different sections for different kinds of expatriating acts. The parts of the form that you complete depend on the nature of the “expatriating” act upon which you rely;

– is better designed to probe whether the applicant’s facts meet the evidentiary standard (“preponderance of the evidence”) to establish the “voluntariness” and “intention to relinquish” which are required under IINA 349(a) and INA 349(b).;

– reflect that the burden of proof of establishing “voluntariness” and “intention” must be met by the individual (the days of presuming intention are over) – INA 349(b)

– clarify that the first interview need NOT take place in person (phone or email can work) but that the second interview MUST take place in person

– clarify that ALL individuals must (1) Complete the newly designed Form DS-4079 (a completely redesigned form) and and (2) what ORIGINAL documents must be presented at the relinquishment/renunciation interview

– appear to be moving toward a standardized process all around the world (up until October 31, 2024 different Consulates used different forms, etc.)

Generally the new process is described in the new DS-4079 which is available here:

ds4079

Those wishing to renounce U.S. citizenship in Canada will be pleased to know that (after a lengthy absence) Quebec City and Halifax are renunciation options. In Canada one can renounce in: Vancouver, Calgary, Toronto, Ottawa, Montreal, Quebec City and Halifax. Canada is surely the renunciation capital of the world!

Additional commentary

1. I will add more in the upcoming days. Until now few (if any) renunciation requests were refused. I predict that the new process will result in the first wave of individuals who cannot meet the evidentiary standard required on renunciation and relinquishment.

2. The new DS-4079 heightens the chance of inadmissibility after renunciation.

To be “FORMWarned” is to be “FOReArmed!”

The Closer Connection rule exempts snowbirds (Canadians who winter in the US) and any non-citizen (including former ones) who spend up to 182 days in a year in the US from being considered US tax residents, though ironically it does not apply to US citizens living outside the US.  John Richardson examines Closer Connection in this article.  (reposted with permission)

Question For Americans Abroad:

Did you know that people who are NOT U.S. citizens or Green Card holders can live in the USA for 182 each year, meet the requirements to to be a U.S. “tax resident” but actually file a “closer connection to another country form” to NOT be treated as a U.S. tax resident? They will avoid U.S. taxation, penalties and reporting!!

Do you like what you just read? Did you know that you can renounce your U.S. citizenship (outside the United States) and then spend up to 182 days in a year in the United States (assuming you meet the immigration requirements) and not be taxable by the United States or have to file forms (including FBAR) as long as you have a “closer connection” to another country?

What about immigration considerations? Can I legally enter and stay in the United States?

The immigration requirements for entry and stay in the United States depend on a number of factors. That said, here are two groups of people who are likely eligible to spend up to six months a year in the United States:

1. Canadian citizens and from the Canadian perspective

2. Holder of a B1/B2 visa.

There may be other options.

Bottom line: To put it simply, non-U.S. citizens can spend loads of time in the USA (for a number of reasons) and be completely exempt from the requirements that make the lives of Americans abroad a “living hell”!

Americans abroad are fully aware of U.S. “citizenship taxation”. The “closer connection” exemption is an example of “citizenship non-taxation”.

Read on!! – it’s all about having a “closer connection” (a form of “citizenship non-taxation”) to another country!

John Richardson reports on “FATCA is Not the Answer,”  by SEAT (Stop Extraterritorial Taxation) co-founders John Richardson, Karen Alpert and Laura Snyder, is SEAT’s response correcting errors and misinterpretations in the article “Taxing Fat Cats Abroad” in Financial News Federal. (reprinted with permission)

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On February 26, 2024, Tax Notes Federal published an article entitled “Taxing Fat Cats Abroad.”

The article defended the Foreign Account Tax Compliance Act (FATCA) as an “automatic exchange of information used to track down and tax accounts held by wealthy U.S. citizens living abroad.”

The article contained many errors and misinterpretations.

SEAT co-founders John Richardson, Karen Alpert, and Laura Snyder submitted a response to the article, entitled “FATCA Is Not the Answer.”

Their response, published on March 18, 2024, can be accessed via SSRN at this link.

The response explains:

1. The considerable differences between FATCA and CRS. They include FATCA’s lack of reciprocity and the United States’ refusal to join CRS;

2. The inequalities inherent in the U.S. tax system with respect to Americans living outside the United States and their discriminatory treatment;

3. The irrelevance of FATCA with respect to Farhy v. Commissioner and Bittner v. United States;

4. The unjust stigmatization of Farhy, Bittner, and all Americans living outside the United States;

5. Inconsistencies between the article’s defense of citizenship-based taxation and the “single tax principle” advocated by professor Reuven Avi-Yonah;

6. The failure of the article, in its theorectical defense of citizenship-based taxation, to contend with the real system in place today and its myriad intractable problems;

7. The lack of any connection between taxation and voting rights;

8. The importance of the 14th Amendment for the equal protection of the rights of Americans living outside the United States; and

9. That the 16th Amendment is not — and it should not be used as — a license to channel violations of constitutional and human rights through the tax code.

A Bloomberg News reporter would like to interview accidental Americans who wish to renounce but are awaiting the announced lowering of the fee back to the $450, which it was prior to being hiked to $2350 in 2014 hike.  In response to a case initiated by l’Association des Américains accidentals in US District Court (District of Columbia), the US Department of State notified the Court in January 2023, shortly prior to the scheduled hearing on the matter, that it would reduce the renunciation fee to $450, but to date has given no indication of when the decrease is to take effect.

Fabien Lehagre of l’Association des Américains accidentals notified me of the request from the Bloomberg reporter.  He mentions that one may remain anonymous and that, although Bloomberg is an English language news site, the interview can be done in French.

If you’d like to be interviewed by Bloomberg News, please contact Fabien at president@americains-accidentels.fr