Please Note: The US State Department under John Kerry, who served in Viet Nam, is now charging $2350 to receive any CLN whether one has relinquished or renounced. So if you are coming to this only now, you are SOL when it comes to getting a free CLN.
See also Relinquishing your US citizenship in Germany
Those of us who have participated in the Expat Forum have seen that one of the first things that many many newbies say is, “I am going to renounce my US citizenship as soon as I have my Canadian citizenship.” Now, I want to suggest that one should never renounce their citizenship if they can relinquish it instead. Months ago I wrote a post on this subject, which I provide below.
But first, some explanations: Renouncing is one of seven ways to lose your citizenship. It requires swearing an oath in front of an official of the US government and it now has a $450 fee attached to it. Relinquishing does not require a US government official, for it is one of several acts that a US citizen can perform that can result in a loss of citizenship, provided the person intends to lose it. Then, the former citizen must only inform the State Department, not so as to validate the relinquishing act, but to make sure that the US government understands what your intent was when you performed it.
It has become clear that there are several advantages to relinquishing over renouncing:
(1) Relinquishment takes the act of losing your citizenship out of the hands of the US government. This has two benefits. (a) There should be no fee because it doesn’t require a US government official–it doesn’t take place in a US Consulate–you only go to the consulate to inform them of a fait accompli, and it only takes one visit, unlike renunciation which usually take two visits. (b) This saves you $450, or it should, because you are not requiring the services of the Consulate–you are there only to inform them of your intention when you committed a potentially expatriating act such as making a pledge to a foreign power.
(2) Relinquishment is usually a positive act which cannot be confused with an expatriation to avoid taxes. You do it so that you can take part in foreign government or to vote in the country you live in, not so that you can avoid US taxes.
(3) Relinquishment is not a renunciation of your citizenship, so much as a positive act vis-a-vis your new home and country. It is not a repudiation of your country but an acknowledgement that dual citizenship is an unworkable absurdity. Thus, relinquishment comes with less stigma, potentially.
Finally, a caveat is in order. Don’t do one thing and say another. That is don’t relinquish your citizenship then travel on US passport, pay tax in the US, register your children born abroad as US citizens, or take up a residence or a job in the USA, except as one holding a legitimate permit to reside or work in the US as an alien. If a person does any of these things, the State Department may not accept your relinquishment. Those who desire to lose their citizenship but who have done such things after the relinquishing act, may need to renounce their citizenship after all.
So without further ado, here is my original post, “Renunciation of US citizenship: On avoiding the new $450 renunciation fee (update 2), which explains in greater detail, what would constitute a relinquishing act:
Renunciation of US citizenship: On avoiding the new $450 renunciation fee (update 2)
I’ve been pretty upset that it would cost me $450 to renounce my citizenship now that the US consulate in Toronto has instituted a fee. But today I was looking at the various government websites: Consider this website from the US state department and its explanation of how to renounce US citizenship:
Section 349(a) of the Immigration and Nationality Act (8 U.S.C. 1481) governs how a U.S. citizen shall lose U.S. nationality. Section 349(a) states:
A person who is a national of the United States whether, by birth or naturalization, shall lose his nationality by voluntarily performing any of the following acts with the intention of relinquishing United States nationality:(5) making a formal renunciation of nationality before a diplomatic or consular officer of the United States in a foreign state, in such form as may be prescribed by the Secretary of State; or(6) making in the United States a formal written renunciation of nationality in such form as may be prescribed by, and before such officer as may be designated by, the Attorney General, whenever the United States shall be in a state of war and the Attorney General shall approve such renunciation as not contrary to the interests of national defense.
Now perhaps it would interest readers to know that this government website is not telling the whole story: The U.S.C. 1481 lists several other ways that a natural born US citizen may lose their citizenship. Here is the full text (emphasis mine):
§ 1481. Loss of nationality by native-born or naturalized citizen; voluntary action; burden of proof; presumptions
(a) A person who is a national of the United States whether by birth or naturalization, shall lose his nationality by voluntarily performing any of the following acts with the intention of relinquishing United States nationality—
(1) obtaining naturalization in a foreign state upon his own application or upon an application filed by a duly authorized agent, after having attained the age of eighteen years; or(2) taking an oath or making an affirmation or other formal declaration of allegiance to a foreign state or a political subdivision thereof, after having attained the age of eighteen years; or(3) entering, or serving in, the armed forces of a foreign state if
(A) such armed forces are engaged in hostilities against the United States, or(B) such persons serve as a commissioned or non-commissioned officer; or(4)
(A) accepting, serving in, or performing the duties of any office, post, or employment under the government of a foreign state or a political subdivision thereof, after attaining the age of eighteen years if he has or acquires the nationality of such foreign state; or(B) accepting, serving in, or performing the duties of any office, post, or employment under the government of a foreign state or a political subdivision thereof, after attaining the age of eighteen years for which office, post, or employment an oath, affirmation, or declaration of allegiance is required; or(5) making a formal renunciation of nationality before a diplomatic or consular officer of the United States in a foreign state, in such form as may be prescribed by the Secretary of State; or(6) making in the United States a formal written renunciation of nationality in such form as may be prescribed by, and before such officer as may be designated by, the Attorney General, whenever the United States shall be in a state of war and the Attorney General shall approve such renunciation as not contrary to the interests of national defense; or(7) committing any act of treason against, or attempting by force to overthrow, or bearing arms against, the United States, violating or conspiring to violate any of the provisions of section 2383 of title 18, or willfully performing any act in violation of section 2385 of title 18, or violating section 2384 of title 18 by engaging in a conspiracy to overthrow, put down, or to destroy by force the Government of the United States, or to levy war against them, if and when he is convicted thereof by a court martial or by a court of competent jurisdiction.(b) Whenever the loss of United States nationality is put in issue in any action or proceeding commenced on or after September 26, 1961 under, or by virtue of, the provisions of this chapter or any other Act, the burden shall be upon the person or party claiming that such loss occurred, to establish such claim by a preponderance of the evidence. Any person who commits or performs, or who has committed or performed, any act of expatriation under the provisions of this chapter or any other Act shall be presumed to have done so voluntarily, but such presumption may be rebutted upon a showing, by a preponderance of the evidence, that the act or acts committed or performed were not done voluntarily.
I swear or affirm that I will be faithful and bear true allegiance to her Majesty Queen of Elizabeth the Second, Queen of Canada, Her Heirs and Successors, and that I will faithfully observe the laws of Canada and fulfill my duties a Canadian Citizen.
An individual who has performed any of the acts made potentially expatriating by statute who wishes to lose U.S. citizenship may do so by affirming in writing to a U.S. consular officer that the act was performed with an intent to relinquish U.S. citizenship. Of course, a person always has the option of seeking to formally renounce U.S. citizenship abroad in accordance with Section 349 (a) (5) INA.
Update 2: Today a consular officer called me from the US consulate in Toronto. She confirmed what I’ve said in this post, that relinquishing US citizenship and renouncing US citizenship are two different processes that are treated in a different manner by the consulate (including the fee structure).
@Steve…. Portland gave you the short version; here’s the long one.
The last sentence of your post “Just Say No? (no relinquishment, no renunciation, no compliance)” is the best course of (non) action. There is no need to switch banks unless your present institution is doing something that annoys you.
Suddenly ceasing to file US returns will elicit no response from the IRS. They won’t have a clue whether you have died, gone to prison, or gone to hell. They won’t even notice. Arguably, continuing to file poses a far greater risk than filing nothing. You are only one innocent mistake away from receiving nasty letters, possible penalties, and harassment by the IRS. (Although our situations are different, I stopped in 2012 and haven’t heard one word from the IRS since.)
You and your assets are safe here in Canada. The Canadian government does not assist the IRS in collecting from a Canadian citizen. Live your Canadian life here in Canada and ignore the US and their silly system.
Thanks everyone! The US system is definitely silly.
It’s so silly it makes us giggle.
So I was born in US, moved to Canada at 14, so never lived or worked in the US since then. I travelled there once a year or more to visit my mother. So it was 40 years before I took up Canadian citizenship in 2012.
Prior to this in 2009, I had gotten caught up In the FACTA crap and spent a fortune filing back taxes to 2003. I was owed a couple thousand dollars, but because it took them so long to process the returns, they said too much time has elapsed and I never received anything. I continued to file US taxes until a few years ago when my life got complicated and I didn’t have it in me, so just quit. I think I filed last for 2016. In all the years I filed I did not show them anything nor did they owe me past 2010.
I have not heard anything from the IRS since, But I am still registering to vote – and I will for sure in this November’s election. And because I have filed FBARs before, they will have my banking info.
So I am thinking that the smart thing to do would’ve been to relinquish after I got my citizenship in 2012 which could’ve saved me a lot of trouble. But I didn’t. I’m hoping that I can continue not filing without any consequence. And maybe after this year will not vote.
Has anyone had a consequence when stopping filing US taxes? What is the worst they can do? I will be retiring within a few years and would really not appreciate them messing with my retirement funds.
I think you answered your own question – has the IRS bothered you since you stopped filing? If you have no US assets, the worst they can do is send you a letter. Keep on not filing.
Relinquishing in 2012 would have been worthwhile because it was free at the time; now it costs the same US$2350 to document relinquishment as it does to renounce. There’s not much point to either unless you have a compelling reason to be rid of the citizenship.
If you think that you are subject to FATCA reporting – have you ever declared US citizenship to any of your banks? – and it bothers you, move your accounts to a new bank, and conveniently forget to declare US citizenship. That solves any issues with past FBARs.
If you do decide to renounce, file something for this year to collect the $1200 stimulus benefit and you can get the service for half price, or a full subsidy if they decide to cut a second cheque, at some future date when the consulates reopen.
Voting won’t change anything (about your situation, I mean).
I thought I had citizenship in the Dominican Republic before renouncing, but it turned out I was scammed by [an agent]. Whe nit came time to renew the DR passport, I was no longer in their system. [The agent] had evidently greased some palms to get the passport and cedula, which of course disappeared from the DR system after a time.
Now I’m having real problems being stateless. I have a bank account in Panama (they don’t know I’m stateless), but the Panama banks will not receive any funds from the sale of precious metals. And I can’t open a bank account in another country without a passport. Any ideas from anyone?