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).
@TheMom,
If you were born prior to Oct 10, 1953, you could try to claim a past relinquishment under the old INA 350. It was in effect from 1952 until Oct 10, 1978, and stricken prospectively (not retroactive). However, we don’t know if this would be accepted by the DoS. It was stricken at the same time voting was stricken as an expatriating act, and the DoS only seems to go by the current INA rules. It’s certainly worth a try though. Voting would only count (if they would honour the act) if you voted before Oct 10 1978.
The oath you took in 2013, if I understand correctly, does nothing to help to lose your US citizenship. Even if it was a valid oath to naturalize a Canadian citizen, back-dating your CLN to March 2013 does nothing to free you from becoming compliant us IRS filing obligations.
I was told face-to-face in the US consulate in 1978 that I was not a US citizen. This is one of my arguments at claiming a past relinquishment.
Personally I could not care less about the tax compliance issue. All I care about is that I’m no longer a U.S. citizen for Canadian banking purposes. The irs can kiss my ….and come up here to haul me off in chains if they think they can get blood from a stone
Has anyone tried to relinquish based on the statement of allegiance in a Canadian passport application (filed as an adult)? I think this might be a straightforward path to relinquishment for a lot of people.
The 4079 is a very problematical form which is designed to assess cases of people who have been deprived of their citizenship and want it back (which, come to think of it, hasn’t happened since 1980).
@GwEvil,
Look again at form DS-4079. The sections it points to for potentially losing US citizenship are 8(b)iii to 11. This includes the things that people have posted today: naturalizing as a citizen, or performing an oath to a foreign government, foreign government employment, serving in the military. The question about voting is #13, which is not in the range specified in #21.
Depending on the Canadian agreement to FATCA which has not yet been announced, we may have to prove to the bank and/or the government that we are not US citizens. Other countries are closing bank accounts if you cannot prove this by showing a CLN, for example. Some of us believe we cannot hide from the IRS due to FATCA, others here believe one will be able to hide. It should be clear once the agreement is announced with details.
@A broken man on a Halifax pier,
I posted here a few months ago that I obtained a copy of my 1976 passport application under the Access to Information act. There was no oath of any kind on the passport application, or in the passport itself.
Whenever this comes up I ask for people to explain and quote such an oath. What have you found?
@ GwEvil,
Be careful how you read form 4079. It’s rather poorly designed in a few places.
Although question 19 asks, “Did you know that by performing the act described in Questions 8-18 you might lose US citizenship,” not all questions between 8 and 19 are potentially expatriating acts. For example, question 13 contains Did you maintain a residence in the US? Do you own property in the US? Do you vote in the US?
The potentially relinquishing acts are set out in the Immigration and Nationalities Act, but not everything in the 4079 is a potentially relinquishing act.
Yes it says that in one section but before that question says “Did you know that performing the act described in 8-18 may result in you losong your US citizenship?” I assume if you say “yup and with full intention” you could argue that any of those was a relinquishing act. Maybe not retroactively but from now forward it could be argued so.
http://www.ppt.gc.ca/form/pdfs/pptc153.pdf
“Declaration—I solemnly declare that I am a Canadian citizen … “
“An oath or … affirmation or other formal declaration of allegiance to a foreign state” covers a lot of ground.
The irony is that they made the language broad in order to police the behaviour of USCs abroad, but ended up creating a legal situation that makes it easier to shed.
I meant to say “before that, question 19 says…”
Please everyone, look at DS-4079. #21 clearly points to 8(b)iii – 11, not 18 or 19:
http://www.state.gov/documents/organization/97025.pdf
You should be aware that under United States law, a citizen may lose U.S. citizenship
if he/she voluntarily performs any of the acts specified above in questions 8(b)(iii)-11
with the intent of relinquishing United States citizenship. If you voluntarily performed
an act stated above with the intent to relinquish United States citizenship, you may
sign Part II of this statement before a Consular Officer at a U.S. Embassy or
Consulate. The U.S. Consulate or Embassy will prepare the forms necessary to
document your loss of U.S. citizenship.
@ WhatAmI:
I meant to close the loop more cleanly: you don’t need to find something that meets a high enough standard to count as an “oath”. Something that is “an oath or … affirmation or other formal declaration of allegiance to a foreign state” will do.
@ WhatAmI,
Good find. That clearly ties it back to the relinquishing acts in the legislation.
@pacifica777,
Yes, and that section #21 is bolded in the form.
However, I now see the other two places that refer to questions up to and including 18 & 19, but as you say, that just looks like a poorly-designed form. This form is an information-gathering tool (see “PURPOSE” on the last page) and there is no doubt that the wording of INA 349 is what really matters, and the range of questions specified in item #21 matches the INA rules.
Many an argument has been won due to a poorly worded form.
@A broken man on a Halifax pier,
Swearing that I am telling the truth about being a Canadian citizen doesn’t sound like your words “an oath or … affirmation or other formal declaration of allegiance to a foreign state”.
Nobody has ever spelled this out, but here is my opinion of a couple of the relevant sections of INA 349:
INA 349(a)(1) describes naturalizing as a citizen of a foreign country.
INA 349(a)(2) describes taking an oath to a foreign country.
I interpret (2) very specifically as meaning a US citizen taking an oath of allegiance to the foreign country _without_ ever obtaining citizenship.
In exactly the same manner, 349(a)(4)(A) describes working for a foreign government if you are a citizen of that country, whereas 349(a)(4)(B) describes working for the government while _not_ a citizen of that country but having been required to take an oath to get the job. In that respect, 349(a)(2) and 349(a)(4)(B) are nearly identical as they apply to non-foreign citizens taking an oath to the foreign country.
People have posted here that when they have made past relinquishment claims due to foreign government employment, they has been asked by the DoS or the consulate for a copy of their oath, or told that an oath is required. I think the above clearly shows that this is false.
Others have been told that foreign employment only counts as an expatriating act if the employment was a high-level, policy-making position. This is also not correct. The following link clearly explains policy-level and non-policy-level employment:
http://travel.state.gov/content/travel/english/legal-considerations/us-citizenship-laws-policies/citizenship-and-dual-nationality/citizenship-and-seeking-public-office.html
Here is just one quote. Note the ___OR___ in the sentence “if you are a citizen of that foreign country or if you take an oath of allegiance to that country”, which fully supports my interpretation above.
@WhatAmI and others…
Actually @GwEvil makes an interesting point by stating that she/he only cares about relinquishing or renunciation. Does it really matter whether one goes with one or the other as long as one gets the CLN? As long as how have the CLN, you can prove to the banks that you are not a U.S. person (in the unlikely event that they are able to identify you as such on an already existing bank account that has no record of your place of birth). Shouldn’t just having the CLN be enough to avoid the potential bank account closing issues that some are worried about? If the IRS tries to come after someone after that, they will be dealing with a non-U.S. person over whom they have no jurisdiction and we should be able to tell them to go jump, as GwEvil says, no?
@Nick
I agree, that could work. I’d be surprised if Canada and the bank would have to do anything once you produced a CLN.
The DoS will send your CLN to the IRS, and they will send you very impressive nasty letters. As long as you don’t set foot in the US again you may be OK. Airlines that fly over the US have to send their passenger lists to the US, but I doubt they’d down the plane just because GwEvil is aboard.
Well, there’s the $450, which buys a lot of groceries.
But if you have *no* exposure to the United States and *never* plan to cross the border, then by all means renounce and don’t bother with the tax paperwork.
(Non-filing of an 8854 triggers a $10,000 fine: http://www.irs.gov/Individuals/International-Taxpayers/Expatriation-Tax#significant I’d be uneasy about crossing the border if I had an unpaid $10,000 tax levy and had been ignoring the notices, but that’s just me – we all have different ideas about risk.)
An *alternative* strategy would be to file the 8854 as your only piece of US tax paperwork, and checking ‘no’ to Part IV(A)(6) (“Do you certify under penalties of perjury that you have complied with all of your tax obligations for the 5 preceding tax years (see instructions)?”) which would automatically make you a covered expatriate, but then list your assets as below $668K, so you don’t pay a real exit tax.
@A broken man
AFAICT, RRSPs are NOT able to make use of the $668K exemption, and the total amount is taxed as income.
GwEvil – Be careful what you wish for – – even after you fully/officially renounce the Tax Compliance issue may come back to bite you (or a neighbor or friend or loved one). We all will have to pay higher bank fees to “support” this “wonderful” new initiative that our banks will have taken on “on our behalf”…. Anyone who wants to do any business involving connection with the US is going to be scrutinized, not just us expats.
@LM personally it does not matter to me if I ever go back to the US so that’s not an issue for me. I don’t do business there either.
@WhatAmI Well, yes I guess that crossing the border is the real sticking point then, because it seems that FATCA is asking the banks to check for U.S. persons, not whether someone is U.S. tax compliant, so the CLN should deal with that. I certainly wouldn’t shed any tears if I could never enter the U.S. again (I much prefer to travel in Europe or South America anyway) but never is a long time. I guess this is something each individual will need to consider…the U.S. is a big country…are people certain they will never need to travel there for any reason? In my case, a lot of important conferences in my professional field take place in the U.S. and as much as I would like to tell the IRS to stick their 8854s where the sun don’t shine, never being able to go there out of fear of the consequences would place constraints on me professionally. This may not matter for everyone, but is something each person has to think about.
Hi IBS folks – can you help?
We have lived in Canada for over 40 years and became citizens in the 1990s.
Hubby renounced US citizenship in 2012. I will renounce this spring.
We have just sold our small winter place in Florida and complete the sale in March.
There will be a small capital gain that we have to pay taxes to the IRS.
I still have my SSN; hubby still has his SSN in relation to receiving a small monthly payment from SS (as do I)
When we complete this small sale, should he use his “old” SSN or does he have to get a new (post-renunciation) ITN?
I’ve written to several “experts” via the web but have gotten contradictory answers. Some say “your SSN stays with you forever” while others say “SSN post-renunciation is only used in relation to SSN payments and otherwise you have to get an ITN”.
Any of you folks had experience in this regard or know “for sure”?
I’ll be glad to get this sale done – -the last of our US holdings – – so I can take the oath and turn my back free and clear.
LM – Good question about SSN vs ITIN. I asked this one a long time back and did some looking around. No clarity achieved. Your situation demands clarity. Whenever you find an “answer,” even just what you take to be your answer, please share.
PS Thanks for your comments over the past week or two. Interesting.
Will do if this is ever clarified. I’ve certainly put out a number of requests. Perhaps I should write to the Embassy and they might pass the question on to reliable sources…Thanks for your encouragement.