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).
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Don’t overlook the just-say-no option. There are credit unions where you can do business without being asked much about your birthplace. Canadian bureaucrats currently won’t do IRS collections for IRS. Even if you renounce or expatriate, that gives you a CLN but there would still be USA tax issues, to which you can just say no, while using your new CLN to help you open bank accounts. In ten years this will all be a distant memory and CBT will be dead. Just say no, of course is not a good option if you need to travel to USA.
@Tom Alciere, bravo and I think more and more are seeing through the fog or better they are seeing the forest through the trees.
You can take everything you said farther to simply relinquishing, put together your file that you committed the relinquishing act, do nothing as a US Citizen and not even bother with a CLN. A CLN is not a requirement to have lost your citizenship.
But as you say, Just Say NO likely means NO to US travel. But the world is your oyster and there are plenty of places to see.
I would like to post my comment to this. I just contacted the consulate in Toronto regarding this matter of relinquishing and here is what is written below (notice I have yet to receive a response regarding my most recent question back to them and also when they responded to my initial email to them they sent what is on the US govt website highlighting about being stateless and how they may still deport me) What I want to know is may still deport me back to the States as stateless how would that work when you are not allowed to come back to the States once you reliquish, is this them trying to scare me? And any advice on how to make it through CBSA to be able to get into Canada to relinquish? Thank you and please call me by my spiritual name Nenari which I choose to go by (I only used my earthly name in this I sent them because I had to. Letters below and any help would be appreciated. Thank you ~Nenari
———- Forwarded message ———-
From: Nenari Diamondlady
Date: Wed, Oct 29, 2014 at 11:52 AM
Subject: Re: Renunciation information
To: “Toronto, Passport”
Thank you for your information. In other words to mean if I do not sign anything that says I Am renouncing and I simply say I Am relinquishing then the $2350 is not owed is this correct? Thank you ~Patti Diamond
On Wed, Oct 29, 2014 at 11:49 AM, Toronto, Passport wrote:
Thank you for your inquiry.
Please note that this is determined at the time of the interview and the forms you complete.
ACS.mh
From: Nenari Diamondlady [mailto:nenariprincess@gmail.com]
Sent: Wednesday, October 29, 2014 2:22 PM
To: Toronto, Passport
Subject: Re: Renunciation information
Thank you for the information. It is my understanding though that when one relinquishes one does not owe the $2350 fee as there is a difference between relinquish and renouncing, thus I choose to relinquish. Is this correct? Thank you ~Patti Diamond
On Wed, Oct 29, 2014 at 5:54 AM, Toronto, Passport wrote:
Thank you for contacting us regarding renouncing or relinquishing U.S. citizenship. This email contains very specific steps you need to follow for your loss of nationality appointment. Please read the email carefully and submit the completed questionnaire (attached) and DS4079 (http://www.state.gov/documents/organization/227465.pdf) when you email to request an appointment.
Renunciation of U.S. citizenship must 1) be taken in the presence of a diplomatic or consular officer; 2) be taken outside the United States; and 3) be in the precise form prescribed by the Secretary of State. It is an irrevocable action that cannot be reversed. Should you choose to pursue renunciation of your U.S. citizenship, you will have to complete form DS4079 “Request for Determination of Possible Loss of United States Citizenship” and come in person to the Consulate to sign an “Oath of Renunciation of the Nationality of the United States” and a “Statement of Understanding.” These documents form the basis for the Department of State’s decision regarding the U.S. citizen’s request to renounce or relinquish citizenship and are enclosed for your information.
Please review these additional documents before scheduling an appointment: Renunciation of U.S. Nationality (http://travel.state.gov/content/travel/english/legal-considerations/us-citizenship-laws-policies/renunciation-of-citizenship.html), Right of Residence in the U.S. (http://travel.state.gov/content/travel/english/legal-considerations/us-citizenship-laws-policies/renunciation-of-citizenship-right-of-residence.html), and Possible Loss of U.S. Nationality and Dual Nationality (http://travel.state.gov/content/travel/english/legal-considerations/us-citizenship-laws-policies/citizenship-and-dual-nationality.html).
Effective September 12, 2014, the Department of State implemented a fee of $2,350.00 for administrative processing of formal renunciation of U.S. citizenship. This fee is payable in either U.S. or Canadian dollars or by major credit card on the day of your appointment.
Once you have all forms filled out and you have gathered the required evidence, please email torontopassport@state.gov to schedule an appointment. Please complete the attached questionnaire and the form DS4079 (http://www.state.gov/documents/organization/227465.pdf) and include both completed documents with your appointment request. Your appointment request should indicate that you read this email and that you have filled out all your required forms and gathered all required supporting documentation.
IMPORTANT NOTE REGARDING APPOINTMENTS
If you arrive fully prepared for your appointment, we will likely process your loss of nationality in one interview. If you do not have the forms filled out or if you do not have all required original evidence, you will need to return for a second appointment.
At the time of your appointment you must bring:
–Completed and unsigned Form DS4079 (http://www.state.gov/documents/organization/227465.pdf)
–Completed Form DS4080 (http://www.state.gov/documents/organization/81606.pdf)
–Completed Form DS4081 (http://www.state.gov/documents/organization/81607.pdf)
–Your most recent U.S. passport and, if you have ever been issued one, your Consular Report of Birth Abroad, Certificate of U.S. Citizenship, or Certificate of U.S. Naturalization.
–Your U.S. birth certificate as evidence of U.S. citizenship, if you do not have one of the citizenship documents listed above. Please see the following website for requirements for U.S. birth certificates: http://travel.state.gov/content/passports/english/news/new-u-s–passport-requirement0.html.
–Original proof of other citizenship (often a valid Canadian passport).
–Original evidence of name changes, if applicable (usually marriage certificates or official name change document).
–Your NEXUS card, if you have been issued one.
–Your U.S. Social Security Card, if you have one.
–The address of your last residence in the United States.
–Original evidence of your prior expatriating act if you are documenting a prior relinquishment of U.S. citizenship (usually a Canadian certificate of citizenship with the date you became a Canadian citizen). This is not required if you are currently a U.S. citizen renouncing your U.S. citizenship. Please see this link to learn about the difference between relinquishment and renunciation (http://travel.state.gov/content/travel/english/legal-considerations/us-citizenship-laws-policies/citizenship-and-dual-nationality.html).
— $2,350.00 for documentation of formal renunciation. We accept cash and credit cards but do not accept debit or personal checks.
–A Canada Post Xpresspost envelope so we can mail your Certificate of Loss of Nationality. The Certificate will be mailed from the Consulate in Toronto so please purchase the proper envelope based on your mailing address. Please see the Canada Post website (http://www.canadapost.ca) for information on Xpresspost envelopes.
Please refer to the Internal Revenue Service (IRS) website http://www.irs.gov/Individuals/International-Taxpayers/Expatriation-Tax for information on U.S. federal tax form 8854 “Initial and Annual Expatriation Information Statement.”
Should you have any questions please send an e-mail to torontopassport@state.gov.
This email is UNCLASSIFIED.
Getting back into Canada is between you and the Canadian Immigration Officials , we will not act on your behalf or intervene in any way.
Renunciation of U.S. Nationality
A. THE IMMIGRATION & NATIONALITY ACT
Section 349(a)(5) of the Immigration and Nationality Act (INA) (8 U.S.C. 1481(a)(5)) is the section of law governing the right of a United States citizen to renounce his or her U.S. citizenship. That section of law provides for the loss of nationality by voluntarily
“(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” (emphasis added).
B. ELEMENTS OF RENUNCIATION
A person wishing to renounce his or her U.S. citizenship must voluntarily and with intent to relinquish U.S. citizenship:
appear in person before a U.S. consular or diplomatic officer,
in a foreign country (normally at a U.S. Embassy or Consulate); and
sign an oath of renunciation
Renunciations that do not meet the conditions described above have no legal effect. Because of the provisions of Section 349(a)(5), U.S. citizens cannot effectively renounce their citizenship by mail, through an agent, or while in the United States. In fact, U.S. courts have held certain attempts to renounce U.S. citizenship to be ineffective on a variety of grounds, as discussed below.
C. REQUIREMENT – RENOUNCE ALL RIGHTS AND PRIVILEGES
a person seeking to renounce U.S. citizenship must renounce all the rights and privileges associated with such citizenships. In the case of Colon v. U.S. Department of State , 2 F.Supp.2d 43 (1998),the U.S. District Court for the District of Columbia rejected Colon’s petition for a writ of mandamus directing the Secretary of State to approve a Certificate of Loss of Nationality in the case because he wanted to retain the right to live in the United States while claiming he was not a U.S. citizen.
D. DUAL NATIONALITY / STATELESSNESS
Persons intending to renounce U.S. citizenship should be aware that, unless they already possess a foreign nationality, they may be rendered stateless and, thus, lack the protection of any government. They may also have difficulty traveling as they may not be entitled to a passport from any country. Even if not stateless, former U.S. citizens would still be required to obtain a visa to travel to the United States, or show that they are eligible for admission pursuant to the terms of the Visa Waiver Pilot Program (VWPP). Renunciation of U.S. citizenship may not prevent a foreign country from deporting that individual to the United States in some non-citizen status.
E. TAX & MILITARY OBLIGATIONS /NO ESCAPE FROM PROSECUTION
Persons who wish to renounce U.S. citizenship should be aware of the fact that renunciation of U.S. citizenship may have no effect whatsoever on his or her U.S. tax or military service obligations (contact the Internal Revenue Service or U.S. Selective Service for more information). In addition, the act of renouncing U.S. citizenship does not allow persons to avoid possible prosecution for crimes which they may have committed in the United States, or escape the repayment of financial obligations previously incurred in the United States or incurred as United States citizens abroad.
F. RENUNCIATION FOR MINOR CHILDREN/INCOMPETENTS
Citizenship is a status that is personal to the U.S. citizen. Therefore parents may not renounce the citizenship of their minor children. Similarly, parents/legal guardians may not renounce the citizenship of individuals who are mentally incompetent. Minors seeking to renounce their U.S. citizenship must demonstrate to a consular officer that they are acting voluntarily and that they fully understand the implications/consequences attendant to the renunciation of U.S. citizenship.
G. IRREVOCABILITY OF RENUNCIATION
Finally, those contemplating a renunciation of U.S. citizenship should understand that the act is irrevocable, except as provided in section 351 of the INA (8 U.S.C. 1483), and cannot be canceled or set aside absent successful administrative or judicial appeal. (Section 351(b) of the INA provides that an applicant who renounced his or her U.S. citizenship before the age of eighteen can have that citizenship reinstated if he or she makes that desire known to the Department of State within six months after attaining the age of eighteen. See also Title 22, Code of Federal Regulations, section 50.20).
Renunciation is the most unequivocal way in which a person can manifest an intention to relinquish U.S. citizenship. Please consider the effects of renouncing U.S. citizenship, described above, before taking this serious and irrevocable action. If you have any further questions regarding this matter, please contact:
Regular Mail
U.S. Department of State
CA/OCS/L
SA-17, 10th Floor
Washington, D.C. 20522-1710
Oh and this was my original email I sent them (thought it was in my original post but it wasn’t so here it is) ———- Forwarded message ———-
From: Nenari Diamondlady
Date: Wed, Oct 29, 2014 at 3:46 AM
Subject: Relinquish US Citizenship
To: Torontopassport@state.gov
Dear Consulate General~
My name is Patti Diamond and legally I Am a US Citizen and earlier this year I was in Canada and illegally detained by CBSA for overstay on a visa. At the moment I was arrested by immigration, I requested that I wish to renounce my US citizenship, I was denied that right, and subsequently had to go through their Refugee status process to be denied status and deported back here to the States. I wish to come there to either Toronto or BC (whichever is necessary) and relinquish my US citizenship simply because I do not choose to be a US citizen anymore and I choose to become a Canadian citizen and while I Am told I can come back anytime I wish despite what occurred as I Am on a simple departure order, I tried to get a work permit and was denied and should I come to the border although on departure order meaning I can come back anytime I choose, would still be denied entry. My entry would be as I stated above, to come to relinquish my US citizenship simply because I do not choose to be a US citizen anymore and I choose to become a Canadian citizen. So I would like to know what can be done to ensure my safe allowance into Canada so that I may relinquish my States citizenship as I choose to do so voluntarily giving my own signed affirmation oath of allegiance to the queen within becoming a Canadian Citizen. I realise that in doing so that until I become a Canadian Citizen that I will be stateless and I do so completely of my own free will. If you can get back to me as soon as you can, I would appreciate it. Thank you ~Patti Diamond
@Nenari, you do not go to the Consulate “to relinquish” or choose relinquishment over renunciation. This is important, because the Consular officials are like vultures trying to feed on expats.
Please: You have committed a prior potentially expatriating act with the the intention of relinquishing your US citizenship. You did this on x date, and you are no longer US citizen. You want to make an appointment to let them know that you have not been a US citizen since x date. You do not go to relinquish but to inform them that you are no longer a US citzen–but you must show to them when and how you relinquished.
BTW, you are going about this all wrong. If you want to get quick citizenship Canada is not the place. Here you have to apply for landed status first, meet a residency requirement, apply for citizenship, wait another two years, take a test and interview, wait a week or two, go to a citizenship ceremony.
You can just decide to be a Canadian citizen. It is not up to you.
@Petros Yes I Am well aware of the process to be a citizen. And on the other you wrote about relinquishing ~ Ok thank you, this makes sense and I appreciate this clarification. I can certainly do such. Now the question is, how do I deal with them at the border? If you read my full post you know the details and why I Am asking. Thank you ~Nenari
@Petros I Am well aware of this and also know that I would be stateless until I Am able to become such a citizen. I would apply for permanent residency can that not be done still as stateless or no? Perhaps that would be my other question then Thank you ~Nenari
Miss Patti, you admit to overstaying a visa in Canada, and that you were “illegally” detained by Canadian authorities for doing so. You then claim that you no longer want to be a US citizen, and choose to be Canadian. What possible refugee status would apply in this situation? You violated Canadian law, and when faced with the consequence of deportation back to the country of your citizenship, you don’t want to go? How long did you stay in Canada, and how did you survive in Canada? Were you working illegally as well? Using Canadian benefits? Living with a Canadian citizen? Instead of taking a victim stance, why don’t you apply to enter Canada as a resident legally by putting in the effort to qualify for residency like the hundreds of thousands of others who want to migrate to Canada, and after that is done, qualify for citizenship, take the tests, and if successful, then relinquish or renounce US citizenship as will be your right? Otherwise, stay in the USA or go somewhere else that doesn’t care about following the rules.
@Leonardo before you be judgmental on me, I NEVER used Canada services NOR did I work illegally in fact I did and do humanitarian work so before you open your mouth and judge someone writing cruelly I would suggest that you ask first AND read here http://www.diamondlady.net/luciavegajimenezcbsa.html
Rant away all you like. Your spells don’t scare me. You are a charlatan, and someone needed to stand up to you in this forum.
@Petros can you please delete all my posts now, I did not come here to be treated like shit, I came here for help. And it is obvious that there are people here who would rather judge then know what occurred. I was under the mistaken impression that this was a place to ask for help and that I would receive that kindness from decent human beings who care for other fellow human beings. I keep forgetting that there are cruel people in this world. Lesson learned. Please remove all my posts now. Thank you ~Nenari
Nenari, I saw your website. You fled to Canada because of domestic abuse. You are not as charlatan but a very creative person unfortunately not really grounded in reality. Also Petros does not manage the website, Calgary411 and Pacifica777 do.
@Kermitzii, I still am Admin and I can do as she requested.
@Nenari, I don’t think becoming stateless will help you in your quest to be come a Canadian citizen or even a landed immigrant. I would not advise it. The valid passport is a typically an important landing document to become a permanent resident of Canada, and it is unlikely that Canada would recognize a stateless passport, unless perhaps you had a refugee passport from the UN.
Also, it seems to me that domestic abuse (as kermitzii suggests, I’ve not read your website) is not a adequate for obtaining refugee status.
Hi Petros,
I am asking this on behalf of my two Canadian kids, ages 18 &19. They were born in the US and were very young when we left the US. Being Canadian, we took out Cdn nationality for them as infants. They are now living in Canada, and are facing challenges to open accounts; even so there are too many do’s and don’ts (i.e. fbar, pfic etc) that it’s just not worth it to face the risk of non-compliancy. For these reasons, they are going to renounce/relinquish their US nationality. My question: As they did not willingly take out Cdn nationality after the age of 18, nor did they swear allegiance to Canada (we took out Cdn nationality for them), do you see any way that they could relinquish, instead of renounce?
Would appreciate if you have any thoughts on this. Thx.
DJ
@DJ, I am a few years behind you in this regard……..
The only option I see is that they take some kind, any kind, of government employment or run for any political office.
But they will need to get SSN and go through the nonsense to not be a covered expat!!
Hi George,
I take it you’re under 18 and in a similar situation then? I’ve done a bit of reading on this and I think that any Cdn can take the Oath of Allegiance. It is part of the citizenship ceremony, but I don’t see why someone who is a Cdn citizen can’t take the oath anyway.
I’m also wondering if becoming a member of a Cdn federal party would do the trick to qualify under “taking an oath or making an affirmation or other formal declaration of allegiance to a foreign state or a political subdivision thereof…” I’m going to make some enquiries on both of these next week and will post my findings on the blog.
The crazy thing is that it really seemed like a good idea at the time that the kids held US nationalities; it’s now a noose around their neck. Sure it’ll help them on the chance they land a job in the US, but the burden to be compliant is just too much.
There’s been a lot of discussion about people with significant income giving it up as the reporting is so onerous (ex. pfic), and depending on what your home country is there may be double taxation involved. (If you live in a low tax country, you’ll owe taxes to the US) There has been very little discussion about how the US nationality affects the other end of the spectrum, such as students who would like to be compliant, but need to check every action they take, to know what the reporting obligations are, and have difficulties opening accounts in foreign countries as no one wants to deal with them as Americans. Furthermore, why should a student who doesn’t owe taxes anyway to the US, need to pay an accountant just to confirm that they don’t owe taxes?
I’m quite on top of these requirements as we gave up our US green cards a few years ago, and had to understand the taxation requirements. Better for students to give it up before they start earning any money, makes it much simpler.
I’m also appalled that the US is now charging $2,350 to renounce the citizenship! Again, how on earth is someone like a student supposed to afford that? I think the US is trying to do damage control and see at what price the exodus will slow down. There was no fee when we gave our green cards up, but that was a few years ago, pre fatca, and pre exodus.
Sorry for ranting… But this whole thing really gets me going, as I can’t believe the US is taking all these actions.
DJ
DJ. They will have to wait for an appointment, pay the outrageous fee and renounce. The good news is they will be free .
The more difficult decision is whether or not to become tax compliant for the previous 5 yrs. and file the infamous 8854.
At their stage, it would be tempting to either file as best you can with a raft of zeros or better yet , don’t bother at all. We have discussed in the past the difficulty in obtaining a SS number or a ITIN. Accounting fees if you choose pro. help adds another layer to the cost
The costs will be recouped over the yrs. as they will now be eligible for RESPs, TFSAs, Canadian mutual funds and so on.
@DJ
Please don’t get confused about making oaths to a foreign country. It is very clear in the Foreign Affairs Manual (FAM) that an oath to a country by a person who already has the nationality of that country means absolutely nothing and is not an expatriating act to US citizenship.
Your kids were naturalized as Canadians while minors, so this does not count as an expatriating act. All they can do is renounce and pay $2,350, or save the $2350 by taking government employment or joining the military. There is at least one person here who was successful in claiming a past relinquishment for government employment that was a summer job for the BC government back in the mid 1970’s while he was a university student. Don’t let anybody tell you that an oath is required for government employment to count, or that a government job has to be high-level policy making, or that a military position has to be a CO or some high level. None or these are true. It is absolutely clear in the FAM.
In any case, if there is the tax compliance issue. At age 18/19, they likely have barely started working and their filing might be relatively simple? However, you mentioned PFICs a couple of times. If they have such investments then things become complicated. If the money was given to them maybe the US has attribution rules like we have in Canada? I have no idea. Some cross-border accountants won’t even take clients for US tax filing if they have PFICs.
My mother’s finances were dead simple (no RRSP, TFSA, PFICs no employment income – just Canadian pensions and US SS). Five years of taxes and 6 years of FBARs cost $3000 to an accountant. That’s probably as cheap and simple as it gets.
New UCIS policy creates US taxable zygotes:
http://www.uscis.gov/news/uscis-expands-definition-mother-and-parent-include-gestational-mothers-using-assisted-reproductive-technology-art
http://www.huffingtonpost.com/2014/10/31/colbert-serrogate-immigration-fox-news-outnumbered_n_6083320.html
DJ, I was born in the US to Canadian parents, and repatriated to Canada as an infant. My parents registered me in Canada as a Canadian birth abroad (this was all in the 60s), and I’ve been here ever since.
In 2013, I swore the Oath of (Canadian) Citizenship before an officer of the Ontario court (JP). i attempted to use this as my relinquishing act, but the consulate would not accept it, and told me DC would turn it down. I paid the $450 on the spot and renounced, I just wanted out of this hellish nightmare.
I believe your kids would be in the same situation. They are already Cdn citizens, so taking the oath of citizenship at this point means nothing. As suggested above, there are oaths of allegiance (spoken or assumed) for other reasons they could use to relinquish, such as government (any level) employment, military, etc. Perhaps a quick stint in the Reserves? a job for the Courts? Justice of the Peace? Marriage Commissioner?
@The Mom & DJ
For Canadian citizens, oaths of allegiance are not required for government employment or military service to be an expatriating act. There is no oath that a dual citizen can make to Canada that is an expatriating act unless it elevates your position and gives you more rights as a Canadian. Is there such a thing? Can you become more Canadian than the rest of us?
http://www.state.gov/documents/organization/120544.pdf
@ WhatAmI, Mom & Duke
I’m so glad I stumbled upon this blog! This is all very interesting information. We abandoned our green cards several years ago, and nothing was this complicated. We simply went to the embassy, without an appointment and handed in the form, no fee to pay, and we were done. We did have to complete the F8854 of course, but worked through the whole expatriation process with an attorney to ensure we were not covered and that we would be free and clear. Since then I haven’t explored the matter at all, until the issue has come up with my kids. So, I really want to thank everyone who contributes to this. The information I have learned has surely saved me time and money in professional fees!
@WhatAmI, Thanks for directing me to the Foreign Affairs Manuel (FAM), I didn’t know this document existed, and have now read the section on “Loss of nationality.” It’s all very clear and laid out. And yes, it does specifically say that taking an oath of allegiance once you are a citizen won’t work. Just as both Mom and WhatAmI say. I also found it interesting that this document lays out exactly how the consular employee is to respond. In our kids case, it does look like the only way for them to expatriate would be to get a government job with the intent to relinquish US nationality, or to pay the $2,350.
I did mention pfic reporting in a previous comment. Our kids have a little bit of money that they have saved up over the years, and would like to put that into some sort of investment vehicle, likely an index etf. If they held an account with a US brokerage, such as Schwab or Vanguard, that would be fine according to the IRS. However, no US financial institution will accept them because they have no US address. Similarly, if they are able to open an account with a Cdn brokerage, (they have been turned down numerous times because of their US nationality), and they are not very careful as to exactly what funds they invest in, they could be subject to PFIC taxes and reporting. I just want to point out, we’re talking very little money here, only about $3K.
@Mom, Your situation is very similar to our kids. Except we left the US when they were toddlers, and lived abroad for many years. They are now students in Canada, and have no plans to leave. We are also planning to return to Canada within the next year or so. As they feel themselves Canadian over anything else, and have no family or other ties in the US, giving up their citizenship was on the radar anyway, so this is as good a time as any to start the process. Your experience confirms what is clearly stated in the FAM, and what WhatAmI also writes.
I’m going to contact our attorney regarding the tax filing for our kids, whether they should complete the last 5 tax returns with all zeros, or if simply saying they’ve been tax compliant for the past 5 years, as they haven’t needed to file will suffice. And, if they need to file form 8854.
Thanks again for all of your input.
DJ
@badger
Saw the Colbert episode and immediately thought – of course they’ll grant the child of a US citizen surrogate US citizenship! It costs a lot to pay for a surrogate, so in most cases the genetic parents are wealthy and likely the child will be wealthy some day. The US is setting up the kid to be in their tax system.