I was born in the US to Canadian parents in 1954. We moved back to Canada in 1966 when I was 12. I have a Canadian certificate of “Canadian Citizen Born Abroad”. I’m now 58. I’ve never worked in the US, never filed any US tax form, never had a US passport. My Canadian passport of course says I was born in the US. As a kid, I remember my mother saying I was a dual citizen up to a certain age. I remember going to the US consulate here in Calgary in the early 70′s. I was somewhere between 18 and 22 or so. I went to ask if I was a dual citizen and what advantage there was to it. As I recall, I was told dual citizenship didn’t really exist and that I wasn’t an American citizen.
I have no idea where I fit into all this IRS/FATCA/FUBAR business. Of course, I want no part of it.
Should I go to the US consul in Calgary and ask questions? I like the idea of some certificate declaring that I’m not a US citizen and have no obligations to any US department. Does the process of relinquishing apply to me?
I’ve spent my whole adult life believing I’m only a Canadian!
The State Department can’t arbitrarily strip a person of citizenship who has committed a potentially expatriating act. But what if the State Department told someone that they were not a citizen back in the day before the Supreme Court changed the law? Does that person then become a citizen even if they don’t want to be one?
Also, I wonder if anyone can come up with further documentation proving that a Canadian like this is not a US citizen. Such written documentation would be useful for quite a number of people if we could.
*@Roger Conklin, I have seen claims that the US does not recognize any other citizenship. There is at least one US law that does mention the citizenship of another country. The so called exit tax contains the following ………….”became at birth a citizen of the United States and a citizen of another country and, as of the expatriation date, continues to be a citizen of, and is taxed as a resident of, such other country”
*@Truenorth, there was a day when the US did not recognize dual nationality, but clearly it does today. http://travel.state.gov/travel/cis_pa_tw/cis/cis_1753.html. The big change came when the Supreme court ruled that Congress had no constitutional right to enact legislation which resulted in US citizens aurtomatically forfeiting their US citizenship by becoming naturalized citizens of another country.
Wih respect to the Exit Tax which is payable by persons who renounce US citizenship who have a certain minimum annual income or world-wide assets which exceed a certain threshhold amount, the tax is slightly less onerous for US citizens who were born with another nationality.
The United States acknowledges Dominant Nationality when it suits, as it also acknowledges international law when wanting to ostracize another nation. President Obama was all in favor of international law until he became president and then decided to do as he pleases and what is right in his own eyes.
WhatAmI’s situation is this: the State Department said decades ago that WhatAmI is not a citizen and therefore refused to issue a passport. Therefore, he/she has lived as a Canadian citizen (since birth) and has lived in Canada since before becoming a taxpayer. He also has no assets in the US. Therefore the IRS has no domestic leverage.
Now I don’t see a problem with him entering the United States, provided he doesn’t spend a lot of money in advance to do so, for fear the that the US would begin to refuse him entry on a Canadian passport. But staying off the radar for thirty years worked for him. That is the best procedure going forward.
For many people in Canada, the United States would have to prove in international court that they must pay tax in the United States, and the US would unable to do it. Now, is the United States going to arrest 1 out of every thirty people who try to cross the border because of their alleged US connexions? I don’t think so.
Thus, I think my recommendation holds: STAY OUT OF THE US SYSTEM. Remain a Canadian–don’t give one inch to the United States–insist on your right to citizenship, and do not allow Obama to force you into the US tax system.
When this whole problem started, I was already in the system and I was a US citizen only. I needed to check out. So I applied for Canadian citizenship, relinquished my citizenship and filed the necessary paper work to the IRS. WhatAmI checked out at the age of 12 when he moved to Canada and he has the proof with his paper that says he is a Canadian born abroad. He is not under the jurisdiction of the United States. Why should he give even the slightest acknowledgement to the claims of the United States against him? They are without sufficient backing in law. I don’t care what US law says. It can make any absurd claim it wants because US law does not guide the lives of Canadians living in Canada.
*@Petros, I doublt that the US is going to try to haul anybody it alleges to be a a US citizen into an international court to try to collect taxes, but I suspect is much more likey to set its sights on “low hanging fruit” in the form of US citizens living abroad who step into US territory when it considers there is a potential to collect significant amounts of tax money.
So my advice to those who are off the radar of the IRS because they in good faith believe themselves to not be US citizens to stay off their radar. It sounds to me as if their case is weaker if, after becoming a citizen of Canada or any other country, to have continued to use their US passport or file US tax returns then the ice on which they walk is much thinner and they have to act accordingly.
@Roger, the future I see is that the US will delay but not arrest Canadians with a US birthplace. I see them harassing them at the border. I see them turning them back if they try to enter on a US passport. I see them even possibly arresting some like me who are ringleaders. But a person like WhatAmI has little to worry about except being turned back.
But is it worth it to renounce just to get a CLN and to avoid being turned back and to avoid the banks marking you as a US person? I’d feel a lot safer if (1) the IRS didn’t even know about me because I don’t even have an SSN number; (2) the IRS didn’t know any of my income and account details because I stood upon my Canadian rights and said that I have no truck with the United States.
So you are right about low hanging fruit. The border service is not going to start hauling people to jail because they have a US birthplace and they consider themselves to be Canadian. They will be delayed, harassed, threatened and inconvenienced. But they aren’t going to spend any real money trying to sue these folks for tax returns. All Canadians would all stop shopping in the United States if that happened. It would set off a diplomatic incident that would end the cross border shopping which is so lucrative for US communities like Bellingham.
*@petros, perhaps it is this “harrasing at the border” that may prove to be the straw that breaks the camel’s back. When the US businesses that thrive on Canadians coming across the border to buy their wares and the amusement parks and retirement communities began to hurt because of a massive drop-off of their Canadian-source business, maybe then, and only then, Congress will have its collective eyes pried open to the monster they have created through citizenship-based taxation, FBAR and FATCA.
Let us hope so. The current US tax policy is not only a nightmare for Canadians who, for whatever reason, also are dual US citizens, but for US citizens living abroad in every corner of the world. As a US citizen I just cannot understand how our leaders can be so blind.
I’ve just read all the recent posts a few more times. Makes my head spin. Here is a summy of thoughts and understaqndings.
seems an important strategy to do nothing that indicates my acceptance or even knowledge of being a USC. That includes of course getting a SSN
and filing IRS and other forms. I think the only way to do that is to do nothing. Or, if I could get a back-dated CLN, that would do the trick.
Renouncing would not, as it would not be back-dated and I’d have to also become compliant with the IRS.
I’m tempted to try to find a US immigration lawyer to see if my story would get me a back-dated CLN.
It would be worth a few hundred (dreaming?) to find out for sure. But then, how could that lawyer guarantee that the US officials would agree?
Am I right that if I enter the consulate and start asking questions they’ll enter me into their books and I’d forever more become a blip on
My woes pale in comparision to many many others here, but it still hurts. Even if I were a USC, I’d be a second-class one in
that, for example, my child are not eligible to be USCs because I didn’t live there long enough. None of that matters, because I don’t want it anyway.
The problem is that it makes me a second class Canadian as well, in that I could not live within the same financial system as other Canadians. There are US complications even of having a TFSA, and I’d have to pay capital gains when I sell my house even though I couldn’t ever deduct the mortgage interest payments, etc. I read a letter dated Dec 2011 from the Bank of Nova Scotia (don’t
remember who sent it to me) that says Canadian mutual funds passively holding US securities count as US holdings. The US views many Candian
financial entities much differently for tax purposes. “I’m all right, Jack, keep your hands off my stack”!
The IRS usually describes their efforts as in terms of cracking down on wealthy cheaters, such as this from the IRS Commissioner:
On the individual front, we have made putting a big dent in offshore tax evasion a major priority.
We view offshore tax evasion as an issue of fundamental fairness.
Wealthy people who unlawfully hide their money offshore aren’t paying the taxes they owe, while schoolteachers, firefighters and other ordinary citizens who play by the rules are forced to pick up the slack.
That’s not me! I think though that they’re happy to to collect money from other USCs who become scared and “comply”. The fishing drift-net analogy.
Forty years ago there was a joke:
“The Russian Express Card: Don’t leave home”.
WhatAmI, I’d bet you can enter the Consulate, ask questions to your heart’s content. But that doesn’t mean you’re on the IRS radar. You still have no SSN, and they have no idea at this point that you have any assets or income. At this point, they know nothing about you except what you tell them.
As for getting an immigration lawyer, why? I don’t know what it would cost to get an immigration, but these lawyers
probably start at around $500 per hour. Perhaps someone who has
consulted such a lawyer can tell us. (That’s considerably more than I
make). Is going to the US so important to you? If you get turned back at the border, which seems unlikely at this point, then so what? You will be inconvenienced. You will perhaps lose a little money. That’s better than the US thinking that you should pay them 300% FBAR fines or that you should pay taxes on your registered accounts in Canada. You have a piece of paper that says you are a Canadian from birth. Live your life as a Canadian in Canada. Sleep well at night. The US can do nothing to you.
I wouldn’t need to talk to an immigration lawyer if I knew I could go to the Consulate and find out if I could get a back-dated CLN without actually having to identify myself to them.
@WhatAmI: I read a letter dated Dec 2011 from the Bank of Nova Scotia … that says Canadian mutual funds passively holding US securities count as US holdings.
This isn’t normal. The usual case is that “Canadian mutual funds holding shares of U.S. corporations are … not classified as U.S. situs property.” The bank may have got their wires crossed, or perhaps they’re talking about a particular fund with some, um… offbeat characteristics.
@Watcher: It turns out the letter I’m referring to was posted here by Petros back in Feb:
@WhatAmI: Thanks for the reference. I can’t see any place in here saying that “Canadian mutual funds passively holding US securities count as US holdings.” What it does say is that Canadian mutual funds, no matter what they hold under the covers, are US PFICs. — no real surprise since the F here stands for “foreign”. That is, Canadian mutual funds never count as US sited. Is there something in this letter that I’m not seeing?
@Watcher: it’s mostly Greek to me, so I’m probably misinterpreting it. But, words like the following seem to indicate that the IRS has their eyes on such investments and a US-person Canadian can’t simply live within the Canadian financial and tax system. It seems there are problems even if there is no US component to the portfolio, which is even worse! Glad this doesn’t apply to me 😉
PFICs are subject to a punitive tax regime with
associated tax liability that exceeds the tax liability
associated with a mutual fund holding in Canada.
Amongst other things, distributed income and capital
gains could be taxed as ordinary income (rather than
investment income) at the highest federal marginal tax
rate (rather than the preferential tax treatment that
may apply to investment income), and unrealized gains
could attract a non-deductible penalty interest charge.
These PFIC rules could apply to a U.S. Person even if
the PFIC is held in a Canadian registered (tax-deferred)
plan, such as a Registered Retirement Savings Plan.
@WhatAmI, yes I think you’re misinterpreting. It’s the domicile of a fund that controls its tax treatment, not the domicile of whatever the fund holds. Even the US cleaves to that. The problem case is of course US persons in Canada, since they have to follow two conflicting sets of tax laws. Holding a US mutual fund that tracks the S&P 500 say is fine from the US perspective but might be punitively taxed by Canada (although I don’t know for sure — not Canadian). Conversely, a Canadian mutual fund holding the precise same stocks is clean for Canadian tax purpose but is whacked with appalling PFIC rules that can wipe out 100% of your gains. It’s really just another facet of US protectionism, barely disguised as tax law. The RRSP (and RESP, and TFSA, and…) icing on the cake is really just insult added to injury. Because the US won’t respect non-US retirement wrappers, a US person holding a non-US tax deferred account that — extremely likely — itself contains a PFIC fund gets kneecapped. There’s an almost infinite number of ways in which you can combine the worst US tax laws with citizenship based taxation and arrive at truly ugly outcomes.
Up until FATCA it was mostly a theoretical problem — these laws were in place, but nobody, including the IRS, was really interested in enforcing them because taken together they make no sense at all. Now, though, the US does want to enforce them all. Even though they still make no sense.
@expatami, re that quote from Douglas Shulman; “
We view offshore tax evasion as an issue of fundamental fairness. Wealthy people who unlawfully hide their money offshore aren’t paying
the taxes they owe, while schoolteachers, firefighters and other
ordinary citizens who play by the rules are forced to pick up the slack."
That should actually read “
We view offshore tax evasion as an issue of fundamental fairness. Wealthy US resident people who unlawfully hide their money offshore, and others living inside the US aren’t paying
the taxes they owe, while those born and living lawfully as schoolteachers, firefighters and other
ordinary citizens abroad who play by the rules and pay taxes in full where they were born, live and work OUTSIDE the US, and owe NO US TAXES are forced to pick up the slack.:' Because we the IRS and the US Congress, don't give a rat's ass about anyone outside the US, and can slander them, plunder their lawful savings and tax their children abroad with impunity. 'Fairness' is whatever we, the IRS say it is.
And from the BC US Border Guard
… and you are US citizens until we say otherwise.
…and until we change our minds again at a later date.
Canadians with border crossing issues – Couldn’t you apply for a passport with just the city of birth written without the three letter country code? I have read that Passport Canada will issue passports in this manner on request. I have also heard that the US does not admit anyone without a place of birth mentioned, but the city would still be mentioned in this case and many other countries do the same (UK, Germany, etc) and do not mention the country of birth, just the city.
As long as you weren’t born in New York or Seattle I would think that this could provide a bit more piece of mind…? I wish I had this option to change my passport data and am very envious that you all have this choice!
Canadians can get a passport without a place of birth, but the process comes with warnings that some countries may object. The US will accept some forms of ID that don’t have a birthplace, like an enhanced driver’s licence or NEXUS card, but it’s hard to know what other databases they’re linked to.
My Swiss passport only has my Swiss “Heimatort” not my birthplace in the US.
Heimatort is an interesting Swiss concept where if you really end up SOL your Heimatort (birth-town or citizenship town) is responsible for making sure you don’t starve. Everyone has a Heimatort.
With eye scans, face scans, biometrics and fingerprints in the long run this may be irrelevant. They may be able to determine your entire genome merely by one piece of DNA at the border. Imagine a linked-in database that covers every generation for a thousand years.
There’s no hope slave, you are powerless.