Cross-posted from Maple Sandbox
We often use separate terms for “renunciation” and “relinquishment” since there are some notable differences between renunciation and the other methods of terminating one’s US citizenship. However, renunciation is actually one of the 7 methods of relinquishment, as set out in Immigration and Nationality Act, s. 349(a). This post explains some of the similarities and differences.
RENUNCIATION – Immigration and Nationality Act, s. 349(a)(5)
Renunciation is only form of relinquishment where the relinquishing act itself takes place at a US consulate. It is performed by taking the oath of renunciation (form 4080). Form 4081 (Statement of understanding of consequences) is also required. Form 4079 (Request for determination of loss of citizenship) is not strictly required, but the DOS procedure manual does state that “it may prove useful” regarding intent and some consulates do require it.
Depending on the consulate, renunciation may take one or two visits. Over the years, there’s been a trend of more consulates moving to one visit. The vast majority of renunciations being reported by Brockers have been one visit.
Since July 2010, there has been a $450 fee for renunciation. It increased to $2350 on 12 September 2014. This fee is payable at the visit where you sign your papers.
In the case of renunciation, the loss of citizenship is effective, for all purposes, as of the date you sign the forms at the consulate.
RELINQUISHMENT BY OTHER MEANS – Immigration and Nationality Act,
s. 349(a)(1)(2)(3)(4)(6)(7)
Of the remaining 6 methods of relinquishment, the most common means is by naturalisation in a foreign country s. 349(a)(1) with the intent of relinquishing one’s US citizenship. [This is of particular interest in Canada because whilst over 100,000 US-born Canadian citizens believe themselves to be “Canadian Citizen Only,” according to the 2006 census, it’s believed that almost none have a Certificate of Loss of Nationality because we were told we terminated our US citizenship automatically upon taking Canadian citizenship, particularly prior to 1990 when the administrative presumption changed, and almost no one seems to have even heard of a CLN before 2011.] Also relatively common are relinquishment by government employment (s. 349(a)(4)) or military service (s. 349(a)(3)).
In the case of relinquishment not done by renunciation, although the loss of citizenship occurs at the moment the relinquishing act is performed, the relinquishment is not effective for practical purposes in the eyes of the US government until the US government is notified by signing forms at a US consulate (although once your CLN is processed, the US govt does recognise the citizenship loss as having occurred at the time of the relinquishing act. Required forms are 4079 (Request for determination of loss of citizenship) and 4081 (Statement of understanding of consequences). It’s also a very good idea to supplement your 4079 with a statement illustrating your intent, how your post-relinquishment conduct has been consistent with lack of US citizenship.
When you attend at the consulate regarding this type of relinquishment, you’re essentially notifying them that you already have relinquished. Consequently, this generally requires only one consulate visit.
There is no fee for processing relinquishments done under these sub-articles. UPDATE: September 2015 – Dept of State has announced relinquishment-based CLNs will cost $2350 beginning November 9, 2015.
Once this is done, the US government will consider the loss of citizenship effective as of the date of the actual relinquishment (this date will appear on your CLN), except IRS will consider the loss to have occurred on the date you signed the forms at the consulate. However, this law, creating separate dates for loss of citizenship and loss of “tax citizenship,” came into effect on 4 June 2004. Important — if you performed your relinquishing act before that date, Brock posts If your expatriation date is before 2004 , Did you relinquish before February 6, 1995, and Pre-1995 Relinquishers and the IRS: Three Recent Legal Opinions discuss this matter. Tax lawyer Michael J. Miller has written an excellent article on this, which is very clear reading with useful references to legislation and case law as well.
Instead of getting a CLN, a relinquishment can also be self-documented for purposes such as for banking/investment in Canada. This is due to the Canada Revenue Agency’s Guidelines allowing self-documentation as proof of non-citizenship. Self-documentation may not a viable solution in all countries or for all situations, but it’s worth considering if it would be right for you. See Self-Documented Relinquishment.
@Susan
One last thing. Your friend who was told to file and (unfortunately) did, can stop any time. Likely won’t cause problems unless she has US assets or income. People stop working or drop off the face of the earth all the time and the IRS has no ability to track them down – particularly if they don’t live in the US.
susan…..many of us have been where you are
stop, take a deep breath, pour yourself a glass of your favorite beverage and start reading here.
repeat above steps until you feel 110% comfortable with a solution that works for only you as no 2 situations are exactly the same.
you will go through the 5 stages of grief and then you will come to your solution. don’t rush into anything. take your time.
for me in the early days my immediate reaction was i have to renounce and possibly would have done so had i been a bit more on the ball at the bargin price of $450. when it jumped to the $2350 that was a game changer. i used that money to pay for my mexican winter vacation that year. 🙂
i now lie regualarly to banks or any other entity that happens to ask my citizenship. it is none of their business and i have zero problem lying to them.
i have no need and there fore no desire to cross the border to the south however the last time i did so i was questioned a bit strongly and advised to “go to the post office and get a pass port application” which my wife and i promptly forgot to do immediatly after driving away from the border and instead stopped at the first convience store, picked up a six pac and went to the nearest beach.
again it seems like you are in your early days in this adventure. stop, take some time and keep reading before you make any decision…..esp one that could cost you $2350.00
“Quite honestly I don’t think the US ever should have had a policy of citizenship-based taxation. ”
‘I agree, as I think most people who visit this website do. Fortunately, it can’t be enforced beyond the US borders.’
It can’t be enforced in non-US countries where the person holds citizenship. A non-citizen of Canada residing in Canada has some experience with CRA helping the IRS.
“they really should not be allowed access to our savings.”
‘They get the reports but they can’t assess a tax liability as long as you don’t make the mistake of filing US tax returns.’
They can’t collect from Canadian assets of a Canadian citizen, but they can assess. We haven’t seen any cases of the IRS making a substitute-for-return on a non-resident of the US, but US law permits them to do so and to assess, though often they can’t collect.
“Which is worse (criminally)?”
‘Lying, if you do it on a US tax form, because all US tax forms carry a penalty-of-perjury jurat which converts a lie into perjury.’
Telling the truth on US tax forms is worse. The IRS penalized me for writing honest declarations and US Tax Court upheld the IRS’s decision. The IRS coerced me into committing perjury on refiled returns (and on newly filed returns beginning with tax year 2009), I complied and renounced. I informed US courts that the IRS coerced perjury but the IRS, US Department of Justice, and US courts are all happy with that.
The IRS never pointed me to Internal Revenue Bulletin 2005-14 but I found it by accident. Altering the jurat brings penalties. If your employer issues a falsified T-4 or equivalent in other countries, you’d better sign that to the best of your knowledge and belief the attached form is true and correct.
26 USC sections 7206 and 7207 punish perjury that is performed willingly, but do not punish perjury that is performed under coercion.
Whatever lies you have to sign, you’d better sign.
US government employees signed declarations under penalty of perjury under 28 USC section 1746 and did indeed commit perjury by declaring false assertions of facts. Courts are happy with that. Though one time an IRS lawyer removed an IRS employee’s perjured declaration from a collection of stipulations after calendar call in US Tax Court.
@Susan
Do not be confused or alarmed by ND’s comments on perjury. They are not relevant to your concerns.