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.
Hi Susan. You are in a pretty common situation. Take your time, relax, don’t panic, do some research. No reason to rush things. At least you haven’t gone and filed US tax returns, which is the biggest mistake.
Have you received a FATCA letter or question from a bank, or did you just learn about this situation?
As for citizenship, unless your father was an “attache” with a diplomatic passport, rather than a military officer on assignment, you were a US citizen at birth. If you swore an oath to the Queen (or similar) when you became a career civil servant in 2001, it’s possible that you could argue that you relinquished. In general it’s much easier to simply renounce, you sign a paper and it’s done, whereas to claim relinquishment you have to demonstrate that you performed such-and-such an act with intent to cease being a US citizen. It’s the same cost, US$2350, in both cases.
The only advantage to relinquishment is that if you did it before 2004 or 1994 (I can never remember which but someone will soon correct me) then you are not required to do anything further to exit the US tax system. That being said, it is in no way required that you become tax compliant before or after you renounce, if you don’t care about exiting the US tax system (which you never entered, presumably).
You have a couple of options here.
1. You can attempt to document relinquishment, and if that works and the cutoff date for tax compliance is 2004, all good. (A poster by the name of BirdPerson is intimately familiar with the pros and cons, and may be along to advise.)
2. You can renounce and go through the exit tax process, probably without owing anything, but time/money to get the paperwork right.
3. You can renounce and do nothing further.
4. You can do nothing further. This is the course of action I would recommend. If you are faced with FATCA questions from your banks or other financial institutions, simply answer “no” to US citizenship. If you are asked about your US birthplace, you say “yes, I was born in the US but my father was a military attache so I am not entitled to US citizenship” and leave it at that. And since presumably you never obtained a US passport, or lived in the US as an adult, that’s a perfectly reasonable story.
One small bit of good news: if you left the US as a small child, you cannot pass on US citizenship to any children. The problem stops with you.
@Portland. Thank you.
“Working for a foreign government at a policy level is considered a relinquishing act especially if you take an oath of allegiance.” So here’s the thing. I am not a policy level person but I am quite certain that I did sign something saying I pledged allegiance to the Queen….or something like that. I would love to get a copy of it but it requires going through Phoenix and good luck with that these days.
“Path number three. Do nothing. If asked by a financial institution, you are Canadian only.” My daughter was recently asked to sign a piece of paper that said she was NOT a US citizen. Rather than “are you a Canadian citizen” it was specifically “are you NOT a US citizen”. Minor difference but critical. Answering yes to one is the truth, answering yes to the other is fraud. Fortunately my other daughter only had to show her passport. So perhaps if I show my Canadian passport to a bank that would be enough. Oh, but then again, it has a US birthplace so it might lead to more questions.
“The only downside is possible harassment at the border. Has this happened to you so far? Harassment by border guys seems to be a completely random event.” I have not had harassment but I was told at the border that they were going to start enforcing that all US citizens require an US passport to enter the US. I could use my Canadian passport to return but needed to get a US one. I simply said “thank you, I did not know this” and then drove off with no intention of applying for a US passport. If this comes up again I plan to say “yes, I was told this previously, I am looking into the process”. I don’t ever want to flat out lie but I am avoiding and avoiding and avoiding as much as possible.
This whole thing makes my blood pressure go through the roof. I just can’t believe that any of this is legal. I keep waiting for the day when someone stands up and says “You can’t do this to people” but no one seems to dare push back.
@Susan
Reposting from other thread.
It looks as though you may have been a US citizen at Birth from the fact of being born on US soil. The only exception to this is if your father or mother were foreign diplomats in the US at that time.
You can check with the US consulate where you live to clarify this and double check that a Canadian Army officer also qualifies for non transference.
However the fact that you worked for the Canadian Federal Gov from 2001 would give you the right to claim a backdated relinquishment without back tax filing, as long as you intended to relinquish your US citizenship at that time and took or signed an oath of service to the Canadian Gov and did nothing American since then like apply for a passport, vote or file US taxes.
Relinquishment is a little trickier as you have to prove that it was your intention to lose US citizenship and be approved by the State Dept. It often takes longer to be approved than simple renunciation.
“This whole thing makes my blood pressure go through the roof. I just can’t believe that any of this is legal. I keep waiting for the day when someone stands up and says “You can’t do this to people” but no one seems to dare push back.”
Push back against what? Are you having bank problems due to FATCA? Or is the problems you’ve experienced when visiting America?
To protest about FATCA-related banking problems, contact your Canadian representative. A court case is underway in Canada.
There’s really no effective way for a person who wants to lose US citizenship to protest about the cost of doing so, but it wouldn’t hurt to raise that also with your Canadian representative.
@Susan
Don’t worry about lying to Canadian banks. I do it all the time. Maybe it’s fraud, maybe it isn’t. It’s not something I lose sleep over.
As for the border, “they were going to start enforcing that all US citizens require an US passport to enter the US” – they told me this once at the airport 7 or 8 years ago and that was the last time I’ve been asked about my US passport. (I have one but I keep it in my bag, on principle I enter with my Canadian).
The situation is absurd, but for Canadian duals life really can be very simple – lie to the bank and go about your business. Spend the money to renounce if it helps you sleep nights, or don’t bother. Be thankful you don’t live in Switzerland, where a US birthplace means you will have huge difficulty opening a bank account.
@susan
Only problem with trying for a relinquishment is that if the state Dept refuses ( maybe on the grounds that how could you have intended to relinquish if you didn’t believe you were a US citizen), it will cost you another 2350 to renounce.
I
@plaxy….
Quite honestly I don’t think the US ever should have had a policy of citizenship-based taxation. And I gather they are the only wealthy country that DOES. I can totally see how their FATCA policies are to prevent people from hiding taxable money in foreign bank accounts but those of us with no ties to the US other than citizenship (in other words, no US address or source of employement) they really should not be allowed access to our savings. I worry about my TFSA. Since I do not pay any Canadian taxes to cancel out US taxes would the US not be able to claim full taxes on it?
@heidi
So I could get charged twice. Eff.
I guess renounce it is. I know I can do nothing but I am so sick and tired of thinking about this and stressing a bit every time I see a border guard. I just want my paper that says I am not a US citizen.
You are going through the “stages of grief” – outrage, fear, anger, sleeplessness, paranoia etc.
Eventually you get to “meh, they can’t touch me” and stop worrying.
Yes technically you might owe taxes on income from a TFSA, in addition to horrible (on paper) penalties for failing to report it on an FBAR. Point 1: TFSAs (like RRSPs, RESPs and so on) are not reported under FATCA, so even if the IRS knew about you from bank reports on regular accounts, they wouldn’t know about the TFSA. Point 2: the US has no ability to collect anything from Canadian citizens in Canada, so who cares?
So do I fill out the forms 4080 and 4081 in advance or do you fill them out at the meeting. I guess I need to call the embasy and make an appointment.
‘Renounce it is’
A perfecly reasonable choice. The other perfectly reasonable choice is to not file any tax information.
As far as your TFSA is concerned, the only reasonable action is to not report it. Since we hope you are not going to file anything, it is moot.
“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. Which is good.
“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.
“I just want my paper that says I am not a US citizen.”
Exactly! 🙂
You email a request to. CanadaCLNInquiries@state.gov
You will get an auto reply with all the ifo you need. The paperwork will take you 2-3 hours.
Your appointment will take several months depending on which city you prefer. You DO NOT need a lawyer or accountant. It’s quite straightforward.
@ Susan,
Re:
The oath is irrelevant in most cases. As a Cdn citizen at the time of taking employment, it would not have altered your relationship with Canada. This is the case for most people; and the act of taking the employment (Immigration and Nationality Act , s. 349(a)(4)) is itself cause of relinquishment if, of course, accompanied by the intention to terminate US citizenship by so doing.
The oath is an either/or situation,:
That’s because as a citizen of Canada, an oath would not change your relationship with Canada:
As for not being policy-level position, also no big deal. That just changes the administrative presumption. The administrative presumption is that a person does not intend to terminate US citizenship by performing a potentially relinquishing act set out in INA s. 349(a). There are a couple of exceptions to this which reverse the presumption, one of which is taking a policy level position.
However, whichever way the presumption applies in one’s fact set, the presumption is rebuttable. So far everyone who’s reported their relinquishment-based CLNs to Brock (see Consulate Report Directory), has fallen under the general presumption (either relinquishment by naturalisation or by taking non-policy government employment).
You mentioned Phoenix. That mess is really outrageous. I hope you’re not caught up in one of the (many) fiascos with it. My sympathy if you’re having to deal with that.
Nonoymous said: “Eventually you get to “meh, they can’t touch me” and stop worrying.”
Susan, this ^.
I was in almost the exact situation as you (Dad recuited by US forces), but no federal employment for me, and returned to Canada as a baby. I spent years on this website (at its birth), stressing. It took a huge toll on me at a time when I could least afford it emotionally. I tried every way possible to relinquish, as following all US rules would have taxed my CANADIAN husband’s income. In the end, I renounced (when it was still only $450), and submitted NO tax returns, only the exit form, with a nasty letter. That was about 5 years ago, and I’ve heard nothing from the US.
What is particularly galling are two points. The first, the Toronto Vice Consul told me in 1992 that I was NOT a US citizen, but supplied me with no CLN, and there was no record of it. The second…the ONLY time I have not had grief from US border folks was after renouncing. I went to the US within in year of renouncing, and have not/will not return ever again, on principle.
Once you gather the information regarding the OPTIONS, you make the decision based on what allows you to sleep at night. I would STRONGLY advise you to gather your information here, from those of us affected, and not from accountants or lawyers (John Richardson here excepted) who would profit heavily from your dilemma.
So for those that say do nothing…..I do have a friend who was asked by a border guard if she had been filing her tax forms. It was a surprise for her, she had no idea she had to. She went home after her trip and mistakenly filed. Now she has to file every year because they have a record of her. So yes, ideally I would like to never file anything. But what do I do if I get asked that question? (I’ve been asked many hinting questions about my US place of birth on a Canadian passport but never that specific question.) I don’t want to flat out lie and say yes I have. What if I play dumb? Would they buy that these days? Surely they suspect all US citizens (expats or accidendtals) are all aware of this crap. Can I argue that asking me about my tax compliance has nothing to do with border security? I just don’t know how to handle the question.
This is why I lean towards terminating my citizenship. But then I worry “what if my husband gets a job in the US and we have to move?” or “what if in my golden years I want to move to a warmer climate?” etc. I don’t want to totally burn all bridges.
I’m still confused/conflicted.
I suppose I’m not entirely opposed to lying, I just don’t want to get caught in a lie and then I’ve committed fraud. Which is worse (criminally)?
“ I don’t want to totally burn all bridges.”
Keeping the citizenship is also a reasonable choice. Lots do. Some file and pay; some file “minimally”; and some never file.
@ Susan,
Re crossing the border, we have a thread where people share their experiences on border crossing. You can see how things have been going so far (generally pretty smooth with no problems), and keep an eye on it to see if/how things develop.
“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.
As for getting tax questions at the border, it sounds like it’s a random occurrence, an officer is being “helpful”. In that case, don’t lie, just say “I had no idea. Thanks for letting me know. I’ll look into it.” (Okay, that last sentence is probably a lie.)
What we know is that CBP has no access to regular IRS data, and that they cannot detain you unless there were actual criminal charges (it’s also possible that you’d be flagged through a DHS system so they could stop you and ask for contact info while in the US, but only if you had a serious debt owing on which they’d attempted to collect, which obviously is not the case if you had never entered the US tax system and aren’t on the radar).
The general approach to the border, with me, is to play dumb, offer no information unless asked, and keep it vague. If they see the US birthplace and say you’re a US citizen and need a US passport, reply with “oh, thanks”. If they actually read the notes and mention a previous conversation – which has never happened to me – say “oh, right, I forgot”. Alternatively if questioned about citizenship mumble something about father was a military attache so I don’t think it applies, or that’s what I was told, mumble, mumble.
Except that I don’t play that dumb if I’m carrying my US passport, just don’t offer it unless they ask.
@susan
What you have to remind yourself is you are not alone in this. Thousands have been through similar situations and come out at the other end with peace of mind. Take your time, read, ask questions and then decide a course of action. Do not let the US and fear control your life, you have done nothing wrong.
If you feel as though you do not want his US citizenship that was imposed on you then the simplest course of action is to renounce. If you and spouse ever wish to work there someday then you are permitted to apply for a visa or green card as any other ‘alien’. You can visit unhindered for up to 120days/yr (rolling average) just like any other non US person.