One of the commonest responses by those who have never studied the issue of US personhood is,”If you don’t want to pay your taxes, then renounce your citizenship.” Well, just off the top of my head here are some reasons that people may be reluctant to renounce United States citizenship:
- There is a $450 [now $2350] fee for renunciation. I don’t want one stinking penny to support the evil Federal government of the United States.
- It is possible that I am not a US citizen, and I don’t think that I am one. If I renounce I am admitting to them that I am a United States taxpayer. Relinquish, don’t renounce if you can.
- I don’t want to show my face to a US consulate: that will put me on their radar and I am better off them not knowing I even exist.
- I don’t want to stand in line. Waiting times have been over one year at some US Consulates.
- I’ve never been in compliance with the IRS, and I don’t have a Social Security Number. I’ve never paid taxes to the United States, but if I renounce, I will have to certify five years of tax compliance under threat of perjury. If I can’t do that, then I can’t fill out the exit tax form (Form 8854), which has me reveal the value and kind of all my assets to the IRS against my will. I may owe a huge amount of money in back taxes and fines, not to mention that I am afraid of 300% FBAR fines of my financial wealth. I’ve had PFICs in my portfolio, and I know that will cost a lot to bring into compliance. I have had a pretty good TFSA increase and TFSA’s are not tax free in the US. I have had a personal corporation or a sole-proprietorship business in Canada which has permitted me to defer taxes on retained earnings in Canada–but this is not allowed in the USA. I’ve made heavy RRSP contributions which have deferred my taxes in the Canada, but I can’t defer personal RRSP contributions in the USA. I sold my house and paid no taxes on it because it is my primary dwelling–the US expects taxes on anything above $250,000 capital taxes, money which I’d refuse to pay if I could.
- If I renounce, I may not be able to visit my relatives in the United States because I will have to give up my passport and the United States has threatened anyone who renounces for tax purposes with permanent exile from the United States.
- I have to be able to travel now, and if I renounce I won’t have a travel document.
- I will not expose my spouse and family to threats of fines for innocent financial accounts.
- I don’t want to become stateless. My country will not allow me to become a citizen until I renounce US citizenship which means I will become a stateless person.
This is by no means a complete list. But here is one more: (9) I don’t want to go through the hassle of dealing with American bureaucracy the way that this person has: