This post appeared on the RenounceUSCitizenship blog.
Born in the USA? The Problem of Two Citizenships: http://t.co/OEgUMOg8i1 – Son sues father for registering his U.S. birth abroad with consul
— U.S. Citizen Abroad (@USCitizenAbroad) December 24, 2014
Yes, it’s finally begun. We have our first reported case (if true) of a child suing the parent for contaminating him with U.S. citizenship.
Here’s the story …
“Hey, I didn’t choose where I was born. It just kind of happened.”
The problem of unwanted U.S. citizenship is becoming bigger and bigger. The world of Americans abroad includes membership in the worlds most exclusive and most punitive “Tax, Form and Penalty Club” (well if you are obeying the “Membership Rules” and if you can understand the “Membership Rules” to begin with).
Those who don’t want to be members of “Club Penalty” are simply running and hiding. But, in a FATCA world, those with a U.S. birthplace are learning that they:
“Can run, but they can’t hide”.
The word is out:
It’s pretty much impossible to abide by the rules of this exclusive club and have any kind of a life. People are relinquishing U.S. citizenship in droves. The Obama administration has responded by raising the renunciation fee to $2350. The fee increase in likely to create more panic increasing the number of renunciations.
The message to the U.S. Government is clear:
“Mr. Obama, tear down this renunciation fee!” But, his representatives in the State Department have publicly stated that they are “happy to take Mr. ______’s money and fit him into the schedule”.
Mr. Obama and the members of his administration are NOT listening. They are denying the legitimacy of “past relinquishments”. Like the slaves in the South, U.S. citizens who wish to escape are required to buy their freedom.
Yes, we can!!
Some are leaving officially by renouncing or seeking a CLN. Some believe they legitimately left years ago. Some are running and hiding their “USness”. Who wouldn’t? U.S. citizenship abroad is the only citizenship on the planet where you need a personal lawyer by your side every day. U.S. citizenship is the only citizenship in the world that is grounds for divorce. In a FATCA world, U.S. citizenship has become an “accusation”. People are renouncing U.S. citizenship to defend themselves from the accusation of U.S. citizenship.
U.S. citizens abroad are an angry bunch. As one comment said:
“I would think that not forcing thousands of very pissed off people to keep their US passports would be “critical to national security”.
But, the latest news is … found in this post from a law firm in India – “Change you never would have believed” …
You better think long and hard before registering the birth of your child abroad as a U.S. citizen!
First, a lawyer describing the problematic nature of U.S. citizenship
“Taking of the rose tinted glasses will however provide us with clarity regarding the pros and cons of retaining U.S. citizenship. According to Poorvi Chothani the founder of LawQuest, people need to examine the long term impact. In her comments regarding this issue in the Economic Times “This is because once you are a U.S. citizen you have to pay income tax to the U.S. on your global income no matter where you live. Further, if this individual were to give up American citizenship, he or she may be subject to an expatriation tax on worldwide assets levied on wealth valued at a mark-to-market value at the time of expatriation. For instance, a person living in a multi-million dollar house, with no intention of wanting to sell it, might end up paying a tax on this property at the time of expatriation”
Second, describing how a son is suing his father for “attaining U.S. citizenship for him at birth” (presumably registering the birth abroad)
She has recently taken up the case of a high net worth businessman, whose 18 year old boy has sued his father for attaining U.S. citizenship for him at birth. While this is an unusual case it may not be the only such case.
It’s unclear whether the father is a U.S. citizen. This unfortunate situation was described more generally in a second blog post alluding to the problems caused by being born in the U.S.
The word is starting to get out!!
Once again we hear the familiar:
“Hey, I didn’t choose where I was born. It just kind of happened”
But, this time there’s more. Much more.
This time the claim is:
“I never consented to your making me a U.S. citizen. It was at YOUR PARENTAL INITIATIVE that U.S. citizenship – which is a threat to my “well being”- was conferred on me. This is NOT something that I had the capacity to choose at such a young age! I intend to sue you.”
This statement raises a number of interesting issues which include:
1. In the past I have heard people joke about the possibility of suing their parents for registering their birth abroad at a U.S. consulate. Little did the parents know …
We now appear to have one of the first confirmed cases of a child actually suing the parent. The plaintiff and defendant appear to be in India which is a “common law” jurisdiction. What would be the legal basis for the lawsuit? In other words, what principle would the son use to sue his father?
I really don’t know, but having some fun with this (although being a U.S. citizen is NOT funny from the son’s perspective).
Let’s analyze this.
Breach of Contract? It’s certainly not a breach of contract (the son was too young to enter into a contract).
Person was definitely “torted” – It must the be based on theory of tort law. This leaves us with either “negligence” or “strict liability”. Furthermore, the father probably thought that U.S. citizenship would be a “good thing” for his son. There was neither malice on the part of the father, nor negligence. Could anybody really have seen the (“change you can believe in”) coming of the current American administration?
It must rely on a theory of strict liability. This is based on the theory that, making someone a U.S. citizen is an abnormally dangerous activity. Okay, so what then is “an abnormally dangerous activity”? Check it out yourself. If you accept the principle that it’s dangerous to be a U.S. citizen abroad, then it must be “a dangerous activity” to confer U.S. citizenship on a child who is likely to live abroad.
Is registering the birth abroad of a child born to U.S. parents a “strict liability” tort? We will find out!
Why "registration of a U.S. birth abroad" or "transmission of U.S. citizenship" could be a "strict liability" tort http://t.co/3hLwKHwdCK
— U.S. Citizen Abroad (@USCitizenAbroad) December 24, 2014
It will certainly be interesting. If successful, this lawsuit is sure to open the “floodgates of litigation”. Once one plaintiff has been successful, it will be “open season” on all parents who registered their children as U.S. citizens.
This will be good news for lawyers. For lawyers and other “Form People”:
“U.S. citizenship is the gift that just keeps on giving.”
We have currently have “Form People” – AKA “Compliance Condors“. We will now have a new kind of “blood sucking” lawyer who makes his living by suing the parents of certain Americans abroad. Instead of calling them “ambulance chasers” we will call them “citizenship chasers”. These “citizenship chasers” will be shopping for “plaintiff friendly jurisdictions” (probably outside the U.S. where U.S. citizenship is so “clearly” a “clear and present danger”). Undoubtedly, the lawyers will be remunerated on a contingent fee basis (the lawyer will seek a percentage of the recovery). Expect to see lawyers hanging around the hospitals (or paying “hospital workers”) for “hot tips” on who is being born in what hospital and what the attitude is toward American citizenship. Some will stand outside U.S. consulates hoping to identify some unsuspecting child who just received the lethal virus of U.S. citizenship. Yes. It’s going to be a “job creation program for lawyers”.
Soon we will see lawyers advertising:
“Were you registered as a U.S. citizen against your will? Has U.S. citizenship destroyed your life?”
If so, we can help. We offer you both “legal” and “emotional counselling” and quick cash!
Obviously, most of what this post is an attempt at sarcasm and humor, but I can see it …
2. However, in all seriousness, one must ask the question:
How can the United States of American – that “Great citadel of freedom and justice”:
1. Refuse to let a parent renounce U.S. citizenship on behalf of a disabled person or a minor renounce (because neither the disabled person nor the minor have the capacity to understand what they are doing? But,
2. Allow a parent to confer U.S. citizenship (by registering a birth abroad) on a child (when the child doesn’t have the capacity to understand what is being foisted on him)?
Seems like “double think” to me.
And what should the reaction of the parent by to this????
You ingrate! Even though you were born in the U.S. I gave you him. Didn’t you know that children born in the U.S. are no longer even adoptable? Adoption agencies in civilized places like Canada are even warning about the dangers of adopting U.S. born children!!! I have only one question for you:
Have you or have you NOT filed your FBARs?
I’m sure when Boris says “it’s not easy to give up”, he’s not referring to getting rid of his passport but peeling off the clinging US taint with it’s requisite back tax filing and FUBAR reporting that would likely bankrupt him.
Are you saying that the ‘fair’ price of entering the US on a vacation, or flying through it, as an involuntary citizen (by birthplace decades ago) who is forced to obtain/renew a US passport to do so, is a huge or portion of the value of one’s home located in another country as well as any penalties and interest assessed and any other tax on one’s entirely non-US income – for life and beyond?
Boris was forced to obtain and renew his US passport.
Even if you believe that access to the US for occasional travel as a tourist is priceless, there has to be some logic or rationale for the fee.
A large portion of the sale value of one’s UK family home seems indefensible as a fee for the potential access to fly to or through the US occasionally.
As has been noted, many others have free and regular access to the US, without paying a dime.
@Badger, as far as I know Boris wasn’t “forced” to do anything. He got hassled about not travelling with his US passport in 2006 and said he’d renounce, but didn’t. So it’s his own fault that he now owes the US capital gains tax for selling his property in 2009 plus is liable for penalties for not filing returns. If he’d renounced when he said he would he wouldn’t have owed anywhere near as much as he would still have owned the property at the time. He moans, quite rightly, that he left at the age of 5 and why should he pay expected to pay tax, but refuses to man up and give the citizenship up. If he wants to continue to be American – which recently renewing his passport suggests he does – then he’ll have to do as thousands of others do and get his tax affairs in order – even if it bankrupts him as it has others. He’s not the only one who’s been through this and I suspect he could weather the cost much better than most.
Of course it’s not a “fair price”, we know that. But at the moment that’s the law unfortunately.
I wonder if he realises that his bank/s may be reporting his account/s to the IRS for wilful non-compliance under the IGA. Has he even signed a W-9 for all his accounts?
An even more interesting question is whether he’d be held at the US border on his next visit until he pays up what the IRS says he owes.
@MediaFleeceStar, in regards to Boris it is actually worse.
In 2006 when he attempted to travel and was rejected by airline staff, his response should have been that he was a former MP serving Her Majestys Government and had in fact relinquished his USC long long ago.
The airline would have then likely permitted him to travel. Upon entering the USA he would have been passed on through once the immigration people realized who he was and would not want an incident.
Boris in 2006 was not a USC.
Boris when he sold the house was not a USC.
But…….he got very bad advice and obtained a US Passport and that screwed him ten times over.
He had the Golden Ticket out of Dodge but blew it up, poof……
How can one accuse Boris of not knowing what would come? How is he supposed to know about the 7000 tax rules of America? I am pretty certain had he known what would happen when he sold his home, he would have decided differently back in 2006. And thats the case for so many here. We are given half truths, scanty information, and it is like quick sand with ever moving rules and regulations. How can we have known things that we either thought did not pertain to us, or that were so convoluted and embedded in 1000s of pages of rules and regulations that most tax accountants don`t have a clear view of matters? Perhaps Boris didn’t have good advisors- but perhaps he didn’t know he would have needed one.
Couldn’t the father in this alleged lawsuit defend himself by saying that because US citizenship is automatically conferred to his son that registering him is just a formality?
Big welcome to you Expat Eric! Forget about ISIS,“we all know that the single biggest threat against Americans abroad is the US government itself”
The only thing you can accuse Boris of is assuming the US is not insane. The hassle he got when he tried to transfer through the US was a hint of what lay ahead. Also, if he’d read the mouse-type on the last page of his newly renewed US passport that states that US citizens are expected to report on all of their worldwide income he may not have sold his home in the UK without making further enquiries. One can only take advantage of sophisticated tax planning if one feels the need for it. Obviously Boris didn’t feel the need for it based on his perception of how he thinks the world should work.
Churchill he most definitely is not.
The tragedy with Boris is that the tax planning he needed wasn’t even that sophisticated. If he had owned his house 50/50 as a tenant in common with his wife instead of owning it jointly, his tax would have been much more reasonable because his share would have been only half the size and most of it would have been covered with the CGT exemption for U.S. citizens. The sum is only so large because his wife doesn’t get an exemption. I don’t think Boris can do much now about his own tax situation, but I think that he should make sure that everyone in the London property business knows not to sell mixed U.S./non-U.S. couples a property as a joint tenancy.
Also, for good measure, I think he should inform budding British entrepreneurs at the London hub of all the lovely tax laws that the U.S. imposes on greencard holders, even those who decide not to stay. Also,California state tax laws, which are unbelievable when it comes to people who move overseas (maybe there is a reason why the song about not being able to leave is called the Hotel California). California believes that all overseas voters should have to file tax in the state, since it sees this as proof that they plan to move back to the state! Linking a tax requirement to the right to vote reminds me of the taxes they used to use in the American south to disenfranchise people.
Ironically, my husband only sees the advantages for our child since greencards are hard to get, even though he knows I have a dim view of the U.S. If you’ve ever seen the T.V. show, The Americans, just imagine Phillip and Elizabeth talking about tax law. That’s pretty close. Never thought I would be comparing myself to a fictitious Russian spy living in 1980s Virginia!
Polly, I loved what you said and how you put it, e.g. “the 7000 tax rules of America”.
How was anyone supposed to foresee FATCA back in 2004 when the U.S. required all people with a U.S. birthplace to use a U.S. passport for entry (implemented Jan. 2007) in order to say, visit their own mother living there? That in March 2010, POTUS would sign this “law” that would blatantly ignore America’s own Bill of Rights and among other things, demand a search and seizures of assets of these same U.S. persons. That due to 30% withholding penalty on banks, this “law” would get other countries to cooperate with them so this “law” could be implemented July, 2014, and that two months later the renunciation fee would be jacked 422% up to $2350. How this “law” would identify as targets like Boris (and our plaintiffs) who left the U.S. as little kids, the spouses of US persons, or partners of a US person with a mere 10% ownership of a multinational business?
This is NOT a legitimate “law”!
Whatever happened to the Land of the Free and the Home of the Brave?
It’s become the Land we must Flee and the Home of The Slaves!
How about this… as an immigrant or naturalised citizen to the US… who knew that the US punished for having things in your own home country or other things u own in other countries u lived in… taxes were paid in that country yet the US still wants a cut of it even though it wasn’t even made in the US…. seniors live in more then 2 countries in my family… they don’t work anymore… yet because of the way they invested… they could end up paying the US a chunk of their retirement money for not knowing the rules. In my family…. we regret that we got the GC… but we had the GC for too long so we are treated like fake citizens…. no vote nor representation… but they want our money… to add salt to the wound… our home country threw us under the bus & made us 2nd class citizens even if we were born there
“….but refuses to man up and give the citizenship up. If he [Boris] wants to continue to be American – which recently renewing his passport suggests he does – then he’ll have to do as thousands of others do and get his tax affairs in order – even if it bankrupts him as it has others. He’s not the only one who’s been through this and I suspect he could weather the cost much better than most…”…
Forgetting about this example being about Boris specifically.
Is the fair price of US citizenship – or any citizenship “…even if it bankrupts… as it has others…”? Should citizenship have a price, or a price so high that it “bankrupts”? Or is it a right conferred on us regardless of our assets and net worth? Rights by definition are something immutable that are not dependent on the ability to pay – or subject to market or other forces.
I and others were FORCED to get a US passport because of the US control of our travel – due to the changes in border crossing rules after 9/11 we had to obtain one – many not until very late in life – if we wanted to see a family member on their deathbed, attend a funeral, care for them in need or emergency. What ‘choice’ is that? Is possible bankruptcy, or going into debt to pay lawyers and accountants and possibly part of the price of our family home outside the US a reasonable price for a birthright?
Is bankruptcy a fair, ethical and just cost that US citizens abroad must all potentially incur in order to “continue to be American”, and to travel to the US if we ever want to see our family again? Or even just to travel to another destination – where most of the travel options go over or through the US in a virtual monopoly? Particularly if we did not choose to be an American, but only inherited it by accident of where our mother happened to be when she gave birth to us? Or, we had a US parent, but were born outside the US?
Is that in the US constitution?
Are FBARs in the US constitution? Is FATCA? Is the punishment of all local non-US mutual funds, savings plans and other legal local banking in the constitution? Is double taxation? How does that accord with the founding values and the ‘rights of man’?
Is American citizenship, or any citizenship a commodity to be bought and sold? Is it a membership fee – as in an exclusive country club where only some can belong – if they can afford to pay whatever is charged?
Does/should US law rule millions outside its boundaries no matter the consequences (and non-US persons and taxpayers and families pay the price too)? Should our US family members be deprived of our assistance and visits because the US is attempting to blackmail them and us by tying the US passport to acceptance and resignation to complex and unfair tax and financial control/oppression over those abroad?
In the current circumstances, there are aprox. 6 million or more living outside the US who it deems to be ‘US taxable persons’. Many are only ordinary people and families, who can neither afford to keep US citizenship, NOR to give it up (an average family of four renouncing would incur almost 10,000. USD just in State Dept. fees, plus the untold thousands in accounting and legal fees, plus whatever interest and penalties the IRS could apply depending on their circumstances – for example, US taxes imposed on their retirement, education and disability savings and their family home). I don’t know about you, but 10,000. is an astronomical amount for my family.
Many are being forced to pay in order to give up the US citizenship because they could not afford to keep it. Especially if they did so using the methods that the IRS and US Treasury demand. A part-time worker or caregiver who makes barely enough to be taxable in either Canada or the US may have almost no income at all and may not even have met the US filing threshold and owe no US taxes. They may have no US economic connection or income, have lived outside the US for more than 50 years, never worked there. Canadian taxpayers, their family and their community and they themselves have paid for their education, healthcare and any other social and economic benefits enjoyed. US hospital fees at birth were paid in full by parents paying directly fee for service, and any other costs came from the taxes paid as US residents at the time incurred. In that scenario, they do not qualify for US social security, or healthcare, and many/most have no intention of ever living in the US. Often, the NON-US/Canadian spouse is the breadwinner. So, the NON-US / Canadian family pays the cost of one or more members retaining their birthright US citizenship – incurred through an accident of fate many decades ago. Should individuals and families outside the US shoulder the compliance burden forever? We are prevented from taking on community work due to the FBAR obligations to report even non-personal co-signatory roles. Prevented from being a co-signatory on RESPs, prevented from being a potential executor or co-signatory on family accounts.
Is that the cost of US citizenship that is just, moral, reasonable and ethical?
I feel that I was the victim of extortion by the US. If I had decided not to burden my Canadian family with the fees to become ‘compliant’ in the manner prescribed by the IRS and US Treasury, and had not renounced, would you advise that I should have ‘manned up’ too? I and my family paid too high a price for ‘compliance’ – a state almost impossible to achieve if done in the manner the US prescribed in 2011, and almost impossible to achieve for anyone with local legal accounts, a home, retirement savings, mutual funds, etc. due to the ways in which we are punished for living, earning, banking and saving outside the US.
Do US residents – those who are merely permanent residents, as well as those who were born with US citizenship have to bear the same burden that those residing outside the US bear? The Taxpayer Advocate says not.
The US is the ONLY country in the world to do this other than Eritrea.
Funny that of all the so-called ‘developed’ nations in the world, only one forces people to entertain bankruptcy in order to maintain a passport or citizenship.
@badger, of course it shouldn’t.
Yes, American citizenship is a commodity to be bought and sold these days. After all, didn’t they offer the whole Swiss sailing team American citizenship if they’d switch over after Alinghi won the America’s Cup off them? Don’t they offer it to any sports person they think will help them win in whatever competition they take part in?
No FBARs/FATCA aren’t in the Constitution, but iirc neither is anything to do with taxation. After all income tax is a relatively new invention.
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If US citizenship is a commodity, then what is the ‘fair’ price that one should be forced to bear for being born or inheriting US citizenship? My citizenship was my birthright, but I was forced to give it up because I could not afford the financial, compliance and psychological burdens the US imposed on me and my NON-US family from afar – it took a toll on our legal local savings and our wellbeing which I and we could not sustain. Citizenship was my RIGHT by birth, and rights are not predicated on ability to pay. What justifies making US citizenship a burden for those who live outside its borders? I did not owe the US any taxes. I cost the US nothing. I and my family, and my fellow Canadian taxpayers financed every social and public good that I enjoy. When I am old and ill it will be myself, my Canadian family and Canada that provides for me. It is Canada who schooled me and my family and funded our healthcare. The US will give me no assistance whatsoever. It could care less what my fate is.
@badger, the fair price is resident based taxation of course as we all know here. The fair price is a reasonable fee if you wish to renounce, not one that could beggar you.
I’m similar to you, left the US at 16 and never returned. Although my basic schooling was US, my work life is UK based and that’s where my pension/s will come from, not the US as I’ve contributed nothing there. They owe me nothing and I owe them nothing too. Which is why I got out when I found out about all this taxation rubbish. No way did my OH deserve to see his hard earned money being taxed by the US just because I have signing rights on the account too. It’s simply ridiculous!
I’m actually going to register my son with the consulate. BUT BUT BUT I’m going to tell him almost every day about the decision that he will have to make one day. I want him to meet my parents, grandparents, and other relatives. The situation gets complicated b/c people here need a visa go to the US and I would rather avoid those awkward moments with the consulate. In the end, if he doesn’t want it, he can give it up later. I’m also going to renew my passport because it will give me another 10 years to acquire more citizenships and decide. I almost have it where I live, just waiting on the judge, and working on another from Europe.
IYAM, I don’t think CBT is never going away. I think the American Government is proud that they can get away with something no other country can. And the almost $2400 fee to renounce is crazy. Americans think people who renounce hate America. But someone can relinquish for free and they don’t care about it — yet the end result is the same!!