ABA Section of Taxation Recommends Those who Relinquished under INA Prior to June 17, 2008 be Treated as Non-Citizens http://t.co/IqGYsexuJt
— Patricia Moon (@nobledreamer16) March 4, 2015
In our view, sections 877A and 7701(a)(50) should not be considered to apply to individuals who had previously ceased to be citizens, for both nationality and federal tax purposes, prior to the date those provisions were enacted. In particular these sections should not apply to individuals who relinquished citizenship on or before June 3 2004, and whose noncitizen status was deliberately grandfathered under the 2004 Act, or to individuals who relinquished their citizenship in accordance with the requirements of former section 7701(n) after June 3, 2004 and prior to June 17, 2008.
The “extra’ here is since 7701(n) was repealed in 2008, the writer also suggests those who relinquished after June 3, 2004 and prior to June 17, 2008, should also be considered non-citizens. IOW, 877A only applies AFTER 2008! NOT RETROACTIVE!
The American Jobs Creation Act of 2004 ( the “2004 Act”), however, created a disparity between expatriation for nationality purposes and expatriation for tax purposes. Specifically the 2004 Act enacted new section 7701 (n), which provided for the first time that an individual who ceased to be a citizen in accordance with the INA would continue to be treated as a citzen for federal tax purposes, until a specified notice requirement was satisfied.. Section 7701(n) was effective only for individuals who expatriated after June 3, 2004 so individuals who had relinquished citizenship on or before that date were not affected, even where they had never provided any noticed described in that provision.
Similarly, section 7701(a)(50) generally provides that an individual shall not cease to be treated as a U.S. citizen before the date on which the individual’s citizenship is treated as relinquished under section 877A (g)(4). Pursuant to section 301(g) of the 2008 Act, these provisions are effective for any individual whose expatriation date (defined as the date on which the individual relinquished citizenship) is on or after June 17, 2008.We therefore recommend that Treasury and the Service issue guidance, in any form that they deem appropriate, confirming that individuals who reliquished citizenship under the INA are not subject to sections 877A and 7701(n)(50) and thus continue to be treated as noncitzens of the United States for federal tax purposes following the 2008 Act.
I don’t need to point out how important this development is! This news is HUGE!
For the whole letter to Commissioner Koskinen, please see Here
Following
So…does this mean that, because I immigrated to Canada during 1980 becoming a Canadian Citizen during 1994, I am no longer a “tax refugee” despite the fact that I have not renounced?
Dave.. It depends on your intent when you became Canadian. If your intent was to dump your US ness and you have done nothing silly since such as renewing a U.S. passport , then you are no longer an American or a tax refugee. It is all explained on links on this site. Read for example the links on relinquishing acts and the one on ‘did you relinquish before June 2004.’ ( gathered together under ‘ how to renounce/relinquish’). . There is also plenty of info from John Richardson on what not to do if you just discovered someone tells you that you are still a tax slave.
My intent from the instant I was born (in Canada, to Canadian parents) was to be a Canadian citizen and I remember distinctly at that instant ( 😉 ) resolving never to be a citizen of any other country (most particularly the USA) because Canada looked like a good country to me (better then than now but generally good). My ancestors were United Empire Loyalists and helped to win the War of 1812 for the Canada to be. So deep was my resolve to be Canadian and only Canadian that I lived in the USA for a spell and not even once did it enter my mind that I might eventually become an American citizen too. How dare that country claim ME as a U.S. tax slave!!! After The_Animal’s passionate comment I’m feeling like digging out our Canadian flag (we’ve got a pole for it somewhere) and flying it, although with the Harper betrayal it’s tempting to fly it upside down in the distress position.
My guess (and only a guess) is that the Treasury and the Service will respond to ABASOT (this organization seems to have influence) but I have no idea what their responses will be or how quickly they will respond. Guess we’ll all have to stay tuned and hope ABASOT releases the responses to the public. There could be some relief for some people here and any relief is a good thing.
@Embee re: “There could be some relief for some people here and any relief is a good thing.”
I agree, just like it would be a good thing for the ‘accidentals’ and those who left USA as young children, to get some relief.
Whoa! Not only is this not an official statement by the American Bar Association as Virginia LaTorre Jeker has pointed out, but the American Bar Association does not make the laws of the United States. A 13-page statement such as this will not be “huge” until it is written in black and white in the law books of the United States.
@Muzzled
Take a look at the front page of the ABA. This is a bit of hair-splitting on a certain level. If it was objectional or not in line with the general perception of the ABA, it would not appear there.
No one is suggesting that they make the laws of the United States. To have a reputable section of the ABA endorse the fact that relinquishment without tax liability should become a reality is a big step on the way. To have the support of those who understand the law and what is wrong with it likely can speak for us in a way we can’t. Would you say the same thing about ADCS-ADSC?
The author of the paper, Michael Miller, has been at this a while. His efforts should be respected and not limited to “a 13-page statement such as this…”
Tricia,
You’re absolutely right! While I was out grocery shopping, and thinking more about this, I realized that I had really only posted half the comment I should have. I stand corrected! It *is* excellent to have one more important group endorsing the seriousness of our concerns.
Thanks Muzzled! Let’s keep our fingers crossed!
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