Attn: Former U.S. Citizens: Are you STILL or have you EVER BEEN a U.S. “Tax Citizen”? http://t.co/IsmbLzUjQL
— Citizenship Lawyer (@ExpatriationLaw) March 4, 2015
My first reaction to the recent letter to IRS Commissioner John Koskinen from the Section of Taxation was excitement, as it seemed a good idea to get the issue of whether 877A is retroactive or not, solved once and for all. For over five years now, many expats have been in agony, knowing they lost their citizenship decades ago and yet many have been told that without a CLN, they might as well accept that they still are US citizens. This is simply intolerable. Now more than ever, we need to understand this as completely as possible.
I want to bring to your attention some posts that John Richardson has written over the last several months on this same subject. Trying to make this intelligible to those of us unused to the language of taxation and law is no easy feat. If we are to make reasonable assessments of our situations before choosing a course of action and/or tax adviser, lawyer or accountant, we need to understand what is involved. That is exactly the reason Brock was started; to read, research and share as opposed to simply allow others to take charge.
#1 “Attn: Former U.S. Citizens: Are you STILL or have you EVER BEEN a U.S. “Tax Citizen?”
“This post is long and I (John) wish to summarize the purpose and possible (but not certain) conclusion of the post in a few simple sentences.
If you were born in the United States (and became a U.S. citizen at birth) who moved to Canada and:
1. Relinquished U.S. citizenship (likely by becoming a Canadian citizen) prior to June 3, 2004, without informing the U.S. State Department or applying for a Certificate of Loss of Nationality; and
2. Are hearing from the media and some members of the tax compliance community that you are either still a U.S. citizen or are somehow liable for U.S. taxes; then
You should NOT believe that you are still a U.S. citizen and/or are that you are subject to U.S. taxation without getting proper counselling. In other words, you should neither apply for a Certificate of Loss of Nationality nor file U.S. tax returns without a thorough investigation of your situation. You may or may not be a U.S. citizen who is subject to U.S. taxation.
Extreme caution is warranted. Please note that this post is NOT legal advice of any kind whatsoever. You meed to discuss your specific circumstances with a competent adviser of your choice.”
You can read the rest of this post here.
#2 – “The “plain language” of S. 877A – To whom does the U.S. Exit Tax apply?”
“Many Americans abroad are confused by the difference between “relinquishment” and “renunciation”. This post will explain exactly why the date of relinquishment matters. This post will make the argument that the “plain language” of the combined effects of S. 7701(a)(50) and S. 877A(g)(4) compel the conclusion that those with a “Relinquishment Date” prior to June 3, 2004 are NOT subject to the S. 877A Exit Tax.”
#3 – “The United States of America – One country two citizenships – Introducing the “Tax Citizen”
“What could be better than U.S. citizenship? Why not a second U.S. citizenship? The United States Congress rewarded U.S. citizens by giving them all a “Second U.S. Citizenship.” To be specific, on June 3, 2004 all U.S. citizens became U.S. “Tax Citizens.” Interestingly, the U.S. public never asked for “Tax Citizenship.” The status of “Tax Citizen” was simply conferred on them. “Tax Citizens” have no rights. They have only obligations. The obligation is pay taxes.”
#4 – “Renunciation is one form of relinquishment – It’s not the form of relinquishment, but the time of relinquishment”
“There is NO difference between “relinquishment” and “renunciation” (renunciation is just one form of relinquishment). For tax purposes, there is likely a difference between a “relinquishment” prior to June 3, 2004 and a “relinquishment” (including a “renunciation” after June 3, 2004.” Read here.
This is an extremely important subject. I do hope you take the time to read these posts and in the spirit of Brock, discuss and share ideas here. We are our own best assets!