When it comes to compliance there is a lot of confusion as to:
- what day does loss of citizenship occur and
- what roles do f8854 and a
- Certificate of Loss of Nationality play?
The filing requirements are explored in two posts by John Richardson.
Before June 3, 2004 (before the creation of the “Tax Citizen”)
The date of your “expatriation”was determined solely by the provisions of the Immigration and Nationality Act.
June 3, 2004 – June 16, 2008 (after the creation of the “Tax Citizen”)
You continued to be treated as a “U.S. person” for tax purposes UNDER THE INTERNAL REVENUE CODE until you gave “notice” of your “relinquishment” to a government agency. For this period part of the “notice” was filing Form 8854 with the Internal Revenue Service. In other words, there was no way to cease to be a “U.S. person” for tax purposes until you had notified the IRS.
After June 16, 2008 –
A.The issuance of a CLN is confirmation that the State Department has agreed that you have relinquished U.S. citizenship. A CLN is a confirmation that you have met the “notice requirement” under the Internal Revenue Code.
B. The CLN is one way (a self-certification is also possible) to satisfy “foreign banks” that you are NOT a U.S. person for tax purposes under the Internal Revenue Code. (In other words, a CLN is a “sufficient” but not a “necessary condition” to prove non-USness.
Read more HERE
1. Is the loss of U.S. citizenship for nationality purposes dependent on having a Certificate of Loss of Nationality (“CLN”)?
The answer is absolutely not.
349(a) of the Immigration and Nationality Act specifies conditions under which one relinquishes U.S citizenship.
2. Is the loss of U.S. citizenship for tax purposes dependent on having a Certificate of Loss of Nationality (“CLN”)?
Prior to June 3, 2004 – NO for either immigration or tax purposes
June 3, 2004 – June 16, 2008 – NO for either immigration or tax purposes.
After June 16, 2008 – No for immigration purposes – It is necessary as a confirmation of having met the “notice requirement” to end U.S. citizenship for tax purposes
3. What is the role of a Certificate of Loss of Nationality (“CLN”)?
For Immigration and Nationality Purposes – no relevance whatsoever
For Tax Purposes – The Internal Revenue Code
The accusation of U.S. citizenship is triggered by various indicia (U.S. place of birth, U.S. residence, U.S. phone number, etc.). The U.S. “place of birth” is the most dangerous indicia. Those with a U.S. place of birth can rebut the accusation of U.S. citizenship with either:
A. The CLN; or
B. A “Self Certification” (that must meet specific requirements) documenting why:
– the person has relinquished U.S. citizenship; and
– does NOT have a CLN.
A denial of U.S. citizenship will generally require proof.
In general, those who have relinquished U.S. citizenship under the Immigration laws of the United States prior to June 3, 2004 are more likely to be able to “self certify” that they are NOT U.S. citizens even though they do NOT have a CLN. This position is consistent with the August 2015
4. Why is the Certificate of Loss of Nationality (“CLN”) of value?
It’s simple. Unless you live in the United States, life as a U.S. citizen abroad, in a FATCA, FBAR and CBT world, will be an endless source of anxiety and difficulty. A Certificate of Loss of U.S. Nationality is becoming one of the most sought after documents in the world today.
5. What is the role of a Certificate of Loss of Nationality (“CLN”) in a FATCA inquisition?
June 16, 2008 – Present
IF (you relinquish U.S. citizenship under the Immigration and Nationality Act) THEN
You continue to be treated as a “U.S. person” for tax purposes UNDER THE INTERNAL REVENUE CODE until you give “notice” of your “relinquishment” to a government agency. The “notice” requirement is NOT to the IRS, but to the State Department. (See S. 877A(g)(3) and S. 877A(g)(4) of the Internal Revenue Code.) Once “appropriate” notice is given to the State Department you cease to be a U.S. taxpayer from the date the notice is given (on a prospective basis).
Read more HERE
“ How can they live in a country that hates their own citizens and denies them so many basic freedoms?”
Because from birth most Americans have been fed the honeydew of American exceptionalism. They have little idea of how the rest of the world functions and have little interest in finding out.
I visited North Korea (as a tourist!) in 2016. Whenever we bowed to the huge statues of the two leaders, I had flashbacks to the daily recital of the ‘Pledge of Allegiance’ at school. When we were told stories about what the two leaders had done, even in their childhoods, I recalled the story of George Washington and the cherry tree. The similarities between the two countries were chilling.
Samuel Johnson said
“Patriotism is the last refuge of a scoundrel “
anyone who questions the actions of their Gov is a traitor to their country. We live in politically dangerous times.
Well having never lived there or being born there I can’t make much social commentary. To paraphrase Kennedy I look to the government to do things for me not vice versa. That includes a comprehensible and fair tax code. As an outside observer I would think they could solve their budget deficit by fixing the IRS.
They have certainly moved a long way from
‘Government of the people, for the people, by the people’
Record renunciations of over 2900 for the first quarter of 2020. There has to be something wrong with a country when so many want to give up their passport.
“How can they live in a country that hates their own citizens and denies them so many basic freedoms?”
The vast majority of Homelanders don’t have a passport and have never traveled outside the US. They just plain don’t know any better because they have nothing to compare with. Instead, they believe the exceptionalism myth that’s fed to them from birth.
To me, the most basic function of any government is to provide its citizens decent education and health care in exchange for the taxes they pay. US governments at all levels are a major failure in those categories. Sadly, they have forgotten their founding principals and have devolved into a tribal, gun toting, ignorant, love-it-or-leave-it cesspool. Anyone who manages to crawl out of the pool seeking a better life is immediately branded a tax-cheating traitor who must be punished to the greatest extent possible.
Essentially I am trying to write “finis” on this artificial imposed tax liability. I have observed that they seem to have their own class of royalty that outdoes the British by far. They elect the same politicians until they are fossilized and then they start electing their kids.
I realize you’ve invested time and money in compliance and renunciation, but as a Canadian-born dual you never really needed to do anything save fail to inform your banks of US citizenship – no “finis” necessary. Hopefully you’ll at least receive a retroactive stimulus benefit for your pains, though.
(I say this only for the benefit of others in a similar situation who may read this.)
Yes, if I had been aware of this site I probably would have taken a different course of action. I might add that getting information from the news media is probably not reliable as they seem to want to paint as glum a picture as possible. I would express a note of caution. If they are bullied politicians in our home countries will turtle and I have heard rumors that the renunciation fee will rise again. I hope I am wrong.
If the renunciation fee rises then a few people will have to keep those stimulus checks to spend on toys, I guess.
I guess if you can afford it some will prefer to get the monkey off their back for good and get out while they can. Who knows how difficult it may get in the future.
Yes, I think it will get worse. CBT is here to stay. It’s like a spoiled little kid who is going to change the rules of the game until he wins all the time.