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.
BRIEF SYNOPSIS
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
Here’s a link to that document from the US Government Publishing Office site:
https://www.gpo.gov/fdsys/pkg/GPO-CPRT-JCS-2-03/pdf/GPO-CPRT-JCS-2-03-7-2.pdf
We have a post on it here:
http://isaacbrocksociety.ca/2014/01/31/joint-congressional-committee-published-report-84-288-gpo-cprt-jc-2-03-7-2-b-aquisition-and-loss-of-citizenship/
A CLN wasn’t, and isn’t, required to terminate the citizenship. Termination is under the control of the person if they’ve performed a potentially relinquishing act under s. 349(a) of the Immigration and National Act voluntarily with the intent to relinquish by so doing. The problem can be proving the termination. Citizenship termination can be proven without a CLN, and has been done fairly easily by at least one Brocker, Silver Birch, who reported on it, but it can be difficult. The usefulness of the CLN is that it provides — as it is all spelled out in one document, issued by the other party to citizenship — convenient and clearly unambiguous proof that the citizenship termination did occur.
Pacifica – thanks for those links.
I wonder if there’s been some confusion because although there was no obligation in 1997 for a USC to get a CLN, once FATCA was invented a USC could find themselves in a situation where they did indeed have to get a CLN if they wanted to keep their bank account / not to be reported on / wanted to be allowed to open new accounts on the same terms as their fellow residents.
It’s indirect coercion, just as the US court case claims, and that’s why (the Bopp team are arguing) the plaintiffs should have standing to sue.
@Plaxy,
Yes, although there’s still no obligation to get a CLN for the citizenship loss to occur, it may be necessary for practical purposes to get one, as you pointed out with banks. A bank doesn’t want to take chances looking at s. 349(a) of the INA and proof of the person’s potentially relinquishing act and evaluate whether a person actually relinquished or not, possibly figuring they may be something else in US law related to this that the person isn’t telling them about, and they might be concerned that the person didn’t really relinquish but continued to use their US citizenship after the performing the act, thereby remaining a USC. So, the banks just make a policy you have to show them a CLN.
The other instance I can think of where going for a CLN may be necessary for practical purposes is a post-4-June-2004 relinquisher in regards the US tax system, as due to 26 USC 877A, a person has to notify DoS in order to log out of IRS. Some people have no intention of officially logging out of the IRS (especially those who were never in it), in which case this doesn’t matter
But the point you bring up is a really big one and can affect even pre-2004 relinquishers. Canada Revenue Agency has issued guidance informing financial institutions how pre-2004 relinquishers can prove their lack of US citizenship by providing proof of their relinquishing act — but so far, to my knowledge, no other country has done this.
“Whenever the loss of U.S. nationality is put in issue, the burden of proof is on the individual or party claiming that a loss of citizenship has occurred to establish, by a preponderance of the evidence, that the loss occurred.”
So (my reading obvs) there’s no obligation to put the loss of US nationality in issue (e.g. by seeking a CLN), but if you do put it in issue the burden of proof is on you. Likewise if the USG puts it in issue (e.g. by claiming they can deport an individual because he committed an expatriating act) the burden of proof is on the USG.
I suppose it’s just common sense really. It’s why most people now renounce rather than relinquish, if they can’t claim a pre-2004 date: intent can’t be disputed, if you’re renouncing.
Pacifica – (our posts crossed) – “The other instance I can think of where going for a CLN may be necessary for practical purposes is a post-4 -June-2004 relinquisher in regards the US tax system, as due to 26 USC 877A, a person has to notify DoS in order to log out of IRS. ”
Yes, I’d forgotten about that one.
“Canada Revenue Agency has issued guidance informing financial institutions how pre-2004 relinquishers can prove their lack of US citizenship by providing proof of their relinquishing act — but so far, to my knowledge, no other country has done this.”
Countries that have signed up to CRS Wider Approach may not even require the bank to give the accountholder an opportunity to prove loss of citizenship; my bank wouldn’t even look at my CLN. I still don’t know if the account was reported.
Thank you, pacifica777! You just saved me from a wild goose chase on the ‘net. Your first link seems to be identical to my printout so I must have grabbed it from Brock way back when. I carry a copy of it in the glove box of my car when I cross the border. I’m not sure whether it would help me or just piss them off if I ever had to produce it!
The confusion surrounding all this is due to the fact that the US has, with their vindictive deviousness, created an additional, imaginary tax citizenship, totally over and above conventional citizenship. (Citizenship for immigration purposes vs. citizenship for tax purposes.) There is no doubt in my mind that I’m no longer a US citizen for immigration purposes, and as I previously mentioned, it would be no problem to get a CLN to prove that if I were willing to submit to the extortion. There’s also no doubt in my mind that I’m still a US tax citizen according to US law, having expatriated post 2004. The good news is that US customs is concerned with citizenship for immigration purposes, not tax purposes. (At least so far.) If I were to change my mind on the CLN, I’d still go for relinquishment vs. renunciation even though the cost is now the same. Why? The tax citizenship issue. Better to have expatriated in 2012 than present day because of capital gains considerations.
We here in Canada are very lucky a CLN isn’t (yet, anyway) necessary to dodge FATCA issues with our banks. Other countries not so much. We don’t have to worry about citizenship questions as long as we are willing to give the “correct” answer whenever asked when opening a new account. If I lived anywhere besides Canada the chances are pretty good I’d have gotten my CLN years ago. Truthfully, I don’t know why I persist; it isn’t like I can’t afford the $2350. I guess its just the old refusnik in me coming to the forefront. Plus the US just plain pisses me off and I don’t want to play their game.
Not sure where to ask this question so I will try here on the busiest thread.
I have a US citizen son who lives in the US and wants to apply for a job in the EU (yea!). He has the opportunity to obtain an Irish passport through a grandparent, unfortunately he has been scared off by reading a paragraph on his US passport renewal form, which I have posted a link below (page 4, titled ‘acts and conditions”,) it makes it sound as though Americans citizens are not legally allowed to apply for another citizenship without committing an act of relinquishment! He wants to keep US citizenship.
https://eforms.state.gov/Forms/ds82.pdf
I have given him the State dept web page pertaining to dual citizenships and the US legal acceptance of Dual citizenships, but to no avail.
https://travel.state.gov/content/travel/en/legal/travel-legal-considerations/Advice-about-Possible-Loss-of-US-Nationality-Dual-Nationality/Dual-Nationality.html
I have tried to explain that taking up another citizenship can lead to a relinquishment of US citizenship but then another act such as applying for an American passport cannot be subsequently performed if relinquishment was intended otherwise it would negate that act and this is just a way to document that a relinquishment was not intended.
Can anyone supply another reference or link to a simple (official) explanation as to the meaning of that very misleading US passport statement, or the state depts link to relinquishing acts and their intentions. The old links I have don’t work. I am pulling my hair out!!
Why do they have to make every so damn complicated, I swear it’s on purpose.
Thanks
maz57:
“There is no doubt in my mind that I’m no longer a US citizen for immigration purposes, and as I previously mentioned, it would be no problem to get a CLN to prove that if I were willing to submit to the extortion. There’s also no doubt in my mind that I’m still a US tax citizen according to US law, having expatriated post 2004.”
(Speculating) It seems to me the status is similar in both cases – citizenship and tax law.
1. Due presumably (?) to Canada’s unique relationship with the US (close allies with a land border), it seems a Canadian citizen is not subject to the extraterritorial indirect coercion of US citizenship law and US tax law which applies in other countries. Or not to the same degree.
A US-born Canadian citizen can say to a US border guard on the US-Canadian border “I’m no longer a US citizen”, and it seems the border guard is not coerced by the US to require proof.
A US-born Canadian citizen can say to a Canadian bank “I’m no longer a US citizen”, and it seems the bank is not coerced by the US to require proof.
Consequently, a US-born Canadian citizen may be less likely to feel the need to buy a CLN than a US-born citizen of another country.
2. In other countries, the indirect coercion means a US-born person is under considerable pressure to produce proof – proof of citizenship status (in both IGA1 and IGA 2 countries) and (in IGA 2 countries) may also be pressed to prove final returns including 8854 were filed.
3. When visiting the US, the situation is the same for all former USCs: questions of citizenship or US tax compliance aren’t likely to arise once you’re past the border, but a former US citizen who wants to guard against the risk can do so by getting the CLN and (perhaps) filing the 8854.
@ Heidi,
You might try showing him this page from the DoS website to impress upon him that a potentially relinquishing act must be accompanied by intention in order to result in a relinquishment occurring: “Advice about Possible Loss of US Nationality and Dual Nationality.” It states [italics in original]:
and the exact text of the law at this link:
Correction:
Interesting.
Perhaps a move towards reducing the “expatriating acts” to just one: explicit renunciation.
Thanks Pacifica
But what does one do?
Sign the renewal of US passport statement that one has NOT naturalized in a foreign state (how would they know) or underline the part where one has and qualify it with another statement saying foreign passport obtained for ease of getting job in Europe! I don’t think either appeals to him.
No plaxy, That passport application has changed. I think it’s purpose is to scare Americans into not even considering taking another citizenship, for whatever reason. It certainly has had that effect!!
PS Pacifica
Do we have a link to anything official from Embassy or the State dept which states one has to document the relinquishment, pay $2530 and have it approved ( not performing any American acts post naturalisation etc) . I am fighting an uphill battle.
“No plaxy, That passport application has changed. I think it’s purpose is to scare Americans into not even considering taking another citizenship, for whatever reason. It certainly has had that effect!!”
The US doesn’t like dual citizenship, there’s nothing new about that. They’ve been trying to scare USCs away from it for decades. But it has its advantages (from the USG’s point of view) when they want to deport a USC and need them to have citizenship in another country.
The USG particularly doesn’t want duals to be able to claim US citizenship benefits (e.g. passport) while not claiming loss of US citizenship in other contexts (e.g. tax, FATCA). Especially retroactive tax obligations such as the exit tax, which the relinquishment-through-naturalization has fortunately saved many from. Of course very few of those who have lost US citizenship through naturalization will have subsequently renewed or used a US passport or claimed treaty benefits, but the US always assumes that if they don’t prevent USCs from committing a crime, the crime will be committed.
Requiring explicit renunciation would be a logical solution,
I said:
“…while not claiming loss of US citizenship”
should have said:
“while claiming loss of US citizenship”
No, my speculation is wrong – according to a thread on another forum this “Acts and Conditions” section has been there since at least 2009.
@plaxy
As far as I can remember the Acts and Conditions section pre 2009 on the US passport application asked a simple question about whether you had applied for another citizenship since your last US passport application. Maybe someone has a link to it?
I certainly don’t remember it having the whole
‘expatriating act warning’
Heidi – I don’t know – Inhaven’t applied to renew a US passport for many years.
Here’s the link to the forum thread I mentioned.
talk.uk-yankee.com/index.php?topic=52751.0
The Acts and Conditions section isn’t quoted entire and verbatim in that thread, so, as you say, it may not have been exactly the same back then.
@ Heidi,
I can’t think of any link with that exact wording. Closest I can think of coming from DoS is the above-mentioned link to their website where they quote the Immigration and Nationality Act with the words “with the intention to relinquish” italicised. But sounds like he’s not finding that reassuring. DoS’ administrative presumption regarding this since 1990 is that the person intends to retain their US citizenship. Don’t have a link handy (I’m at work) but can post one later.
Maybe he’d be most comfortable if he writes to the Embassy or to Citizens Services at HQ with his question and they’ll reply directly to his question.
@ Heidi,
Got it. See Dept of State Foreign Affairs Manual, 7 FAM 1222, “Administrative Presumption.”
From the State Department:
“U.S. law does not mention dual nationality or require a person to choose one nationality or another. A U.S. citizen may naturalize in a foreign state without any risk to his or her U.S. citizenship.”
https://travel.state.gov/content/travel/en/legal/travel-legal-considerations/Advice-about-Possible-Loss-of-US-Nationality-Dual-Nationality/Dual-Nationality.html
To note, this refers to naturalization, and in Heidi’s son’s case would not be necessary should he have been born an Irish citizen. If one loses his US citizenship by the mere fact of being born a citizen of another country, he would have lost it already!
Seems like a welcome change of tone from warning to reassurance, compared to my final U.S. passport (issued 2005), which emphasised the risk rather than the lack of risk:
“But what does one do?
Sign the renewal of US passport statement that one has NOT naturalized in a foreign state”
I don’t know. We know that perjury is required on US tax returns and at least sometimes in US courts, but I never committed perjury in a US passport application and don’t know if it’s required there.
“(how would they know)”
The Canadian government knows the person’s previous nationality and I bet it informs them.
“or underline the part where one has and qualify it with another statement saying foreign passport obtained for ease of getting job in Europe!”
Line it out (strike it out) not underline it. That’s what I did. Also I qualified it with another statement, as you’re saying. Of course if I’d known what was coming, I would have relinquished ASAP instead of going to this effort to keep US citizenship when the occasion arose.
“I don’t think either appeals to him.”
If he’s not getting it for ease of getting a job in Europe (or residing in Europe), why’s he getting it?
@norman
He has lived and worked previously in Europe as a dual from birth UK/US. Now post Brexit it seems most jobs in Europe are advertised asking for EU citizenship.
It’s the wording of the question which is the stumbling block.
Do you really think the Irish Gov informs the US State Dept of all the US citizens who have become newly Irish. I very much doubt it, otherwise they would have no need to ask those questions.