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
“Now post Brexit it seems most jobs in Europe are advertised asking for EU citizenship.”
Then it seems that “or [line out] the part where one has and qualify it with another statement saying foreign passport obtained for ease of getting job in Europe!” should appeal to him perfectly.
“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.”
I bet the Irish government does so, but I bet the Irish government doesn’t ask its new citizens questions like “Did you do this with the intention of relinquishing US citizenship” or “Do you intend to renew your US passport after this”.
@Norman
“Then it seems that “or [line out] the part where one has and qualify it with another statement saying foreign passport obtained for ease of getting job in Europe!” should appeal to him perfectly.”
Thanks for your input, I will try to convince him that is the way to go, but we also have the factor of a ‘homelander type” wife in the background trying to convince him he is about to lose his US citizenship.
“I bet the Irish government does so,”
I think the Irish Gov have better things to do with their time and money. Their citizens are their business.
I said (of BB’s quote from https://travel.state.gov/content/travel/en/legal/travel-legal-considerations/Advice-about-Possible-Loss-of-US-Nationality-Dual-Nationality/Dual-Nationality.html)
“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”
However, the following statement seems to me to reflect what I understand to be the US view of dual nationality:
http://www.passportsusa.com/travel/cis_pa_tw/cis/cis_1753.html
In the context of taxation: “Claims of other countries over the income of dual national USCs may conflict with US laws attempting to claim tax from the same income.”
@plaxy
Think you hit the proverbial nail on the head.
The U.S. Government recognizes that other countries exist but does not encourage them as a matter of policy because of the problems they may cause. Claims of other countries on a human being[*] may conflict with U.S. law, although nothing may limit U.S. Government efforts to assist citizens abroad because the U.S. Government already does nothing to assist citizens abroad. The country where a person is located generally has a stronger claim to that person’s allegiance if the person is located in the U.S. but not if the person is located in another country.
[* or fish, or lumber, or any other economic property that strikes the U.S. Government’s fancy that day]
Heidi:
“also have the factor of a ‘homelander type” wife in the background trying to convince him he is about to lose his US citizenship.”
Understandably, if she doesn’t want to move to Europe.
And she might be right. Living and working in Europe, with three citizenships, he’ll have to choose between double taxation and losing his US citizenship. (Or non-compliance, of course.)
@plaxy
She liked living there in the past even under compliance.
Two of those citizenships wouldn’t pose a problem. 🙂
The third I had hoped may eventually become obsolete, but I may not be around to see that happen. 🙂
“Two of those citizenships wouldn’t pose a problem.”
No. On the contrary. Having at least one non-US-citizenship is what gives him the option of losing his US citizenship; having two makes that option even better. Unless the plan is to return to America of course.
@plaxy
You beat me to it. I was just going to suggest that Heidi needs point out that possessing a second citizenship (one with no downside) would put him in the enviable position of being able to ditch his US citizenship immediately once he has finally had it with the US.
Its sickening how the US government threatens those whose only aim is to try to enhance their employment opportunities or enrich their lives by reconnecting with their heritage. But then, that’s what the US government has become; threats and punishment.
maz57:
“that’s what the US government has become; threats and punishment.”
Remind me – when was it otherwise?
@maz
He has always had a second citizenship,( born US/UK dual) , but ditching the American one step too far at present especially as they live and work there at present. I dare not even breach that subject. It’s the possibility of a great job in the EU that may be on offer. UK citizenship not so good in the EU now post Brexit, much easier to have citizenship rights to live and work in the EU.
PS@Maz
I think they really cannot conceive that anyone would choose to live and work permanently outside ‘the best country in the world’.
@Maz
‘They’ meaning the US gov.
“that’s what the US government has become; threats and punishment.”
Remind me – when was it otherwise?
Well, as far as I know, things were OK back in 1776. (When their main concern was asserting their right to be free of taxation by King George.)
“things were OK back in 1776. (When their main concern was asserting their right to be free of taxation by King George.)”
Is that what they were squabbling about? I could’ve sworn it was a fight about who was going to have the land both sides took by force from the people that used to live there.
Two people beat me to it, but I’ll pitch in my two senses worth.
In 1791, those who weren’t Negro or American Indian[*] or half-breed or Irish or female got a bill of rights.
[* Excluding Eskimo because Alaska wasn’t American yet.]
@Heidi
I renewed a US passport after I obtained British Citizenship. This was around 1998 and I did not encounter any problems. At the time it was before this whole mess so my intentions were to keep US citizenship and I believe I had to attach a signed statement explaining that my intention was to retain US citizenship.
At the time I did take some advise about it, can’t remember exactly who gave me the advise, perhaps an immigration lawyer and I remember I was told that I could make out a written declaration before the event to make my intentions crystal clear; sign it in the presence of witnesses and have it notorised; and keep it in secure place so if there was ever any doubt, this statement would help. Also I was told to keep my US passport renewed at all times. Also always travel to the US on a US passport and always mention you are a US citizen as well on any forms that ask for citizenship. The case for this was to show that your intentions were to be a dual citizenship. These were of course the days when US citizenship was not a liability.
“1791, those who weren’t Negro or American Indian[*] or half-breed or Irish or female got a bill of rights.”
Mmm. Number 4’s a good one.
@UK Rose
Thanks for your input. Good to know others have faced it.
It does seem to be a whole lot of trouble to be taken to enable a simple job application!
“Is that what they were squabbling about? I could’ve sworn it was a fight about who was going to have the land both sides took by force from the people that used to live there.”
Aside from evading tax (from the British point of view, anyway) and stealing land from the aboriginals, I’ve read that the wealthy businessmen in the colonies were extremely worried about the abolitionist movement which was quickly gaining momentum in England at the time. The banning of slavery would have ruined their business plans.
As it turns out, their concerns were fully justified; England ended slavery a full generation before the US did. (And managed it without having to resort to a civil war.) As in most situations like that, it was complicated. There was no mention of any of this, either in the history books or my classes, back when I was in school growing up in the US. Its a pity you don’t find out what the real story is until you move away from the US.
“At the time I did take some advise about it, can’t remember exactly who gave me the advise, perhaps an immigration lawyer”
Maybe a US embassy or consulate, because the rest of this looks like what I got from the US consulate in Toronto:
“and I remember I was told that I could make out a written declaration before the event to make my intentions crystal clear; sign it in the presence of witnesses and have it notorised; and keep it in secure place so if there was ever any doubt, this statement would help. Also I was told to keep my US passport renewed at all times. Also always travel to the US on a US passport and always mention you are a US citizen as well on any forms that ask for citizenship. The case for this was to show that your intentions were to be a dual citizenship.”
I drove to Buffalo, looked for a lawyer’s office (in 1986 before the internet), and made a notarized declaration.
Hey, I should send that notarized declaration to a US District Court by registered mail with return receipt so the court will destroy the declaration and deny having received it even though I get a return receipt signed by a court employee.
“These were of course the days when US citizenship was not a liability.”
Yup. Sob. Where are those psychics when we need them?
“England ended slavery a full generation before the US did. (And managed it without having to resort to a civil war.)”
(That doesn’t count because England already had its civil war.)
“England ended slavery a full generation before the US did (And managed it without having to resort to a civil war.) “
Britain mostly offshored stuff like war and slavery. Sound familiar?
Colonial South Carolina and Virginia both tried to ban the slave trade, out of fear of the rapid demographic changes that were being brought about by the rapid increase – both by import and by domestic production. (Grow money: rape your slaves.)
Britain refused, the slave trade being “vital to the British economy.”
@Heidi
So true and if anything I would say now is even less of a problem then when I went through it in the 90s. 20 years later now being dual citizenship is much more prevalent because the world is more global and information easily accessible online on rules and regulations for each country. It must be a common scenario now.
Also back then there was only one type of US citizenship, there was no tax citizenship yet. Now everyone is well aware of the tax citizenship and I would think the opposite would apply, They aren’t going to make it easy for you to lose the shackles of your US citizenship and many are even having to prove relinquishment was their actual intent back in the old days.