While reading through U.S. Department of State (DOS) form DS-4081 I noticed that the renouncer is required to make (or not make by ticking off a “do not choose” box) to DOS a “written explanation of my reasons for renouncing/relinquishing”.
Has any Brock reader explained in writing on DS-4801 that they renounced for “tax-related reasons”?
Point #10 of DS-4081 does make the bold statement that hopes to terrify:
“.. I understand that if my renunciation of United States nationality is determined by the United States Attorney general to be motivated by tax avoidance purposes, I will be found excludable from the United States under Immigration and Nationality Act, as amended.”
— IRS tells us however that “tax avoidance” is NOT a criminal act, yet DOS wants to punish those who renounce for tax avoidance purposes.
Canada Revenue Agency, on the other hand, grudgingly admits that tax avoidance is of course “within the letter of the law” but cautions fair-minded Canadians who all must support the CRA that “those actions contravene the object and spirit of the law“. CRA has four approaches to “combat tax avoidance”.
The Australian Government lumps tax avoidance with tax evasion and promises: “Those seeking to do the wrong thing will be left with no doubt that deliberate tax avoidance and evasion will not be tolerated.“…etc.
It was my understanding that one was NOT required to provide a reason for renunciating US citizenship. Right? Wrong?
@Gail, that is correct. It is a legal and constitutional right to expatriate. No reason for wanting to relinquish/renounce is necessary or required. They sometimes ask verbally as well, but no answer is necessary. If one thinks one might be caught offguard by the question if it arises, think of an innocuous answer beforehand. Don’t mention taxes.
Here is the statement I provided on April 7, 2011:
I have lived in Canada most of my adult life. I have married a Canadian. After so many years in Canada it became clear that I have a great attachment to Canada, to my Canadian friends, to my Canadian wife and her family, and to my church community in Canada. I felt that it was therefore necessary to become a Canadian citizen so that I may become a full member of this great and wonderful country and its people. Therefore, I applied for Canadian citizenship in 2010, and I also had, even at that time, the intention of relinquishing my US citizenship. For in taking my pledge to the Queen of Canada, Elizabeth II, on February 28, 2011, I realized that it would be absurd for me to be of divided loyalty. My duty to the Queen and to the Dominion of Canada precludes me from maintaining citizenship in the United States of America, since when one country calls me to serve, dual citizenship could potentially create a conflict of interest. To avoid all such conflicts, I have decided with my full volition and all my heart, to relinquish my United States citizenship once and for all, realizing that it is an irrevocable act.
@Stephen, re;
“Canada Revenue Agency, on the other hand, grudgingly admits that tax avoidance is of course “within the letter of the law” but cautions fair-minded Canadians who all must support the CRA that “those actions contravene the object and spirit of the law“. CRA has four approaches to “combat tax avoidance”. ”
Is that why the Revenue Minister has no problem with administering the terms of the FATCA IGA and doing the extraterritorial dirty work of a foreign country’s Treasury despite the “compliance burden” she now admits it poses for Canadian taxpayers resident in Canada, and which her policy imposes; http://isaacbrocksociety.ca/fatca/comment-page-136/#comment-7612681 ?
Is it ‘tax avoidance’ if those affected are ‘avoiding’ foreign double extraterritorial taxation or taxation on things that Canada’s government and social and economic policy has specifically chosen not to tax or penalize us for, like the sale of our principal residence or our TFSAs? And are those who are not directly USPs seeking to get rid of the FATCA IGA ‘avoiding’ the ab/use of our own Canadian taxpayer revenues paid so that the CRA can administer the extraterritorial tax laws of a foreign country? (Remember that the CRA got a big boost in Canadian taxpayer funding when it agreed to be an arm of the IRS; “…. $4 million pertains to tax measures, including the implementation of the intergovernmental agreement between Canada and the United States to enhance the exchange of tax information” ( http://www.cra-arc.gc.ca/gncy/fnncl/r150828-eng.html ) – to fulfill its duties as the Canadian arm of the US Treasury and IRS, under the FATCA IGA.
Here is what the CRA brags about doing in that vein:
“One of the most far-reaching and complex changes in 2014-2015 was the implementation of an agreement between the governments of Canada and the United States to improve international tax compliance through better reporting of financial account information (FATCA). Beginning in 2015, Canadian financial institutions have to give the CRA information of account holders who are United States citizens or residents. To assist financial institutions and respect privacy laws, the CRA became the intermediary, receiving the information and relaying it to the Internal Revenue Service (IRS) rather than having Canadian financial institutions report directly to the IRS.
During 2014-2015, the CRA completed a number of significant steps in implementing this agreement. Key steps included making sure financial institutions had all of the information they need to meet their reporting obligations, putting in place the information return financial institutions will use, and setting up the IT systems needed to allow the electronic exchange of information with the IRS……..”
http://www.cra-arc.gc.ca/gncy/nnnl/2014-2015/p1-eng.html
“…. $29 million increase to implement and administer measures announced in Budget 2014, of which $25 million is for improving the integrity of the tax system and strengthening tax compliance and $4 million pertains to tax measures, including the implementation of the intergovernmental agreement between Canada and the United States to enhance the exchange of tax information; ….”
from;
Canada Revenue Agency
Quarterly Financial Report
For the quarter ended June 30, 2015
http://www.cra-arc.gc.ca/gncy/fnncl/r150828-eng.html
It is a fundamental right to be able to expatriate. The right to vote is also considered a fundamental right. Could you imagine if they made it a requirement to $2350 before your right to vote would be recognized?
I chose to leave that section blank when I renounced 8+ yrs ago.
Recently, I read an article that said only 2 people have been
refused entry into the US for admitting that they renounced to
avoid taxes.
I have a 10 year, multiple entry visa to the US and have never
encountered anything beyond mild curiosity by Customs and Immigration.
Let’s explore why they’re asking in the first place. Is it do determine whether someone is renouncing under their own volition, or is it to determine whether someone is renouncing due to tax reasons so they can be punished?
It seems to me that the latter undermines the objective of the former, when US citizens are forced to adopt an unofficial “don’t ask, don’t tell” policy at the consulate.
My right to expatriate is actually undermined by the Reed Amendment, when the only reason I have to renounce US citizenship is to avoid the burdens of being taxed based solely on citizenship. The Reed Amendement makes no distinction between “avoidance” and “evasion” as far as I know.
When taxation is the sole determinate of whether someone chooses to retain citizenship or not, I think it’s pretty clear that tax responsibilities drive the boat here, not the rights granted under citizenship – especially when Americans can routinely be denied entry to the US for not living up to their citizenship imposed responsibilities.
Any enforcement of taxation through the denial of citizenship rights makes US citizenship taxation-based in my opinion.
“…the latter undermines the objective of the former, when US citizens are forced to adopt an unofficial “don’t ask, don’t tell” policy at the consulate….”.
Very astute observation @Bubblebustin.
The US essentially gave me no option except to relinquish, it was done under duress and therefore was involuntary. It was the US government itself which created and perpetuates the duress. I did not freely choose to give up my birthright. I was forced into it. But, if I had said that I would be denied my relinquishment. If I told them the truth – that the whole apparatus and capriciousness of the US Treasury FBAR ‘n FATCA Fiery Hoops of Fun/draiser was something I could not live with or afford to keep up with (psychologically, intellectually AND fiscally), and that my US status posed a significant hazard to my Canadian family, no doubt that would have been counted as ‘tax avoidance’ and kept on record forever and ever – for dissemination and storage as the US sees fit – and for any nefarious or other uses as they might decide in future.
And the US does not want to know and does not want us to tell that it has basically adopted an official policy of forcing us to be silent and to expatriate. AND to make a profit while making renunciants and now relinquishers too pay to exercise a legal RIGHT – the 2350. USD fee is their way of punishing us on the way out while forcing us to pay for the punishment – AND denying the right to those who can’t afford it AND keeping the numbers low (in conjunction with keeping the backlogs long to keep the official numbers down).
So I am angry and resentful that I was forced out of something that was mine by legal right enshrined in US law, but relieved that I am no longer forced to continue to jump through flaming hoops over tanks of sharks in the circus juggling act that being a compliant US citizen living outside the US has become.
F the US is how I feel. Hearing the anthem and seeing the flag makes me nauseous now.
Stephen, There is no need to mention taxes. This seems to be understood by almost everyone.
A “Sophie’s Choice” aptly describes what it is you and so many of us have faced, are facing and will face in the future. The situation for US citizens living abroad is intolerable, yet to do anything about it is to face exile under the terms of the Reed Amendment.
I wonder if we might have grounds to sue the US government over the Reed Amendment as it infringes on our right to expatriate? Or are we dealing with a Gordian Knot that by the mere existence of CBT allows the powers that be to continue to heap more abuse at the expense of our rights?
I was actually asked why I cannot keep both passports when I renounced.
I answered “I don`t need 2.”
@Bubblebustin, the US Treasury (and now the DOS in collusion) remind me of captors who torment the bears in their power who are chained and cannot break the chain. The bears are forced to ‘dance’ by their captors, and beaten and starved if they do not (penalized for ‘non-compliance’ abroad) – and also sometimes/often capriciously even when they do (compliance abroad).
I have argued that the Reed Amendment is a bill of attainder. Only Orlando Gotay has contradicted me–without giving a single reason (really fine education lawyers in the USA receive, eh?), and then blocked me on Facebook.
Petros will correct, but Wikipedia says this about a “bill of attainder”:
“A bill of attainder (also known as an act of attainder or writ of attainder or bill of pains and penalties) is an act of a legislature declaring a person or group of persons guilty of some crime and punishing them, often without a trial.”
‘While reading through U.S. Department of State (DOS) form DS-4081 I noticed that the renouncer is required to make (or not make by ticking off a “do not choose” box) to DOS a “written explanation of my reasons for renouncing/relinquishing”.’
I suppose it looks that way, but that’s not the way it’s practiced.
When I mailed my US passport to the US embassy for cancellation, the embassy phoned me, said I was a US citizen, wanted to return my passport, tried to discourage me, and asked why I want to renounce. I answered. (Details in a minute.) I persuaded them not to return my US passport, waited for a letter from Washington that didn’t arrive, and then wrote another letter to the embassy, upon which they agreed to set my first appointment.
During the first interview, a State Department official asked again why I want to renounce, and I answered again. My original reason was going to be the use of torture. I had been planning to wait until retirement and then renounce unless torture would be outlawed in the meantime. However, when the IRS told me that alteration of jurat is automatically considered frivolous even when I did it to tell the truth, I understood that the IRS would continue to penalize me every year that I fail to commit perjury. Although under coercion I did commit perjury in every refiled return and newly filed return after that, I do not willingly consent to commit perjury, and there is only one way to stop it, so let’s get it over with.
The State Department official suggested that he could save me the (then) US$450 fee for renouncing by declaring that I had had the intention to relinquish US citizenship at the time I took Canadian citizenship, but again I told him I would not voluntarily commit perjury, I would pay the fee.
The State Department made a DS-4081 form. The State Department checked the box saying I don’t wish to make a written statement. The State Department wrote a statement saying that I had had the intention to relinquish US citizenship at the time I took Canadian citizenship. The State Department also wrote a few other lies.
During the second interview, I told a different State Department official that I could not sign the DS-4081 with those lies in it. She agreed immediately that I had not had the intention to relinquish US citizenship at the time I took Canadian citizenship; that was obvious because of the renewals of US passports. I looked at her in astonishment because up to that point I’d never seen a US government official with such competent and honest grasp of facts. If the US government had more officials like her, maybe I wouldn’t have needed to renounce. She asked again if I’m certain I want to renounce because she can’t let me do this if it’s not voluntary. I answered that I have to do this. She accepted it. It was clear that I wasn’t being coerced by a person, I was being coerced by the US government.
After the forms were signed, I mentioned to the second State Department official that on US tax returns I used to write honest declarations of known problems instead of committing perjury (for example when attached W-2 from a US employer or equivalent from a Japanese employer were false, and when I couldn’t figure out how to compute amounts to carry back or forward on 1116). She interrupted me and said “Good.” I told her I get penalized for it. This time it was her turn to be astonished and she was speechless. I guess that’s the moment she understood why she’d just accepted a renunciation from me.
So tax related, obviously yes. But tax avoidance, no. The US still gets to withhold US taxes from US-sourced dividends and interest, but I’m no longer eligible to file for refunds, so my US taxes have gone up.
‘Canada Revenue Agency, on the other hand, grudgingly admits that tax avoidance is of course “within the letter of the law” but cautions fair-minded Canadians who all must support the CRA that “those actions contravene the object and spirit of the law“. CRA has four approaches to “combat tax avoidance”.’
Oh. So everyone who opens a TFSA can expect to be prosecuted now?
There’s no such thing as a “simple” Canadian bank account, eh?
‘Petros will correct, but Wikipedia says this about a “bill of attainder”:
“A bill of attainder (also known as an act of attainder or writ of attainder or bill of pains and penalties) is an act of a legislature declaring a person or group of persons guilty of some crime and punishing them, often without a trial.”’
Yeah, I had trouble getting even that much of an adjustment, but my unknown adversaries finally allowed that much. The wording used to say it was an act declaring etc. etc., and other wording used to say that the US prohibition of bills of attainder was based on opposition to use by the UK’s monarchs. When a Nobel prize winner, the Chief Constitutional Scholar of the United States, proved that the US allows Executive Orders of attainder and only prohibits Legislative Bills of attainder, I made several corrections to that article, but my adversaries reverted them. The only hint which they permitted to remain was that the word Legislative is now in there.
Under the heading of “don’t give them any ideas”…..
A while ago some Brock-connected people made videos relating their experience of renunciation.
Three of those videos are posted on the Tax Connections website:
https://www.taxconnections.com/internet_tax_summit/fatca
In Marilyn’s video, her confession makes my hair stand on end on her behalf. At 4:10 she declares, “…it [renunciation] was not something I really felt I was doing voluntarily. I felt I was being forced into a position….”
If DOS got wind of this video, couldn’t they declare her renunciation null and void because it was done under coercion? Her very own words are that it “was not something I really felt I was doing voluntarily.”
Yikes! Just where is the line?
@all
On another post I read “congressional legislation and one bill aimed at severely increasing FATCA”
Has anyone heard is congress is trying to increase FATCA ?
Any comments?
@Shovel, a Brocker @markpinetree; “…. had a letter from the IRS indicating that his best course of action would be to renounce his US citizenship.”
http://isaacbrocksociety.ca/2015/08/18/another-brock-warrior-down-in-memory-of-marcio-v-pinheiro/
We’ve been told by both US and Canadian politicians that if we don’t want to comply with US tax laws, we should ‘just renounce’.
That seems like acknowledgement of duress and coercion to me.
I suppose they can try and force my US citizenship back on me, but that would make for very bad press I think.
@BAdger
Bad press? The press makes shit taste like honey.
America has absolute power.
Shovel, I do understand what you mean.
Of course I would strongly caution other readers not to tell the DOS or acknowledge it if they feel they are being coerced or renouncing under duress. That would be counterproductive and jeopardize their relinquishment/renunciation.
I exercised my legal and human right to renounce, and I did voluntarily exercise it in response to the external threat the US posed to my wellbeing and that of my Canadian family – I did voluntarily plan and carry out my relinquishment to its successful conclusion. I had the requisite intent. All my actions afterwards were and are congruent with relinquishing. However, without the substantial threat and abuse that the FBAR and FATCA and CBT regime posed to my psychological and economic wellbeing and that of my Canadian family, I would not have voluntarily chosen to relinquish my US citizenship. But the US government chose to make it more harmful to myself and my family to keep my birthright citizenship than to relinquish it.
They chose to deliberately create and foster a situation of threat, duress and coercion. They chose to cast those outside the US as criminals in waiting- before the fact. They deprived us of the presumption of innocence before guilt. They chose to make it almost impossible to comply or to come into compliance. They chose to make it exceedingly difficult to get assistance and to continue to pile on layers of potential obliterating penalty regimes and pitfalls. Our elected ‘representatives’ in the US made it very clear they couldn’t give a rat’s ass and that no assistance or redress or recourse would be forthcoming.
So, I CHOSE to relinquish – but under threat, duress and coercion created and deliberately fostered by the US government. I literally felt I was left with no other viable options in order to survive. Even if I had the money to pay for (and was able to find competent) compliance help every year for the rest of my life, I would refuse to accept how it would distort and make my life miserable from afar. I could never accept the constant assumption that I was a criminal, and the demand that I annually register with a Financial CRIMES Enforcement agency merely because I do not live and bank inside the US. I reject the presumption that I must answer to a country that I left as a minor, do not live in, and have no connection to other than a birthplace and once had some vestigial sentimental feelings and illusions about.
From the very beginning when I first read the threats and slander issuing forth from US politicians and in official statements of the IRS and US Treasury on a regular basis, and saw that they intended to work to make it even more punitive and more difficult to comply and even more labyrinthine and incomprehensible than it already was for those it claimed outside the US, I felt I could not stand to live with US citizenship, under US extraterritorial life control any seconds, minutes or days longer than forced to.
UScitizenship = a sentence of lifelong FBAR, FATCA and extraterritorial CBT and whatever else they will come up with (always punitive) forever and ever: therefore the only remedy left to me was to sever my US citizenship from myself, to cut it off like a familiar and taken for granted body part that has suddenly and without warning gone cancerous and become life threatening. Sure, at first it hurt to contemplate, the necessity made me sad and very angry too, but the panic and anxiety were too strong to live with. It would have hurt me more to keep it than to get rid of it as soon as possible. I felt the burden pressing on me every day. The burden only lifted somewhat when I relinquished, and wasn’t complete until I filed the last forms as well as I could, and sent it by expensive courier and felt that even if they came back to me and demanded more, I owed them nothing and I could tell them to go to hell.
The DOS and the US Treasury is welcome to read this and consider what would ensue in terms of public relations and media if they tried to forcibly re-attach that necrotic deformed tumour of a citizenship (whose distortions they created and sustain) against my will, but it would definitely work against their attempts to publicly ‘splain away the rising numbers and keep quiet the reasons why people feel they have to expatriate. I would be loudly unwilling. I do not want my US status back even if it were to be offered to me. The injury and injustice is too great. And nothing essential in the situation has changed for those ‘abroad’. The burden would remain the same or worse.
I want justice and to help others from falling into the quicksand traps. And to force my home country government of Canada to respect the Charter and our rights, and to counter the traitorous betrayal embodied in the FATCA IGA and legislation enabling a foreign country’s law – and now the federal defense of its actions – abusing and wasting our Canadian taxpayer revenues to do so.
@badger Well said!
@Badger: Yes, well said! There is no need for a person to explain why they decided to renounce. State Dept, Congress, and the IRS all know perfectly well why people are making that choice and not only do they not care, they will punish you if you say one word about it. Any government that demonstrates such a lack of respect for its own citizens absolutely doesn’t deserve to keep them.
Lincoln’s government of the people, for the people, by the people has gradually morphed into a government that now exists only to serve its own purposes. I wouldn’t let them restore my US citizenship even if they paid me.