The current media narrative is anti-Trump 24-7. He is bad. And of course all those celebrities and other people are waiting in line to flee the country and renounce their citizenship. So I was contacted by a reporter of a well-known news network who is writing an article on people who are renouncing their USA citizenship because of Donald Trump. He asked me:
- If there has been an increase of traffic to isaabrocksociety.ca since the November election.
- If anyone had contacted us with questions about renouncing directly linked to Trump.
Here is my response:
There has been no uptick in traffic to our website, and no one anti-Trump has contacted me in my function at Isaac Brock. I do not predict an uptick in renunciations over Trump. People are renouncing for practical reasons. Anti-Trumpism is fanatical, but Trump has not so far caused real problems for American citizens. FATCA, citizenship taxation, the Obama enforcement of FBAR, CBT and FATCA, and the compliance condors have created real problems for so-called “Americans” abroad–especially those of us who are little older and more established financially. Trump just seems to make some American citizens really angry but has not yet substantially harmed them (at least I do not know of concrete examples).
I had one person contact me on behalf of someone who owns property here in Canada, wanting to know the tax implications of moving to Canada and how one might transfer bank assets. This person was not asking about renunciation of citizenship–just the tax implications of moving to Canada (and how to move assets). She did not know I run the Isaac Brock Society. I know her from Facebook for other reasons.
I see that one of the problems with the shrill anti-Trump narrative in the mainstream press and social media is that the wrongs done against expats have been completely ignored. When I talk about the wrongs that Obama did, I am scorned.
Trump may eventually reverse FATCA, but I do not hold out hope. Nevertheless, in the current persecution of expats Trump only continues the demonic policies of his predecessor.
Here is a reminder of why Peter Dunn relinquished his USA citizenship:
@Calgary. Out of curiosity I took a look at the Sunrise Adoption page you linked above. They are to be commended for providing fair warning regarding the adoption of US born children. Unfortunately, at the same time they are spreading incorrect information about the subject.
For example, they mention renunciation as a way of eliminating US citizenship complications. We all know it is effectively impossible for a minor child to renounce their US citizenship. There is no realistic chance of that happening until age 18. They then go on to state that one cannot renounce US citizenship without being totally up to date on all US tax filing and informational reporting (FBARs) obligations. We all know that is not true, either. I suppose such misinformation is not really surprising considering how complicated the subject is.
Perhaps someone needs to gently encourage Sunrise Adoption to correct and update what is obviously a good faith attempt to provide useful and important information.
Thanks. The link you provided no longer goes to direct information on children adopted from the US, but a search of international adoptions say this adoption from the US have decreased. No surprise there!
I too noticed the inaccuracies in the Sunshine article (with updated link) but they are relatively minor points. They are at least well-intentioned in terms of warning potential adoptive parents.
I have no idea how this works, but if a child adopted from the US is given new Canadian documentation without US place of birth or other indicia then they are FATCA-proof and US citizenship should not be a concern. (Presumably they don’t bring along the original birth certificate with name or names of the biological parents.)
I don’t know the in’s and out’s either. Perhaps prospective parents wishing to adopt should also check out US government sites for the important process in adopting a child, from the US or elsewhere:
My children were born on or after April 17, 2009
Your children will only be Canadian at birth if you:
were born in Canada, or
became a naturalized Canadian citizen before they were born. (If you were adopted, see the exception below.)
There are exceptions to these rules.
You were born outside Canada and adopted by a Canadian
Your children born outside Canada will not be citizens if you were:
– born outside Canada,
– adopted by a Canadian citizen, and
– became a Canadian citizen using the citizenship process for intercountry adoption.
However, if your children’s other parent was born in Canada or is a naturalized citizen, your children will become citizens through them.
BONUS FOR ME AND OTHERS WHO TRIED TO GET CONFIRMATION ON WHETHER THERE WAS A CLAIM TO US CITIZENSHIP OR AUTOMATIC US CITIZENSHIP FOR CHILDREN BOARD ABROAD TO US PARENT(S) (see: http://isaacbrocksociety.ca/2013/07/07/frustration-abounds-as-answers-are-not-received-accidental-americans-born-abroad-to-us-parents-and-not-registered-with-the-us-are-they-automatic-us-citizens-or-do-they-have-the-o/) — if I am reading correctly:
Contrary to what I was advised by several sources (the US Consulate in Calgary, my US tax lawyer in Calgary, a Washington, DC US immigration / nationality lawyer that I hired to answer this question, the Department of State / Legal Department), the link to this site now gives information that thre is indeed A CLAIM TO US CITIZENSHIP: https://ca.usembassy.gov/u-s-citizen-services/birth/transmit-citizenship/
Thanks for pointing that out, which needs to be pointed out to the Sunrise people so they can correct on their site. I’ll try to find a link appropriate to send to them to back up what we know, which differs from their information — tomorrow.
This on the top left of the drudgereport as of 6pm Pacitic Time:
“Americans forfeiting citizenship at record rates with no tax relief in sight…”
(Could’ve been posted earlier).
Impt. as no other headlines around it; i.e., it stood out. (In big letters at the centre was news about NKorea — unrelated).
The link to the headline: http://fortune.com/2017/03/06/renounce-us-citizenship-irs/
The text has little new to Brockers but it’s a great in terms of the problem’s continuing visibility. Plus, here’s Dan Mitchell again prodding (iin as many words) Republicans to repeal FATCA. Impt too:: blames Obama.
Pls. also note that Drudge Report is a conservative website and influential at that. Among other things, it keeps tabs on Republicans in Congress urging them to get on w/the GOP agenda. The other headline this afternoon (unveiled earlier, I believe): Obamacare replacement. Since Republicans have said that tax reform will follow Obamacare replacement –a few days ago Mnuchin indicated by August– and since tax reform should include FATCA repeal, I’m thinking this is impt context (and perhaps the takeaway that is not being explicitly noted).
A child renouncing at age 18 isn’t likely to have enough money in an account to trigger a Fincen Form 114 filing and they aren’t likely to have had enough income that they need to file a tax return.
And if they have a substantial RESP or any other tax-protected savings accounts in their name, those are exempt from FATCA under the terms of the IGA, so they needn’t complicate matters by reporting them.
To my original point, a child born in Canada has no US indicia (adopted or not; regardless of their biological or adoptive parents’ citizenship) so they won’t be identified by FATCA and can remain safely and happily non-compliant. A child born in the US and adopted by Canadians may have an issue, depending on what sort of documentation they are given in lieu of a birth certificate. If there are no US indicia on the documents they need to open bank accounts, they avoid FATCA and can skip compliance.
In Canada, this discussion is almost entirely moot because Canadian banks do not yet demand proof of non-US-personhood. It’s generally sufficient to simply say that you are not a US citizen when asked by a financial institution, and if they do not follow up or demand confirmation, you are not flagged for FATCA. And without FATCA, there’s no real point to compliance.
I have sent information through Sunrise’s online contact page. Among other things, I referred them to the IRS instructions for Form 8854, timing of filing of that form, etc., and said that a person will never (or should never) be asked about their US tax and FBAR compliance in their renunciation procedure that takes place at a US Consulate within Canada (or any other country outside the USA).
Off-topic, but the “transmission requirements” for US citizenship (a few posts above) seem terribly unfair, and I wonder what the drafters were thinking. Obviously they didn’t want to create permanent diaspora populations with no real US ties, but why the distinction between legitimate and illegitimate children? And if “the U.S. citizen father must acknowledge paternity and agree in writing to provide financial support for the child until s/he reaches the age of 18 years,” what if the father is dead? It’s bad enough that the child loses its citizenship rights for having a deadbeat father. I suppose this rule may have come from the US-Vietnam War, when the multiracial children of US soldiers and local women attracted a certain amount of press. (I remember a 60 Minutes report.)
I’ve also written to a couple of adoption agencies in the last couple of days, asking if they are aware of the tax laws around adopting children from the US. I’m actually in an email conversation with one agency that returned my email. She was also misinformed about a child’s ability to renounce US citizenship. She is taking the matter very seriously and feels other agencies are obligated to do so too. In her last correspondence she stated:
“First off, I want to say thanks so much for bringing this to my attention. I’m going to look into this in more depth over the next few days and I’ll get back to you – I want to speak with some US Hague attorneys about the renouncing of US citizenship. I read the Immigration laws in the link you sent, and unless there is a caveat for adoption or otherwise (which as you said, it doesn’t seem like there is), then this has enormous impact on all families formed by adoption through the US.
I don’t think these laws have affected adoption numbers overall, although I can only speak for what I’ve heard from families I’ve spoken to over the past 5 or 6 years. Most seem to take the attitude “I’ll worry about that when the time comes”, not realizing that the time is sooner than they expected and babies don’t stay babies for long! I think the declining numbers (assuming you mean post-Hague, as obviously the Hague ratification has an enormous impact as well) are more to do with the enormous cost of the program, made worse by plummeting exchange rates.
Agencies could certainly have a role in creating awareness around this issue – and really almost have an obligation to do so (in the sharing of information, but might be limited in the advocating for legal reform).
I’ll be in touch soon, and if you have other information to share I’d love to see it, if you are okay with passing it along.”
According to Wikipedia, that’s precisely where the father having to claim the child came from – the Vietnam War. As I’ve said, it seems US soldiers are allowed to spread their seed as indiscriminately as they do their bombs without any serious repercussions.
I believe that this is being challenged in court as discriminatory. Maybe others have more up to date information on that.
“A child renouncing at age 18 isn’t likely to have enough money in an account to trigger a Fincen Form 114 filing and they aren’t likely to have had enough income that they need to file a tax return.”
I don’t think one has to be in the 1% to deliver newspapers, program computers, and have US$10,000 in a savings account by age 18.
“In Canada, this discussion is almost entirely moot because Canadian banks do not yet demand proof of non-US-personhood.”
TD didn’t demand that I send them their version of W8, and maybe I shouldn’t have done it, but surely their reason for creating it was that they demand it from some customers.
“why the distinction between legitimate and illegitimate children? […] I suppose this rule may have come from the US-Vietnam War, when the multiracial children of US soldiers and local women attracted a certain amount of press. (I remember a 60 Minutes report.)”
I remember a 60 Minutes report about children of US soldiers and Korean women when the UN authorized taking sides in the Korean War. But it’s been reported on this site (I think by Eric) that the US already implemented this while intending to enter World War II.
@nononymous… R.E.S.P.’s are held by the parent, not the child. If a child does not elect to attend college/university, then the R.E.S.P. can be rolled into a R.R.S.P. The portion that the Canadian government contributed is returned to the government so only the portion that the parent contributed will be rolled into the R.R.S.P. The parent must report them on a 3520 and 3520A. The US deems them a foreign trust because the parent may benefit from the interest earned on the R.E.S.P. if it isn’t used by the child and rolled into a R.R.S.P. The parent has to declare it, never the child because it’s held in trust by the parent.
US applications for New Zealand citizenship jump post-Trump