Reed Amendment – The Isaac Brock Society

If you Decide to Comply, DON’T choose a Homelander Tax Compliance Professional

Posted on April 23, 2018 by Patricia Moon

Posted in Non Resident Taxation, Renunciation 73 Comments

I was very surprised to receive the following email on Friday evening. I cannot recall ever getting anything like this before. I will not identify the author because it is not proper to publicly share an email without the permission of the sender. It is not anyone I have ever heard of before and I doubt any of you have either. It took me a while to decide if I would answer or not. I tried to put my reaction aside after all, why be surprised that a tax compliance professional would demonstrate so little awareness outside of his/her experience. In the end, I simply could not ignore how I felt. I replied and have decided to publish the email without naming its author and my response.
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Emigrant-hating Congressional Progressive Caucus accidentally proposes right of return for (some) ex-citizens

Posted on April 22, 2017 by Eric

Posted in Issues regarding US persons abroad 14 Comments

Earlier this month, Raúl Grijalva (D-AZ-3) and forty other Democrats introduced the Veterans Visa and Protection Act of 2017 (H.R. 1405), a bill to shield current and former members of the U.S. armed forces against deportation or removal from the United States and to let them apply for green cards. Grijalva is the co-chair of the Congressional Progressive Caucus, and the bill’s co-sponsors include twenty-six other CPC members.

When Homelanders proclaim that they want to protect immigrants, they only mean immigrants from other countries to the United States, not immigrants from the United States to other countries. However, Grijalva’s bill is so broadly written that it would protect veterans in both groups of immigrants — those who were never U.S. citizens in the first place and got deported, and those who emigrated and gave up U.S. citizenship after being discharged.

SEC. 4. Protecting veterans and service members from removal.

Notwithstanding any other provision of law, including section 237 of the Immigration and Nationality Act (8 U.S.C. 1227), a noncitizen who is a veteran or service member shall not be removed from the United States unless the noncitizen has a criminal conviction for a crime of violence.

As I understand it, this prohibition against removal extends to expedited removal of inadmissible aliens at ports of entry. In simpler terms, not only would non-citizen veterans now in the U.S. not have to worry about being sent away against their will, non-citizen veterans outside of the U.S. could show up at the border without fear of being turned away — whether they intended to stay in the U.S. for a week or for the rest of their lives. This is much better news than other CPC-supported legislation like the Foreign Account Tax Compliance Act, which forced at least one veteran living in another country to renounce U.S. citizenship in order to save his home.

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U.S. State Department rejected two visa applications in 2016 based on Reed Amendment

Posted on March 17, 2017 by Eric

Posted in Issues regarding US persons abroad 23 Comments

As I just noticed, last week the State Department released one of the final missing pieces of their Report of the Visa Office for Fiscal Year 2016: Table XX, “Immigrant and Nonimmigrant Visa Ineligibilities (by Grounds for Refusal Under the Immigration and Nationality Act)”.

This latest update reveals that two out of the tens of thousands of people who have renounced citizenship since 1996 were denied U.S. non-immigrant visas last year under 8 USC § 1182(a)(10)(E) (colloquially known as the Reed Amendment) because they had renounced U.S. citizenship for the purpose of avoiding taxation by the United States. One was later able to overcome the finding of inadmissibility.

This is the first time the State Department have formally admitted to denying visas on that basis. However, for decades they have been denying visas to about a half-dozen ex-citizens or ex-green card holders per year whom they believe left or stayed outside the U.S. to avoid the draft.

The State Department acting on their own cannot legally find you inadmissible under the Reed Amendment, and the Foreign Affairs Manual warns consular officers against doing so. They need a determination of inadmissibility from the Department of Homeland Security. DHS have said they can only make such determinations if ex-citizens “affirmatively admit to renouncing their U.S. citizenship for the purpose of avoiding U.S. taxation” — the IRS cannot offer DHS any assistance, due to provisions protecting the confidentiality of tax returns, and State can only tell DHS what the renunciant tells State.

DHS revealed all these difficulties in a November 2015 report, which both myself and Patricia Moon have previously discussed. It is not clear whether the two individuals denied visas by State last year were the same two individuals mentioned in that 2015 report (to whom DHS had previously denied entry), though I suspect that may be the case.

In short, don’t tell DHS or State the obvious truth about why you want to stop being a U.S. citizen, and they — unlike the IRS — officially won’t treat you any worse than they treat other non-citizens. (Unofficially, there do seem to be a few reports of consular officers getting angry that anyone would dare apostatise from the American civic religion, and then using an outlandish finding of 8 USC § 1184(b) “failure to overcome presumption of immigrant intent” as an excuse to deny a visa.)

The Reed Amendment – Another one to Throw on the Pile

Posted on August 14, 2016 by Patricia Moon

Posted in Issues regarding US persons abroad, Relinquishment, Renunciation 42 Comments

UPDATE:

Someone strongly disagreed with my conclusion (Reed cannot be applied) due to worry of dealing with border guards. However, if a border guard were to claim he/she was denying one entry based upon a perception of Reed, such an action would not constitute an application of the Reed Amendment but an inaccurate assessment by an overzealous/ignorant border guard. This reminds me of something I have heard John Richardson say many times; that there will be a solution to one’s compliance predicament but that it won’t likely be a “good” one or one to like. IOW there are no perfect (or necessarily likeable) solutions. If any US govt employee (or compliance or media person for that matter) misapplied the Reed Amendment, that does not constitute wrong conclusions or information in this post. And it certainly does not suggest I am “misleading.” The DHS has indicated Reed cannot be applied. The State Dept has said it can’t apply it. An IRS counsel could not draft regulations and says it cannot be applied. If one thinks a compliance person or a misguided govt official or a media person should be believed over all these, then what more can be said?

If one needs a “stock answer” to a border guard, the simple answer to “Did you renounce for tax purposes” is “No.” If one feels the need to say more something like “I’ve lived in/been a dual citizen for x-number of years and simply feel more CDN/French whatever.” Something as neutral as possible. A zealot would still see such a statement as treason. There are no perfect solutions. I really dislike adding this because the whole point of this post is to give expats the information to STOP that reaction of “but what if”..IOW, the fear factor. I am NOT writing this to diss any firm, govt agency etc (even though I will not hide my anger or disgust at how this is abused). However, I am responding to the criticism mentioned above. FWIW, I hope this helps.

STOP! Enough Already!! The Reed Amendment is a MYTH!!!

Posted on June 2, 2016 by Patricia Moon

Posted in Issues regarding US persons abroad 81 Comments

If u want 2 renounce ur US citizenship DO NOT believe those who say u can be refused entry ever again-IT IS NOT TRUE https://t.co/I7K58J2jzd

— Patricia Moon (@nobledreamer16) June 2, 2016

I have become very tired and once again, extremely irritated at claims “if you renounce for tax reasons, you can be refused entry into the United States-ever again.” This is simply not true. It is late and am finally sleepy so am just going to copy/paste from set of tweets created after seeing a volley of tweets between Keith and 2 other individuals. I hope it makes sense. Please, please, please, make sure you become familiar with this information in an accurate way and pass it on every time the issue comes up.This is the only way to offset the way this information is aggressively used to frighten people. There is no excuse for it. I hope someday, someone who fell for it realizes the deceit and sues the damned compliance person who is responsible for it

MYTHS ABOUT THE REED AMENDMENT & THE ExPATRIOT ACT

No would-be US renunciant/relinquisher should ever believe an advisor 2 making claims about Reed Amendment preventing ability to enter the U.S.1/11

Willard Yates on why the Reed Amendment is unworkable. “There was a little problem from the outset. It’s called section 6103 of the IRC.” http://bit.ly/1ud93xP 2/11

S 6103 prohibits disclosure of “return information,” by the IRS, subject to criminal prosecution under Title 18 of the U.S. Code” http://bit.ly/1ud93xP 3/11

How was the IRS going to tell INS that a taxpayer’s expatriation was tax motivated? Ruling procedure eliminated in 2004. http://bit.ly/1ud93xP 4/11

Whole idea of the mark-to-market tax section 877A was 2 eliminate “motive” element of prior version of S 877 http://bit.ly/1ud93xP 5/11

IRS does not make rulings on whether or not expatriation was tax motivated. In 2002, authority switched to DHS. http://bit.ly/1ud93xP\ 6/11

DHS has never issued regs bc unless former citizen admits given up due to tax, no way to enforce. From 2002-2015 -only 2 refused entry. http://bit.ly/2850Le8 7/11

Implementation of section 212(a)(10)(E) of the Act has been hindered by numerous policy, operational, and legal complexities and challenges. http://bit.ly/2850Le8 8/11

Confidentiality laws prevent disclosure of tax information to DHS or DOS absent a voluntarily signed disclosure from the renunciant. http://bit.ly/2850Le8 9/11

Congress since amended the tax code to eliminate a direct connection between expatriate tax liability and a renunciant’s intent. http://bit.ly/2850Le8 10/11

There is no law called the ExPatriot Act. Claims in 2015 that it would pass since attached to immigration bill incorrect. Has failed twice to be passed into law. 11/11

To recap, the Reed Amendment, passed in 1996 has to date, twenty years later, resulted in only two people being refused entry into the United States. And only because they chose to explain that they renounced for tax purposes. NO ONE has been stopped at the border and refused entry because a CBP agent suspected they renounced “for tax purposes.” There is NO CONNECTION between an expatriate’s tax liability and a renunciant’s intent. NONE!

U.S. State Department releases FY2015 visa ineligibility statistics; zero Reed Amendment denials, nine draft-related denials

Posted on April 28, 2016 by Eric

Posted in Issues regarding US persons abroad 1 Comment

On Wednesday, the U.S. Department of State released one of the last missing parts of the Report of the Visa Office 2015: Table XX, Immigrant and Nonimmigrant Visa Ineligibilities (by Grounds for Refusal Under the Immigration and Nationality Act). Two grounds of ineligibility in particular may be of interest to U.S. emigrants and accidental Americans: § 212(a)(8)(B) “Draft evader” and § 212(a)(10)(E) “Former U.S. citizen who renounced citizenship to avoid taxation”.

We explored the origins of the draft-related grounds for U.S. visa denial in a post last year. As noted then, since 2004 most people applying for tourist or other non-immigrant visas (though none of those applying for green cards) have been able to overcome the finding that they were ineligible for a visa due to having “departed from or who has remained outside the United States to avoid or evade training or service in the armed forces in time of war or a period declared by the President to be a national emergency”. The denial rate this year is slightly higher: nine people were denied non-immigrant visas, and only six had been able to overcome their ineligibility by the end of the fiscal year in September, either by obtaining a waiver, or by providing evidence that the ineligibility does not actually apply. Zero people were denied immigrant visas on this ground of ineligibility last year. All of those denied non-immigrant visas on this ground were U.S. citizens or green card holders at the time of their departure from the U.S.; § 212(a)(8)(B) states that it does “not apply to an alien who at the time of such departure was a nonimmigrant and who is seeking to reenter the United States as a nonimmigrant.”

With regards to people “determined by the Attorney General to have renounced United States citizenship for the purpose of avoiding taxation by the United States”, the State Department said they did not deny any of them a U.S. visa last year, as they have said every year since 2000. As we discussed recently, the Department of Homeland Security — responsible for making their own determinations of whether non-Americans who show up at U.S. borders (including those with visas, and those who don’t need visas such as citizens of VWP countries) are eligible to enter the country — revealed last November that since 2002, they have only denied two people entry to the U.S. due to the Reed Amendment, because both of them “affirmatively admitted” to government officials that they had renounced U.S. citizenship to avoid taxation.

Homeland Security enforced Reed Amendment twice in 14 years; banished two ex-citizens who mentioned tax motivations

Posted on March 23, 2016 by Eric

Posted in Renunciation 27 Comments

In a short November 2015 report which seems to have gone unnoticed by compliance professionals, the U.S. Department of Homeland Security — responsible, via one of their myriad sub-agencies, for deciding whether a person who shows up at a U.S. border crossing can legally enter the country — revealed (p. 2):

Since 2002, two individuals who admitted to having renounced for tax avoidance purposes were found to be inadmissible under section 212(a)(10)(E) of the Act. Five additional individuals were identified as possibly inadmissible on the basis of section 212(a)(10)(E). One was served a notice to appear, but was not placed in removal proceedings. The four others were paroled, one of whom was deferred for inspection and later admitted.

Many countries, including Australia, Denmark, India, the Philippines, and the United Kingdom grant their former citizens “diaspora visas” or allow them to re-acquire citizenship easily — a simple humanitarian gesture so that emigrants can make decisions about their nationality without worrying they will be blocked from coming back to visit their hometowns, attend their high school reunions, watch their nieces & nephews grow up, or care for their parents in their dying days.

In contrast, the U.S. threatens its diaspora with permanent banishment: § 212(a)(10)(E) of the Immigration and Nationality Act, known for short as the Reed Amendment, makes former citizens inadmissible if DHS (originally, the Attorney-General) determines that they “renounced United States citizenship for the purpose of avoiding taxation by the United States”. Some Canadians have stated openly that fear of the Reed Amendment is their sole reason for retaining U.S. citizenship.

The thing is, Reed’s badly-drafted law didn’t bother giving the IRS authorisation to share tax information with DHS, meaning it’s nearly impossible to enforce legally. So you might ask: how did DHS make this determination in the cases mentioned above? (pp. 3, 5):

Interagency coordination between DHS and DOS operations in this area is improving continuously, but there currently are no advisable options for altering enforcement of the inadmissibility ground against persons who do not affirmatively admit to renouncing their U.S. citizenship for the purpose of avoiding U.S. taxation …

Despite the legal, operational, and policy challenges to the full implementation of section 212(a)(10)(E) of the Immigration and Nationality Act, the Department of Homeland Security and the Department of State remain committed to continuing to strengthen lines of communication, improve information sharing, and develop more consistent protocols to ensure that both Departments are aware when a renunciant admits that he or she renounced U.S. citizenship for the purpose of U.S. tax avoidance.

So there you have it, straight from the horse’s mouth: they have no way to enforce the Reed Amendment unless you “admit” to a government official the obvious truth that taxation-based citizenship is making it miserable for you to lead a normal life in the country you have chosen to call home.

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How to banish a citizen: a two-step transaction

Posted on May 16, 2015 by Eric

Posted in Issues regarding US persons abroad 20 Comments

On Friday, the State Department released one of the remaining missing sections of the Report of the Visa Office for Fiscal Year 2014: Table X, “Immigrant and Nonimmigrant Visa Ineligibilities (by Grounds for Refusal Under the Immigration and Nationality Act)”. For our purposes, this is interesting because of its statistics on two particular grounds of ineligibility which apply to emigrants: 8 USC § 1182(a)(8)(B) (“Draft evaders”) and § 1182(a)(10)(E) (“Former citizens who renounced citizenship to avoid taxation”).

The latter ground, the infamous Reed Amendment, is not known ever to have been enforced officially, though oddly enough this year’s Table X does not give us the number of determinations of ineligibility for a non-immigrant visa under the Reed Amendment: unlike in past years, the table entry is blank. It is not listed as a dash, which is used in the report to indicate that a particular ground of ineligibility doesn’t apply to non-immigrants; there’s simply no symbol in that row & column of the table at all. (The last time the report failed to include the Reed Amendment, in 2003, there was simply no row in the table at all; this time, however, the row is present, it’s just that the non-immigrant column is blank.) I have no idea what this might mean.

One thing Table X does show is the continued decline in enforcement of the former ground: only about half a dozen to a dozen people per year are being found ineligible for visas on draft-related grounds, and in recent years nearly all of them have been able to overcome their ineligibility upon review. However, despite Jimmy Carter’s pardon back in the 1970s, the number of people unable to overcome their ineligibility is not zero.

The ban on re-entry for people who left the U.S. as draft evaders or deserters is rooted in a much older Civil War-era law which stripped such people of their citizenship and made them ineligible for naturalisation. At the time, the U.S. had very few immigration controls, but by the 1920s, new immigration laws began placing barriers in the way of entry of all aliens ineligible to citizenship, presumably including draft evaders & deserters. These banishment provisions were made explicit in the Immigration and Nationality Act of 1952, and even survived the Supreme Court cases Trop v. Dulles in 1958 and Kennedy v. Mendoza-Martinez in 1963, which declared the nationality-stripping provisions for desertion and draft evasion respectively unconstitutional.

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Ex-U.S. citizen actor visited California for holiday without issues

Posted on February 10, 2015 by Eric

Posted in Issues regarding US persons abroad 19 Comments

While nasty and vindictive Homelanders were expressing glee at the news that Roger Ver had been denied a U.S. visa to speak at a Bitcoin conference in the U.S., another covered expatriate was able to celebrate a much quieter Christmas and New Year’s holiday in Southern California with his Canadian wife. A recent article in Hong Kong’s Headline News confirms that Hong Kong actor Donnie Yen Chi-tan recently visited the U.S. and Peru with his family. His wife Cecilia Wang posted a picture of herself, Yen, and the kids in Los Angeles just after the New Year on Chinese microblogging service Sina Weibo. As far as is known, Yen himself — unlike his wife — holds only a Hong Kong SAR passport and not a Canadian passport, meaning he does not enjoy visa-free entry but instead had to apply for an actual U.S. visa to enter the country.

Yen is an “accidental American” of a different sort: he was not born a dual citizen, but instead came to the U.S. with his family at age 11. However, he moved back to Hong Kong pretty much as soon as he reached adulthood, and achieved fame in the movie industry there through his roles in martial arts films. He renounced U.S. citizenship in 2009, and showed up in the Federal Register “published expatriates” list for Q3 2010; as he stated to Xinhua News Agency when they interviewed him a few years later about his renunciation, “now I’m 100% Chinese”. This was not Yen’s first visit to the U.S. since his renunciation, either; in July 2014, he went to Boston where his parents still live. Having U.S. citizen or resident relatives makes it more difficult to overcome the presumption of immigrant intent when applying for a tourist visa, but as Yen’s case demonstrates it is far from impossible either.

Even though politicians on both sides of the aisle keep threatening to banish us, many other ex-U.S. Persons both famous and obscure have had no issues in obtaining a U.S. tourist visa or entering through the Visa Waiver Program. Some have even moved back to the country, either on work visas or green cards. Unfortunately, even the mere threat of being denied entry to the U.S. to visit friends and relatives has left some U.S. Persons in other countries too afraid to cast off their unwanted citizenship.

Reed Amendment, Logan Act: why worry about unenforced & unenforceable laws?

Posted on January 16, 2015 by Eric

Posted in Issues regarding US persons abroad 42 Comments

Here’s another unenforced and arguably unconstitutional United States federal law with potentially life-altering penalties and fines which nearly every Isaac Brock Society reader has violated:

18 USC § 953. Private correspondence with foreign governments

Any citizen of the United States, wherever he may be, who, without authority of the United States, directly or indirectly commences or carries on any correspondence or intercourse with any foreign government or any officer or agent thereof, with intent to influence the measures or conduct of any foreign government or of any officer or agent thereof, in relation to any disputes or controversies with the United States, or to defeat the measures of the United States, shall be fined under this title or imprisoned not more than three years, or both.

This section shall not abridge the right of a citizen to apply himself, or his agent, to any foreign government, or the agents thereof, for redress of any injury which he may have sustained from such government or any of its agents or subjects.

There has never been a single prosecution under this law, the Logan Act, in its two-century history. But there didn’t need to be in order for it to scare people away from exercising their rights.

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