The Unknown Ambassadors: A Saga Of Citizenship – Phyllis Michaux

I just read “The Unknown Ambassadors: A Saga Of Citizenship” by Phyllis Michaux.* Phyllis Michaux was an American citizen who married a French citizen/resident. She lived her adult life in France. By any standard, she was an impressive and effective advocate for the rights of Americans abroad.**

I recommend the book (if you can find a copy) to all Americans abroad. As diverse as the community of Americans abroad is, what unites them is far greater than what divides them. What unites all Americans abroad is the horrible discriminatory treatment they suffer at the hands of the U.S. government. (As the distribution of vaccines in the covid pandemic demonstrated, the discriminatory treatment is NOT limited to taxation.) In this respect the United States is practically unique. Ireland honours and celebrates its diaspora. France gives it expats representatives in the legislature. The United States does (in 2024) and always has (as documented in “The Unknown Ambassadors”) mistreat its citizens abroad. U.S. citizens abroad are examples of the “discrete and insular minorities” contemplated in Justice Stone’s infamous Carolene Products footnote 4.)**** U.S. citizens, more than the citizens of any other country are in need of a second citizenship.

Phyllis Michaux’s achievements from the 20th century offer lessons for the many individuals and groups who are advocating to achieve justice for Americans abroad in the 21st century.

“The Unknown Ambassadors” provides an account of Ms. Michaux’s recognizing discrimination against Americans abroad as a matter of fact, identifying the laws responsible for that discrimination, identifying the appropriate U.S. government agencies to lobby for change and finally executing that change. Advocates for Americans abroad in the 21st century should read this book. A testament to her achievements is that the “Phyllis Michaux Papers” are found in the “Georgetown University Archival Resources”.

The scope of advocacy in the 21st century – It all starts with the U.S. Extra-territorial tax and regulatory regime …

US citizens who move from the United States and becomes a tax resident of another country:

1. Continue to be subject to the U.S. Internal Revenue Code (the extra-territorial tax regime); and

2. Are subject to more punitive U.S. taxation and reporting than are resident Americans!

“The Unknown Ambassadors” describes a history which:

– documents the horrible discrimination against Americans abroad in the area of the “citizenship rights” (of children born outside the United States to a U.S. citizen parent – between 1959 and roughly 1980)*****;

– documents the history of a time when Americans abroad had no voting rights (up until 1976); and

– documents the collective advocacy undertaken by Ms. Michaux (and others) to reverse this discrimination (there are lessons to be learned from their success).

The battles won by Ms. Michaux (enhanced citizenship and voting rights) were impressive. Yet the successes of the past have exacerbated the problems that Americans abroad experience today. (There are more people born abroad who are American citizens. The right to vote is frequently used to justify U.S. citizenship taxation.) Of course, nobody could have foreseen: the growth in the number of U.S. citizens abroad (resulting from the Afroyim decision), the nasty evolution of the U.S. tax system, the activation of citizenship taxation under the Obama administration, the Obama Offshore Voluntary Disclosure Programs, the dusting off of Mr. FBAR after 911, the discovery of PFICs in the OVDI programs, the Clinton Treasury 877A expatriation tax and the implementation of FATCA.

(While acknowledging the existence of citizenship taxation, Ms. Michaux seems to accept it as part of what it means to be American. Significantly, Ms. Michaux was recounting a period of history before FATCA and the other aspects of citizenship taxation that are forcing Americans abroad to renounce U.S. citizenship.)

There are at least four reasons why the situation for Americans abroad has escalated and is far worse in 2024.


Four significant escalations since the Phyllis Michaux era

1. The expansion of U.S. citizen individuals who are “Overseas Americans” – Before And After the 1967 Supreme Court Decision In Afroyim***

As documented in Amanda Frost’s “You Are Not American“, the United States has a long history – through Congressional legislation – of stripping Americans of their citizenship. To put this in context, imagine a situation where a majority could use the democratic process to simply exclude one or more individuals from the political process (and more) by stripping them of their citizenship.

In the 1967 U.S. Supreme Court decision in Afroyim v. Rusk, the court ruled that Congress could NOT strip people of their U.S. citizenship. Interestingly it took almost 20 years (and several more court decisions) for the Immigration and Nationality Act to make this change and for the State Department to recognize it.

Prior to Afroyim U.S. law stripped Americans of their citizenship for a variety of reasons. These reasons included (but were not limited to) naturalizing as a citizen of another country! Therefore the result of Afroyim was that more and more U.S. citizens were also citizens of another country. Dual citizenship became and increasingly becoming more common.

Notably the increase in the number of dual citizens has significantly changed the composition of who an “Overseas American” actually is. In the days of Phyllis Michaux, an “Overseas American” was much more likely to be an expat or government worker who identified as a U.S. citizen. U.S. citizenship laws, made it difficult for an “Overseas American” to be anything else. This means that the Ms. Michaux group was likely to be the dominant group lobbying for changes in U.S. laws. They (because they identified as U.S. citizens) were also a more sympathetic group than the diverse groups that exist today (accidental Americans, emigrants, expats, retirees abroad, etc.)

2. The inclusion (since 1984) of “Green Card holders (like U.S. citizens) as U.S. tax residents

U.S. “residents” have always been subject to U.S. worldwide taxation. That said, U.S. “residents” include individuals who are NOT actually “resident” in the United States. Nonresident U.S. citizens are treated as though they reside in the United States. Prior to January 1, 1984, whether “Green Card” holders were treated as U.S. residents was a question of fact. Effective January 1, 1984 the Internal Revenue Code was amended so that “Green Card” holders are deemed to be U.S. residents regardless of where they live in the world. This change in the definition of U.S. tax residency has swept another large group of people into the U.S. tax system.

3. The expansion of ways “Overseas Americans” can be subjected to U.S. taxes, forms and penalties

Since Ms. Michaux’s time the expansion of taxes and forms applicable to Americans abroad (and enforced against them) has been shocking. In a previous post I described some of the forms and information returns that are likely apply to Americans abroad.

Forms that are common today, but did not exist or were not known in Ms. Michaux’s time include:

– Mr. FBAR – FinCEN 114: Although it has existed since 1970, but remained virtually unknown since 2003

Form 8938: Part of FATCA and the HIRE Act of 2010

Form 5471: Existed but not known by Americans abroad with small businesses

Form 3520: The result of 1996 changes to the Foreign Trust rules

Form 8621: The result of the creation of PFICs in the 1986 tax reform (but not applied to non-US mutual funds until the 2010 Offshore Voluntary Disclosure Programs)

The encactment of FATCA in 2010 was the circumstance that unleashed the horrors of the U.S. extraterritorial tax regime on the world.

There is no comparison between the taxation of Americans abroad in the time of Phyllis Michaux and the environment that exists today.

4. The decline in pensions and the necessity of individuals taking responsibility for their retirement and financial planning

1976 was 50 years ago. In 1976 pensions were far more common than they are today. In 2024 individuals have a responsibility to themselves and to their families to engage in responsible financial and retirement planning. Unfortunately the U.S. tax system (largely because of the tax treaty “saving clause” has made this increasingly difficult for individual “Overseas Americans”. The biggest cost of U.S. citizenship for Americans abroad is the opportunity cost associated with not being able to participate in tax advantaged retirement programs in their country of residence. Many U.S. emigrants are forced to choose between retaining their U.S. citizenship or renouncing U.S. citizenship in order to participate in financial planning programs in their country of residence. Unsurprisingly, many are choosing to simply renounce U.S. citizenship.

Then and now …

We all respond to the circumstances of our time. Ms. Michaux’s advocacy took place during a time of (relative) tax simplicity and a much smaller and well defined group of “Overseas Americans”. Significantly, in the Phyllis Michaux there is no evidence that “Overseas Americans” were under pressure to renounce U.S. citizenship.

John Richardson – Follow me on Twitter @Expatriationlaw

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Appendixes

*Appendix A – The Book

From the Back Cover

“One hundred years ago, Frederick Jackson Turner of Harvard University predicted the end of the American frontier. In her thoroughly researched book, Phyllis Michaux breaks new ground by exploring the technical and legal horizons of a vastly different frontier, one inhabited by the millions of Americans living abroad, eager to preserve their rights and identity as citizens of the United States.” Pamela Harriman, United States Ambassador to France “This book is a valuable account of Michaux’s attack on the bureaucracy, which changed a law and the lives of thousands of children, mine among them, and their anguished American mothers. What she did is in that wonderful American tradition of feisty determination to take on injustice, no matter what the odds.” -Polly Platt, Director, Culture Crossings Ltd., and author of French or Foe?

About the Author

Born and raised in Washington, D.C., Phyllis Michaux married a French citizen after World War II. After the birth of their first child she became concerned with American citizenship laws as they apply to children born overseas of dual-national couples. She was instrumental in founding the Association of American Wives of Europeans (AAWE) in 1961 and the Association of American Residents Overseas (AARO) in 1973. In March 1996 Michaux was awarded the Eugene Abrams Senior Citizenship Award by American Citizens Abroad.

**Appendix B –

From the AARO site – 2007 Commentary from Phyllis Michaux

https://www.aaro.org/about-aaro/the-teabag-campaign

The Teabag Campaign of 1975 for Passage of the Overseas Citizens Absentee Voting Rights Act
Teabags
Sonja Minçbère and Phyllis Michaux, 1975

In 1973 the Bipartisan Committee on Absentee Voting, founded in Paris by prominent members of the American community, was able to introduce a bill in Congress by Senator Charles McCurdy Mathias, Jr. (R-MD). The bill sought to abolish domicile and residence requirements as pre-conditions for absentee voting in federal elections.

At that time local, county and state officials determined procedures for absentee voter registration. For example, the state of New York would not issue an absentee ballot unless state income tax had been paid – even if your last residence was in Minnesota.

By September 1975 the bill was still wending its way through the legislative process – committees, hearings, verifications, more hearings – but never coming to a vote. Several former ambassadors, including Charles Bohlen, Arthur Goldberg, Averill Harriman and George H. W. Bush, had testified on behalf of the bill.

Yet the Justice department, suspicious of voter fraud, came out against it. A legal counsel to the Deputy Assistant Attorney General, Antonin Scalia (later named to the Supreme Court by Ronald Reagan), held that it basically seemed unfair to permit a person who might have no knowledge or interest in the state in which he was formally domiciled to cast votes in that state.

Joining forces with the Bipartisan committee, AARO was able to use the administrative facilities of the American Chamber of Commerce in France. It thus became possible to coordinate a grassroots letter writing campaign, working with FAWCO clubs, veterans groups alumni associations, schools, churches, and just about any American organization that could be located. We could reach individuals all over Europe and beyond. But generating letters was not easy. Many people had never even tried to vote. They were unsure of their congressional district or the name of their congressmen. They needed the name and the number of the bill. What to say? What mailing address and terms to use? All of these questions discouraged action. (Obviously, the generalized use of email, photocopiers and computers had not yet arrived).

During the fall of 1975, a former president of FAWCO, Sonja Minçbère, came often to the Chamber of Commerce to keep our paperwork moving. In the afternoon we would have our cup of tea, usually discussing how to get more people to write more letters to more congressmen. And then one day, suddenly, Sonja picked up her tea bag, waved it around and said “Tea Party, Boston!” She had found the solution.

It was simple, direct, and catchy. We wrote a brief message on AARO stationary:Tea Bag Letter IMG 7386

A short cover letter was prepared, telling the addressees to staple a tea bag to the letter and mail it to their congressmen. All we had to do then was to send one copy to everyone on our mailing list, counting on them to copy and distribute as many as possible. And so they did.

Tea Bag Press Release IMG 7385By December 1975, the Reconcilation Bill had passed the House 374 to 43. The Chairman of the House Administration Committee stated that the mail received in his office on behalf of this legislation had exceeded by five or six times the amount that had come in on any other issue during the year.

But opposition by the Justice Department continued, still led by Antonin Scalia, who had persuaded the Attorney General to oppose the President’s signature. The representative of the bipartisan committee, Gene Marans, decided to go over the head of the Justice Department. He asked Sen. Barry Goldwater to call the legal counsel of President Gerald Ford.

Senator Goldwater’s message to the White House was: “Listen you ___ fools! There are more Republicans in Paris than there are in Detroit! And Ford doesn’t want to be the first President to veto a voting rights bill since the Reconstruction.”

The bill was signed by the President on January 2, 1976. Direct political life had begun for Americans living overseas.

Phyllis Michaux
March 2007

***Appendix C – Concluding paragraph of Justice Black’s ruling in Afroyim

Because the legislative history of the Fourteenth Amendment, and of the expatriation proposals which preceded and followed it, like most other legislative history, contains many statements from which conflicting inferences can be drawn, our holding might be unwarranted if it rested entirely or principally upon that legislative history. But it does not. Our holding, we think, is the only one that can stand in view of the language and the purpose of the Fourteenth Amendment, and our construction of that Amendment, we believe, comports more nearly than Perez with the principles of liberty and equal justice to all that the entire Fourteenth Amendment was adopted to guarantee. Citizenship is no light trifle to be jeopardized any moment Congress decides to do so under the name of one of its general or implied grants of power. In some instances, loss of citizenship can mean that a man is left without the protection of citizenship in any country in the world — as a man without a country. Citizenship in this Nation is a part of a cooperative affair. Its citizenry is the country, and the country is its citizenry. The very nature of our free government makes it completely incongruous to have a rule of law under which a group of citizens temporarily in office can deprive another group of citizens of their citizenship. We hold that the Fourteenth Amendment was designed to, and does, protect every citizen of this Nation against a congressional forcible destruction of his citizenship, whatever his creed, color, or race. Our holding does no more than to give to this citizen that which is his own, a constitutional right to remain a citizen in a free country unless he voluntarily relinquishes that citizenship.

https://supreme.justia.com/cases/federal/us/387/253/

****Appendix D – Carolene Products Footnote 4

Footnote 4]

There may be narrower scope for operation of the presumption of constitutionality when legislation appears on its face to be within a specific prohibition of the Constitution, such as those of the first ten amendments, which are deemed equally specific when held to be embraced within the Fourteenth. See Stromberg v. California, 283 U. S. 359, 283 U. S. 369-370; Lovell v. Griffin, 303 U. S. 444, 303 U. S. 452.

It is unnecessary to consider now whether legislation which restricts those political processes which can ordinarily be expected to bring about repeal of undesirable legislation is to be subjected to more exacting judicial scrutiny under the general prohibitions of the Fourteenth Amendment than are most other types of legislation. On restrictions upon the right to vote, see Nixon v. Herndon, 273 U. S. 536; Nixon v. Condon, 286 U. S. 73; on restraints upon the dissemination of information, see Near v. Minnesota ex rel. Olson, 283 U. S. 697, 283 U. S. 713-714, 283 U. S. 718-720, 283 U. S. 722; Grosjean v. American Press Co., 297 U. S. 233; Lovell v. Griffin, supra; on interferences with political organizations, see Stromberg v. California, supra, 283 U. S. 369; Fiske v. Kansas, 274 U. S. 380; Whitney v. California, 274 U. S. 357, 274 U. S. 373-378; Herndon v. Lowry, 301 U. S. 242, and see Holmes, J., in Gitlow v. New York, 268 U. S. 652, 268 U. S. 673; as to prohibition of peaceable assembly, see De Jonge v. Oregon, 299 U. S. 353, 299 U. S. 365.

Nor need we enquire whether similar considerations enter into the review of statutes directed at particular religious, Pierce v. Society of Sisters, 268 U. S. 510, or national, Meyer v. Nebraska, 262 U. S. 390; Bartels v. Iowa, 262 U. S. 404; Farrington v. Tokushige, 273 U. S. 284, or racial minorities, Nixon v. Herndon, supra; Nixon v. Condon, supra: whether prejudice against discrete and insular minorities may be a special condition, which tends seriously to curtail the operation of those political processes ordinarily to be relied upon to protect minorities, and which may call for a correspondingly more searching judicial inquiry. Compare 17 U. S. Maryland, 4 Wheat. 316, 17 U. S. 428; South Carolina v. Barnwell Bros., 303 U. S. 177, 303 U. S. 184, n 2, and cases cited.

https://supreme.justia.com/cases/federal/us/304/144/

Interesting article …

https://www.encyclopedia.com/politics/encyclopedias-almanacs-transcripts-and-maps/discrete-and-insular-minorities

*****Appendix E – Notable quotes

Page 111 …

“Having to apply for a visa every time we visit my family in the United States, having to fill out forms certifying that my four-year-old daughter isn’t a Communist, drug user or importer of pornographic literature! I find this situation nonsensical and outrageous. The law concerning transmission must be changed. After all, I did not choose to leave America before completing ten years’ residence there, so why should my children be victimized by circumstances entirely out of my control?”

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