Monthly Archives: February 2026

Justice Warren’s Dissent In Perez v. Brownell Supports Right To Renounce Citizenship

Introduction

More and more U.S. citizens are relinquishing their U.S. citizenship. The mechanism to do this is found in S. 349(a) of the Immigration and Nationality Act. A statutory right to expatriation does not imply a constitutional right to expatriation. In the last few years (specifically in the Roger case and the Accidental Americans case) the U.S. government has denied that there is a constitutional right to expatriation.

The Constitutional Right To Retain U.S. Citizenship May NOT Include A Constitutional Right To Relinquish U.S. Citizenship

It’s likely that the constitutional status of the right to relinquish U.S. citizenship will be litigated!

It is likely that (sooner or later) the courts will rule on whether U.S. citizens have a constitutional right to expatriate. In that spirit, I believe that the then Chief Justice Warren’s dissent in Perez v. Brownell should be remembered.

The 1967 case of Afroyim v. Rusk overruled the 1958 decision in Perez v. Brownnell

U.S citizenship stripping – 1958 to 1967

The 1967 U.S. Supreme Court decision in Afroyim v. Rusk specifically overruled the 1958 Supreme Court decision in Perez v. Brownell. The majority in the 1958 decision in Perez v. Brownell affirmed the right of Congress to strip U.S. citizens of their citizenship. The majority in the 1967 decision in Afroyim ruled that Congress could not strip a U.S. citizen who born or naturalized in the United States of their citizenship. The majority decision in Afroyim was written by Justice Black who was part of the Warren minority in Brownell.

U.S. citizenship relinquishment in a post-FATCA world – 2010 and onwards

More than half a century later, many U.S. citizens are constructively forced to renounce their U.S. citizenship. Recent litigation (Roger Ver, Accidental Americans, etc.) has raised the issue of whether U.S. citizens have a constitutional right to expatriate.

It is worth remembering Justice Warren’s dissent in Perez v. Brownell. In Perez, Justice Warren stated that U.S. citizens DO have the right to expatriate! I agree that Justice Warren was writing the dissent. I also agree that the right of expatriation was NOT the precise issue in Perez v. Brownell. That said, Perez v. Brownell is an example where a Justice of the Supreme Court of the United States has considered the right of expatriation and stated that U.S. citizens do have a right to expatriate.

Beginning on page 66 Chief Justice Warren stated:

There is no question that citizenship may be voluntarily relinquished. The right of voluntary expatriation was ‘recognized by Congress in 1868.1 Congress declared that “the right of expatriation is a natural and inherent right of all people .” ,, Although the primary purpose of this declaration was the protection of our naturalized citizens from the claims of their countries of origin, the language was properly regarded as establishing the reciprocal right of American citizens to abjure their allegiance. 1 In the early days of this Nation the right of expatriation lad been a matter of controversy. The common-law doctrine of perpetial allegiance was evident in the opinions of this Court. 2 And, although impressment of naturalized American seamen of British birth was a cause of the War of 1812, the executive officials of this Government were not unwavering in their support of the right of expatriation.” Prior to 1868 all efforts to obtain congressional enactments concerning expatriation failed. 4 The doctrine of perpetual allegiance, however, was so ill-suited to the growing nation whose doors were open to -immigrants from abroad that it could not last. Nine years before Congress acted Attorney General Black stated the American positiori in a notable opinion:

“Here, in the United States, the thought of giving it [the right of ‘expatriation] up cannot be entertained for a moment. Upon that principle this country was populated. We owe to it our existence as a nation. Ever since our independence we have upheld and maintained it by every form of words and acts. We have constantly promised full and complete protection to all persons who should come here and seek it by renouncing their natural allegiance and transferring their fealty to us. We stand pledged to it in the face of the whole world.”

https://tile.loc.gov/storage-services/service/ll/usrep/usrep356/usrep356044/usrep356044.pdf

The complete PDF of the decision is available here:

service-ll-usrep-usrep356-usrep356044-usrep356044

Justice Warren’s dissent includes the building blocks of an argument that expatriation is a constitutional right.

I suspect that I (and perhaps others) will reread this post in the years to come!

John Richardson – Follow on X.com/ExpatriationLaw

FATCA Reporting, The Banks And Their U.S. Citizen Customers: The Saga Continues

Reposted with permission from The Isaac Brock Society.

In October I published a post about the U.K. division of Fidelity cleansing itself of U.S. citizen customers. Since the beginning, it has been clear that FATCA has made U.S. citizen customers a problems for non-U.S. banks. Today I was informed that FATCA reporting to the IRS has begun to find its way to U.S. citizens directly. As the above post from X.com indicates, some individual U.S. citizens are receiving communications from the IRS. The communication notes the existence of the “foreign financial asset” and that the asset should have been reported.

Significantly the letter notes the bank where the unreported account was located. In this case the bank was “Bank Hapoalim B.M” which is apparently one of Israel’s largest banks.

Interestingly on April 30, 2020 Bank Hapoalim admitted to helping U.S. citizen customers hide assets and avoid U.S. taxation. This resulted in a deferred prosecution agreement and a penalty. (The Department Of Justice Press Release is available online.) A reading of the press release strongly suggests that customers of this bank may be presumed to be guilty by association.

This is interesting news.

Of course:

“To be FORMwarned Is To Be Forearmed!”

John Richardson Follow me on X.com/Expatriationlaw

Restore U.S. Citizenship

Part 1 – Why have many U.S. citizens abroad relinquished their U.S. citizenship?

FATCA was passed into law as part of the HIRE Act on March 18, 2010. The implementation began in 2014 in the form of FATCA IGAs (“Inter-Governmental Agreements”). The implementation of FATCA and the IGAs was NOT free from controversy. I – John Richardson – was a witness at a Canadian House of Commons Hearing about FATCA in 2014. The complete text of my 2014 statement is here.

FATCA has caused enormous problems for U.S. citizens living outside the United States. These problems have led to an increasing number of U.S. citizens renouncing U.S. citizenship.

The problems caused by FATCA. leading to citizenship renunciation, fall into at least three distinct categories.

First, many U.S. citizens living outside the United States have difficulty maintaining access to regular bank and financial accounts. This has caused great disruption and inconvenience in their lives. Many people have renounced their U.S. citizenship in order to have the access to the bank and financial accounts needed to live their daily lives.

Second, along with FATCA came an awareness of U.S. citizenship taxation. Prior to FATCA citizenship taxation was neither well known nor enforced. By causing an awareness of citizenship taxation, more U.S. citizens abroad have entered the U.S. tax system. The consequence of entering the U.S. tax system has caused difficulties for many Americans abroad. These difficulties include double taxation, U.S. taxation of retirement planning accounts (example TFSA in Canada). Generally, this has disadvantaged U.S. citizens abroad in their country of residence. It caused many U.S. citizens abroad to relinquish/renounce their U.S. citizenship.

Third, as discussed in Helen Burggraf’s American Expat Finance News Journal, FATCA facilitated the expansion of the U.S. tax base into other countries.

The combination of these circumstances has incentivized (and in some cased forced) many U.S. citizens abroad to relinquish/renounce their U.S. citizenship.

Part 2 – The legal test for relinquishment/renunciation

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U.S. Supreme Court Strikes Down Trump Tariffs – Read The Decision Here

Read the decision here:

A PDF is here:

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Here is an AI generated podcast analyzing the decision:

John Richardson – Follow me on X.com/ExpatriationLaw

PFIC: Revenue Procedure 2026-10 – Making A Retroactive Qualified Electing Fund (QEF) Election

Introduction

The Purpose of the PFIC rules – Description of the 1986 Tax Reform Act

The PFIC rules were part of the general tax reform act of 1986. In order to understand the intent of the PFIC rules it is useful to read the general explanation of the tax reform act. The explanation starts at page 1021 of the document or page 1037 of the pdf. It is worth the read …

https://web.archive.org/web/20120507115421/https://www.jct.gov/jcs-10-87.pdf

jcs-10-87

The discussion of PFICs begins on page 1021 of the document. What is clear is that the purpose of the PFIC rules was to impose punitive taxation on investments in foreign corporations. The PFIC rules were designed to apply when he Subpart F rules did not apply.

In 1986, it was contemplated that taxpayers would be subject to either default (most punitive taxation) under 1291 or the QEF election under 1295 (pay tax on your share of the corporations undistributed profits). The 1296 – Mark to Market option – was created in the mid 1990s.

The IRC 1291 Default Option
Continue reading

Part 56 – Professor Hank Adler – “When An Income Tax Is Not A Tax On Income” – The Moore Case

Part 56 – The Little Red Transition Tax Book

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Purpose

On February 6, 2026 I interviewed Professor Hank Adler on his latest article in Tax Notes titled:

“When An Income Tax Is Not A Tax On Income”

Professor Adler notes that although the transition tax was based on untaxed income, the rate of tax payable was dependent on what the retained earnings had been invested in. Notably:

– the portion of retained earnings invested in liquid assets was taxed at a higher rate than;

– the portion of the retained earnings invested in less liquid assets.

Professor Alder questions whether this can truly be an income tax. Or rather it is a tax based on how earnings have been invested.

John Richardson – Follow me on X.com/Expatriationlaw

Authenticating A Document For Use Outside Of Canada And The Hague Apostille Convention

Introduction

Canadian citizens or residents may need to prove the validity of Canadian documentation outside of Canada. Examples might include the need to prove the validity of a marriage certificate, birth certificate or any of a number of other documents.

The purpose of this post is ONLY to alert you to the necessity of authenticating a document. It is also to distinguish the authentication of a document from what the authenticated document may allow you to do.

Part A – Why Authenticating A Document May Be Necessary

An ounce of prevention is worth a pound of cure!

Note that the authentication of a document is a different issue from the creation of a power of attorney. This is because one could have:

– a power of attorney validly created under Canadian law; but

– that validly created power of attorney might be insufficient for its intended use in another jurisdiction.

See “The Power Of Attorney: WHERE Is It To Be Used And WHAT Is It To Be Used For?” for a discussion of why you should have a power of attorney created in the jurisdiction it is to be used.

This post is focused only on proving that a document created in Canada is an “authentic document”.

Part B – How To Authenticate a document for use outside Canada

If you are working, studying, or doing business abroad, you may need proof of authentication for public documents issued in Ontario. Official Documents Services (ODS) is the authority that issues certificates of authentications and apostilles in Ontario.

Here the following link is a starting point in understanding this issue. The page is long and comprehensive. Should the link become obsolete after the publication of this post search “Authenticate a document for use outside Canada” and the new source should be revealed.

https://www.ontario.ca/page/authenticate-document-use-outside-canada

The overview of the page includes:

Overview

Notice: Effective January 11, 2024, Canada joined the Hague Apostille Convention.

Learn more about upcoming changes to document authentication.

When working, studying, or travelling abroad, end destination recipients may ask for certificates of authentication or apostilles to ensure that public documents (e.g., birth certificates, corporate powers of attorney, diplomas, etc.) are valid.

Official Documents Services (ODS) verifies the validity of documents by checking if the signatures and seals on the documents match their records. If the signatures and seals match, ODS will authenticate documents by issuing certificates of authentication or apostilles.

A certificate of authentication is an authentication of public documents utilized by countries that are not signatories of the Hague Apostille Convention, Abolishing the Requirement of Legalisation of Foreign Public Documents (Hague Apostille Convention).

An apostille is an authentication of public documents utilized by countries that are signatories of the Hague Apostille Convention.

Clients are responsible for contacting the relevant consulate, embassy, or end destination recipient prior to requesting document authentication services to understand requirements.

Part C – The Hague Apostille Convention

This is a multi-lateral treaty to provide for the authentication of documents. Information is here:

https://www.hcch.net/en/instruments/conventions/specialised-sections/apostille

John Richardson – Follow me on X.com/expatriationlaw

The Power Of Attorney: WHERE Is It To Be Used And WHAT Is It To Be Used For?

The purpose of this post is to draw awareness to the common problem of the validity and effectiveness of a power of attorney (“POA”) to deal with a property in a cross-jurisdictional context. For example, is a power of attorney validly created in Canada sufficient to allow one to make decisions pertaining to the registration of land in Florida? The “POA” could be perfectly valid under Canadian law but NOT be sufficient for its intended use in Florida.

The validity of a “POA” where it is created is different from whether it is sufficient to be used in its effective jurisdiction.

Note also that this is a different issue from “Authenticating A Document Created In Canada”.

Q. What if a property is located in another jurisdiction and a POA is needed to deal with that specific property? Will a POA created in Canada or Europe be valid in the United States?

A. Not necessarily!

As one person commented:

I had POA for a family member, took the document to that family member’s bank in the US and they sent us back to get it notarized at the US consulate in Canada.

It makes good sense to create:

1. Separate powers of attorney for different purposes: and

2. A power of attorney in the jurisdiction where the power of attorney is to be used!

“An ounce of prevention is worth a pound of cure!”

Yesterday I participated in an IRS Medic podcast to discuss “Powers Of Attorney” and Americans Abroad.

Generally, a Power Of Attorney is created when an individual grants to an “attorney” the power to act on behalf of the grantor with respect to a particular property or issue. For example, a grantor could grant to an attorney the power to sell or manage a specific property. But, what if that property is outside the the residence or domicile of the grantor? What are the requirements that make a POA valid? Is a POA that is valid under the laws of Ontario, Canada valid in a U.S. state? The short answer is NOT NECESSARILY. Would it make sense to have multiple POAs, each of which is limited to a specific decision/property, etc? The answer is probably YES.

The reality of an individually living in jurisdiction A having to deal with property in jurisdiction B is becoming more and more common.

After participating in the IRS Medic podcast I saw the a blog post written by the Toronto law firm of O’Sullivan law titled: “Powers of Attorney: Jurisdictional Challenges“. The post does an excellent job of defining why this issue is important:

In order for a POA to be valid, it must comply with the formal POA requirements of the applicable jurisdiction. These requirements are generally concerned with who may make a POA, who may be appointed as an attorney, who may or must witness the execution of the POA and when the POA will be in force. Although the formalities may appear similar across jurisdictions, each jurisdiction generally has its own unique requirements, with the result that extra-provincial/extra-territorial or foreign country POAs may not be recognized locally.

In summarizing the problem, the article includes:

Problems caused by the lack of uniformity in POA law among various jurisdictions are becoming well known to the legal community. The uniform law commissions of Canada and the United States have enacted uniform model POA legislation which, if implemented in these jurisdictions, would solve many of the various problems that exist with divergent laws. Some progress in this field has been made, however, a complete overhaul of the POA laws is far from complete. It is therefore imperative that individuals who have ties to other jurisdictions speak to their lawyers about having valid local POAs as part of their personal, estate and incapacity planning so that inconveniences such as those recently encountered by the Ontario couple can be avoided.

Bottom Line:

To be forewarned is to be forearmed. It makes good sense to have a POA created in accordance with the laws of the jurisdiction where the POA is to be used. For example: If you are a U.S. citizen living in Canada and a POA of needed to manage a property located in the United States, the UK or any other country, consider the creation of a separate POA for that particular jurisdiction!

John Richardson – Follow me X.com/ExpatriationLaw