Category Archives: 1947 Canada Citizenship Act

Canada’s new “citizenship by descent” law may benefit many U.S. citizens in unanticipated ways

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Introduction and purpose of this post

In response to a 2023 Canadian court decision the Government of Canada is enacting a new law – Bill C-71. (A good analysis of the court decision is here). Assuming it is enacted, Bill C-71 may create an opportunity for certain U.S. citizens to become Canadian citizens at birth. This will this give them the usual benefits of citizenship (right to live and work in Canada). But, it may also allow them to accumulate wealth in the United States, move to Canada, renounce U.S. citizenship and avoid paying the 877A Exit Tax. Once again, we see the U.S. Tax Code has created a hierarchy of U.S. citizens. Those born with dual citizenship (U.S. and another citizenship) are “preferred U.S. citizens”. Those born with dual citizenship are the Brahmins of the USA and those born with only U.S. citizenship are the “Sudras” of the USA. In the same way that a change in a country’s criminal laws can impact extradition TO the United States, a change in a country’s citizenship laws can facilitate escape FROM the United States.

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Travel Documents: Canadian citizens need either a U.S. or Canadian passport to enter Canada by air (or by land)

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This post is a reminder for Canadian citizens traveling outside of Canada who wish to return to Canada by air! YOU NEED THE RIGHT KIND OF “TRAVEL DOCUMENT” TO RETURN TO CANADA!
Section 6 of Canada’ Charter of Rights and Freedoms guarantees the right of Canadian citizens to enter Canada.

6. (1) Every citizen of Canada has the right to enter, remain in and leave Canada.

Yet, certain travel documents are required as proof of identity and citizenship.
There is a distinction between a “travel document” and one’s “citizenship or immigration status”. The “travel document” is generally considered to be “proof” of the “citizenship status”. A Canadian “permanent resident” card, which is valid for at most five years, is proof of having the status of “permanent resident” of Canada. A U.S. Green Card, which is subject to renewal, is a document that is proof of having the status of being a lawful permanent resident of the United States. All travel documents are valid for finite periods of time and must be renewed.
The expiration of the “travel document” does not affect the “citizenship” or “immigration” status. For example, the failure to renew the U.S. Green Card does NOT mean that you lose the right to live permanently in the United States. (You will be required to file U.S. taxes until your status as a lawful permanent resident has been terminated. The recent cases of Mr. Topsnik, discussed here and here, confirm that Green Card holders are subject to U.S. taxation until their status as permanent residents has been terminated.)
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Citizenship showdown coming: Has Australia ceded control of its sovereignty to foreign countries?

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Shades of Larissa Waters …
Oh My God! Think of it:
My sources in Australia tell me …

This time it’s the Deputy Prime Minister – http://www.abc.net.au/news/2017-08-14/barnaby-joyce-is-a-new-zealand-citizen-nz-government-confirms/8804620 – and the first member of the lower house to be tainted by dual citizenship. This is significant. With the Senate they usually go to the next person on that party’s ticket from the last Senate election. With the House of Reps they have to have a by-election – and Turnbull’s government is hanging on by a single vote. So, if the High Court rules that Barnaby Joyce must vacate his seat, it could topple the government!

And I thought that Politics in Canada was dirty. And we all revel in the daily stench of the toxic partisanship in the USA. But, hey at least these two countries do NOT have constitutional provisions that (as they have been interpreted) allow other countries to interfere in who the elected representatives are! (We let them interfere in covert ways – think “From Russia With Love” ….)
But Australia. This really is unique. Think of it. Once a person is accused of being a dual citizen – AS DEFINED BY THE LAWS OF ANOTHER COUNTRY – then the person is disqualified from serving in the Senate or the Lower House. I had always thought of Australia as a sovereign country. Can it really be true that Australia allows eligibility for service in the Senate or the lower house to be determined by another country’s citizenship laws? Does it matter whether these “foreign laws” confer citizenship by force rather than citizenship by consent?
Think of the possibilities here. There have always been suggestions that “The USA via the CIA” had been (wonderful melody) instrumental in the dismissal of Australian Prime Minister Gough Whitlam. Why go to so much trouble? The way Australia is interpreting its own constitution, all a future U.S. Government would have to do is confer U.S. citizenship on the Prime Minister of Australia and he would be forced to resign. But this would be the intentional “weaponization of citizenship”. (But, the FATCA is that: the USA would NEVER use citizenship as a weapon now, would it?) Australia has already surrendered much of its sovereignty to the United States through a combination of the FATCA IGA and the “savings clause” in the Australia U.S. Tax Treaty.
It’s worse than you think. The problem extends to the ongoing changes in the citizenship laws of other nations
What about the change in one country’s citizenship laws conferring citizenship on an Australian citizen without his/her knowing about it? For example, Canada has made significant amendments to its citizenship laws in 2009 and 2016. In both cases Canadian citizenship was conferred on people who did NOT have Canadian citizenship. One example is that prior to 1977, a person born abroad to a married couple where the father was NOT Canadian (say Australian) and the mother was Canadian would NOT have become Canadian by descent. In 2009 people in these circumstances were given Canadian citizenship. What if a person affected by this was in the Australian Senate in 2009 when the Canadian law was changed. Would that person be forced to resign?
Can the citizenship of country A be forcibly imposed on a resident of country B who has NEITHER ACCEPTED NOR ACKNOWLEDGED THAT CITIZENSHIP?


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The "Exit Tax": Dual US/Canada citizen from birth, no Canada citizenship today = no exemption to US "Exit Tax"

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The above tweet references a “guest post” written by Dominic Ferszt of Cape Town South Africa. The post demonstrates how the “dual citizen from birth” exemption to the S. 877A “Exit Tax” relies on the citizenship laws of other nations. In some cases those laws of other nations are arbitrary and unjust. If these laws were U.S. laws, they might violate the equal protection and/or due process guarantees found in the United States constitution. For example, Mr. Ferszt describes how the “dual citizenship exemption” to the “Ext Tax” is dependent on South African “Apartheid Laws”. He describes a situation where a “black” U.S. citizen from birth is denied the benefits of the dual citizen exemption to the Exit Tax, which are available to a “white” dual citizen from birth. (During the “Apartheid Era” Blacks were not entitled to South African citizenship.)

So, what’s the S. 877A “Exit Tax”  dual citizen exemption and how does it work?

The dual citizen exemption, which I have discussed in previous posts,  is found in Internal Revenue Code S. 877A(g)(1)(B) and reads:

(B) Exceptions An individual shall not be treated as meeting the requirements of subparagraph (A) or (B) of section 877(a)(2) if—

(i) the individual—

(I) became at birth a citizen of the United States and a citizen of another country and, as of the expatriation date, continues to be a citizen of, and is taxed as a resident of, such other country, and
(II) has been a resident of the United States (as defined in section 7701(b)(1)(A)(ii)) for not more than 10 taxable years during the 15-taxable year period ending with the taxable year during which the expatriation date occurs, or

Entitlement to the “dual citizen exemption” depends entirely on the citizenship laws of other countries …

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Relinquishing US citizenship: South African Apartheid, the Accidental Taxpayer and the United States S. 877A exit tax

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Introducing this “guest post”

This guest post is written by Dominic Ferszt of Cape Town, South Africa. I first became aware of Mr. Ferszt when, in October of 2014, his post: “The Accidental Tax Invasion” was published in Forbes. I have discussed various aspects of “citizenship-based taxation” with him since. I am very pleased that he has accepted my invitation to write this “guest post” for publication at Citizenship Solutions. His post exposes an aspect of “citizenship taxation” and the S. 877A U.S. expatriation tax that has not (as far as I am aware) been discussed before. Those who did NOT acquire “dual citizenship” at birth because of discriminatory laws (example British and Canadian laws saying that citizenship could be passed down from the father but not from the mother) will find this post extremely interesting and relevant.

Without further adieu …

___________________________________________________________________________

Apartheid and the Accidental Taxpayer

How the United States Congress has passed legislation which imposes a tax obligation in accordance with the discriminatory policies of foreign nations; and how this might offer a glimmer of hope to millions around the world who feel unjustly targeted by FATCA or the IRS.

By Dominic Ferszt, Cape Town

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The S. 877A "Dual Citizen" exemption: The 1947 Canada Citizenship Act – Am I still a Canadian or did I lose Canadian citizenship?

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Introduction:
This is the 4th of seven posts analyzing the “dual citizen exemption” to the S. 877A Exit Tax which is found in S. 877A(g)(1)(B) of the Internal Revenue Code. Please remember that the “dual citizen exemption” is available ONLY to those who meet the “five year tax compliance test”.
1. What is the S. 877A(g)(1)(B) “dual citizen exemption” and why does it encourage those “born dual citizens” to not renounce U.S. citizenship?
2. The history of Canada’s citizenship laws: Did the 1947 Canada Citizenship Act affirm citizenship or “strip” citizenship and create @LostCanadians?
3. The S. 877A “dual citizen” exemption – I was born before the first ever Canada Citizenship Act? Could I have been “born a Canadian citizen”?
4. The S. 877A “Dual Citizen” exemption: The 1947 Canada Citizenship Act – Am I still a Canadian or did I lose Canadian citizenship? (The “Sins Of The Father”)
5. The S. 877A “Dual Citizen” exemption: The 1947 Canada Citizenship Act and the requirements to be “born Canadian”
6. “The S. 877A “Dual Citizen” exemption: I was born a dual citizen! Am I still “taxed as a resident” of Canada?”
7. The S. 877A “Dual Citizen” exemption: “MUST certify tax compliance for the five years prior to relinquishment”
Was I a “Canadian Citizen” at birth and/or Am I still a Canadian Citizen?
The 1947 Canada Citizenship Act and loss of Canadian Citizenship
Canada Citizenship Act 1947
Pursuant to S. 16 and S. 18  of the Canada Citizenship Act, one could lose Canadian Citizenship if your “responsible parent” became naturalized as a citizen of another country.
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The S. 877A "Dual Citizen" exemption: The 1947 Canada Citizenship Act and being "born Canadian"

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Introduction:
This is the 5th of seven posts analyzing the “dual citizen exemption” to the S. 877A Exit Tax which is found in S. 877A(g)(1)(B) of the Internal Revenue Code. Please remember that the “dual citizen exemption” is available ONLY to those who meet the “five year tax compliance test”.
1. What is the S. 877A(g)(1)(B) “dual citizen exemption” and why does it encourage those “born dual citizens” to not renounce U.S. citizenship?
2. The history of Canada’s citizenship laws: Did the 1947 Canada Citizenship Act affirm citizenship or “strip” citizenship and create @LostCanadians?
3. The S. 877A “dual citizen” exemption – I was born before the first ever Canada Citizenship Act? Could I have been “born a Canadian citizen”?
4. The S. 877A “Dual Citizen” exemption: The 1947 Canada Citizenship Act – Am I still a Canadian or did I lose Canadian citizenship? (The “Sins Of The Father”)
5. The S. 877A “Dual Citizen” exemption: The 1947 Canada Citizenship Act and the requirements to be “born Canadian”
6. “The S. 877A “Dual Citizen” exemption: I was born a dual citizen! Am I still “taxed as a resident” of Canada?”
7. The S. 877A “Dual Citizen” exemption: “MUST certify tax compliance for the five years prior to relinquishment”
 
Bubblebustin, comments at the Isaac Brock Society:

Being a non-resident US citizen is never about making good decisions for one self – it’s about making the least-worst ones. The fact that I will never be subjected to the US exit tax as long as I remain US tax compliant may reduce the urgency to renounce, but also gives me one other thing to consider when making those least-worst decisions.
Interesting that Canada amended its Citizenship Act in 2009 to allow more people to claim Canadian citizenship partially in response to the Canadian border baby passport crisis in 2007:
http://www.cbc.ca/news/canada/manitoba/border-babies-face-fight-for-canadian-citizenship-1.656376
…and the same year the HEART Act became effective.
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The S. 877A "dual citizen" exemption – Born before 1947, Could I have been "born a Canadian citizen"?

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Introduction:
This is the 3rd of seven posts analyzing the “dual citizen exemption” to the S. 877A Exit Tax which is found in S. 877A(g)(1)(B) of the Internal Revenue Code. Please remember that the “dual citizen exemption” is available ONLY to those who meet the “five year tax compliance test”.
1. What is the S. 877A(g)(1)(B) “dual citizen exemption” and why does it encourage those “born dual citizens” to not renounce U.S. citizenship?
2. The history of Canada’s citizenship laws: Did the 1947 Canada Citizenship Act affirm citizenship or “strip” citizenship and create @LostCanadians?
3. The S. 877A “dual citizen” exemption – I was born before the first ever Canada Citizenship Act? Could I have been “born a Canadian citizen”?
4. The S. 877A “Dual Citizen” exemption: The 1947 Canada Citizenship Act – Am I still a Canadian or did I lose Canadian citizenship? (The “Sins Of The Father”)
5. The S. 877A “Dual Citizen” exemption: The 1947 Canada Citizenship Act and the requirements to be “born Canadian”
6. “The S. 877A “Dual Citizen” exemption: I was born a dual citizen! Am I still “taxed as a resident” of Canada?”
7. The S. 877A “Dual Citizen” exemption: “MUST certify tax compliance for the five years prior to relinquishment”


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Did the 1947 Canada Citizenship Act affirm citizenship or "strip" citizenship and create @LostCanadians?

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Introduction:
This is the 2nd of seven posts analyzing the “dual citizen exemption” to the S. 877A Exit Tax which is found in S. 877A(g)(1)(B) of the Internal Revenue Code. Please remember that the “dual citizen exemption” is available ONLY to those who meet the “five year tax compliance test”.
1. What is the S. 877A(g)(1)(B) “dual citizen exemption” and why does it encourage those “born dual citizens” to not renounce U.S. citizenship?
2. The history of Canada’s citizenship laws: Did the 1947 Canada Citizenship Act affirm citizenship or “strip” citizenship and create @LostCanadians?
3. The S. 877A “dual citizen” exemption – I was born before the first ever Canada Citizenship Act? Could I have been “born a Canadian citizen”?
4. The S. 877A “Dual Citizen” exemption: The 1947 Canada Citizenship Act – Am I still a Canadian or did I lose Canadian citizenship? (The “Sins Of The Father”)
5. The S. 877A “Dual Citizen” exemption: The 1947 Canada Citizenship Act and the requirements to be “born Canadian”
6. “The S. 877A “Dual Citizen” exemption: I was born a dual citizen! Am I still “taxed as a resident” of Canada?”
7. The S. 877A “Dual Citizen” exemption: “MUST certify tax compliance for the five years prior to relinquishment”


Last Friday I was in Ottawa. I walked into a bookstore and saw the book: “The Lost Canadians” by Don Chapman.
lostcanadians
It is a fascinating book. Once again, see how important citizenship is. Citizenship is “invisible” until your citizenship or lack thereof creates problems in your life. Don Chapman’s book “The Lost Canadians” is a history of the problems caused by Canada’s first citizenship act – the 1947 Canada Citizenship Act. Many (but not all) of the problems were caused by  situations where, according to the 1947 Canada Citizenship Act:

  1. According to S. 16 of the 1947 Canada Citizenship Act, a minor would lose his/her Canadian citizenship if the responsible parent became a citizen of another nation and in so doing lost her/her Canadian citizenship; and
  2. According to S. 5 of the 1947 Canada Citizenship Act, a person born in wedlock outside of Canada to a father who was NOT a Canadian citizen and a mother who WAS a Canadian citizen never acquired Canadian citizenship by birth. (Note that in the Benner case the Supreme Court of Canada ruled that this distinction violated S. 15 of the Canadian Charter Of Rights And Freedoms.) This injustice, which meant that those born in the U.S. did NOT acquire dual citizenship at birth (think of the definition of “covered expatriate” of the S. 877A “Exit Tax” rules),  was “fixed in the 2009 changes to the Canada Citizenship Act.
  3. According to S. 6 of the Canada Citizenship Act, some Canadians born outside of Canada had to reside in Canada on their 24th birthday. The failure to meet this residency requirement meant that they “lost” their Canadian citizenship.

These injustices were the reason for the 2009 changes to the Canada Citizenship Act.


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