For those who want ONLY the “Readers Digest” version of this post …
Boston, USA based Fidelity has grown to be a global bemouth in the world of investment management for individuals. Their UK division (and perhaps others) will NOT do business with individuals even “suspected” to be US citizens.https://t.co/x0r50l50DH
— John Richardson – Counsellor for US persons abroad (@ExpatriationLaw) October 31, 2025
This is a long but important post. For some the post will be too long to read and digest. The post is about Fidelity. Those of a certain age will associate Fidelity with legendary fund manager Peter Lynch author of “One Up On Wall Street“.
There is an international trend of financial firms avoiding U.S. citizens. This post is specifically about Fidelity UK (1) refusing to accept U.S. citizens as clients and (2) proactively ridding their client base of those who they know are U.S. citizens or have reason to believe “may be” U.S. citizens!
I recently became aware of the following letter sent by Fidelity U.K. to certain undesirables …
This is Part 5 in a series of posts that I began writing in 2023. See the Appendix for links to all of the previous posts. The context of this series of posts is that FATCA IGAs require “foreign financial institutions” to provide the U.S. Social Security numbers of their U.S. citizen customers. This is a problem because:
1. The banks cannot provide to the IRS what they sometimes don’t have.
2. Many Americans abroad do NOT have a Social Security number to provide.
Part A – Prologue – It’s not about FATCA. It’s about U.S. citizenship taxation
U.S. citizenship taxation is a mechanism that is used by the United States to:
1. Capture the residents of OTHER countries and claim they are really U.S. residents; and
2. Impose U.S.taxation on the non-US source income actually received (or in the case of GILTI, transition tax, foreign trust rules, etc. not actually received) by those residents of other countries.
FATCA is a mechanism used by the United States to force other countries to search for and locate their own residents who are (because of a U.S. birth place) effectively the property of the United States. In practical terms, the mechanism used is the “FATCA IGA” and the countries who sign the “FATCA IGA” are partner countries. The job of the partner country is three-fold:
(i) to locate and determine which of their residents are either U.S. citizens or are suspected to be U.S. citizens
(ii) to report their financial information to the Internal Revenue Service of the United States
(iii) to deny bank services to those individuals who do not cooperate with the FATCA inquisition.
In effect, (as the court decision makes clear) the purpose and effect of FATCA is to assist with exporting U.S. citizenship taxation into other countries. In the same way that modern extradition treaties are used to export U.S. criminal law around the world, FATCA is used to export U.S. citizenship taxation around the world. The following post also argues that U.S. citizenship taxation (if it matters) is a violation of international law.
On July 25, 2025 a Dutch court confirmed its view that the Netherland’s FATCA IGA with the United States is NOT subject to any provisions of the GDPR. In other words, U.S. citizens, who are residents of the Netherlands and call the Netherlands home do NOT have the same rights as citizens of other countries!
In paragraph 7 of its decision, the court confirms that Accidental Americans in the Netherlands are NOT afforded the same rights as other Dutch residents as follows:
Beoordeling door de rechtbank
7. De rechtbank stelt voorop dat zij begrip heeft voor de op zitting door eisers geuite gevoelens van frustratie en onvrede. Eisers hebben duidelijk gemaakt dat zij door het hebben van een dubbele nationaliteit nadelige gevolgen ondervinden als gevolg van Amerikaanse wetgeving. De rechtbank kan begrijpen dat de uitwisseling van financiële gegevens van eisers met de VS door de Belastingdienst een zekere impact kan hebben op eisers. Dat laat onverlet dat de rechtbank de beroepen moet beoordelen aan de hand van de aangevoerde beroepsgronden en de toepasselijke wet- en regelgeving (het toetsingskader).
An English translation of Paragraph 7 is:
7. The court first of all states that it understands the feelings of frustration and dissatisfaction expressed by the plaintiffs at the hearing. The plaintiffs have made it clear that they suffer adverse consequences as a result of American legislation due to their dual nationality. The court understands that the exchange of the plaintiffs’ financial data with the US by the Dutch Tax Authorities may have a certain impact on the plaintiffs. Nevertheless, the court must assess the appeals on the basis of the grounds for appeal put forward and the applicable laws and regulations (the assessment framework).
The decision of the Dutch court underscores the simple reality that U.S. citizenship is indeed a disability in the 21st Century.
Part B – A brief summary of the decision – Accidental Americans in the Netherlands do NOT have rights under Article 18 of the GDPR
— John Richardson – Counsellor for US persons abroad (@ExpatriationLaw) July 26, 2025
In summary:
Because the Netherlands has signed a FATCA IGA with the United States, individuals described in the IGA (U.S. Citizens) have NO rights under Article 18 of the GDPR!
In that post, I suggested that FATCA litigation fails because it has to date focused on certain results of FATCA (privacy breaches, discrimination, etc.) No FATCA litigation (to date) has focused on the reality that U.S. “citizenship taxation” is the reason for FATCA and therefore the cause of all the FATCA related problems. The effect of FATCA and the FATCA IGAs is to enforce U.S. citizenship taxation on the world (including and PRIMARILY on individuals who are tax residents of other countries). A principal purpose of FATCA is to export U.S. tax laws into other countries. By signing the FATCA IGAs, these countries agree to assist the United States in identifying which of their country’s residents (and often citizens) are also U.S. citizens and should therefore be subject to U.S taxation. Put another way: the purpose of the FATCA IGAs is to expand the U.S. tax base into other countries.
For background on the issue of the United States claiming the residents of other countries as U.S. tax residents see:
The conclusion of the September 2024 post was that:
Future FATCA litigation should focus on whether it is a violation of international law for the United States to impose citizenship taxation (the reason for FATCA) on the residents of other countries (who suffer the effects of FATCA).
The purpose of this post is to continue the analysis and to explore the specific question:
Is U.S. citizenship taxation – the process of claiming nonresidents as U.S. tax residents – a violation of international law?
Is it a violation of international law for the United States to:
1. Claim the residents of other countries as U.S. tax residents; and
2. Impose U.S. taxation on the non-U.S. source income of those individuals who do NOT live in the United States?
(I am introducing and developing the argument cannot impose U.S. citizenship taxation on the tax residents of OTHER countries. The United States, has of course the sovereign right, to impose citizenship taxation on U.S. residents.)
If U.S. citizenship taxation, as applied to the residents of OTHER countries, conflicts with the norms of international law, then the foundation for FATCA (as applied to non-U.S. residents) crumbles. In theory, this would provide courts and tribunals a justification for refusing to apply FATCA obligations in relation to individuals who are tax residents of other countries and are not residents of the United States. In addition, it might cause countries to give careful consideration to the effects of the “saving clause” which is part of all U.S. tax treaties.
It is my hope that this post will analyze this question by identifying and outlining “some” of the relevant issues. Perhaps, this post will “begin’ a discussion about this important issue. Should U.S. citizens, because and only because of their citizenship, become “dual tax residents” simply by moving from the United States?
For each issue I will suggest an answer and provide a backup source(s) for further inquiry.
Suggested conclusion:
This post is a “thought experiment”. I believe that a credible argument can be developed that U.S. citizenship taxation – as applied to those who are tax residents of other countries – is a violation of CIL (“Customary International Law”). What follows are the “individual components” of the argument, along with commentary on each. The individual components are organized in the following outline:
Outline
Part A – Some Theoretical Concepts
1. What is US citizenship taxation? U.S. citizenship taxation defined
2. What is meant by international law?
Part B – Tax Residency And International Law
3. Is the concept of “tax residency” generally subject to the rules of international law?
4. Concepts of tax residency as expressed through tax treaties including treaty tie breakers
Part C – Can The Method Of Taxation Violate Individual Rights As Expressed In Human Rights Documents?
5. Professor William Thomas Worster – Taxation and Human Rights
6. Barriers To Emigration Under International Law
Part D – U.S. Citizenship Taxation And the Tax Sovereignty Of Other Nations
7. U.S. Citizenship Taxation As A Method To Siphon Capital From Other Nations
8. The Common Law Revenue Rule As An Expression Of Tax and Territorial Sovereignty
Part E – U.S. Tax Treaties And The “Saving Clause” – Contracting Out Of The Principles Of International Law?
9. Taxation Perspective: Is the “saving clause” an agreed upon override to the “revenue rule” and other international norms?
10. Information Perspective: Can FATCA information extraction generally be used to refuse to provide information about a country’s tax residents?
11. Enforcement Perspective: Should exemptions from cooperation on enforcement of tax debts extend to the disclosure of FATCA information? The cases of Canada, Netherlands, France, Sweden …
Part F – Possible Conclusions …
For those who don’t want to read the rest:
The purpose of this post has been to develop a general theory of why U.S. citizenship taxation – to the extent that it claims the tax residents of other countries as U.S. tax residents – is a violation of international law. Theory aside, there is no other country in the world that uses an attribute (citizenship), that is often an immutable characteristic (place of birth), that bears no presumptive relevance to a physical or economic connection to a country, as a sufficient condition for tax residency. In so doing, the United States is defining tax residency in terms of the “circumstances of birth”, rather than the “circumstances of life”. The only effect is to claim the residents of other countries as tax residents of the United States (even when they are residents and often citizens of those other countries).
It is respectfully submitted that, for these reasons, that citizenship taxation is a violation of CIL (“Customary International Law” and should NOT be tolerated by the international community.
In developing my argument, I have included links to previous posts. The linked posts are NOT part of this post, but are supplied for further reading on each topic.
"The Unknown Ambassadors: A Saga Of Citizenship" by Phyllis Michaux – A great read documenting the history of discrimination against #Americansabraod prior to the #FATCA era … (also provides an interesting blueprint for effective advocacy) pic.twitter.com/4cOYOn3KRl
— John Richardson – Counsellor for US persons abroad (@ExpatriationLaw) January 19, 2024
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”.
I will be in London on Wednesday January 17, 2024. Since I am already there, I am happy to connect with London residents who wish to discuss all things related to surviving as a U.S. citizen living outside the USA. The session is:
When: Wednesday January 17, 2024 – 18:00 – 20:00
Where: Pret A Manger 18:00 – The Sutton Arms – first floor wine room – 6 Carthusian Street, London – EC1M 6EB
Registration for the London session: Please send me an email to: citizenshipsolutions@protonmail.com
Just tell me me your name and indicate that you wish to attend.
Read on to learn what these events/discussions are about.
Prague – Sunday January 21, 2024 – Livestream or attend live in Prague
Prague – 1. Livestream with @IRS_Medic and @Keith__Redmond or 2. Attend in person in Prague – Jan. 21, 2024 – 13:00 CET – Brix bar & Hostel, Rohacova 132/15, Prague 3 Žižkov – 200CZK (includes lunch) – DM @Expatriationlaw to register if attending live. https://t.co/l5NblSqrD9
— John Richardson – Counsellor for US persons abroad (@ExpatriationLaw) January 9, 2024
– frustrated with the U.S. policy of citizenship taxation?
– disappointed with the progress in achieving a change in the law?
– fed up with being asked for your vote with no candidates representing your interests?
– finding it difficult to understand what it means to be in compliance?
– finding you cannot afford U.S. tax compliance?
– forced to plead GILTI for running a small business?
– experiencing further FATCA related problems?
– wondering if/when the USA will join the rest of the world by adopting residence taxation?
– concerned that this may impact your non-citizen spouse and family?
– worried about how to plan for retirement?
– worried about estate planning?
– considering renunciation of U.S. citizenship?
These topics and more …
Don’t miss this opportunity to engage in discussion with people who live with the constant of anxiety of being a U.S. citizen living outside the United States. (Green Card holders are welcome too …)
This is a second post exploring what is the true meaning of U.S. citizenship-based taxation. In an earlier post – “Toward A Definition Of Citizenship Taxation” – I explored the contextual meaning and effect of U.S. “citizenship taxation”. The only “contextual effect” and “practical meaning” of U.S. citizenship taxation may be described as:
Therefore, the practical meaning of “citizenship taxation” is the United States imposing taxation on the non-US source income earned by people who live in other countries. To be clear: citizenship taxation means that the United States is claiming the residents of OTHER countries as US residents for tax purposes!
That’s amazing stuff! Most countries believe that they are sovereign and that includes sovereignty over matters of taxation. Yet, any country that is a party to a U.S. tax treaty has actually agreed that a subset of the treaty partner’s tax residents are ALSO U.S. tax residents! Although nobody questions the right of the United States to prescribe its own definition of tax residency, few would agree that the United States has the right to claim the residents of other countries as U.S. tax residents. Yet, this is what the U.S. citizenship taxation regime means. This U.S. extraterritorial claim of taxation is at the root of the FATCA administration problems and at the root of the the events that led to Treasury Notice 2023-11 (released on December 30, 2022).
July 2022 – A FATCA Delegation Goes To Washington, DC
A delegation of 🇪🇺 lawmakers from @EP_Petitions led by @YanaToom began their week in 🇺🇸 by meeting with a former Staff Director of @HSGAC's Permanent Subcommittee on Investigations and with @EUintheUS@EUAmbUS to talk about the US Foreign Account Tax Compliance Act (FATCA). pic.twitter.com/2r8H5vInre
"Accidental Americans", US citizens residing in the 🇪🇺, people w/ dual citizenship – all unwilling victims of injustices of #FATCA (Foreign Account Tax Compliance Act). Our members in @EP_Petitions went to Washington DC to work towards solving this & answer our petitioners. pic.twitter.com/ZJBI4Oaf2W
This post is to document a small part of the practical impact of the US citizenship taxation regime. It is a continuation of a series of posts exploring what US citizenship taxation is and how it impacts people who live outside the United States and the countries where they live.
Therefore, the practical meaning of “citizenship taxation” is the United States imposing taxation on the non-US source income earned by people who live in other countries. To be clear: citizenship taxation means that the United States is claiming the residents of OTHER countries as US residents for tax purposes!
The US claim of tax residency is based on the “circumstances of their birth”. The “push back” from those impacted is based on the “circumstances of their life”.
Combining the themes of the first two posts we see that:
The United States claims the right based on and only an individual’s “circumstances of birth” to impose regulations and taxation on that individuals’s income earned outside the United States when his “circumstances of life” are such that he lives outside the United States.
Or to describe it slightly differently:
The United States claims the right based on and only an individual’s “circumstances of birth” to impose taxation on the non-US source income of people when their “circumstances of live” are that do NOT live in the United States.
Or maybe …
The United States claims the right based on and only an individual’s “circumstances of birth” to regulate, penalize and tax those individuals when they no longer live in the United States. This includes imposing tax on the non-US source income of people who do NOT live in the United States.
It is very difficult to arrive at a succinct and simple description of what tax and regulation of individuals based on a a “U.S. birthplace” means.
Categories of problems caused by this US extra-territorial claim of tax residency include (but are not limited to):
1. Direct taxation of non-US source income earned by nonresidents
2. Expensive and penalty compliance requirements which interfere withe the ability to manage the financial/retirement planning options in their country of residence
3. The ability to open and maintain basic bank and investment accounts
The problem of bank account access
The European Delegation visiting Washington, DC in July of 2022 was concerned with and ONLY with access to bank and financial accounts. Significantly and disappointedly the delegation expressed no objection to the U.S. extra-territorial tax policies that “claim” European residents as tax residents of the United States.
Banking Access Problems Of European Residents Who Are US Citizens
A delegation of the PETI Committee went to Washington DC from 18 to 22 July, to raise awareness and discuss the impact of the US Foreign Account Tax Compliance Act (#FATCA) on EU citizens and to have exchanges of views with US politicians https://t.co/isypZwbu5Z via @Europarl_EN
— John Richardson – Counsellor for US persons abroad (@ExpatriationLaw) January 27, 2023
– the necessity of continuing to work on the “European FATCA” problem
– the general attitude of their American hosts towards the FATCA problem (in some cases outright denial).
I would say that the sentiment was “cautious optimism”.
Very interesting … The people quoted i this article are the delegates who attended the July 2022 meeting in Washington, DC with certain Congressmen and Treasury Officials. https://t.co/4JYqwKMDtb
— John Richardson – Counsellor for US persons abroad (@ExpatriationLaw) January 26, 2023
(The article by Stephen Gardner referenced in the above tweet continues additional commentary.)
The video also includes the thoughts of “Prof Carlo Garbarino – Bocconi University, Milano, Italy” who prepared the following report titled: “FATCA LEGISLATION AND ITS APPLICATION AT INTERNATIONAL AND EU LEVEL: – AN UPDATE”
Buying Their Freedom – A More Efficient Renunciation Process – The “Readers Digest” Version Of This Post …
Update – February 21, 2025
This post was written in 2022. Last week I received a message from a Canadian, born in the USA who lived for only the first two years of his life in the USA. He is a person of modest means who was beginning to be asked the frightening question of:
“Are you or have you ever been a U.S. citizen?”
This particular individual cannot afford to comply with U.S. tax obligations and cannot afford to renounce U.S. citizenship. He is simply living with the “circumstances of his birth” which are completely disconnected from the circumstances of his life. I believe that he is representative of a millions of people living around the world.
The time has come for the non-U.S. world to protect its citizens from the demands of a foreign country.
The time has come for the non-U.S. world to protect its national sovereignty from the demands of a foreign country.
What follows are some thoughts on a more just and efficient process of renunciation of U.S. citizenship.
With or without tax reform, it’s time to recognize that individuals cannot remain captives of the circumstances of their birth.
Recent U.S. claims that there is no constitutional right to renounce U.S. citizenship have made this issue even more urgent.
Q. Why are people getting rid of their US citizenship? A. It's because of the "10 Commandments of U.S. Citizenship" in a #FATCA and #FBAR world by John Richardson https://t.co/cbjEJ91Ijw
— John Richardson – Counsellor for US persons abroad (@ExpatriationLaw) January 3, 2018
The effects of US citizenship taxation enforced by FATCA are causing great distress to the US citizens who reside in and are tax residents of other countries. They are being constructively forced to renounce US citizenship because of (1) the out of pocket costs of US tax compliance (2) the possibility of double taxation (3) the US taxation of things that are not taxable in their country of residence (4) the “opportunity cost” of their inability to engage in financial and retirement planning and in some cases (5) the threat or reality of bank/financial account closures. In addition, these circumstances are unfair to their countries of residence who are forced to deal with a group of people who are more likely to require “social assistance” in their retirement years. US citizenship is a problem for US citizens who attempt to live outside the United States and for the countries where they live.
Although many people are constructively forced to renounce US citizenship, the US has made renunciation very difficult from both a cost and availability perspective.
The purpose of this post is to suggest that the process of renouncing US citizenship should be facilitated in the US citizen’s country of residence by that government. Renunciation could be achieved more quickly, at lower cost and (under my proposal) partially subsidized by the government of residence (which would justify this as “buying back their citizens” from any US claim of taxation or other regulatory burdens). I believe that this proposal would benefit the individual US citizen, the US citizen’s country of residence and the United States itself. The following post describes how this can be achieved under the existing US laws.
As President Obama once said:
“The circumstances of one’s birth should not determine the outcome of one’s life.”
This post is composed of the following parts:
Part A – Introduction Part B – The US Government And The Oppression OF Americans Abroad Part C – The Legal Framework Of Renunciation Part D – The Logistics – How The New Renunciation Process Would Work Part E – Reviewing The Benefits Of The New Renunciation Process Part F – The Revised Renunciation Fee Part G – Democratizing Renunciation – Making It Available To All – A Financing Proposal Part H – Sadly this could all be be prevented if the United States were to end citizenship taxation and adopt the world standard of residence taxation. But, … Part I – Conclusion – “All Roads Lead To Renunciation”
