Category Archives: FATCA

You Have Your Certificate Of Canadian Citizenship – What Next? Six Options For Newly Recognized Canadians

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John Richardson, J.D. – August 13, 2026

Introduction and purpose

This is the third of a series of posts to help you understand Canadian citizenship by descent. Canada’s Bill C-3 which took effect on December 15, 2025 made major changes to Canada’s citizenship laws. By changing it’s “citizenship by descent” rules, Canada has created an opportunity for many U.S. citizens to be formally recognized as Canadian citizens. This series of posts has been designed to understand Canada’s Bill C-3 (effective December 15, 2025) and understand how and why these changes are so valuable for many U.S. citizens.

A series of posts

The first post focused on Understanding The Citizenship By Descent Provisions Of Bill C-3 – The Canada Citizenship Act. Specifically what factual conditions would result in an indiviudal being a Canadian citizen and therefore entitled to a Certificate of Canadian citizenship? (Note that with the exception of naturalization or direct grant, one would, under Canadian law, be a Canadian citizen from birth. Those born in the United States are U.S. citizens from birth. Hence, many people, recognized as Canadian citizens from birth, would be Canada/U.S. dual citizens from birth.)

Understanding The Citizenship By Descent Provisions Of Bill C-3 – The Canada Citizenship Act

The second post is a discussion of “Canadian Citizenship By Descent – A Search For Proof (To Prove The Truth)”

Canadian Citizenship By Descent – A Search For Proof (To Prove The Truth) – 4 Perspectives

If citizenship cannot be proven, it has no functional or practical existence. Therefore, those seeking a Certificate of Canadian citizenship embark on “a search for proof”. Although the law does not establish a formal deadline to submit the application for a “Certificate of Canadian Citizenship”, I suggest applying as quickly as possible. Laws can and do change!

This third post is to explore why eligibility for a “Certificate of Canadian Citizenshp” matters. What good is it to be a Canadian citizen? What role could Canadian citizenship play in your life. So, you are a Canadian citizen? What do you do with it? How can it benefit you and your descendants? I suggest that (particularly as a U.S. citizen) that there are (at least) six ways that having a Canadian passport could enhance your life.

What does it mean to be a Canadian citizen? What does it mean to move to Canada as a Canadian citizen?

This post is organized in the following Parts.

Part A – Taxation is destiny – moving to another country always has tax implications

Part B – If you move to Canada and renounce U.S. citizenship you may be subject to the U.S. “Exit Tax” rules

Part C – A review of who IS a Canadian citizen and entitled to a Certificate of Canadian citizenship”

Part D – I have my certificate of Canadian citizenship – what do I do with it? How do I turn it into a family heirloom? How can I sponsor my spouse?

Part E – Six specific opportunities Canadian citizenship provides to U.S. citizens

Part F – Renouncing U.S. citizenship and having access to the United States as a Canadian citizen

Conclusion

Appendix A – The 877A U.S. Exit Tax Rules

Appendix B – The 877A “dual citizen from birth” exemption to the Exit Tax Rules

Appendix C – The legislative text of the “dual citizen from birth” exemption to “covered expatriate” status

Here we go …

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Part 1: The University Of Washington “Low Income Tax Clinic” And A Canadian Student

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Prologue

This is the first of two blog posts (Part 1 and Part 2) that discuss the University of Washington Low Income Tax Clinic report referencing a dual Canada/U.S. citizen student living and working in Canada.

Part 1 (this) will discuss the report generally and how the circumstances actually trigger the Canada/U.S. tax treaty. Think of it! A few thousand dollars of summer income received by a Canadian student implicates an international tax treaty. Only in America!

Interestingly, the specific factual circumstances include an example of what happens when a U.S. citizen living outside the United States receives a U.S. inheritance that generates U.S. source income. This is a concern for many Americans abroad. It is a complicated area.

Mostly Part 1 will discuss the “LITC” Report. Specifically how the “LITC” viewed the issue. How they incorrectly tried to apply the U.S. Canada tax treaty (apparently) without regard to the “saving clause” which is included in all U.S. tax treaties.

The report seems to say that the taxpayer filed a U.S. tax return for the 2021 tax year and filed to include income which (because of information reporting) the IRS was aware of. This should be of concern to Americans abroad generally. I will discuss this aspect more fully in Part 2.

Part 2 will discuss the specific problem of a U.S. citizen abroad inheriting (or anticipating inheriting) U.S. assets (whether income producing or not). I am making this a separate post because it is a complicated topic. The most rational response to this situation is highly dependent on your factual situation.

Part 2: Inheriting From America AKA Anxiety On Steroids – Retain Or Renounce U.S. Citizenship? What About U.S. Tax Compliance?

In any case, we begin with Part 1 …
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FATCA Reporting, The Banks And Their U.S. Citizen Customers: The Saga Continues

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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

“The IRS has an obligation to meet taxpayers where they live, but it is not doing so for taxpayers living abroad”

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So states the 2025 report of the Taxpayer Advocate!

A January tradition

January is the month that the IRS Taxpayer Advocate release its report for the previous year. In keeping with tradition the Taxpayer Advocate released the 2025 report this week.

Bottom Line:

The report is extraordinary in its recognition of the problems of Americans abroad. The problems are recognized as one of the ten most significant categories of problems experienced by taxpayers generally. The Taxpayer Advocate does a wonderful and powerful job of recognizing the injustices of the U.S. tax system as it applies to taxpayers living outside the United States. The report is available here.

A pdf version of the Taxpayer Advocate report is here:

ARC_Publication-2104_2025_Web

Podcast discussing the report

A condensed version of the podcast is captured in this AI generated video:

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Part 5 – Fidelity U.K. – Cleansing The Firm Of “Suspected” U.S. Citizens And The Problems They Bring

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For those who want ONLY the “Readers Digest” version of this post …

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 …

Unconfirmed USP Sell To Cash Letter

Some of you may be satisfied to read the letter.

For those interested in the general context and discussion, here is the complete post …

________________________________________________________________________

Part A – Introduction and context

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.

3. Many former U.S. citizens have relinquished U.S. citizenship without necessarily having a Certificate of Loss of Nationality (“CLN”).

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“13 Reasons Why” I Committed Citizide By Renouncing US Citizenship By Jane Doe

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13 Reasons Why I Committed Citizide

Note: The following brilliant essay was written by a former client of mine. I originally posted it in 2017 on Medium here. My introductory comments in 2017 are (I think) worth considering. If you want help with deciding whether to renounce U.S. citizenship feel free to reach out.

(Inspired by the television series, 13 Reasons Why)

Hey, it’s Jane. Jane Doe. Settle in because I’m about to tell you the story of my renunciation. More specifically, why I gave up my US citizenship. And if you’re reading this article, you’re probably thinking of doing it too. I can’t expect you to understand exactly how I feel; each person has a unique set of circumstances, a deeply personal mix of conflicting emotions, fears and problems that shape their response. But I can tell you why I did it. Let me start by saying, don’t believe everything you hear.

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From The OVDI Trauma Of 2011 To The Continuing Trauma Of U.S. Citizenship Abroad Today

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Prologue – August 2011

Today is August 26, 2025. This coming weekend is Labour Day weekend. It was almost 14 years ago to the day that many U.S. citizens (and some former citizens) in Canada and around the world were being pressured to enter into the 2011 OVDI (“Offshore Voluntary Disclosure Initiative”). Those who entered that program, offered a substantial percentage of their wealth to the IRS, to avoid punishment. The punishment would have been for the failure to comploy with laws they had no way of knowing existed. Shockingly, many who entered the OVDI program agreed to penalties that were completely disproportionate to their noncompliance. Interestingly, many who (1) entered the program and (2) used the opt out provision paid little or no penalties.

The OVDI program was predicated on the generation of penalty threats from the IRS and the tax advisers delivering those threats to the individuals impacted. The nature of the threats evolved. Toward the deadline for entering OVDI the IRS offered increased penalty to nonresidents who didn’t know they were U.S. citizens. As noted by Robert Wood on August 11, 2011 writing in Forbes, the IRS agreed that individuals who didn’t know they were U.S. citizens would pay a reduced rate of 5% for the privilege of participating in the OVDI program. Mr. Wood describes this special concession to those who didn’t know they were U.S. citizens as follows:

You are invited to read the complete post on the Isaac Brock Society here.

From The OVDI Trauma Of 2011 To The Continuing Trauma Of U.S. Citizenship Abroad Today

John Richardson – Follow me on X.com @Expatriationlaw

Sacred Trust: Counseling Americans Abroad Through The Trauma Of A FATCA World

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Introduction:

Much of living as a U.S. citizen abroad is learning to cope with a life of trauma. Posts discussing the trauma are here here, here and here. For Americans abroad, preparing to file a U.S. tax return is a form of trauma.


The U.S. extra-territorial tax, form and penalty regime reminds Americans that they are:

“Subject to certain penalties, for uncertain conduct!

Those who do not file tax returns worry about the consequences of not filing.

Those who do file tax returns worry about the consequences of filing.

Thinking about the issue of trauma, I was reminded of a presentation that I did in 2015 in London, UK. It was titled:

Sacred Trust: Counselling Clients Through The Trauma Of “U.S. Citizenship Abroad” In A FATCAesque World”

(The audience was a group of U.S. tax professionals. I am not sure that they really understood the message. But, the presentation was a welcome diversion from the usual technical tax talk.)

I had forgotten about the presentation, but was reminded of it today. Looking at the slides, I think I agree with everything I said in 2015. If anything, it has gotten worse!

Here is the presentation:

A PDF version is here:

Sacred Trust – Counselling Clients Through the “Trauma of U.S. Citizenship Abroad” in a FATCAesque world – Toronto – February 2015 1

AI Generated Podcast generated from the 2015 presentation

John Richardson – Follow me on X.com @ExpatriationLaw

Tax Law Professors Mason and Dagan: “Reconsidering Citizenship Taxation”

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Introduction and purpose

In 2010 few people even knew what citizenship taxation was. It is now 2025. Awareness of the existence of citizenship taxation has expanded. An understanding of WHAT citizenship taxation actually is (it’s the the U.S. applying its worldwide tax, reporting and penalty regime on non-U.S. source income received by nonresidents) and how it impacts the lives of Americans abroad is still not understood. The nature of citizenship taxation is more fully explored in the following post:

The Road To Tax Reform For Americans Abroad: Part 2 – What Is US Citizenship Taxation?

How tax academics view citizenship taxation

Although, there have been articles about citizenship taxation written by various academics, few if any, have included a description of how U.S. citizenship taxation results in the U.S. imposing a more punitive form of taxation on Americans abroad. Of course, one must have actually experienced the reality (as opposed to the theory) of citizenship taxation to understand it.

To put it another way:

Generally, academics view citizenship taxation purely from the perspective of a U.S. tax return and a U.S. citizen living outside the United States. There is no consideration of how living as a tax resident of another country impacts U.S. tax filing.

Generally, U.S. citizens living outside the United States view citizenship taxation from the perspective of building a live outside the United States (that includes taxation) with the U.S. tax imposed on that life.

These are TOTALLY different perspectives!

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