Citizenship For Nationality Purposes vs. Citizenship For Tax Purposes
The United States has two kinds of citizenship:
Citizenship For Nationality Purposes: This gives the right to enter the USA, Work in the USA, Vote in US Election and access US Consular Services.
Citizenship For Tax Purposes: It is possible to have relinquished US citizenship for nationality purposes but still be considered to be a US citizen for tax purposes (yes, it’s true depending on the date of the relinquishment.)
— John Richardson – lawyer for "U.S. persons" abroad (@ExpatriationLaw) October 7, 2020
Two rules of thumb:
All citizens for nationality purposes are citizens for tax purposes.
Not all citizens for tax purposes are citizens for nationality purposes.
Focusing on citizenship for nationality purposes: It’s complicated (or at least it can be) …
A surprisingly large number of people are confused about the status of their U.S. citizenship.
There are people who are U.S. citizens who think they are not. Often these are accidental Americans.
They are people who are not U.S. citizens who think they are.
There are people who are entitled to a back-dated CLN – based on a prior relinquishment – who may not know it.
There are people who are US citizens and who wish to renounce US citizenship.
A clear determination of citizenship status and the individual’s objective, is the first step in any analysis.
I have successfully assisted a large number of people who have applied for Certificates of Loss of Nationality for having relinquished U.S. citizenship years ago.