Tag Archives: Certificate of Loss of Nationality

Extreme Caution Should Be Exercised In Applying For Non-Renunciation “Relinquishments” Of U.S. Citizenship

January 25, 2025

Keeping this short, sweet and to the point:

I recommend NOT applying for Certificates Of Loss Of Nationality (“CLNs”) based on a past relinquishing act. Past relinquishing acts include ANY form of relinquishment that is not a present day “renunciation” of U.S. citizenship. (See the appendix to this post.)

If you need help with this problem feel free to reach out to me.

This recommendation is based on experiences in Canada:

– knowing several cases where the Consular appointments documenting the past relinquishing act took place almost two years ago. The individuals have still, despite repeated inquiries, NOT had a response from the State Department! To be clear, two of these were based on naturalizations as Canadian citizens after June 16, 2008 (meaning they were clearly subject to U.S. taxation up to the date of the appointment and were in fact tax compliant!)

– the new rules (using a new DS-4079) which took effect on November 1, 2024 make it VERY clear that the State Department is reviewing the evidence of voluntariness and intent to relinquish U.S. citizenship. The voluntariness and intent must be proven at the moment of the expatriating act!

– I know people who submitted applications to renounce U.S. citizenship (in Canada) prior to November 1, 2024 (and therefore prior to the beginning of the new DS-4079), who are awaiting appointments to renounce. They have subsequently received messages asking them (in anticipation of their renunciation appointments) to complete the new DS-4079. The message to them also included the statement that:

The Department of State will only have a legal basis to approve a CLN in your name if the preponderance of evidence shows that you voluntarily performed a potentially expatriating act with the intent to relinquish U.S. nationality.

Notice that the burden of proof is on the person seeking the CLN. The State Department decides what it takes to satisfy the “preponderance of the evidence” standard. This is a difficult burden to meet when the relinquishing act was many years ago. It appears that the facts of “NOT exercising any rights of U.S. citizenship” (after the relinquishing act) are insufficient to meet the evidentiary standard.

For many years I was able to assist (many) people in getting CLNs based on “relinquishing acts in the past”. The law has not changed. What appears to have changed is what the State Department will accept as evidence of meeting the “burden of proof” of voluntariness and intent. The shift in the State Department attitude appears to have started about two years ago. It is clearly expressed in the new DS-4079. I have been warning people about this for the last year or so. I strongly suggest that people exercise extreme caution in applying for CLNs based on relinquishing acts in the past. This is particularly true for those who need a CLN relatively quickly.

Bottom line: You should renounce!

At this point my suggestion is (assuming you qualify):

Renounce and use the 2019 “IRS Relief Procedures For Former Citizens“. Current information on the “Relief Procedures For Former Citizens” program is here.

If you need help, feel free to contact me.

John Richardson – Follow me on X.com @ExpatriationLaw

Appendix – 349(a) of the Immigration and Nationality Act.

What follows is the statute governing relinquishment of U.S. citizenship. I have added “JR Commentary in italics“.

Notice that paragraph (b) describes the “burden of proof”.

I suggest using (5) renunciation as your method of relinquishment. The other options are now presenting hurdles that are difficult to meett.

§1481. Loss of nationality by native-born or naturalized citizen; voluntary action; burden of proof; presumptions

(a) A person who is a national of the United States whether by birth or naturalization, shall lose his nationality by voluntarily performing any of the following acts with the intention of relinquishing United States nationality–

JR Commentary: The general test is that the expatriating act must be or have been performed voluntarily and with the intention of relinquishing U.S. citizenship.

(1) obtaining naturalization in a foreign state upon his own application or upon an application filed by a duly authorized agent, after having attained the age of eighteen years; or

JR Commentary: This is a past relinquishing act. I know of people who have relied on this and are having difficulty getting CLNs.

(2) taking an oath or making an affirmation or other formal declaration of allegiance to a foreign state or a political subdivision thereof, after having attained the age of eighteen years; or

JR Commentary: This is a past relinquishing act. I know of people who have relied on this and are having difficulty getting CLNs.

(3) entering, or serving in, the armed forces of a foreign state if (A) such armed forces are engaged in hostilities against the United States, or (B) such persons serve as a commissioned or non-commissioned officer; or

JR Commentary: Again, only in the most extraordinary circumstances will this succeed.

(4)(A) accepting, serving in, or performing the duties of any office, post, or employment under the government of a foreign state or a political subdivision thereof, after attaining the age of eighteen years if he has or acquires the nationality of such foreign state; or (B) accepting, serving in, or performing the duties of any office, post, or employment under the government of a foreign state or a political subdivision thereof, after attaining the age of eighteen years for which office, post, or employment an oath, affirmation, or declaration of allegiance is required; or

JR Commentary: This depends on the nature of the work for the foreign government. Only specific kinds of employment have a chance of success (and even then there is the problem of proof).

(5) making a formal renunciation of nationality before a diplomatic or consular officer of the United States in a foreign state, in such form as may be prescribed by the Secretary of State; or

JR Commentary: So far I have never had a renunciation, at the Consulate rejected. If you want a CLN quickly this is the way to go.

(6) making in the United States a formal written renunciation of nationality in such form as may be prescribed by, and before such officer as may be designated by, the Attorney General, whenever the United States shall be in a state of war and the Attorney General shall approve such renunciation as not contrary to the interests of national defense; or

(7) committing any act of treason against, or attempting by force to overthrow, or bearing arms against, the United States, violating or conspiring to violate any of the provisions of section 2383 of title 18, or willfully performing any act in violation of section 2385 of title 18, or violating section 2384 of title 18 by engaging in a conspiracy to overthrow, put down, or to destroy by force the Government of the United States, or to levy war against them, if and when he is convicted thereof by a court martial or by a court of competent jurisdiction.

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(b) Whenever the loss of United States nationality is put in issue in any action or proceeding commenced on or after September 26, 1961 under, or by virtue of, the provisions of this chapter or any other Act, the burden shall be upon the person or party claiming that such loss occurred, to establish such claim by a preponderance of the evidence. Any person who commits or performs, or who has committed or performed, any act of expatriation under the provisions of this chapter or any other Act shall be presumed to have done so voluntarily, but such presumption may be rebutted upon a showing, by a preponderance of the evidence, that the act or acts committed or performed were not done voluntarily.

JR Commentary: It appears that the focus of the State Department is now squarely on whether the individual seeking the CLN has met this burden of proof.

(June 27, 1952, ch. 477, title III, ch. 3, §349, 66 Stat. 267 ; Sept. 3, 1954, ch. 1256, §2, 68 Stat. 1146 ; Pub. L. 87–301, §19, Sept. 26, 1961, 75 Stat. 656 ; Pub. L. 94–412, title V, §501(a), Sept. 14, 1976, 90 Stat. 1258 ; Pub. L. 95–432, §§2, 4, Oct. 10, 1978, 92 Stat. 1046 ; Pub. L. 97–116, §18(k)(2), (q), Dec. 29, 1981, 95 Stat. 1620 , 1621; Pub. L. 99–653, §§18, 19, Nov. 14, 1986, 100 Stat. 3658 ; Pub. L. 100–525, §§8(m), (n), 9(hh), Oct. 24, 1988, 102 Stat. 2618 , 2622.)

https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title8-section1481&num=0&edition=prelim

Official Notice Of Proposed Rule Change: To Lower The Cost Of The CLN Issued Upon Renouncing US Citizenship From $2350 To $450

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Prologue

Although it has taken a while, it appears that the reduction of the fee for a Certificate Of Loss Of Nationality ("CLN") from $2350 to $450 is going forward … https://t.co/bQOugdXOSO

— John Richardson – Counsellor for US persons abroad (@ExpatriationLaw) September 28, 2023

October 2, 2023 – Notice of Proposed Rule Change

Okay, it’s official. Here is a link to the proposed rule change which is necessary to reduce the renunciation fee from $2350 to $450. Officially, the fee is NOT a fee to expatriate. Rather it is a fee to issue the “Certificate Of Loss Of. Nationality”. also known as a CLN.

There is a 32. day comment period and I strongly suggest that you DO comment!

I encourage you to read the Notice in. its entirety. But, I note that it includes the following:

In the years since the fee was increased, members of the public have continued to raise concerns about the cost of the fee and the impact of the fee on their ability to renounce their citizenship. While there is no legal requirement for individuals to declare their motivation for renouncing U.S. citizenship, anecdotal evidence suggests that difficulties due at least in part to stricter financial reporting requirements imposed by the Foreign Account Tax Compliance Act (FATCA), Public Law 111–147, on foreign financial institutions with whom U.S. nationals have an account or accounts may well be a factor.

After significant deliberation, taking into account both the affected public’s concerns regarding the cost of the fee and the not insignificant anecdotal evidence regarding the difficulties many U.S. nationals residing abroad are encountering at least in part because of FATCA, the Department has made a policy decision to help alleviate at least the cost burden for those individuals who decide for whatever reason to request CLN services by returning to the below-cost fee of $450. Although the prior fee of $450 represents a fraction of the cost of providing CLN services, this change will better align the fee for CLN services with other fees for services provided to U.S. citizens abroad, including, for example, applications for a Consular Report of Birth Abroad, which all are set significantly below cost, even as the costs of providing these services have fluctuated over time.

If you go to the following link you can submit a comment (and even email this to a friend).

https://www.federalregister.gov/documents/2023/10/02/2023-21559/schedule-of-fees-for-consular-services-administrative-processing-of-request-for-certificate-of-loss

Here is a pdf version:

Federal Register Schedule of Fees for Consular Services-Administrative Processing of Request for Certificate of Loss of Nationality (CLN) Fee

John Richardson – Follow me on Twitter @Expatriationlaw

Presumptions, tax residency and presumptions of tax residency: Nonresident alien status in a FATCA world

Q. Is a CLN necessary to relinquish US citizenship for tax purposes? A. It depends on the date of relinquishment

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In a recent post, I discussed your “Taxabililty Freedom Day“. This is the day when you cease to be a taxable U.S. person. From that day you begin life free of the U.S. tax system. That post discussed the role of Form 8854 (noting that between June 3, 2004 and June 16, 2008 one had to file Form 8854 to no longer be a U.S. tax citizen). During the period between June 3, 2004 and June 16, 2008:

IF [you relinquished U.S. citizenship under the Immigration and Nationality Act)] THEN
[You continued to be treated as a “U.S. person” for tax purposes UNDER THE INTERNAL REVENUE CODE until you gave “notice” of your “relinquishment” to a government agency.] For this period part of the “notice” was filing Form 8854 with the Internal Revenue Service. In other words, there was no way to cease to be a “U.S. person” for tax purposes until you had notified the IRS.
In order to STOP being a “U.S. citizen for tax purposes” Form 8854 had to be filed with the IRS. Without filing Form 8854, you simply continued to be treated as a “U.S. citizen” for tax purposes.

The purpose of this post is to discuss the relation between the U.S. Certificate of Loss of Nationality (“CLN”) and loss of U.S. citizenship for tax purposes. This is an anxiety inducing and confusing area. If you don’t want to read the analysis go straight to the bottom which provides the following answer to the question:

Is a CLN required in order to cease to be a U.S. citizen for either immigration or tax purposes?
Putting it all together – is a CLN necessary for relinquishment of U.S. citizenship?

Prior to June 3, 2004 – NO for either immigration or tax purposes

June 3, 2004 – June 16, 2008 – NO for either immigration or tax purposes.

After June 16, 2008 – No for immigration purposes – Yes for tax purposes. A CLN is necessary as a confirmation of having met the “notice requirement” to end U.S. citizenship for tax purposes.

Therefore, a CLN (for practical purposes) is necessary for relinquishment of U.S. citizenship, for tax purposes, for expatriating acts after June 16, 2008.
And finally, a disclaimer …
These issues are complex. They are not well understood. There is some disagreement in the legal and accounting professions about these issues. I am not your lawyer. Nothing on this site is legal advice. Get yourself competent counsel.

The rest of the post is explanation which is tedious and technical. You are welcome to it if you want.

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Absent "renunciation" – $2350 "relinquihsment fee" is NOT to lose US nationality it's to acquire proof of non-USness http://t.co/eDKJdQ3FAL

— John Richardson – Counsellor for US persons abroad (@ExpatriationLaw) October 6, 2015

The above tweet references the following insightful comment at the Isaac Brock Society.
The comment appeared on a post discussing the new $2350 fee that applies to (non-renunciation) “relinquishments” of U.S. citizenship. Those who are entitled to “back dated” relinquishments should still attempt to seek “non-renunciation relinquishments“.

@Eido, @Allison Christians, You (Eido) state “they are now charging the same amount of money for relinquishing U.S. nationality as they are for renouncing it” and “This means that it costs ALL American nationals thousands of dollars to change their nationality.”
Let me punch some holes in what you wrote as it will improve the arguments that we from the “Borg Collective” will make.
I have argued on this board that a CLN is NOT a requirement to lose ones US Nationality if an appropriate action was taken in accordance with 8 US Code. I relinquished a decade ago, do not have a CLN but do have documentation from the US Government recognizing my relinquishment and that I am no longer a USC. That said, I do believe a CLN can be a pretty handy piece of paper to have in ones pocket!!
I would argue that this regulation further supports my argument that a CLN is not in fact required to have lost US Citizenship hence the reason I believe the above quotes by the author are incorrect.
The State Department is now acutely aware of the Expatriation Act 1868 and cites the act in 7 FAM 1200, “That any declaration, instruction, opinion, order, or decision of any officers of this government which denies, restricts, impairs, or questions the right of expatriation, is hereby declared inconsistent with the fundamental principles of this government.”
http://www.state.gov/documents/organization/120536.pdf
So how do you complete the circle between the left hand and the right hand? It is very clear that charging $2,350 to relinquish ones USC clearly runs foul to the Expatriation Act 1868 which the State Department clearly acknowledges!!
What is State charging for? They are not charging for “relinquishing” they are charging for “Documentation for Loss of Nationality.” They are charging those persons that want the State Department to issue them a piece of paper just as they charge for issuing an affidavit or notarial service.
They also state “In the past, individuals seldom requested Certificates of Loss of Nationality from the Department to document relinquishment.”
This is important for several reasons. First, it highlights in writing for those giving an FI a reasonable explanation as to why they do not have a CLN is simply that prior to the date of this notice “individuals seldom requested Certificates of Loss of Nationality.”
Second, it is not a fee for the act of relinquishment rather it is a fee to “document” same. There is a major difference between an action and documenting said action.
Now here is where Allison is on to something in stating “certainly relative to resisting the tax jurisdiction.”
I think Allison understands my above argument or if not will understand it now, but a CLN is a requirement dependent on relinquishment date to escape “tax jurisdiction.”
Effectively the IRS is now requiring the payment of an administrative fee of $2,350, circuitously through State, in order for a person to file a Form 8854 because a CLN date is required as part of that form!!
Is this action a good thing? Yes, I believe that the USG has provided another path forward for our cause. They have now confirmed in writing that CLNs were “seldom requested” which means most people that relinquished will NOT have a CLN!!! So when a FI asks a person for their CLN they can provide a reasonable explanation with their own written proof along with the State Departments own written word that such documents were “seldom requested.” The proof of not getting such a document now is the cost!!!
I do believe that State has perfected their argument on this matter but I also believe that they still need to be challenged based on the argument that this does violate the Expatriation Act 1868 and the UN Declaration. Such a challenge may force them to either back down on the fee which is good or it forces them to admit in stronger terms that the CLN is an “optional” document to have and that is good too! Arguing the case with State is a win/win for our cause.
The “bonus” in all this is that charging a fee to get a CLN, I think flies in the face with tax expatriation and Form 8854. I think if State lawyers had talked with Treasury lawyers they would not have gone down this route. It also muddies the water on the IGA agreements that were signed because many were signed when a CLN was free for to “document” a relinquishment.
OK Brockers fire back at me because iron strengthens iron. I know my argument sounds like a cheap lawyer talking but lessons were learned from the Summary Trial and the Bopp injunction. I believe that State was very careful in their choice of words.

Continue reading →

Renunciation is one form of relinquishment – It’s not the form of relinquishment, but the time of relinquishment

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Updated August 2020 with this video where this complex issue is discussed

Q. Is a CLN always required to have lost US citizenship for purposes of taxation? A. It depends on when the relinquishing act took place (unless you believe that S. 877A is retrospective and retroactive) Issue discussed with @IRSMedic and @Keith__Redomond https://t.co/HF4EfloKf3

— John Richardson – Counsellor for US persons abroad (@ExpatriationLaw) August 16, 2020

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Tina Turner: What’s FBAR Got To Do With It?

What's Tax Got To Do With It? Tina Turner 'Relinquishes' (Not 'Renounces') U.S. Citizenship http://t.co/5hdMIsGFuI – From @SoCalTaxProf

— John Richardson – Counsellor for US persons abroad (@ExpatriationLaw) February 21, 2015

Professor Caron writes:

Washington Post, Tina Turner Formally ‘Relinquishes’ U.S. Citizenship:

This item just in via an “activity” report from the U.S. Embassy in Bern, Switzerland, headlined “Soul Legend Relinquishes U.S. Citizenship.”

“Long-time Swiss resident Tina Turner” was in the embassy Oct. 24 to sign her “Statement of Voluntary Relinquishment of U.S. Citizenship under Section 349 (a)(1) of the INA” — the Immigration and Naturalization Act. …
The key word in the embassy report apparently is the term “relinquishment.” That means, a knowledgeable source told us, that she did not “formally renounce her U.S. citizenship under 349(a)(5) Immigration and Nationality Act, but took Swiss citizenship with the intent to lose her U.S. citizenship.” As opposed to formal renunciation — a much more complex process, we were told — there are no “tax or other penalties for loss of citizenship in this fashion.”
For the difference between relinquishing and renouncing U.S. citizenship, see here. As this detailed post makes clear, the tax consequences are the same whether one relinquishes or renounces U.S. citizenship. Previous press coverage suggested that Ms. Turner’s actions may be motivated in part by a desire to escape the new FATCA regime.