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.
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What follows is my 2022 post …
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”