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Taxation Makes U.S. Citizenship A Caste System With Or Without Birthright Citizenship

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John Richardson – July 4, 2026

On June 30, 2026 the Supreme Court Of The United States released it’s decision in Trump v. Barbara. The complete decision can be read here:

https://www.supremecourt.gov/opinions/25pdf/25-365_4hdj.pdf

A June 30, 2026 discussion (with initial impressions) is found in the Appendix to this post.

It starts with the 14th Amendment

The 14th Amendment of the U.S. constitution starts with the following language:

Section 1

All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside.

The decision should be interpreted in a very minimal way as follows:

– Five justices (Roberts, Sotomayor, Kagan, Jackson and Barrett) interpreted the 14th Amendment (the words “and subject to the jurisdiction” notwithstanding) to mean that birth on U.S. soil is a sufficient condition for U.S. citizenship (the number of dissenting decisions means that there is a good chance that this issue will be revisited)

– Four justices (Thomas, Alito, Gorsuch and Kavanaugh) ruled that the 14th Amendment should NOT be interpreted to mean that birth on U.S. soil was a sufficient condition for U.S. citizenship

– Justice Alito in particular was very skeptical of those who were born in the USA but were also born as citizens of another country. Justice Alito begins his dissent with:

JUSTICE ALITO, dissenting.

This is one of the most important decisions in the history of the Court, and in my judgment, the Court has made a serious mistake. As interpreted by the Court today, the Fourteenth Amendment confers citizenship on virtually everyone who happens to be born in this country, including the children of “birth tourists,” women who come here solely for the purpose of giving birth to a child and then promptly return home. Careful analysis of the text of the Fourteenth Amendment and the process that led to its adoption shows that it does not degrade the concept of United States citizenship in this way. Instead, the Fourteenth Amendment confers citizenship on only those children who, at birth, owe allegiance solely to this country.

It is the inclusion of the words “owe allegiance solely to this country” with particular emphasis on the word “solely” that indicates the hostility toward “dual citizenship” at birth.

Yet, it is the combination of “birth on U.S. soil” coupled with being born as a citizen of another country that creates the most valuable form of U.S. citizenship!

America is taxation and taxation is America!

Yes, it’s the Internal Revenue Code that makes dual citizenship from birth so valuable. Under 877A(g)(1)(B)(i) an exemption to the Exit Tax rules is created for certain individuals who were born dual citizens. The specific text of the Internal Revenue Code which creates preferential treatment for dual citizens at birth is:

(i)the individual—

(I) became at birth a citizen of the United States and a citizen of another country and, as of the expatriation date, continues to be a citizen of, and is taxed as a resident of, such other country, and
(II) has been a resident of the United States (as defined in section 7701(b)(1)(A)(ii)) for not more than 10 taxable years during the 15-taxable year period ending with the taxable year during which the expatriation date occurs,

Those interested in a “deeper dive” might find this earlier post from this Citizenship Solutions blog interesting.

The narrow purpose of this post is to demonstrate that those who were born on U.S. soil as dual citizens from birth have a much higher standard of U.S. citizenship than those who were NOT born as dual citizens from birth. This is a shocking realization for a country that claims to have equality of citizenship. Because of the tax code, nothing could be further from the truth! The Internal Revenue Code generally (through complexity and exemptions) divides and conquers U.S. citizens. The United States is the only major country in the world that requires its citizens, who do NOT live in the country, to pay tax on their worldwide income to their country of citizenship.

In practical terms this means that:

– taxation is what distinguishes U.S. citizenship from other citizenships (If July 4 is considered to be a celebration of citizenship, then it should be considered to be a celebration of U.S. citizenship taxation);

– the only practical meaning of U.S. citizenship taxation is that the United States imposes direct taxation according to U.S. tax laws on (1) individuals who are tax residents of other countries and (2) on the non-U.S source income received by those individuals; and

– the United States imposes a more punitive form of taxation on U.S. citizens who live outside the United States than on U.S. citizens who live in the United States (PFIC, GILTI, Subpart F, phantom capital gains tax, FBAR, Form 8938, etc.)

(Incidentally those individuals are also subject to taxation in the countries where they reside.)

In short for U.S. citizens living outside the United States:

U.S. Citizenship = double taxation

A picture or chart is worth a thousand words

The following table will show why those “Born In The USA” and are ALSO born as citizens of another country are born as “preferred citizens”. Significantly they have both the right to NOT be stripped of U.S. citizenship AND the right to renounce U.S. citizenship without being subject to the 877A Exit Tax AND are not impacted by the 2801 “Covered Gift Tax” (meaning they are still permitted to make gifts and/or bequests to U.S. citizens.

Conclusion: The highest form of U.S. citizenship are U.S. citizens who were born with dual citizenship. Specifically those who (1) Became U.S. citizens by being “Born In The USA” and (2) were born as citizens of another country have a much higher standard of U.S. citizenship than any other level of U.S. citizenship. They cannot be stripped of their U.S. citizenship and they have the necessary condition required to expatriate without triggering the U.S.Internal Revenue Code 877A Exit tax or the U.S. Internal Revenue Code 2801 covered gift tax. This is the highest level of U.S. citizenship and is based ONLY on circumstances of birth.

The next level of U.S. citizenship is U.S. citizens born abroad to a U.S. citizen parent who were also born as citizens of another country – dual citizens from birth.

Bottom line: Dual citizenship from birth is extremely valuable. There is NO question that the citizens who Justice Alito finds the most objectionable are the ones who hold the highest level of U.S. citizenship!

Q. Is U.S. citizenship a “caste” system of citizenship?

A. Based on the definition of “caste” found here, it may very well be.

Significantly, what Justice Alito finds problematic (being born a citizen of another country) is precisely the most valuable form of U.S. citizenship.

Bottom line: Not all U.S. citizenship is the same!

________________________________________________________________

Protection of 14h Amendment - cannot be stripped of citizenshipEligible to be PresidentAble to expatriate and not trigger 877A Exit TaxAble to expatriate and not trigger 2801 covered gift tax
USC - Born In USAYesYesYes if also citizen of another country at birthYes if also citizen of another country at birth
USC - Born Outside USA to USC abroadNoYesYes if also citizen of another country at birthYes if also citizen of another country at birth
Born as citizen of another countryYes if also born in the USAYes if also born as a USC (think Ted Cruz)Yes if also citizen of USA at birthYes if also citizen of USA at birth
Naturalized USCYesNoNo - but tax applies only to period of "US Personness"No
Born outside of USA to a USC parent and becomes US citizen at birth but NOT a citizen of another countryNoYes (think George Romney and John McCain)No because not born a dual citizen from birthNo

John Richardson – Follow me X at @Expatriationlaw

Appendix – Discussion of the Trump v. Barbara case on June 30, 2026

IRS Ends “Delinquent FBAR Submission Procedures” Leaving No “Guaranteed Penalty Free Option”

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Introduction

Podcast 1 – July 2, 2026

Podcast 2 – July 17, 2026

On June 26, 2026 I did a presentation in London, UK titled “The Life And Times Of Mr. FBAR”. Obviously, the presentation included a discussion of how to file delinquent FBARs without triggering an FBAR penalty.

That discussion included references to both:

– “Streamlined filing procedures“; and

– “Delinquent FBAR submission procedures”

On June 30, 2026 the “Delinquent FBAR submission procedures” option was removed from the IRS site. It appears that this specific procedure is no longer an option. Notably, the “Delinquent FBAR submission procedures” option included the promise that:

The IRS will not impose a penalty for the failure to file the delinquent FBARs if you properly reported on your U.S. tax returns, and paid all tax on, the income from the foreign financial accounts reported on the delinquent FBARs, and you have not previously been contacted regarding an income tax examination or a request for delinquent returns for the years for which the delinquent FBARs are submitted.

Continue reading →

December 2011 – IRS FS-2011-13: Information for U.S. Citizens or Dual Citizens Residing Outside the U.S.

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Purpose

The purpose of this post is to archive the 2011 IRS Fact Sheet for U.S. Citizens or Dual Citizens Living Outside the U.S.

The summer of 2011 was a particularly difficult time for U.S. citizens living outside the United States. Many of them were learning about U.S. citizenship taxation and FBAR for the first time. Many made the mistake of entering the IRS 2011 Offshore Voluntary Disclosure Program (“OVDI”).

Finally, in December of 2011 the IRS provided minimal direction on what Americans abroad were required to do.

I am in the middle of preparing a presentation on “The Life And Times Of Mr. FBAR” and have been considering “civil” FBAR penalties under 31 U.S.C. 5321. Specifically, what are the factors that the IRS considers in determing whether an FBAR violation is willful or non-willful. I remember this 2011 directive as including some interesting considerations. It taok me some time to track this down. Hence, I though I would write a short post to ensure that:

“Information for U.S. Citizens or Dual Citizens Residing Outside the U.S.
FS-2011-13, December 2011”

was stored on this site. Hence, this post.

Of particular interest are the following paragraphs:

“6. Possible penalties for failure to file FBAR

If you fail to file an FBAR, in the absence of reasonable cause, you may be subject to either a willful or non-willful civil penalty. Generally, the civil penalty for willfully failing to file an FBAR can be up to the greater of $100,000 or 50 percent of the total balance of the foreign account at the time of the violation. See 31 U.S.C. §5321(a)(5). Note that this penalty is applicable only in cases in which there is willful intent to avoid filing. Non-
willful violations that the IRS determines are not due to reasonable cause are subject to a penalty of up to $10,000 per violation. There is no penalty in the case of a violation that IRS determines was due to reasonable cause. For more information about the FBAR penalty, see Form TD F 90-22.1. For information about the reasonable cause exception to the FBAR penalty, see IRM 4.26.16, Report of Foreign Bank and Financial Accounts (FBAR).

Example 3: Same facts as Example 1, except that the highest balance in Taxpayer’s checking account exceeded $10,000 and, after reading recent press and thus learning of his FBAR filing obligations, Taxpayer filed an accurate, though late, FBAR. The FBAR was accompanied by a written statement explaining why Taxpayer believed the failure to file the FBAR was due to reasonable cause. The IRS will determine whether the violation was due to reasonable cause based on all the facts and circumstances. Taxpayer’s explanation for why he failed to timely file an FBAR appears reasonable in view of the facts and circumstances of the case. Since
the IRS determined that the FBAR violation was due to reasonable cause, no FBAR penalty will be asserted.

Factors that might weigh in favor of a determination that an FBAR violation was due to reasonable cause include reliance upon the advice of a professional tax advisor who was informed of the existence of the foreign financial account, that the unreported account was established for a legitimate purpose and there were no indications of efforts taken to intentionally conceal the reporting of income or assets, and that there was no tax
deficiency (or there was a tax deficiency but the amount was de minimis) related to the unreported foreign account. There may be factors in addition to those listed that weigh in favor of a determination that a violation was due to reasonable cause. No single factor is determinative.

Factors that might weigh against a determination that an FBAR violation was due to reasonable cause include whether the taxpayer’s background and education indicate that he should have known of the FBAR reporting requirements, whether there was a tax deficiency related to the unreported foreign account, and whether the taxpayer failed to disclose the existence of the account to the person preparing his tax return. As with factors that might weigh in favor of a determination that an FBAR violation was due to reasonable cause, there may be other factors that weigh against a determination that a violation was due to reasonable cause. No single factor is determinative.

Current IRS procedures state that an examiner may determine that the facts and circumstances of a particular case do not justify asserting a penalty and that instead an examiner should issue a warning letter. See IRM 4.26.16, Report of Foreign Bank and Financial Accounts (FBAR). The IRS has established penalty mitigation guidelines, but examiners may determine that a penalty is not appropriate or that a lesser (or greater) penalty amount than the guidelines would otherwise provide is appropriate. Examiners are instructed to consider whether compliance objectives would be achieved by issuance of a warning letter; whether the person whocommitted the violation had been previously issued a warning letter or has been assessed the FBAR penalty; the nature of the violation and the amounts involved; and the cooperation of the taxpayer during the examination.

Example 4: Taxpayer is a United States citizen who lives and works in Country B as a computer programmer. Taxpayer has checking and savings accounts with a bank that is located in the city where he lives. The aggregate balance of the checking and savings accounts is $50,000 during the tax year. Taxpayer complied with Country B’s tax laws and properly reported all his income on Country B tax returns. Taxpayer failed to file federal income tax returns and failed to file FBARs to report his financial interest in the checking and savings accounts. After reading recent press and thus learning of his federal income tax return and FBAR reporting obligations, Taxpayer filed delinquent FBARs, reporting both foreign accounts, and attached statements to the FBARs explaining that he was previously unaware of his obligation to report the accounts on an FBAR. Taxpayer also filed federal income tax returns properly reporting all income and no tax was due. The IRS will determine whether the FBAR violation was due to reasonable cause based on all the facts and circumstances. Taxpayer had a legitimate purpose for maintaining the foreign accounts, there were no indications of efforts taken to intentionally conceal the reporting of income or assets, and no tax was due. Taxpayer’s explanation for why he failed to timely file an FBAR appears reasonable in view of the facts and circumstances of the case.

Since the IRS determined that the FBAR violation was due to reasonable cause, no FBAR penalty will be asserted.”

You can read the FS-2011-13 in its entirety here:

FS-2011-13

It is also discussed here.

John Richardson – Follow me on X.com/Expatriationlaw

A History Of The Board Of Appellate Review And A Tribute To Chairman Alan James

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By: John Richardson – June 15, 2026

Prologue

On July 18, 2017 the Washington Post included a section describing:

“Notable Deaths in the Washington, area”

“Alan James, lawyer, State Dept. officer

Alan James, 96, a lawyer who specialized in admiralty law and a State Department officer who served as a delegate to international panels on laws of the sea, died June 13 at a hospital in Bethesda, Md. The cause was heart ailments, said a daughter, Anne James.

Mr. James, a Bethesda resident, was born in Brooklyn. In the 1950s, he began his State Department career as an administrative and political counselor specializing in maritime matters. He was a political counselor at U.S. embassies in London and Paris as well as a delegate to laws of the seas treaty conferences. From 1982 to 1995, he chaired the State Department Board of Appellate Review, which reviews individual nationality cases. He was an avocational scholar who specialized in the works of Henry James (no relation).”

https://wapo.st/4eKK4hG

https://www.washingtonpost.com/local/obituaries/notable-deaths-in-the-washington-area/2017/07/18/ecb73298-6bd2-11e7-96ab-5f38140b38cc_story.html

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About The Expired U.S. Passport – Is It Proof Of U.S. Citizenship (Yes)? Can It Be Used As A Travel Document (No)?

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Introduction

There is no such thing as a small citizenship problem. In many instances the only thing worse than being a U.S. citizen is NOT being a U.S. citizen. Many individuals who have never lived in the United States are U.S. citizens. They endure the problems of U.S. citizenship taxation and restricted access to financial accounts (yes, in many instances U.S. citizenship can be a disability). There are many people who have lived most of their lives in the United States who are NOT U.S. citizens. In some cases Green Card holders will become U.S. citizens specifically because they wish to move from the United States and avoid the 877 Exit Taxes. In some cases, non-citizens can enter the United States with less friction than U.S. citizens!! Sound crazy!! Yes it most certainly is.

Consider the following scenario:

Two Canadian citizens live in Canada and have Canadian passports. One of the two citizens is also a U.S. citizen without a current U.S. passport or with no U.S. passport. Incredibly the person who is ONLY Canadian can enter the United States with only his Canadian passport. But, the other person is in violation of U.S.C. 1185 which requires the U.S. citizen to enter the United States with a valid U.S. passport. Sound incredible? Yes it is.

The principle: Who you are is different from what you can or or required to do

The conditions or circumstances that determine whether you are a U.S. citizen are different from the restrictions that may apply to you because you are a U.S. citizen.

Whether you are a U.S. citizen

Constitutional U.S. citizenship

At present the 14th Amendment is interpreted to mean that all persons born or naturalized in the United States ARE U.S. citizens. (This is the principle at the heart of the Afroyim v. Rusk case which prohibits Congress from stripping people from their citizenship.) In 8 U.S.C. 1401 prescribes other conditions under which is a U.S. citizen.

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AARO To File Amicus Brief To Support Argument That FBAR Penalties May Violate 8th Amendment Prohibition On Excessive Fines

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The AARO brief is for the benefit of ALL Americans abroad. Please support AARO by completing their survey!

Call for Member Input – FBAR Case (Amicus Brief)

AARO to file an amicus brief with the 9th Circuit Court

AARO is working with a major U.S. law firm on an amicus brief (“friend of the court” brief), which it plans to file in May 2026, in the case United States of America v. Tuncay Saydam. Mr. Saydam was assessed penalties, now exceeding $500,000 with interest, for not having filed FBAR reports during the years 2013-2017 for his overseas bank accounts. Our amicus brief will support Mr. Saydam’s argument that these penalties are unconstitutional under the 8th Amendment to the U.S. Constitution, which prohibits the imposition of excessive fines.

Your answers to the questions below will help AARO describe in our amicus brief the difficulty for ordinary Americans to navigate the complexity and burden of compliance with the FBAR and other financial reporting requirements.

Here is the link:

https://aaro.org/issues/fbar/call-for-member-input-fbar-case-amicus-brief

John Richardson – Follow me on X.com/ExpatriationLaw

You Know A Tax System Is Broken When People Fear Tax Compliance As Much As They Fear Noncompliance

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When tax compliance is weaponized because of the "status" of an individual there is a risk in attempting compliance and a risk in non-compliance. The undocumented in the USA have a lot in common with US citizens outside the USA. (NYTImes.com gift article)www.nytimes.com/2026/04/14/u…

— John Richardson (@expatriationlaw.bsky.social) 2026-04-17T12:52:36.628Z

U.S. citizens living outside the United States and “undocumented U.S. residents” have a great deal in common. They are both subjected to (1) more punitive taxation than U.S. residents with legal immigration status and (2) are forced to pay for programs they will never benefit from.

In addition, the integrity of tax systems is (I believe) dependent on their being focused on tax administration and not being used for other (including immigration) purposes. The New York Times article (referenced above) is an excellent example of using tax information for other purposes and who this creates disincentives to tax compliance.

I discuss this problem in more detail in the following post published at the Isaac Brock Society.

You Know A Tax System Is Broken When Individuals Fear Tax Compliance As Much As They Fear Tax Noncompliance

John Richardson – Follow me on X.com/ExpatriationLaw

Trump v. Barbara – Ending The “Birth Tourism” Presumption That Birth On U.S. Soil Guarantees U.S. Citizenship

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Prologue

Interesting article and even more interesting comments on the 14th Amendment "birthright citizenship" issue.The Trump v. Barbara case to be heard April 1, 2026 will probe which individuals born in the USA are not U.S. citizens at birth.www.nytimes.com/2026/03/30/u…

— John Richardson (@expatriationlaw.bsky.social) 2026-03-31T09:07:48.861Z

On Wednesday April 1, 2026 the Supreme Court of the United States will hear the “Trump v. Barbara” case. This issue is whether birth on U.S. soil is sufficient to confer U.S. citizenship regardless of the legal status of the parents.

You can listen to the live argument on the Supreme Court site. It all takes place on Wednesday April 1, 2026 at 10:00 a.m. Eastern time. I will post the audio on this blog.

Birth Tourism – What is it? Is it a legitimate concern?

A 2022 U.S. Government report on “birth tourism” included:

I. Executive Summary

Birth tourism refers to expecting mothers traveling to the United States to obtain U.S. citizenship for their children. These tourists often cite the superior educational and professional opportunities available in the United States as their justification for making such a trip. Obtaining U.S. citizenship for their children is a hedged bet—a rainy day fund for a better life.

The benefits of U.S. citizenship require little explanation and should be cherished by all who are presented with such a unique privilege. Birth tourists
surely understand the benefits, but fail to comprehend the privilege of U.S. citizenship. Birth tourism is problematic because it short circuits and demeans the U.S. naturalization process. U.S. citizenship is not a backup plan.

VII. Conclusion

The Committee’s investigation demonstrates the prevalence of birth tourism in the United States and how it demeans the naturalization process by
monetizing the privilege of U.S. citizenship. The State Department and CBP should work together to better understand the breadth of birth tourism in the
United States. Congress should also clarify the Immigration and Nationality Act to exclude birth tourism as a permissible basis for temporary travel to the
United States.

https://www.hsgac.senate.gov/wp-content/uploads/imo/media/doc/2022.12.20-%20Final_Birth%20Tourism%20Report.pdf

PDF here:

2022.12.20- Final_Birth Tourism Report

Clearly and understandably the U.S. Government is not happy with mothers coming to the United States for the sole purpose of giving birth to a U.S. citizen child.
Continue reading →

Some Americans Considering A Move To Canada May Already Be Canadian Citizens

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I just got off a call with a Canadian resident who wishes to renounce his U.S. citizenship. He is NOT a naturalized Canadian citizen. Rather he was born in the United States (making him a U.S. citizen) to a Canadian citizen father (making him a Canadian citizen). The benefits of “dual citizenship from birth” means that he will be able to avoid “covered expatriate” status (no 877A exit tax payable).

During the conversation it became apparent that he has a son who born in the United States and has always lived in the United States (about 25 years old).

Amazingly, due to a change in Canada’s citizenship laws that took effect on December 15, 2025:

1. The son (born before December 15, 2025) IS a Canadian citizen!! All that is necessary is that the facts be proven to support that claim to citizenship.

2. Children born after December 15, 2025 to a “born abroad” Canadian citizen are Canadian citizens if the Canadian citizen parent has 1095 days of Canadian presence prior to the birth of the child. (Do you think it might be a good idea to acquire that presence by attending university in Canada?)

Great news for a lot of people!

A “watered down” description of this is available here on the Government of Canada site.

I suspect that this change in Canada’s citizenship laws is a “gift” to many U.S. citizens. Think of it!

Many U.S. citizens (and of course citizens of many other countries) will have the right to be recognized as Canadian citizens. For those who don’t want Canadian citizenship, there is even a simplified procedure to renounce Canadian citizenship. Interestingly the cost to renounce Canadian citizenship is $100 CDN.

Further information is available here.

In a world where people are paying huge amounts of money for a second citizenship this is a bargain!

John Richardson Follow me on X.com/expatriationlaw