Category Archives: American expatriates

The Unknown Ambassadors: A Saga Of Citizenship – Phyllis Michaux

I just read “The Unknown Ambassadors: A Saga Of Citizenship” by Phyllis Michaux.* Phyllis Michaux was an American citizen who married a French citizen/resident. She lived her adult life in France. By any standard, she was an impressive and effective advocate for the rights of Americans abroad.**

I recommend the book (if you can find a copy) to all Americans abroad. As diverse as the community of Americans abroad is, what unites them is far greater than what divides them. What unites all Americans abroad is the horrible discriminatory treatment they suffer at the hands of the U.S. government. (As the distribution of vaccines in the covid pandemic demonstrated, the discriminatory treatment is NOT limited to taxation.) In this respect the United States is practically unique. Ireland honours and celebrates its diaspora. France gives it expats representatives in the legislature. The United States does (in 2024) and always has (as documented in “The Unknown Ambassadors”) mistreat its citizens abroad. U.S. citizens abroad are examples of the “discrete and insular minorities” contemplated in Justice Stone’s infamous Carolene Products footnote 4.)**** U.S. citizens, more than the citizens of any other country are in need of a second citizenship.

Phyllis Michaux’s achievements from the 20th century offer lessons for the many individuals and groups who are advocating to achieve justice for Americans abroad in the 21st century.

“The Unknown Ambassadors” provides an account of Ms. Michaux’s recognizing discrimination against Americans abroad as a matter of fact, identifying the laws responsible for that discrimination, identifying the appropriate U.S. government agencies to lobby for change and finally executing that change. Advocates for Americans abroad in the 21st century should read this book. A testament to her achievements is that the “Phyllis Michaux Papers” are found in the “Georgetown University Archival Resources”.

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US Citizens Abroad – Discussion: Sunday January 21, 2024 – 13:00 – Prague Czech Republic (and London, UK – Jan. 17 – 18:30)

U.S. Citizens and Green Card Holders Abroad!!

Update – … London, UK too

I will be in London on Wednesday January 17, 2024. Since I am already there, I am happy to connect with London residents who wish to discuss all things related to surviving as a U.S. citizen living outside the USA. The session is:

When: Wednesday January 17, 2024 – 18:00 – 20:00

Where: Pret A Manger 18:00 – The Sutton Arms – first floor wine room – 6 Carthusian Street, London – EC1M 6EB

Registration for the London session: Please send me an email to: citizenshipsolutions@protonmail.com

Just tell me me your name and indicate that you wish to attend.

Read on to learn what these events/discussions are about.

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Prague – Sunday January 21, 2024 – Livestream or attend live in Prague

Read on …

An appropriate New Year message …

Are you …

frustrated with the U.S. policy of citizenship taxation?

disappointed with the progress in achieving a change in the law?

fed up with being asked for your vote with no candidates representing your interests?

– finding it difficult to understand what it means to be in compliance?

– finding you cannot afford U.S. tax compliance?

forced to plead GILTI for running a small business?

experiencing further FATCA related problems?

wondering if/when the USA will join the rest of the world by adopting residence taxation?

– concerned that this may impact your non-citizen spouse and family?

– worried about how to plan for retirement?

– worried about estate planning?

– considering renunciation of U.S. citizenship?

These topics and more …

Don’t miss this opportunity to engage in discussion with people who live with the constant of anxiety of being a U.S. citizen living outside the United States. (Green Card holders are welcome too …)

Speaker: John RichardsonToronto based expatriation lawyer, co-founder of SEAT, blogger at CitizenshipSolutions.ca, Commentator on X.com/ExpatriationLaw

When: Sunday January 21, 2024 – 13:00

Where: Brix bar & Hostel, Rohacova 132/15, Prague 3 Žižkov

Cost: 200CZK – includes lunch

Registration:

In order to register please email:

g.smith@brixhostel.com

We look forward to a great (nonpartisan) discussion!

Americans Abroad Aren’t Denouncing Because They Want To. They Are Renouncing Because They Feel They Have To

Introduction/background:

Denunciation of U.S. Citizenship – From the perspective from a U.S. Senator

Renunciation of U.S. Citizenship – From the perspective of a U.S. journalist

It’s hard to have a discussion about why Americans abroad are renouncing U.S. citizenship. There are many different perspectives about renunciation. There is very little “shared reality”. Tax academics (who have the resources to know better), “pensioned intellectuals”, politicians and most journalists see this from a “U.S. resident perspective”. They don’t understand the reality of the lives of Americans abroad. But, Americans abroad are NOT a monolith. The ONLY thing they have in common is that they live outside the United States. Their circumstances vary widely. There is little “shared reality” among Americans abroad of what the issues are. AT the risk of oversimplification, I have attempted to divide “Americans abroad” into four categories (as defined below). The categorization will explain why different groups of “Americans abroad” experience the U.S. extra-territorial tax regime differently.

Hint: Americans abroad aren’t renouncing U.S. citizenship because they want to. They are renouncing U.S. citizenship because they feel they have to.

Politicians, tax academics, “pensioned intellectuals” and many journalists deal in the world of opinions. The opinions they hold are often “myths”. They are not “facts”. They are entitled to their opinions (as misguided and ignorant as they may be). They are NOT entitled to their “facts”.

This post is to describe the facts about how the extra-territorial application of the Internal Revenue Code and the Bank Secrecy Act pressure many Americans abroad to renounce U.S. citizenship. Interestingly a large percentage of those renouncing owe ZERO taxes to the U.S. government. They renounce anyway!

First, a bit of background to the problem – what is the problem and who is affected?

They do NOT meet the test of being “nonresident aliens” under the Internal Revenue Code

As SEAT cofounder, Dr. Laura Snyder explains, in the first of her 16 “working papers” describing the problems of Americans abroad:

The people most affected by the U.S. extraterritorial tax system are not a monolithic group. Some left the United States recently, some left years or decades ago. Some left as adults (some young, some middle-aged, and some retirees), while others left as children (with their families), and some have never lived in the United States (they are U.S. citizens by virtue of the U.S. citizenship of at least one parent). Some intend to live in the United States (again) in the near or distant future, while others do not intend to ever live in the United States (again). Some identify as Americans while others do not. Many are also citizens of the country where they live (dual citizens) while others hold triple or even quadruple citizenships. In referring to this group, there is no one term that sufficiently reflects its full diversity. What unites them is that they do not meet the test of “nonresident alien” under the Internal Revenue Code. Depending upon the context, this series of papers will use terms such as “persons,” “individuals,” “affected individuals,” and “overseas Americans.” The latter term has a drawback, however: it emphasizes connections to the United States while minimizing the important connections that such persons have to the countries and communities where they live.

That said, what divides Americans abroad may be greater than what unites Americans abroad!

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Should tax residency Be Based On The “Circumstances Of Your Birth” Or The “Circumstances Of Your Life”?

Panel session – US Expat Tax Conference from Deborah Hicks on Vimeo.

Should taxation be based on the “circumstances of your birth” or the “circumstances of your life”? President Obama doesn’t think (apparently) that the “circumstances of your birth” birth should determine the “outcome of your life”. Should the “circumstances of your birth” determine your tax residency?

This is a second post exploring what is the true meaning of U.S. citizenship-based taxation. In an earlier post – “Toward A Definition Of Citizenship Taxation” – I explored the contextual meaning and effect of U.S. “citizenship taxation”. The only “contextual effect” and “practical meaning” of U.S. citizenship taxation may be described as:

Therefore, the practical meaning of “citizenship taxation” is the United States imposing taxation on the non-US source income earned by people who live in other countries. To be clear: citizenship taxation means that the United States is claiming the residents of OTHER countries as US residents for tax purposes!

That’s amazing stuff! Most countries believe that they are sovereign and that includes sovereignty over matters of taxation. Yet, any country that is a party to a U.S. tax treaty has actually agreed that a subset of the treaty partner’s tax residents are ALSO U.S. tax residents! Although nobody questions the right of the United States to prescribe its own definition of tax residency, few would agree that the United States has the right to claim the residents of other countries as U.S. tax residents. Yet, this is what the U.S. citizenship taxation regime means. This U.S. extraterritorial claim of taxation is at the root of the FATCA administration problems and at the root of the the events that led to Treasury Notice 2023-11 (released on December 30, 2022).

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Afroyim v. Rusk – A New Perspective: Do The Specific Rules Of US Citizenship Taxation Result In The Forcible Destruction Of US citizenship?

Prologue

The United States of America is the ONLY country in the world that both:

1. Confers citizenship by birth inside the country; AND

2. Imposes worldwide taxation and regulation based on citizenship.

Therefore, it is reasonable to conclude that:

US citizenship is the world’s only true “taxation-based citizenship”.

Afroyim – Should extending constitutional status to US citizenship be understood as a new gift or exacerbating an old curse?

US Citizenship Stripping Before 1967 – The Significance Of Afroyim

The US government was stripping US citizens of their citizenship if they committed various “expatriating” acts. This was codified in statutes that mandated that certain kinds of conduct would result in the loss of US citizenship. At various times the expatriating conduct included (but was not limited to): naturalizing as a citizen of another country, voting in a foreign election, serving in the armed forces of a foreign country and even marrying a non-citizen.

US Citizenship Stripping After 1967 – Afroyim

The 1967 US Supreme Court decision in Afroyim clarified that Congress lacked the power to strip US citizens (who were born or naturalized in the United States) of their citizenship. The Afroyim ruling clarified that:

1. US citizenship belonged to the citizen and could be lost by the citizen only if the citizen voluntarily relinquished US citizenship by voluntarily committing an expatriating act with the intention of relinquishing US citizenship; and

2. Congress cannot enact laws or engage in practices that result in the forcible destruction of citizenship.

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Extradition Is One Way That Changes In Another Country’s Tax Laws May Change Your Tax Relationship With The US

Prologue

As long as the US continues to employ citizenship taxation any changes in US tax law will continue to have unintended consequences on Americans abroad. In March of 2022 I outlined how some of the tax changes proposed in the 2023 Biden Green book would impact US citizens who live outside the United States. As important as US tax changes are, Americans abroad must be aware of how changes in the laws of their country of residence may also impact their “tax relationship” with the United States.

The purpose of this post is provide five simple examples. Some of the examples are based on Canada’s tax laws and others are of a more general nature.

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John Richardson – Information Session – London, UK – Thursday Oct. 13/22 – 19:00 – 21:00

Attention!! Date, time and location updated!! – Thursday Oct. 13/22 – 19:30 – 21:30 – New location! See here.

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John Richardson – Information Session – London, UK – Thursday Oct. 13/22 – 19:00

What: John Richardson informal information and discussion session for those impacted by US extraterritorial overreach

When: Thursday October 13, 2022 – 19:00 – 21:00

Where: Pret A Manger – Directly Across From Russell Square Tube (careful to choose the correct Pret)
40 Bernard Street, London, WC1N 1LE
https://www.pret.co.uk/en-GB/shop-finder/l/london/40-bernard-street/284

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Buying Their Freedom: Toward A More Efficient Process Of US Citizenship Renunciation

Buying Their Freedom – A More Efficient Renunciation Process – The “Readers Digest” Version Of This Post …

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”

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Thinking About Financial And Life Planning For US Citizens Living Outside The United States

Introduction

This week I am giving a (short) presentation on this topic. I created some slides that are designed to provide the categories for discussion. I thought I would share the slides in this blog post.

John Richardson – Follow me on Twitter @Expatrationlaw

H.R. 5800 – To establish a commission to study how Federal laws and policies (except US Citizenship Taxation) affect United States citizens living in foreign countries

The Readers Digest Version

Yes, this post is a bit long. If you don’t want to read it, here is the “Readers Digest” version in the form of a tweet:

Now, on to the explanation …

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