Category Archives: Certificate of Loss Of Nationality

Considering Renunciation Part 2: Recognizing And Overcoming The Emotional Barriers

I recently wrote a post describing some of the objective tax, immigration and financial planning issues surrounding the renunciation of U.S. citizenship. For all people tax and financial planning issues should be objectively considered. But objective issues can take one only so far. We are all individual human beings who experience the world differently. We all ascribe various degrees of importance to different things. Citizenship is about more than immigration, tax and financial planning. Citizenship is also a huge component of how we see ourselves in the world. Citizenship is part of who we are!

Therefore, for many people the renunciation of U.S. citizenship is very much a psychological and emotional process. It is a process of transitioning to a both a new stage of life and a new stage of self! This is because citizenship is very much a component of (1) who we are today, (2) our personal histories and (3) how we see our futures. I was recently seated at a lunch table with a new Canadian citizen who immigrated to Canada from China. By becoming a Canadian citizen he ceased to be a citizen of China. I asked him how he felt about losing Chinese citizenship. He said that he felt very bad and very sad. But, he said his present and future was in Canada and that he wanted to be and identify as a Canadian citizen. (U.S. citizens do NOT automatically lose their citizenship by naturalizing as Canadian citizens.) To think about citizenship is to think about life planning and (especially for U.S. citizens) financial planning. Citizenship can deprive people of opportunities or open up new opportunities.

As I was counselling a people who was renouncing in February 2024, I was asked:

“Do many people regret renouncing U.S. citizenship?”

In all the years I have been assisting people I have had exactly two people regret their renunciations. But, this was immediately after renunciation and the regret was short lived. In most cases, people comment that they wish they had renounced sooner. That said (especially for those who grew up in the United States) people wish they were not placed in a position where they feel they must renounce.

When it comes to renouncing U.S. citizenship:

People are NOT renouncing because they want to.

People are renouncing because they feel they have to.

Two podcasts to help people overcome the regret of renouncing U.S. citizenship


1. The Retired Citizen – You can always identify as a U.S. citizen if you want to

https://prep.podbean.com/e/the-retired-us-citizen/

2. The Dodge Stratus ad – You’re not losing a sports car. You are GAINING two doors!

https://prep.podbean.com/e/about-loss-of-identity-what-the-dodge-stratus-teaches-us-about-renouncing-us-citizenship/


Hope this helps you clear the emotional hurdles!

John Richardson – Follow me on Twitter @Expatriationlaw

The State Department Should Allow For US Citizenship Renunciations To Take Place By Video

This post has been co-authored by Diane Gelon* (see “Reflections Of An Expatriation Lawyer“) and John Richardson

Prologue

In September of 2021 the Paris based “Accidental Americans Association” filed a lawsuit against the US State Department. The lawsuit was brought in an attempt to force the State Department to allow individuals to renounce their US citizenship. (A prior lawsuit by the “Accidental Americans Association” was based on the excessive $2350 renunciation fee.)

The lawsuit is evidence of the extreme frustration that many Americans abroad are experiencing because they (1) are unable to renounce US citizenship and (2) justifiably feel that they are prisoners of the circumstances of their birth.

It was recently announced that “The US Department of State (DOS) is suspending in-person interview requirements at local consulates for a year for numerous non-immigrant work visa categories and their families (spouse and dependent children“. In London the US Embassy is conducting telephone meetings to deal with Social Security issues. (Prior to Covid this would have required an in person meeting at the Embassy.) The State Department is clearly reducing the number and kinds of services that require “in person” Consulate visits.

The purpose of this post is to argue that renunciations of US Citizenship need not take place through in person interviews at a US Embassy or Consulate. Rather renunciations of US citizenship can and should take place through video conferencing. The backlog in processing renunciations is explained as being related to the Covid-19 pandemic. A response to the pandemic has been that more and more legal proceedings are taking place through video conferencing. Both Canada and the UK (and certainly other countries) are conducing citizenship ceremonies by video, entire court cases are held via video conferencing, and documents can be witnessed and certified by video. We have discussed various aspects of this issue with each other over a long period of time as well as benefiting from discussions with Dubai based lawyer Virginia La Torre Jeker and Esquire Founder Jimmy Sexton.

There is no law that requires that renunciations of US citizenship take place inside a US Consulate or Embassy!

This post is composed of the following seven parts leading to the following conclusion:

Americans abroad and their representatives should pressure the State Department to use their statutory authority to allow renunciations by video conferencing. The State Department has the statutory authority to do so. The fact that the State Department does not currently allow renunciations through video conferencing doesn’t mean that it cannot allow renunciations through video conferencing!

Part I – Introduction: Why Americans Abroad Are Renouncing US Citizenship
Part II – An appointment to renounce US citizenship is hard to find
Part III – Why there is NO legal requirement that renunciation appointments must take place inside a US Embassy or Consulate
Part IV – The State Department website does not specifically state that renunciations must take place inside the US Consulate or Embassy
Part V – Americans abroad and their organizations must push the Biden administration to allow renunciations of US Citizenship through video conferencing
Part VI – Interesting Bobby Fisher anecdote supporting the view that renunciations are not required to take place inside US Consulates
Part VII – Diane Gelon and John Richardson update their November 29, 2020 podcast with a December 29, 2021 podcast

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Recent economic upheaval creates expatriation opportunities for “US Persons” living abroad

This post was motivated by a thread on Reddit …

At the end of this post, I have included the Reddit thread. (Note that I am trying to develop a “RenounceUSCitizenship” thread on Reddit – you will find it here.)

As you know the US Section 877A Expatriation Tax applies to U.S. citizens and “Long Term Residents”. A “Long Term Resident” is an individual who has had a Green Card (as defined by the rules in Internal Revenue Code Section 7701(b)(6) for at least eight of the fifteen years prior to expatriation). This has become a serious problem for Green Card holders who simply move from the United States and and don’t take formal steps to sever their U.S. tax residency. (They must either file the I-407 or use a tax treaty tie breaker election to expatriate. Otherwise they may be in a situation where they have no right to live in the United States (having lost the immigration status) but are taxable on their worldwide income (still being tax citizens).

That said, whether you are a U.S. citizen wishing to renounce U.S. citizenship or a Long Term Resident wishing to sever U.S. tax residency, you do NOT want to be a “covered expatriate“. Generally, (unless one is subject to two exceptions – dual citizen from birth or expatriation between 18 and 181/2 – that are beyond the scope of this post), one is treated as a “covered expatriate” if one meets any one of these three tests:

1. Net worth of 2 million USD or more (which this post will focus on)

2. Average U.S. tax liability of more than approximately $165,000 USD over the five years prior to expatriation

3. Failure to certify U.S. tax compliance for the five years prior to expatriation.

The COVID-19 Panic – Falling asset values – more favourable exchange rates -2 million USD net worth test

The last couple of weeks have changed and continue to change our world. We are experiencing human misery on an unprecedented and global scale. This includes physical illness, fear of illness and social distancing. I live in a large city and I am beginning to see less variety in the food available. Self-employed people are seeing disruptions to their revenue streams, etc. I don’t want to keep listing examples. But it is very bad. On the economic front, we are seeing unprecedented and incalculable damage to the world economy. This includes (but is not limited to) falling asset values – how is your stock portfolio doing? We see currencies that are weakening relative to the U.S. dollar. (This means that a higher Canadian or Australian dollar net worth would equal 2 million USD.) As I write this post I just received a message, from someone advising me that the shares in a certain cruise ship stock, have fallen from $136 to $22. (My advice would be: Don’t spend money on the cruise. Instead buy the shares in the company.)

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The U.S. citizenship news of the week: While seeking to strip some naturalized Americans of their citizenship, the USA makes it harder for those with @dualcitizenship in Canada to renounce

We live in an era of the weaponization of citizenship. This has been quite a week on the U.S. citizenship front.

While, making it more difficult for certain citizens to renounce U.S. citizenship

The U.S. Government is taking specific initiatives to strip naturalized U.S. citizens of their U.S. citizenship

Is this constitutional? Interesting commentary from the Twittersphere …

Individuals, Treasury, The State Department And IRC 6039G: Who has to report what when an individual renounces US citizenship?

Renunciation of U.S. Citizenship triggers a “Reporting Frenzy”!

It’s simply unbelievable. The renunciation of U.S. citizenship triggers more reporting obligations on the part of individuals and government agencies than anything else. More than birth. More than death. More than marriage. More than bankruptcy. More than conviction of a crime (probably). It’s unbelievable.

The purpose of this post is to “slice and dice” what those reporting obligations are.

Let’s Go On A Magical Reporting Tour

https://www.law.cornell.edu/uscode/text/26/6039G

The rules governing information reporting when one relinquishes U.S. citizenship are found in Internal Revenue Code 6039G. They impose reporting obligations on “some” individual relinquishers (“covered expatriates”), the State Department whenever a Certificate of Loss Of Nationality has been issued and on U.S. Treasury. (I will comment separately on the situation of Green Card holders at the end of this post.) Most of this is summarized in the following two tweets. But, because this is so confused, I am going to take the time to parse the statute.

It’s all in Internal Revenue Code – 6039G Note that Section 6039G is found in Subtitle F which is the – “Procedure and Administration” – part of the Internal Revenue Code. In other words, it deals only with information reporting. It does NOT impose taxation. Interestingly, Section 6039G imposes reporting requirements on individuals, the State Department, U.S. Treasury (and in the case of Green Card holders) the Immigration authorities.

That pretty much sums it up. For those who want to understand the analysis …

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How To Replace A Lost US Certificate Of Loss Of Nationality or Consular Report Of Birth Abroad

I have been asked this question before and at the time was unable to answer. Since, I have found the answer I wanted to “store the answer” in a post. Surely, this must affect a lot of people.

1. Here is the link (as of today’s date) that explains how to replace a Certificate of Loss Of Nationality.

https://travel.state.gov/content/travel/en/passports/have-passport/passport-records.html

2. Note that Certificates Of Loss Of Nationality are found under “Passport Records”.

3. In case the link is changed, here is specifically what it says:

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