New relinquishment fee

The DoS is forecasting 6,000 renunciations for 2015 and 550 relinquishments..

Any idea where this forecast can be found?

Any idea where this forecast can be found?

If you open the link in post #1 and scroll down to about 4/5 of the way through the article, you will find a table of the new costs for both passports and relinquishing. If you look at the 2nd column from the right, it gives the estimated number of applicants. For (a.) Oath of Renunciation, it lists an estimate of 5,986. For (b.) Relinquishments, it lists an estimate of 559.

If you look at footnote 4, below the table, it states: The existing fee definition covers a projected 5,986 applicants renouncing their U.S. nationality in FY 2015. This rule expands the definition of the fee to cover an additional projected 559 applicants who will relinquish their nationality in FY 2015. The total volume of applicants paying this fee is projected to be 6,545, if in effect for all of FY 2015. This is for the US Fiscal Year 2015, not calendar year 2015. The ratio of relinquishments to renunciations appears low, judging by what little information is available. 5,986 renouncing should equal about 2,500 relinquishing. The DoS claims to have no figures for either, so stating 5,986 comes as a surprise, although it may align more accurately with available FBI statistics. The number reported in the Federal Registers "Name and Shame" quarterly list has been proven to be low, and even publications such as the Wall Street Journal now refer to the figures as "reported renunciations", not actual renunciations.

https://www.federalregister.gov/articles/2015/09/08/2015-22054/schedule-of-fees-for-consular-services-department-of-state-and-overseas-embassies-and#p-48

The new fee for relinquishment does not come as a surprise. Most guessed it would have to happen sooner rather than later. 6,545 X $2,350 = $15.4 million. If it were all spent in London, that should at least help pay the rent to the Middle Eastern owners of the London US embassy until they move to their new site.

The new fee for relinquishing does close out an option for those who cannot afford the $2,350, especially if there are 2 or more family members taking this action.   

The new fee for relinquishing does close out an option for those who cannot afford the $2,350, especially if there are 2 or more family members taking this action.

There is a very worrying trend to practically exclude the poor from immigration and citizenship issues. the high fees for US citizen relinquishment are only one example. Probably a worse one is the income threshold imposed by the UK on spousal visas for the non-EU spouses of UK citizens. 47% of the working population of the UK fall below the income threshold of 18600 pounds a year and of course because of the geographical disparity of wages you are far more likely to earn less than that if you work outside the South East.

There is a very worrying trend to practically exclude the poor from immigration and citizenship issues. the high fees for US citizen relinquishment are only one example. Probably a worse one is the income threshold imposed by the UK on spousal visas for the non-EU spouses of UK citizens. 47% of the working population of the UK fall below the income threshold of 18600 pounds a year and of course because of the geographical disparity of wages you are far more likely to earn less than that if you work outside the South East.

Yes, it is worrying. Considering the difficulty for a returning UKC with a non-EU spouse and family, it is disturbing.

There are two separate factors at work. The UK situation which discourages immigrants coming to the UK is one factor, and is becoming more prevalent around the world. The current Syrian refugee situation has blown the EU policy, and those of its member States, to bits (if there is an EU policy). By contrast, the US policy of charging an extremely high fee to leave US citizenship is unique in the world. Combined with the also unique practice of citizenship based taxation, those who are only now realising they are US citizens, along with its attendant obligations, are being faced not only with a citizenship consideration, but possibly a difficult financial consideration as well. Potentially expensive if you stay and become compliant, and expensive if you want to leave.   

There's also the question of an old law, the Expatriation Act of 1868, which is (as I understand) still in force today:

“Whereas the right of expatriation is a natural and inherent right of all people, indispensable to the enjoyment of the rights of life, liberty, and the pursuit of happiness … Therefore any declaration, instruction, opinion, order, or decision of any officer of the United States which denies, restricts, impairs, or questions the right of expatriation, is declared inconsistent with the fundamental principles of the Republic.” 15 Stat. 223; R.S. § 1999; 8 U.S.C.A. 1481….” (bold mine)

https://en.wikipedia.org/wiki/Expatriation_Act_of_1868

If that law is indeed still in effect someone with standing ought to file a case with the federal courts that the exorbitant fee set by the agency is in violation of the law (and perhaps the Constitution).

If that law is indeed still in effect someone with standing ought to file a case with the federal courts that the exorbitant fee set by the agency is in violation of the law (and perhaps the Constitution).

There's an interesting article about the history of laws to do with expatriation at https://www.law.cornell.edu/anncon/html/art1frag65_user.html

Seems the Act of 1868 was actually intended to make it easier for citizens of other countries to expatriate and become citizens of the U.S.  Interesting.

.......denies, restricts, impairs, or questions the right of expatriation

My reading of this is that the right of expatriation is not changed by the fee. You still have the right, but the actual expatriation now costs quite a bit of money.

My reading of this is that the right of expatriation is not changed by the fee. You still have the right, but the actual expatriation now costs quite a bit of money.

But it can restrict or impair the right for someone who cannot afford the fee. If the fee were more nominal and truly reflected the processing costs I would not object, but there is no way that I see that it actually costs the State Department on average $2,350 to review a renunciation/relinquishment or print a CLN (especially when you look at the fees that other nations charge and what the US government charge to OBTAIN naturalized citizenship - which I imagine is much more scrutinized than the other way around). Therefore, the exorbitant fee is either 1) A back-door "exit tax" that does not have a statutory basis or 2) A ploy to discourage USCs from giving up their citizenship (that once again does not have any basis in actual law). I have a feeling it's more along the lines of the latter.

If that law is indeed still in effect someone with standing ought to file a case with the federal courts that the exorbitant fee set by the agency is in violation of the law (and perhaps the Constitution).

Filing in the US will always be an uphill battle.

I know some on this site are aware of the various legal actions proceeding internationally at this time, but for those who are not aware, I'll attempt to offer a quick familiarity course. I may get some of this wrong.

IMHO: If there were no CBT (citizenship based taxation), there would be no need for relinquishment or renunciation of US Citizenship, other than by those seeking a citizenship in those countries that do not allow dual citizenship. Period.

First and foremost, it is clear the US Congress is well aware of the problems faced by some US expats as a consequence of both FATCA and CBT. A recent request from a Senate bi-partisan group working on reform of the US tax code, asking individuals to write to them regarding problems, yielded an 82 page report from the International Tax Reform group. In the report, 81 pages were devoted to corporate tax problems. For expats, this was the only section within the 82 pages:

"F. Overseas Americans

According to working group submissions, there are currently 7.6 million American citizens living outside of the United States. Of the 347 submissions made to the international working group, nearly three-quarters dealt with the international taxation of individuals, mainly focusing on citizenship-based taxation, the Foreign Account Tax Compliance Act (FATCA), and the Report of Foreign Bank and Financial Accounts (FBAR).

While the co-chairs were not able to produce a comprehensive plan to overhaul the taxation of individual Americans living overseas within the time-constraints placed on the working group, the co-chairs urge the Chairman and Ranking Member to carefully consider the concerns articulated in the submissions moving forward."

Note, 75% of the responses were from expat individuals.

Democrats Abroad are supporting an initiative called the Same Country Exception - Safe Harbour. They have the backing of ACA (American Citizens Abroad). It would allow accounts held in an expats country of residence to be a non-reportable account for FATCA by the FFI(only). Details include the requirement to produce a completed FBAR and 8938 for review by the FI before the exception is allowed. It does not challenge CBT and is therefore seen as a more likely achievable solution.

https://www.democratsabroad.org/sites/default/files/DA%20FATCA%20POSITION%20PAPER%20September%202015.pdf

The Republicans Overseas organisation has filed a lawsuit challenging FATCA, in the U.S. District Court for the Southern District of Ohio. The first hearings have been held, and a judgement relating to account reporting is due by the end of this month. The trial will continue regardless of the initial ruling. Thus far, the attorney for the US Dept. of Justice gave the following opinion on harm (account closures and reporting) caused by FATCA:

“The harm definitely has to be imposed specifically on you,” Murphy said. “This is a decision made by a foreign financial institution, not by the U.S. government. An indirect chain of causation isn't enough.”

https://www.facebook.com/republicansoverseas

http://www.bna.com/attorneys-clash-hearing-n17179935671/

There's also a challenge against the Canadian government. Hearings are ongoing, and a judgement regarding the transmission of data is due this week. The main challenge will be the US/Canada IGA is in direct violation of the Canadian Charter of Rights.

http://www.adcs-adsc.ca/



 


   

@theOAP - Another possible reason to renounce is if in the future the US instates a military draft, especially for an unpopular (domestically and/or internationally) war (e.g. there was an uptick of renunciations during the Vietnam War).

But it can restrict or impair the right for someone who cannot afford the fee. If the fee were more nominal and truly reflected the processing costs I would not object, but there is no way that I see that it actually costs the State Department on average $2,350 to review a renunciation/relinquishment or print a CLN (especially when you look at the fees that other nations charge and what the US government charge to OBTAIN naturalized citizenship - which I imagine is much more scrutinized than the other way around). Therefore, the exorbitant fee is either 1) A back-door "exit tax" that does not have a statutory basis or 2) A ploy to discourage USCs from giving up their citizenship (that once again does not have any basis in actual law). I have a feeling it's more along the lines of the latter.

I'm not saying that this fee is a good thing, just that because it is the same for everyone it does not restrict the right of expatriation.

I took the plunge and submitted a comment on there stating some of the points I've mentioned in this thread (not up yet as of the time of this post), also citing the text of the law theOAP brought up. It probably won't be any use, but at least my thoughts will be on there.

Thank you theOAP.  The USA's high fees for relinquishing or renouncing citizenship are the sort of thing the US condemned USSR for in the last century. The fees essentially bar most Americans from giving up US citizenship, especially for couples and families. It is shameful. I hope people will lend support to the Isaac Brock Society and http://www.adcs-adsc.ca/ as they are pretty much the only show in town when it comes to standing up to US overreach of this kind. And, unpalatable though it may be for some, consider backing Rand Paul!

Thank you theOAP.  The USA's high fees for relinquishing or renouncing citizenship are the sort of thing the US condemned USSR for in the last century. The fees essentially bar most Americans from giving up US citizenship, especially for couples and families. It is shameful. I hope people will lend support to the Isaac Brock Society and http://www.adcs-adsc.ca/ as they are pretty much the only show in town when it comes to standing up to US overreach of this kind. And, unpalatable though it may be for some, consider backing Rand Paul!

It's ironic that Americans are asked to support a society named after Isaac Brock.

It's ironic that Americans are asked to support a society named after Isaac Brock.

 

It may be ironic, but it may also be clever. (We could get into one Hell of a philosophical debate on this topic.  )

The key word in your comment is "American". Isaac Brock (an Englishman) successfully defeated an attempted American invasion of Canada. He died as a result of that battle.

An American resident in Canada, without Canadian citizenship, could well be defined as an "American residing in Canada". Is a dual citizen (US/Canadian), resident in Canada with intentions of living permanently there, still an "American residing in Canada", or a Canadian citizen with additional US citizenship? Rephrasing your comment to "Canadians are asked to support a society named after Isaac Brock" is less ironic.

We could change the definition Canadian to the UK in the previous paragraph. Isaac Brock, even though he was a Brit, would of course be irrelevant, but is a dual UK/US citizen, permanently resident in the UK, still an "American resident in the UK"? Enter the Act of 1868. Is the US practicing the “ancient English doctrine of perpetual and unchangeable allegiance to the government of one’s birth, a citizen being precluded from renouncing his allegiance without permission [via a $2,350 fee) of that government.” (from  the link supplied by iota)