Introductory comment added June 1, 2013.
This is an incredibly important issue for the reasons given here.
Since the Obama/Geithner/Shulman assault on U.S. citizens abroad began, I have observed people attempting U.S. tax compliance when they are NOT U.S. persons. The following post is neither fun nor all that interesting. Remember, for those unlucky to have it:
“U.S. citizenship is a problem to be solved.”
You may not need to solve it at all!
Hang in for a long read.
Once upon a time people wanted to be a U.S. citizen and were proud to be a U.S. citizen. That changed in 2011 when the IRS began to “hunt” U.S. citizens in all corners of the world. This affected many people who were and are paying huge taxes in “high tax” jurisdictions and did not know that they were also required to file U.S. tax returns. People were also introduced to Mr. FBAR. Mr. FBAR is a particularly nasty guy who had the potential to subject them to huge penalties.
And just when you thought you had seen and endured it all the U.S. enacted FATCA. With the advent of FATCA – America’s Berlin wall:
– There is anecdotal evidence that the reporting requirements of FBAR and FATCA are putting strain on marriages between a U.S. citizen and a non-U.S. citizen. American Citizens Abroad has commented on this in their informative radio interviews
– U.S. citizens may be unable to afford the high financial cost of tax compliance (this is a problem because they want to be in compliance)
– U.S. citizens may be unable to maintain employment if the employment requires access to company financial accounts
In any case what is clear is that for many U.S. citizens want out – plain and simple. Who can blame them? The U.S. government has provided many reasons to renounce U.S. citizenship. This is especially true in the case of “accidental Americans”. The decision to end U.S. citizenship is NOT because of a desire to avoid U.S. taxes. It is the exact opposite. People DO want to be in compliance with the tax and reporting laws, but it is just too difficult to do so. The IRS has made it very difficult for people to be in compliance.
The irony is that (especially with respect to U.S. citizens living in Canada) that they pay far higher taxes in Canada than they would in the United States. This point needs be emphasized. The ignorant U.S. public and Congress believe that people living outside the U.S. are “tax cheats”. The reality is that they pay higher taxes. Yet they are being pursued and terrorized by the IRS.
What about those “accidental Americans?”
“Accidental Americans” are of two types.
Type 1: Those who were accidentally born in the U.S., you were still born in the U.S. You must adopt an “exit strategy”
If you were born in the U.S. then you are a U.S. citizen unless you have relinquished your citizenship (renunciation is one way to do this) under S. 349 of the INA. S. 349 contains a number of “expatriating acts”. Bear in mind that the effect of an “expatriating act” will be determined by the law in effect at the time the act was performed. I have written several blog posts on this point.
U.S. citizenship for Canadians
Expatriating Acts – The Status of Your U.S. citizenship
So you may think you are a U.S. citizen – think again
If you were born in the United States I recommend these posts to you.
For those who were born in the United States you need to consider “expatriating acts” under the provisions of the Immigration and Nationality Act (“INA”) over the years. In other words you are seeking an “Exit strategy”.
Type 2: Those who were born outside of the U.S. but were born to a U.S. parent or parents. Some of these Type 2 “accidental Americans” may have never lived in the United States. If you want U.S. citizenship you must adopt an “Entrance strategy”
There are many who do not want to be a U.S. citizen. For most people citizenship is an accident of birth. Some people are born luckier than others.
Those who were born outside the United States to U.S. parent(s) need to consider the conditions that would bestow U.S. citizenship upon you. Again, once must consider the relevant provisions of the “INA” over the years. In other words, you are hoping that an “Entrance Strategy” does not apply to your situation.
Part A – The Position of the United States Government – The Current State Of The Law
The IRS acknowledges both “Type 1” and “Type 2” accidental Americans as follows:
” Amendment XIV, Section 1, Clause 1 of the U.S. Constitution directs that all persons born in the United States are U.S. citizens. This is the case regardless of the tax or immigration status of a person’s parents.
“Furthermore, a person born outside the United States may also be a U.S. citizen at birth if at least one parent is a U.S. citizen and has lived in the United States for a period of time. The United States Citizenship and Immigration (USCIS) Web page on Citizenship Through Parents contains more detailed information for persons born outside the United States to a U.S. citizen parent or parents.”
Note the words “may be a U.S.” at birth. It is not simple and the law has changed over time. Let’s go over to the “Citizenship and Immigration Services Site”.
It states that if you were born to U.S. parents outside the United States you “may” be a U.S. citizen. The next issue in the determination becomes whether you reside in the United States or not.
“A child automatically becomes a U.S. citizen when all of the following conditions have been met under section 320 of the Immigration and Nationality Act (INA), as amended by the Child Citizenship Act (CCA):
- At least one parent of the child is a U.S. citizen, whether by birth or naturalization.
- The child is under the age of 18 years.
- The child is residing in the United States in the legal and physical custody of the U.S. citizen parent based on a lawful admission for permanent residence.
- An adopted child may automatically become a citizen under section 320 of the INA if the child satisfies the requirements applicable to adopted children under sections 101(b)(1)(E), (F) or (G) of the INA.
To qualify as a “child” for purposes of section 320 of the INA, the individual must be unmarried. Also, a person who was born out of wedlock (meaning that the parents were not married at the time of the person’s birth), must be “legitimated” while under the age of 16 and while in the legal custody of the legitimating parent. See section 101(c)(1) of the INA. Finally, a stepchild who has not been adopted does not qualify as a child under this section.
A person who satisfies the requirements of section 320 of the INA before turning 18 automatically obtains citizenship without having to file an application. However, in order to obtain a certificate of citizenship from USCIS, an individual must file Form N-600, Application for Certificate of Citizenship. To obtain a U.S. Passport, visit the Department of State’s Apply for a U.S. Passport webpage.
Individuals who were age 18 or older on February 27, 2001, do not qualify for citizenship under section 320 of the INA as amended by the CCA. A person who was over the age of 18 on February 27, 2001, may, however, be a citizen under the law in effect prior to the enactment of the CCA. If you believe this may apply to you, please visit our Contact Us page to call our National Customer Service Center.
“Biological or adopted children who regularly reside outside of the United States may qualify for naturalization under section 322 of the Immigration and Nationality Act (INA), as amended by the Child Citizenship Act (CCA). In general, to be eligible for citizenship under section 322 of the INA, a child must meet the following requirements:
- At least one parent is a U.S. citizen or, if deceased, the parent was a U.S. citizen at the time of death.
- The U.S. citizen parent or his or her U.S. citizen parent has (or at the time of death had) been physically present in the United States or its outlying possessions for at least 5 years, at least two of which were after attaining the age of 14.
- The child is under the age of 18 years.
- The child is residing outside of the United States in the legal and physical custody of the U.S. citizen parent (or, if the citizen parent is deceased, an individual who does not object to the application).
- The child is temporarily present in the United States after having entered lawfully and is maintaining lawful status in the United States.
- An adopted child may be eligible for naturalization under section 322 of the INA if the child satisfies the requirements applicable to adopted children under sections 101(b)(1)(E), (F) or (G) of the INA.
To qualify as a “child” for purposes of this section, the person must be unmarried. Also, a person who was born out of wedlock (meaning that the parents were not married at the time of the person’s birth), must be “legitimated” while under the age of 16 and while in the legal custody of the legitimating parent. See section 101(c)(1) of the INA. Finally, a stepchild who has not been adopted does not qualify as a child under this section.
An application on behalf of an eligible child must be filed on Form N-600K, Application for Citizenship and Issuance of Certificate under section 322 of the INA. See the Citizenship and Naturalization Based Forms for more information. The Form N-600K must be filed on behalf of the child by the U.S. citizen parent. If the U.S. citizen parent of the child has died, a U.S. citizen grandparent or U.S. citizen legal guardian may apply on behalf of the child within 5 years of the parent’s death.
To obtain citizenship under section 322 of the INA, the application must be filed, approved, and the child must take the oath of allegiance, if required to do so, before the child reaches age 18.
Note: For children of some members of the military who are overseas on active duty, section 322(d) of the INA waives the requirement that the child be temporarily present in the United States and provides that any period of residence overseas on active duty qualifies as residence in the United States. For more information on children of military members, see the “Information for Members of the Military and Their Families” link to the right.
After naturalization, a child can obtain a U.S. passport if so desired. For more information on applying for a passport, visit the Department of State, Apply for a U.S. Passport webpage.
Part B – The Law of Accidental Citizenship Has Changed Over Time
Quite obviously the law evolves. What is the current law (see above) may not have been the law at the time that you were born. Assuming that you are no longer able to take advantage of the current law (too old, too married, or whatever), you must consider your situation at the time that you were born. This will require “looking back” to see what the law was at that time.
Type 1 Accidental Americans: Those born in the United States – You are a U.S. citizen unless you have “relinquished” your U.S. citizenship (see above)
Type 2 Accidental Americans: Those who were born outside of the U.S. but were born to a U.S. parent or parents. Some of these Type 2 “accidental Americans” may have never lived in the United States. If you want U.S. citizenship you must adopt an “entrance strategy”
I have alluded to this problem in a previous post – U.S. Citizenship for Canadians. This is a tedious area of the law. Hence, I refer you to the site of Joseph Grasmick who is a U.S. lawyer. (I assume the accuracy of this information.)
His site includes an interesting chart. Study it carefully. The law on acquiring citizenship from a U.S. parent has been different at different times. Note that this may be different from the current law. Hence, if you were born to U.S. parent(s) outside of Canada there is no general answer to whether you are a U.S. citizen. As I look at this chart (assuming that you do NOT want to be a U.S. citizen), the news does not look particularly good. But, you should consider how your parent(s) got their U.S. citizenship.
Interestingly the U.S. embassy in Dublin has some interesting commentary that recognizes that the law has changed over time.
Children born abroad to U.S. citizen parents may have a claim to U.S. citizenship. The following is a brief description of the various circumstances under which a child born abroad acquires American citizenship.
Child born in wedlock to two U.S. citizens: A child born outside of the United States or its outlying possessions to two U.S. citizen parents is entitled to citizenship, provided one of the parents had, prior to the birth of the child, been resident in the United States or one of its outlying possessions. (No specific period of time is required.)
Child born in wedlock to one U.S. citizen parent and one non U.S. citizen parent on or after November 14, 1986: A child born outside of the United States to one U.S. citizen parent and one non-U.S. citizen parent may be entitled to citizenship providing the U.S. citizen parent had been physically present in the United States or one of its outlying possessions for five years, at least two years of which were after s/he reached the age of fourteen. This period of physical presence must have taken place prior to the birth of the child.
Child born in wedlock to one U.S. citizen parent and one non-U.S. Citizen parent between December 24, 1952 and November 13, 1986: A child born outside of the United States to one U.S. Citizen parent and one non-U.S. Citizen parent, may be entitled to citizenship providing the U.S. Citizen parent had, prior to the birth of the child, been physically present in the United States for a period of ten years, at least five years of which were after s/he reached the age of fourteen.
Child born out of wedlock to a U.S. Citizen mother: A child born outside of the United States and out of wedlock to a U.S. Citizen mother is entitled to U.S. citizenship providing the U.S. Citizen mother had been physically present in the United States for a continuous period of at least one year at some time prior to the birth of her child. (NOTE: The U.S. citizen mother must have lived continuously for 1 year IN THE UNITED STATES OR ITS OUTLYING POSSESSIONS. Periods spent overseas with the U.S. government/military or as a government/military dependent, may NOT be computed as physical presence in the U.S.).
Child born out of wedlock to a U.S. Citizen father: A child born outside of the United States to an U.S. Citizen father where there is no marriage to the non-American mother is entitled to U.S. Citizenship providing the American citizen father had been physically present in the United States for the period of time as specified in previous paragraphs for children born in wedlock to one U.S. Citizen and one non-U.S. Citizen parent, either before or after November 14, 1986; and
- the alien mother completes an “Affidavit to establish paternity of child” at this office before a consular officer; and
- the father signs a sworn statement agreeing to provide financial support for the child until s/he reaches the age of 18 years; and
- the father provides a written statement acknowledging paternity.”
What if the person was born of U.S. citizen parents, is over 18 and has never been documented to be a U.S. citizen? Now it gets really interesting. It occurs to me that a lot of people would have trouble proving that they are U.S. citizens. It is clear that in this situation, the burden of proof is on the person making the claim to U.S. citizenship. Here is what the U.S. embassy in Dublin says:
If you are age 18 or above and have never been documented as a U.S. citizen by your parent(s), you may proceed to complete the following:
1) Application for Passport (Form DS-11);
2) Questionnaire for Determining Possible Loss of U.S. Citizenship (DS-4079).
It will be necessary to submit the following with your application:
1) Your Birth Certificate
A certified copy of your long-form birth record issued by the appropriate governmental authority, showing your full name, date and place of birth, parents’ information, filing and issue date.
2) Evidence of U.S. Citizenship of the Parent(s)
- U.S. Passport
- U.S. Naturalization Certificate
If not previously issued one of the above:
- U.S. Birth Certificate
- Certificate of Citizenship
- Consular Report of Birth Abroad
Review information on the Department of State website for Documentation of U.S. Citizens Born Abroad.
Further evidence may be required to establish that your parent was a U.S. citizen at the time of your birth if his/her claim has not been previously established.
3) Evidence of Parents’ Marriage
Certified copy of your parents’ marriage certificate issued by the appropriate governmental authority. Religious records are not acceptable.
4) Evidence of Termination of your Parents’ Previous Marriages
Certified copy of divorce/death certificate etc.
5) Evidence of Physical Presence in the United States of U.S. Citizen Parent(s)
Documentary evidence of periods of physical presence in the United States of your U.S. citizen parent(s) prior to your birth, including periods of physical presence outside the United States when the parent served in the U.S. armed forces or employed by other U.S. government agencies (if applicable). Please consult the “Transmission Requirements for U.S. Citizenship” for physical presence requirements applicable at the time of your birth.
6) Your Identifying Documents
Current foreign passport. It may also be necessary for your mother/father/brother or sister to accompany you to the Embassy to identify you. If your parents’ or siblings are deceased, you should submit a progression of identifying documents of yourself from childhood to the present (e.g. medical records, baptism certificate, school yearbooks, student I.D. card, old passports, old driver’s license, etc).
7) Evidence of Change of Name
If you and/or your parent’s have changed names through marriage or court order, submit an original or certified copy of the verifying documents.
8) Evidence of Parentage and/or Legitimation
Credible and substantial evidence of blood relationship between yourself and your U.S. parent(s) must be submitted with your application. If you were born out-of-wedlock, please consult the attached “Transmission Requirements for U.S. Citizenship* for the legitimation laws that may be applicable at the time of your birth.
9) Affidavit of Parentage Completed and Signed by your U.S. Citizen Parent(s)
Your U.S. citizen parent should accompany you to the Embassy to sign the affidavit under oath. If your parent is in the United States, the affidavit can be signed before a notary public. The affidavit must be accompanied by a notarized copy of your parent’s passport or driver’s license.
10) If Born Out-of-Wedlock to a U.S. Citizen Father
(see “Transmission Requirements for U.S. Citizenship”). Your mother will be required to complete an “Affidavit from Mother to Establish Paternity of Child” before our Consular Officer. This affidavit does not establish paternity. She will be required to exhibit her foreign passport. If your claim to U.S. citizenship falls under Section 201(i) of the Nationality Act (born out-of-wedlock to a U.S. citizen father between January 13, 1941 and December 24, 1952), you will be required to submit your father’s Honorable Discharge papers as well as sworn statements from mother’s and father’s family regarding the circumstances surrounding your birth. Family photographs, particularly those that show a resemblance to your father’s family, should also be submitted.
Please note: Certain applications may require additional documents/evidence and procedures to process.”
As you can say, ensuring that you are divested of U.S. citizenship may be complex. It may be expensive. But, for everybody but the very poor and the very rich U.S. citizenship has been priced out of the market.
Please note that this post does not constitute legal advice or any other kind of advice. It is only to alert you to issues that you will want to explore with your lawyer.