5 ms·

I have a question about this, that I've never been able to find a good answer to: what happens if you unilaterally renounce US citizenship? Consider the situat

by hbrav 5y ago

I have a question about this, that I've never been able to find a good answer to: what happens if you unilaterally renounce US citizenship? Consider the situation: you're a dual US / Dutch citizen. You want to avoid paying US income tax (or just to avoid filling in a form each year that results in the IRS telling you that your tax bill is $0 because the Netherlands' tax rate is higher). But the State Department's renunciation route takes 3-4 years. So you mail them a letter instead announcing that you are renouncing your citizenship, and you include your US passport with the letter. You don't send the IRS a tax return in subsequent years, and you tell all your banks that you are not a US citizen and ask them to update your details accordingly. I assume that what happens next is that your bank has a procedure for asking the US State Department if you have renounced your citizenship, and they say "no". So the bank continues to treat you as a US citizen, with all of the reporting obligations that entails. Your method of enforcing this would (I assume) be to file a suit against the bank in the Netherlands and seek an order to prevent them from passing any information on you to the IRS. You would effectively be asking a Dutch court to rule on whether you can unilaterally renounce US citizenship. I have never heard of such a case (either in the Netherlands or elsewhere), so I assume this has never been attempted. I don't know if that is because there is a strong reason to suspect that it would fail.

jacquesm 5y ago
It will make you in violation of the law, and that could come back to haunt you in the future, for instance when and if you want to go and visit your family back in the USA. I would strongly recommend against going that route. Besides that, you still have to get your 'new' country to give you citizenship as well, which will go a lot smoother if the new citizenship is paired with renouncing the USA one, you really don't want to become 'stateless' for many reasons.
- monocasa 5y ago
  In this example they're already a dual citizen before starting down this road.
- Rapzid 5y ago
  Or you get married abroad and want to sponsor your spouse's VISA; they want to see your tax returns.
voisin 5y ago
> you tell all your banks that you are not a US citizen and ask them to update your details accordingly. Banks abroad demand proof beyond just telling them that. You need to show the Certificate of Loss of Nationality or present a US Taxpayer Identification Number.
- eterevsky 5y ago
  I've once had a pleasure of trying to convince a Swiss bank that I am neither US citizen nor resident. Fortunately it boiled down to a few phone calls and a couple of letter saying that I am really really not a US citizen, I swear.
- hbrav 5y ago
  This is why I suspect such an attempt would require going via the courts. You would say to the bank "I have unilaterally renounced my citizenship", the bank would not accept it, and you would be asking the court to order the bank to recognize that renunciation.
- PaulDavisThe1st 5y ago
  Why not tell them you were never a US citizen and present them with a passport from another country? One catch is that if the passport is like the UK or US passports (i.e. perhaps all?) it will show your place of birth, and if (like the UK Prime Minister) that was within the US, anyone with half a brain will know that from the US perspective, you were born a US citizen.
voisin 5y ago
> Your method of enforcing this would (I assume) be to file a suit against the bank in the Netherlands and seek an order to prevent them from passing any information on you to the IRS. You would effectively be asking a Dutch court to rule on whether you can unilaterally renounce US citizenship. This is incorrect. The method of enforcing tax obligations is spelled out in bilateral tax treaties. In this instance the US would lean on the Netherlands to enforce it and failure to pay the obligations to the Dutch would be punished by whatever their tax law says.
- PaulDavisThe1st 5y ago
  The obligations are not owed to the Dutch, and I find extremely unlikely that the tax treaty includes language which says "the fee for renouncing citizenship, if unpaid, shall be paid to the Dutch". In the outlined scenario, no taxes are owed. What is not paid is the fee for renoucning, and what has not been done is filing the paperwork. So the question is whether the tax treaty covers this, and whether or not a Dutch court would try to act on behalf of the US government regarding these matters.
- Scoundreller 5y ago
  It depends on the treaty, many are like you say, but not all include mutual collection/enforcement of tax debts.
- hbrav 5y ago
  I expect there is such a treaty, but presumably it specifies that the Netherlands will have certain obligations regarding US citizens that reside in the Netherlands. I doubt it will be specific on who actually is a US citizen. Further, you might still be able to prevail in a court. You would essentially be asking a court to find that you have a unilateral right to renounce a citizenship. Again, I doubt such a right is explicitly set out in any Netherlands law, but you would would be arguing that such a right is implied by some other principles. If the court were to find in your favor, the fact that the Netherlands has a treaty to the contrary would merely mean that the treaty was now incompatible with Dutch law.
rognjen 5y ago
That's fascinating. I'm not a lawyer but I'd guess that since you're citizen at the time, you'd have to follow the law for renouncing citizenship. You "unilaterally" renouncing it wouldn't mean anything since the law of the country says different. Perhaps consult a lawyer and if they say that there might be something there try to crowdfund it.
- ajay-b 5y ago
  Oswald did as his passport said, renounced his citizenship, but the embassy attache did nothing further with it.
- hbrav 5y ago
  > since the law of the country says different. But this is exactly the point. US law specifies what you must do to give up US citizenship. And the US would continue to regard you as a citizen - you definitely put yourself in a position of not being able to set foot on US soil without consequences if you go this route. But remember, in this scenario you live in the Netherlands. You want Dutch law to agree that you are not a US citizen, thus relieving you of your obligations so long as you continue to live in the Netherlands.
eterevsky 5y ago
I don't think citizenship in general can be unilaterally renounced, in the same way as you usually can't unilaterally divorce somebody. Citizenship includes obligations both from the state towards an individual and vice versa. In my understanding (IANAL) the easiest way to unilaterally renounce a citizenship is to seek political asylum.
- calessian 5y ago
  At least in the US, unilateral no-fault divorce is possible in nearly all states.
throw63738 5y ago
It is good business for gov, so of course it fails. There is something similar that happens regularly. Perhaps look at gaining citizenship at country that allows only single citizenship. It should make American citizenship null and void.
- hbrav 5y ago
  Germany is such a country. However, as part of granting you citizenship they do a search for other countries that you have citizenship of. I believe they will not grant you German citizenship until you have relinquished your other citizenship. I suppose another test case would be if you were to apply for German citizenship following your unilateral renunciation.
  - usr1106 5y ago
    You can get double citizenship in Germany by birth and if the other country does generally not grant loss if nationality. Some other exception I don't recall by heart, but generally not. And nowadays without difficulty if the other country is a EU country. But that is a deviation from German law tradition EU has forced on them.
  - sterlind 5y ago
    If you had to give up any other citizenships first, then you'd be temporarily stateless. And then what if Germany decided not to make you a citizen after that? Where would they deport you to? Statelessness exists, but the UN treats it as a human rights concern so I doubt Germany would impose it.
    - 7steps2much 5y ago
      The way it works in Austria, another country that only allows single citizenship is as follows. You apply for Austrian citizenship while you still have your original citizenship. Austrian authorities decide whether or not you should receive citizenship, *but do not grant it to you* Instead they give you documents that basically say that you have an entitlement to Austrian citizenship the second you renounce all other citizenships, if possible. There are exceptions for some, none cooperative nations. So if you are a US citizen you would basically have a document that says you are an Austrian citizen the second you renounce your American one. I imagine the Germany handles it similarly
estewart 5y ago
There is no unilateral renunciation of citizenship. The tax treaty between the US and the Netherlands has what is known as a 'savings clause', which basically states, regardless of what else is in the treaty, nothing will stop the U.S. from taxing the US person based on US laws as though the treaty did not exist, except for specified circumstances. https://hr.vanderbilt.edu/international-tax/tax_treaty_savings_clause.php https://hr.vanderbilt.edu/international-tax/tax_treaty_savin...
curryst 5y ago
I don't think the Dutch court has any authority with regards to your US citizenship. It would be a massive breach of national sovereignty if Dutch judges could strip Americans of their citizenship. They could prevent the Dutch banks transmitting your info, but they can do that regardless of your US citizenship. The likely outcome is the Dutch court refuses to touch it. Even if you win, I don't think they'd touch your citizenship. They'd just refuse to extradite. They don't have to do what the US wants just because the subject is a US citizen. The US is going to be infinitely more interested in preventing this than the Dutch are in allowing it though.

by hbrav 5y ago

jacquesm 5y ago

It will make you in violation of the law, and that could come back to haunt you in the future, for instance when and if you want to go and visit your family back in the USA. I would strongly recommend against going that route. Besides that, you still have to get your 'new' country to give you citizenship as well, which will go a lot smoother if the new citizenship is paired with renouncing the USA one, you really don't want to become 'stateless' for many reasons.

monocasa 5y ago
In this example they're already a dual citizen before starting down this road.
Rapzid 5y ago
Or you get married abroad and want to sponsor your spouse's VISA; they want to see your tax returns.

voisin 5y ago

> you tell all your banks that you are not a US citizen and ask them to update your details accordingly. Banks abroad demand proof beyond just telling them that. You need to show the Certificate of Loss of Nationality or present a US Taxpayer Identification Number.

eterevsky 5y ago
I've once had a pleasure of trying to convince a Swiss bank that I am neither US citizen nor resident. Fortunately it boiled down to a few phone calls and a couple of letter saying that I am really really not a US citizen, I swear.
hbrav 5y ago
This is why I suspect such an attempt would require going via the courts. You would say to the bank "I have unilaterally renounced my citizenship", the bank would not accept it, and you would be asking the court to order the bank to recognize that renunciation.
PaulDavisThe1st 5y ago
Why not tell them you were never a US citizen and present them with a passport from another country? One catch is that if the passport is like the UK or US passports (i.e. perhaps all?) it will show your place of birth, and if (like the UK Prime Minister) that was within the US, anyone with half a brain will know that from the US perspective, you were born a US citizen.

voisin 5y ago

> Your method of enforcing this would (I assume) be to file a suit against the bank in the Netherlands and seek an order to prevent them from passing any information on you to the IRS. You would effectively be asking a Dutch court to rule on whether you can unilaterally renounce US citizenship. This is incorrect. The method of enforcing tax obligations is spelled out in bilateral tax treaties. In this instance the US would lean on the Netherlands to enforce it and failure to pay the obligations to the Dutch would be punished by whatever their tax law says.

PaulDavisThe1st 5y ago
The obligations are not owed to the Dutch, and I find extremely unlikely that the tax treaty includes language which says "the fee for renouncing citizenship, if unpaid, shall be paid to the Dutch". In the outlined scenario, no taxes are owed. What is not paid is the fee for renoucning, and what has not been done is filing the paperwork. So the question is whether the tax treaty covers this, and whether or not a Dutch court would try to act on behalf of the US government regarding these matters.
Scoundreller 5y ago
It depends on the treaty, many are like you say, but not all include mutual collection/enforcement of tax debts.
hbrav 5y ago
I expect there is such a treaty, but presumably it specifies that the Netherlands will have certain obligations regarding US citizens that reside in the Netherlands. I doubt it will be specific on who actually is a US citizen. Further, you might still be able to prevail in a court. You would essentially be asking a court to find that you have a unilateral right to renounce a citizenship. Again, I doubt such a right is explicitly set out in any Netherlands law, but you would would be arguing that such a right is implied by some other principles. If the court were to find in your favor, the fact that the Netherlands has a treaty to the contrary would merely mean that the treaty was now incompatible with Dutch law.

rognjen 5y ago

That's fascinating. I'm not a lawyer but I'd guess that since you're citizen at the time, you'd have to follow the law for renouncing citizenship. You "unilaterally" renouncing it wouldn't mean anything since the law of the country says different. Perhaps consult a lawyer and if they say that there might be something there try to crowdfund it.

ajay-b 5y ago
Oswald did as his passport said, renounced his citizenship, but the embassy attache did nothing further with it.
hbrav 5y ago
> since the law of the country says different. But this is exactly the point. US law specifies what you must do to give up US citizenship. And the US would continue to regard you as a citizen - you definitely put yourself in a position of not being able to set foot on US soil without consequences if you go this route. But remember, in this scenario you live in the Netherlands. You want Dutch law to agree that you are not a US citizen, thus relieving you of your obligations so long as you continue to live in the Netherlands.

eterevsky 5y ago

I don't think citizenship in general can be unilaterally renounced, in the same way as you usually can't unilaterally divorce somebody. Citizenship includes obligations both from the state towards an individual and vice versa. In my understanding (IANAL) the easiest way to unilaterally renounce a citizenship is to seek political asylum.

calessian 5y ago
At least in the US, unilateral no-fault divorce is possible in nearly all states.

throw63738 5y ago

It is good business for gov, so of course it fails. There is something similar that happens regularly. Perhaps look at gaining citizenship at country that allows only single citizenship. It should make American citizenship null and void.

hbrav 5y ago
Germany is such a country. However, as part of granting you citizenship they do a search for other countries that you have citizenship of. I believe they will not grant you German citizenship until you have relinquished your other citizenship. I suppose another test case would be if you were to apply for German citizenship following your unilateral renunciation.
- usr1106 5y ago
  You can get double citizenship in Germany by birth and if the other country does generally not grant loss if nationality. Some other exception I don't recall by heart, but generally not. And nowadays without difficulty if the other country is a EU country. But that is a deviation from German law tradition EU has forced on them.
- sterlind 5y ago
  If you had to give up any other citizenships first, then you'd be temporarily stateless. And then what if Germany decided not to make you a citizen after that? Where would they deport you to? Statelessness exists, but the UN treats it as a human rights concern so I doubt Germany would impose it.
  - 7steps2much 5y ago
    The way it works in Austria, another country that only allows single citizenship is as follows. You apply for Austrian citizenship while you still have your original citizenship. Austrian authorities decide whether or not you should receive citizenship, *but do not grant it to you* Instead they give you documents that basically say that you have an entitlement to Austrian citizenship the second you renounce all other citizenships, if possible. There are exceptions for some, none cooperative nations. So if you are a US citizen you would basically have a document that says you are an Austrian citizen the second you renounce your American one. I imagine the Germany handles it similarly

estewart 5y ago

There is no unilateral renunciation of citizenship. The tax treaty between the US and the Netherlands has what is known as a 'savings clause', which basically states, regardless of what else is in the treaty, nothing will stop the U.S. from taxing the US person based on US laws as though the treaty did not exist, except for specified circumstances. https://hr.vanderbilt.edu/international-tax/tax_treaty_savings_clause.php https://hr.vanderbilt.edu/international-tax/tax_treaty_savin...

curryst 5y ago

I don't think the Dutch court has any authority with regards to your US citizenship. It would be a massive breach of national sovereignty if Dutch judges could strip Americans of their citizenship. They could prevent the Dutch banks transmitting your info, but they can do that regardless of your US citizenship. The likely outcome is the Dutch court refuses to touch it. Even if you win, I don't think they'd touch your citizenship. They'd just refuse to extradite. They don't have to do what the US wants just because the subject is a US citizen. The US is going to be infinitely more interested in preventing this than the Dutch are in allowing it though.