Help, I Want to Expatriate, But They Won’t Let Me….Part II

This is a two-part blog post with Part I available here.

Renouncing US Citizenship if the Individual is a Minor

“Jus soli” (the law of the soil) is a rule of common law followed by the US, under which the place of a person’s birth determines his citizenship. In addition to common law, this principle is embodied in the 14th Amendment to the US Constitution which states, in part, that: “All persons born in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside.” Citizenship is also determined under various US citizenship and nationality statutes, such as the Immigration and Nationality Act (INA).

The renunciation of one’s citizenship is regarded as a personal elective right that cannot be exercised by another person. Parents or guardians cannot renounce or relinquish the US citizenship of a child who acquired his US citizenship at birth.  This means that only the individual child himself can renounce his US citizenship, but this is not so easy to do in the case of children. The US Consular offices and Embassies recognize that minors who seek to renounce citizenship often do so at the urging of or under pressure from a parent(s).  This pressure can sometimes be so overwhelming that it will destroy the free will of the minor such that the act of expatriation cannot be committed “voluntarily”.

Under guidelines issued by the Department of State, the younger the minor is at the time of renunciation, the more influence the parent is assumed to have. Consular officers are given strict guidelines to follow when a minor seeks to renounce his US citizenship.  For example, when conducting the initial interview with a minor and during the renunciation procedure, officers are instructed to have at least one other person present. They are instructed that the parents and guardians should not be present and that the interview should take place in the presence of the consular officer and a witness, preferably another consular officer, a non-consular officer or locally employed staff. The minor should be clearly advised that upon reaching the age of 18, he has a six-month opportunity to “reclaim” his US nationality.

Even when there is no evidence of parental inducements or pressure, the relevant Consular personnel must make a judgment whether the individual minor manifested the requisite maturity to appreciate the irrevocable nature of expatriation so that his action can be treated as one that was taken “voluntarily”.  In addition, it must be determined if the minor had the necessary intent to renounce his US citizenship. This will be found lacking if he did fully understand what he was doing. Under the guidelines issued by the Department of State, children under the age of 16 are presumed not to have the requisite maturity and knowing intent to undertake a renunciation of US citizenship. 

Even if the consular report indicates the minor had the necessary intent and renounced his citizenship voluntarily, the matter does not end there. A CLN must be issued by the Department of State approving the renunciation. A CLN for a minor will not be issued without the concurrence of various divisions of the Department of State and without the prior appropriate consultations.

Potentially Expatriating Acts and the Minor

Section 349 of the INA, currently provides that US citizens are subject to loss of citizenship if they perform certain specified acts voluntarily and with the intention to relinquish US citizenship. Several of these potentially expatriating acts are limited by specific provisions mandating that the individual must be over the age of eighteen years at the time the act is committed.

Briefly stated, these acts are:

  1. obtaining naturalization in a foreign state upon one’s own application after the age of 18 (Sec. 349 (a) (1) INA);
  2. taking an oath, affirmation or other formal declaration of allegiance to a foreign state or its political subdivisions after the age of 18 (Sec. 349 (a) (2) INA);
  3. accepting employment with a foreign government after the age of 18 if (a) one has the nationality of that foreign state or (b) an oath or declaration of allegiance is required in accepting the position (Sec. 349 (a) (4) INA);

The relevant provisions can be found here In other words, there can be no finding of a loss of US nationality when these acts are committed by a person under the age of eighteen.

In addition, INA Section 351(b) provides that an individual under the age of 18, shall not be deemed to have lost US nationality by having served in the armed forces of a foreign nation under certain circumstances, or by having formally renounced US citizenship, if within six months after attaining the age of eighteen, the individual reasserts his claim to US nationality in accordance with a special procedure.

Mental Incompetency Issues

If mental competency is an issue, special care must also be taken. An individual cannot lose US citizenship unless he has the legal capacity to form the specific intent necessary to give up his US nationality.  When the person has some type of mental incapacity, the question will arise whether the individual understands the seriousness of renunciation, including its irrevocable nature and the major consequences that flow from it. “Voluntariness” may also be an issue with persons who suffer from mental incapacity or impairment, as such individuals may be especially susceptible to the influence of others.

A court finding of mental incompetency, whether by a US court or one overseas, will preclude a finding that the individual has the requisite intent to renounce his citizenship.  A parent, guardian or trustee cannot renounce the US citizenship on behalf of a mentally incompetent individual, since it is viewed as a personal right that cannot be exercised by any other person.

Parent or Guardian – What Should You Do?

US tax planning in the  kinds of cases discussed is ever critical. If the individual cannot expatriate currently, it is very important to structure his affairs to minimize any US tax bite during the time he remains a US citizen and in planning for a future expatriation. It the individual is under a permanent mental incapacity such that renunciation will never be possible, then proper planning of US tax matters becomes even more critical.  A well-meaning parent or guardian may often look to trust structures to ensure the continued care of the child or mentally challenged individual. However, setting up a “foreign” (non-US) trust for such an individual may well be the worst action to take from a US tax planning perspective!  The stakes are high. Get proper advice.


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5 thoughts on “Help, I Want to Expatriate, But They Won’t Let Me….Part II

  1. A few points:

    (1) There is a “rebuttable presumption of alienage” (non-acquisition of US nationality) in the case of persons born abroad, at least in non-criminal cases. The State Department allows its consular offices abroad to issue reports of birth abroad of a citizen only up to age 5, after which all cases must be referred to Washington. Especially in cases of doubtful qualifying residence (or for non-marital children, mother’s unbroken presence) in the United States, this presumption may be useful. The IRS after all has no status to bring an action to establish nationality. (There is substantial case law on “doubtful nationality” cases, many of which have been collected in the Gordon, Mailman, Yale-Loehr & Wada Immigration Law treatise.)

    (2) While International Law reserves to each state to the right to determine who are its nationals, it does not compel recognition of that nationality by other states in exorbitant cases. The concept of “dominant nationality” widely accepted before WW II fell into disuse as dual nationality became common (partly because of gender equality) (viz. the 1992 Micheletti case of the ECJ); but the paramount national interests of other countries whose “ordre public” might violated by US PFIC and citizen-tax rules just might revalidate it. Provisions of tax treaties notwithstanding (“For the purposes of this Convention, the term ‘resident’ of a Contracting State means any person that, under the laws of that State, is liable to tax therein by reason of that person’s domicile, residence, citizenship”).

    (3) The State Department’s views on loss and renunciation of nationality are here: These are not unqualified statements of law but rather agency interpretation. Statistics alone suggest that large numbers of persons who may be counted as its nationals abroad have disregarded their status and obligations. Many lack the means and sophistication to be compliant. Some forego CLNs and rely on pre-1980 expatriation or on their own interpretation of the expatriation statute. In the sad cases of mentally-incompetent individuals disadvantaged (i.e., for PFIC and tax reasons obstructed for benefiting from foreign tax-sparing allowances and trusts) some rely on the points in paragraph (2) above.

    (4) That said, Big Data and new tools (the TECS database of passports, green cards, visas, travel reservations and border crossing) and the occasional use of “ne exeat republica” injunctions puts at risk those who, like Ronald Anderson, once thought they could visit the USA undetected

    (5) Ronald Anderson was a Vietnam war era Army deserter. Such people relied on sympathetic foreign governments (which often gave them residency and eventually naturalized-citizen status). Other cases highlight the policy conflicts that dual nationals encounter. FATCA and other aggressive foreign assertion of jurisdiction by the USG may be acceptable when they relate to US residents. How conflicts will be resolved when dual- (and multi-) national individuals are targeted within their other country of nationality remains to be seen.

    (6) Most countries of the world have permutations of “nationality”, sometimes based primarily on ethnic or cultural priorities. The USA rather has something else: English Common Law “allegiance”, as in “Pledge of” and in “Ligeance of the King”. For Americans expatriation has typically had within it a whiff of apostasy. (The US still has “grades” of citizen, with 14th Amendment citizens born in the 50 states compared with territory-born citizens and foreign-born “jus sanguinis” citizens (and beyond that pre-1924 Indian Citizenship Act Native American protégés, pre-Cable Act women, American Samoa “noncitizen nationals” and a few other anomalies.)) This may explain a certain lack of sympathy for Americans abroad faced with the kind of conundrum you have written about.

    (7) The US often holds other countries to a higher standard than it holds itself in international-law matters, the Nicaragua case before the ICJ being only one example. Although other countries have “expatriation taxes” (France, Denmark, Canada…) and Eritrea (and until 1999 the Philippines) have levied tax on their diaspora, the main conflict has been in military conscription. Some countries (Greece, for example, except with respect to its Muslims and ethnic Slavs) have had no provision for loss of nationality. One might hope that a multiplication of cases of conflict between the USA and foreign nations will lead to a clarification and perhaps an alleviation of hardship in some cases of reluctant and “accidental” Americans.

  2. I thank you too for that comment. It won’t apply in this case though..
    Parent or Guardian (or Trustee) – What Should You Do?

    US tax planning in the kinds of cases discussed is ever critical. If the individual cannot expatriate currently, it is very important to structure his affairs to minimize any US tax bite during the time he remains a US citizen and in planning for a future expatriation. ******If the individual is under a permanent mental incapacity such that renunciation will never be possible, then proper planning of US tax matters becomes even more critical. A well-meaning parent or guardian may often look to trust structures to ensure the continued care of the child or mentally challenged individual. However, setting up a “foreign” (non-US) trust for such an individual may well be the worst action to take from a US tax planning perspective! The stakes are high. Get proper advice.******

    So, more money for proper advice since the country in which my son was born, Canada, will / can do nothing to protect him? In fact the Government of Canada just waived my son’s rights in signing an IGA with the US. (And the rights of others like my son; and the rights of other persons who may have a “mental incapacity” like someone with age-related dementia.) The person with Mental Incompetency Issues is even lesser than the second-class Canadian citizenship that all other ‘US Persons in Canada’ now have with the US IGA, compared to “all other Canadians, no matter where their ‘national origin’ or the ‘national origin’ of their parent ( s ).

    Or, do I just do nothing and ***HOPE*** that ***they*** (whoever they is: local CANADIAN “foreign financial institutions” or the Canada Revenue Agency or the US Treasury or IRS [ who has the information on my son in my FBARs (Foreign Bank Account Reports) ] will not take action? I refuse to register him with the US and the abyss of cost of administration of compliance of a US citizenship never registered / never asked for (the only purpose for which would be the ability to renounce, which he can’t). It’s a circular argument.

    NEVER MIND: Just Me just solved my problem — his strategy to deal with it, is with that clever little Mormon trick. Turn it off. 🙂

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