My April 7 visit to the US consulate

Today I visited the US Consulate in Toronto to inform them that I had committed an act which had caused me to relinquish my US citizenship.  They made me fill out seven pages of paperwork (which I had done in advance–DS-4079 and DS 4081), swear with my right hand raised that I had read and understood the consequences of my actions, and then I signed the paperwork in front of a consular officer, who then put the seal of the Consulate General of the United States on each signature page.

How I was treated

The main person that I dealt with Mrs. A. was very polite; she too is Canadian, and so there was zero recrimination for the act I had committed–but she did her job, and made sure that I knew what I was doing.  The consular officer, a certain Ms. J.H.F., also was polite.  At first Mrs. A. suggested that I must come in for a second visit, but when I insisted that I had already committed an expatriating act, she agreed that I was only at the consulate to inform them of that fait accompli and that there would be no need to return.  The expatriating act took place on 28th of February, and she recognized that I was no longer an American citizen according to USC 1481 .

$450 renunciation fee [UPDATE: Please note, I did in fact receive my CLN without paying $450]

I can’t yet say, as I suggested in an earlier post, that the $450 fee would not apply to someone who had committed a prior relinquishing act.  It is clear however that “renunciation” and “relinquishment” are two completely different acts in the understanding of the United States Department of the State and their US Consulates General around the world.  Mrs. A. explained that my paperwork would be sent to Washington for examination.  This could take a great deal of time.  Meanwhile, she provided me with sealed copies of all the paperwork.  She said that when the Certificate of Loss of Nationality (CLN) would be approved, she would contact me and I could pick it up after it arrives but I would have to pay any fee that might apply.  She didn’t think that the $450 fee would apply but she wasn’t sure.  So I am not in the clear.  However, the Toronto US Consulate General says that fee is applicable at the time of taking the oath of renuciation.  Singapore too.  The Hamilton Consulate General says the fee is applicable at the time of picking up the CLN, and says that fee technically applies to the processing of the necessary paperwork.  In any case, if I’ve made the relinquishing act, owning a Certificate of Loss of Citizenship may not be necessary, provided the State Department recognizes my loss of citizenship.  I’d be like Scarecrow, brains but no diploma.

My written statement

I provided a written statement which I signed in front of the consular officer and which she stamped and sealed.  The text of that statement is as follows:

I have lived in Canada most of my adult life.  I have married a Canadian.  After so many years in Canada it became clear that I have a great attachment to Canada, to my Canadian friends, to my Canadian wife and her family, and to my church community in Canada.  I felt that it was therefore necessary to become a Canadian citizen so that I may become a full member of this great and wonderful country and its people.  Therefore, I applied for Canadian citizenship in 2010, and I also had, even at that time, the intention of relinquishing my US citizenship.  For in taking my pledge to the Queen of Canada, Elizabeth II, on February 28, 2011, I realized that it would be absurd for me to be of divided loyalty.  My duty to the Queen and to the Dominion of Canada precludes me from maintaining citizenship in the United States of America, since when one country calls me to serve, dual citizenship could potentially create a conflict of interest.  To avoid all such conflicts, I have decided with my full volition and all my heart, to relinquish my United States citizenship once and for all, realizing that it is an irrevocable act.

The New Berlin Wall: Heroes Earnings Assistance and Relief Tax Act 2008

Yesterday I sent my application for Canadian citizenship via registered mail to the Sydney, Ontario, Processing Centre.  An American citizen from birth, I’ve lived outside the USA, first as a student then as a permanent resident of Canada, since 1986.  I’ve never really felt that I needed Canadian citizenship.  My reason for applying now is that it is inconvenient being an American living in Canada.  So before my citizenship ceremony in a year or so, I will be renouncing my US citizenship.  Likely, for a few days while awaiting the ceremony, I will be a stateless person. [actually, I became a Canadian on February 28, 2011, and informed the US Consulate in Toronto of my relinquishment on April 7, 2011]

The United States is the only country in the world that requires that all its residents and all its citizens, even if living abroad, pay tax, though there is an earned income exemption of $70,000 [over 90,000 today] and foreign tax, dollar per dollar, credit.  The threshold for filing is ridiculously low.  As a married person filing a separate return, I must file if I make more than $2000; this despite the knowledge that as a resident of Canada, it is difficult to imagine very many scenarios where I might be liable for tax, since the rate here is higher than in the USA, particularly for lower income earners.  But it is a hassle to file every year, and it creates a lot of anxiety for me.  Last year, my accountant forgot a certain form and he was sick when I was required to send the amendment, and so I had to do it myself and that created a huge headache.

So I am not going to renounce my citizenship because I owe tax.  I am liable to the IRS for nothing.  I am doing it first of all because I am tired of filing a frivolous return to the IRS each year; frivolous because I owe nothing, and cannot possibly owe anything living here in Canada.

But there is another even more important reason which I call the “New Berlin Wall”.  Since 2008, the US has placed particular restrictions on wealthy people who wish to expatriate.  If I were to own 2 million in assets or if my average net income tax liability over the last five years were $139,000 , I would be a “covered expatriate” upon renouncing my citizenship.  The law penalizes these individuals with exorbitant expatriation tax that boggles the mind.  Why?  To keep them in the USA.  So it is a Berlin Wall designed to keep people from leaving the US.

I am long way from being a covered expatriate.  But with the devaluation of the dollar due to hyperinflation, I foresee being there soon.  Therefore, I’ve decided to leave before the law applies to me; because it was much easier to leave East Berlin before the Wall was built.

Oh and by the way, Go Canada Go!!!

[corrections, 20 April 2011]