Letter to IRS on Accidental Americans

In a letter to the IRS, US law firm Flott and Co tells of three “Accidental Americans”:

The first is a Canadian.  She was born in the US while her parents, both Canadian citizens, were at graduate school in 1954.  She returned to Canada with them when she was two years old and has lived in Canada since.  When her father inquired about her US citizenship in 1973, the US Consul in Winnipeg advised that she would lose her US citizenship if she obtained a Canadian passport and lived in Canada for three year after reaching her 22nd birthday without taking an oath of allegiance to the United States.  She obtained a Canadian passport, continued to live in Canada, and did not take an oath of allegiance to the United States prior to reaching her 25th birthday.  Unfortunately, unbeknownst to her, the section of the Immigration and Nationality Act of 1952, which the US Consul referenced in his letter to her father, was repealed in 1978 before she had completed three years continuous residence in Canada after turning 22 in 1976. She was shocked to learn on July 22, 2013 that she is still a US citizen by birth.

The second is British.  She, too, was born in the United States while her parents, both of whom were British citizens, were in the US.  She returned with them to England when she was three and has lived in the UK ever since.  Indeed, she has travelled to the US on a UK passport with a US visa, issued by the US Consulate in London.  She contacted me in early May to confirm that she was not as US citizen based on the US visa issued to her.  I had to advise her that she was indeed a US citizen by birth and explained US citizenship is automatic and non-consensual by operation of the Fourteenth Amendment.  Being a British citizen at birth did not affect her US citizenship.

The third is Irish.  She was born in the US to Irish nationals who were studying in the US.  She left when she was five and has lived in Ireland or other parts of Europe since.  On July 10, 2013 she contacted me after having been told the week before at a party that US citizens were being called in to a local bank to verify their citizenship.  Like the Canadian before her, she was genuinely surprised to learn that she is a US citizen and subject to tax on her worldwide income.

He raises some good points in his letter. However, he focuses–as many lawyers and accountants seem to do–on suggesting better ways for these three women who are not economically connected to U.S. to become compliant with IRS. He refers to them as “innocent delinquents.”

Why aren’t the professionals recommending changes to American law? Why aren’t they telling IRS what FATCA is doing to real lives? Why does United States of Arrogance think they have any right to claim these individuals, along with millions of others around the globe, as their own?!?

Oh, wait, I know the answer to that last question. Because they are bullies.

5 thoughts on “Letter to IRS on Accidental Americans

  1. @Blaze, I have to admit, that I was more or less aware that my birth place made me a US citizen, or at least that I had a right to claim US citizenship.

    What I definitely DID NOT KNOW was that US citizenship implied I was a US taxpayer. I think that this is the problem more than the fact that US citizenship is bestowed upon people unknowingly. Who cares if you are a US citizen technically? It is the fact that this legality comes with requisite ‘US taxpayer’ status. Who could have known this without having been given a manual at birth? Many, perhaps most homelanders are also unaware of this, as it is counter-intuitive.

    USA needs to recognize that it is at odds with the entire world with CBT, and not punish people who rightfully do not understand USA’s backwards way of imposing tax payer status on those who have nothing to do with USA economically.

  2. @WhiteKat: I agree 100%. Like you, those women had no idea they were U.S. citizens.

    I hope my post didn’t make it sound like I was supporting easier ways for people to come into compliance. When I suggested lawyers should be recommending ways to change the laws, I was meaning so people like you and others don’t have any requirement to file and so you can easily relinquish unwelcome U.S. citizenship.

    One of these women did what I did when I relinquished. She checked with the U.S. Consulate. Naively, she believed what they told her and used that as the basis for many decisions in her life.

    Like with those of us who were told we relinquished, the rules changed after she spoke with the Consulate. How should she know that?!?

    Another of the women got a visa for visiting the United States at a US Consulate so she could travel to United States on a UK passport. It sounds like they made no mention to her of US citizenship or the IRS.

    I find this attitude of United States particularly offensive:

    US citizenship is automatic and non-consensual by operation of the Fourteenth Amendment.

    Sounds like Iran or the Soviet Union.

  3. @Blaze,

    As an ‘accidental’, I don’t care how ‘easy’ IRS makes it to come into compliance. I owe USA nothing, and the right thing for USA to do, is to adopt residency based taxation like the rest of the civilized world, rather than devise some new version of OVDP.

    No way, am I going to spend 1000′s of dollars on back filing of US tax returns and FBARS, and even if I did, it would not be for the purpose of coming into compliance, it would so I could renounce. If USA, simply cannot change to RBT, then why not allow accidentals the option to choose between a simple no-fuss renunciation, or for those who wish to retain citizenship, the option of filing forward rather than having to go through the expense and complication of years of back filing. Guess how many would choose the latter option? I bet close to 0%.

  4. Common sense of Flott’s letter 100%

    Chances IRS will respond favorably 0%

    Kevyn Nightingale of MNP, who is often quoted in Canadian media on U.S taxation issues, contrasted the CRA approach to penalties to the IRS OVDI approach in a blog posting from Feb, 2011.

    http://www.mnp.ca/en/media-centre/blog/2011/2/11/us-2011-offshore-voluntary-disclosure-initiative

    Kevyn, in the media, often gives the “must comply or else” line. However, I have spoken to him privately and his attitude was quite different.

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