Cdn renouncing American Citizenship - have questions

I have a 17 yr old son who is presently living and going to school in the US. He has dual Canadian and American citizenship because he was born in Canada and moved with me at age 9 to the US. I married an American and after the 3 yr wait became an American citizen. My son gained American citizenshp (as a minor attached to my case) when I did. He now plans to return to live and work in Canada when he graduates highschool next June. The question we have is about renouncing his American citizenship and how it will affect him. He is supposed to sign up for selective service at 18 as an American. He will move back to Canada before that 30 day window expires. If he goes to an American consul and renounces his citizenship once he gets to Canada, will there be any issues with the selective service? Will there be problems for him at the border if he were to return to the US as a Canadian to visit me? Thanks for any information you can pass along. Every website the American gov't has is very vague about this topic.

I do believe that renouncing ones citizenship is fairly detailed and arduous process, and not done often enough that anyone on an internet message forum would be knowledgable about.

I'd suggest you speak with a lawyer, and/or a US citizneship official.

I wouldn't do it just to avoid selective service registration, if he renounces his US citizenship it can cause all kinds of nasty problems down the road.

If you really want to avoid the draft, the time to do it is when a law is passed requiring a draft, before they start issuing draft notices. Frankly the chances of that happening are basically nil, short of some sort of national emergency that would almost certainly lead to the draft in Canada.

If he's got an SSN now, then the IRS are aware of his existence, so he must file a US tax return once he becomes an adult. Renouncing US citizenship is basically carte blanche to the IRS to refuse to allow him to move his tax home to the US if he ever wants to live in the US again, which means the IRS has the ability to stop any kind of US entry if they so wish. Not a problem for simple visits, because he pays no tax, but if he ever wants to work in the US, forget it.

The IRS does this merely for people who give up LPR status, so renouncing US citizenship I would say is a severely unwise decision to make. Imagine for example if he wants to get married to a US citizen at some future point.

Bear in mind the reason websites are vague on this topic is because it basically boils down to what the State Dept. thinks about the case in question.

A 17-year-old doing this without knowing what he will do as an adult sounds like a bad idea to me. Black mark with the State Dept. is not something to volunteer for.

thanks for the input Steve. We're still exploring options, he never wanted to come to the US in the first place, but had to because I was going. I'm finding it hard to convince him to consider keeping the citizenship. I also find it extremely arrogant that the US can tax his Cdn income just because he's an American citizen. He shouldn't have to spend the next 40+ years paying 2 income taxes!

As long as his income is under US$85,700 (in 2007 dollars) it's not a big deal, and the Democrats keep saying they're going to repeal that limit (because the Republicans came up with it) but no sign yet.

I find the whole US system rather quaint, the number of times they've tried to abolish the Selective Service system I've lost count of, because it is utterly pointless and useless. I'm sure some Congressman has their offices in his district and wants to protect their jobs or something.

They could just use the Canadian system - i.e. calling up people using SINs, and in fact that's how they will do it in the US if it ever happens.

Moreover US law (the Militia Act) defines who is subject to call up as provided for in the Constitution (national emergency or act of war against the US) and it is:

Any able-bodied person aged 17 to 45 who is capable of bearing arms and who is a US citizen or who has declared their intent to become a US citizen, which I think is from 10 USC 311. Save for a few public officials. The call-up can be done by the President or a Governor.

So basically they can call up any able-bodied adult in the event of a national emergency, and they would doubtless use your SSN to do it. Which is the argument that is always put forward in Congress to abolish Selective Service. "Oh, but it will allow us to identify some of the people most suitable more quickly."

Mmm, yeah, sure it will. Which is why they put your selective service registration on your dogtags - oh no wait, that's your SSN.

Bear in mind there are similar provisions in Canadian law and a lot of other countries, it's just the US makes it more overt.

The only real reason I can see to renounce citizenship of any country is for tax reasons (or because dual citizenship is illegal, e.g. if you're German). But the time to do that is when you're earning lots and lots of money and it's a major issue. (Even then, the US has an "expatriation" tax).

The problem is given the mindset of the US you have no clue what action they might take against former US citizens 20 years from now. For example they might ban them from visiting after Donald Trump buys the Cayman Islands and buggers off there. I'm sure a lot of former US citizens had their eyes bulge out of their heads when the expatriation tax came in a few years ago.

It's not something to volunteer for.

Hello!

I am a European facing the same problem as you. I do not AT ALL like the answers of STEVE, although his intentions may be good...
The US tax regulations are NOT "QUAINT". The United States is the only nation in the world to tax (a) its citizens who live abroad and (b) even foreign citizens who live abroad (what..??! it can't be but.. believe it!!).

The tax laws are not "Quaint". If you are a US citizen you are subject to very heavy reporting requirements such as declaring all foreign bank accounts etc. If ever during your expatriate life you let lapse your duties you will heavily pay and possibly lose everything to an IRS audit even if you live abroad or in Canada. Wake up, dual nationals!!!!

In my country, the US tax laws result in (a) no tax (but no reimbursement either!!!) in years when european taxes are above US taxes - for example, during your work career when earning a salary and (b) ADDITIONAL US taxes in years when US taxes are above european taxes. This means that while working, since taxed at 60% in Europe, we will not be taxed in the US. But as soon as we retire, all capital gains, pension plans etc... (which are built into the 60% work tax during younger years of course!!!) will be taxed by the USA since not taxed in my country! Which means I live in the 3RD HIGHEST TAXED COUNTRY IN THE WORLD and I WILL PAY SUPPLEMENTAL US TAXES FOR THE REST OF MY LIFE AFTER RETIREMENT.

This is ridiculous!

Many of us, like your son, never *chose* to be American. And getting rid of the US nationality has become complexe and terrifying, considering the threats of banishment (which ps are against the 15th article of the human rights declaration which allows people to freely choose their nationality).

I made the (HUGEST) mistake of obtaining USA nationality for my kids. I thought it was the right thing to do at the time. Little did I know that they would be LESS FREE as dual nationals, than if they were purely European nationals (as they would be if I had not taken my stupid initiative). Now they are dual citizens, subject to US laws and taxes, and worst of all face total banishment in the event that they choose Europe over the USA.

None of this is quaint, adorable or cute.

Your son will be subject to US reporting requirement for the rest of your life, live under the threat of an IRS audit and confiscation for the rest of your life, in addition to obeying the laws and practices of the country you live in.

My advice to you is encourage your son to expatriate within 30 days of his 18th birthday. There are numerous allowances made in the laws for people who do this.

If he lives abroad at that time I believe that they will be more understanding of his case. However the fact that he may have lived over 5 years in the USA could aggravate the case.

As for the true risk of banishment from visits etc. There are a lot of scare mongers on the internet, like Steve. Be realistic. If you don't pay US taxes, you cannot work or live year round in the US. Fair deal. But so far, to my knowledge, they do not banish ex-us citizens from entry on a tourist visa. You just have to understand that if you expatriate, you become a true foreigner, subject to the same visa requirements as other foreigners in your country, no more, no less.

Well, thanks to the wonderful US nationality, you will now have to consult an extremely expensive immigration lawyer and possibly more expensive tax lawyer to get him out of this situation.

I wish you lots of luck; we have been working on our case for a year now and still have no clear solution. Good luck & big hugs to everyone in our situation.

Good luck.

The tax laws are not "Quaint".

I didn't say they were, I said the selective service system was.

Like I said, the point at which to think about renouncing citizenship is the point at which the tax laws cause you a problem. Otherwise you're just volunteering for a black mark from the State Dept. for no reason and that's stupid, frankly.

Steven, Could you be a little more clear about this "black mark"? What exactly do you mean, do you have any cases to support this?

I wouldn't recommend waiting until you have a draft or a tax problem later in life.

The time to get out is when you are convinced you will not come back to live or work in the USA.

If you wait until tax or draft issues arrive it will be more difficult to get out. Renounciation is refused, or you can be banished, if it is apparent that you are doing it for tax or draft reasons.

If you expatriate within 6 months of 18th birthday, specific criteria apply to your case; esp if you were born a citizen of another country and obtaining US citizenship was not done by your initiative. Don't know if having been a resident for over 5 years worsens the case.

It is a serious and difficult process, a very difficult choice to make. I highly recommend getting information from a tax lawyer, and not from the internet or government employees at the embassy.

Like I said at the start, it basically boils down to what the State Dept. thinks because they consider the application. This creates a problem if your kids ever want to live and work in the US which is why you shouldn't do it, because when they apply on their State Dept. record it will say they renounced citizenship. That may not be a problem but then again it may, so why volunteer your kids for it? That's not just a US problem that's a problem in any situation where you renounce citizenship of a country and then later on decide to live there.

I disagree that you should pre-emptively decide to do it so that it doesn't appear to be done because of a tax issue.

Filing a 1040 return every year is no big deal unless their income is over the foreign tax credit limit, which may never happen and is very unlikely at least until they're in their 30s.

The limit was only imposed in 2006 and the Democrats have said they want to repeal it, so renouncing citizenship on the basis of not liking a tax law which may not even exist by the time your kids become subject to it sounds like a bad idea to me.

At this point you cannot know what your kids will be doing 20 years from now or what the situation with US immigration and tax laws will be in the distant future so if it's not causing a major problem at the moment, why bother?

The time to get out is when you are convinced you will not come back to live or work in the USA.

But how can your child know that, or you know what your child might want to do later in life? Plus I have to say this is a different situation, you live in Europe, we're talking about someone who lives in Canada close to the border and has family who lives in the United States.

The only reason I can see for a Canadian to renounce US citizenship is if they've got a big tax problem (today) because of it.

The arguments both for and against are very compelling. Fortunately, we do have a little more time beofre my son heads north to return to Canada. We are trying to get some 'official' input on both options and so far haven't had a lot of success getting straight answers out of anybody. I do appreciate the input from both sides and have been discussing what I've read with my son. After all, it is his decision what to do ultimately. Thanks again for all the good info!