Introduction And General Context
On Friday January 6, 2023 the State Department announced its intention to reduce the administrative fee for issuing CLNs (“Certificates Of Loss Of Nationality”) for US citizenship relinquishments from the current $2350 to $450. Notably in 2015 the State Department increased the fee from $450 to $2350.
The precise language found in the Declaration of Assistant Secretary For Consular Affairs Reena Bitter was:
3. Under 31 U.S.C. 9701, 22 U.S.C. § 4219, and Executive Order 10718, the Department has the authority to establish fees to be charged for official services provided by U.S. embassies and consulates. The Department intends to pursue rulemaking to reduce the fee for processing CLN requests from the current amount of $2350 to the previous fee of $450, as set in 75 FR 36522 on June 28, 2010. The Department will consider any necessary changes to this fee, as appropriate, in a future rulemaking.
The reduction was announced in conjunction with a lawsuit launched by the Association Of Accidental Americans arguing that the $2350 renunciation fee is unconstitutional. The announcement and general context is described in the article at the American Expat Finance News Journal.
Those wishing to better understand the lawsuit might be interested in a 2020 podcast I did with the lawyer Marc Zell.
Podcast – 2020 @GOPIsrael (Marc Zell) and @Expatriationlaw discuss: – "The Association Of Accidental Americans. v. Department Of State" https://t.co/ziAeI6u0i4
— John Richardson – lawyer for "U.S. persons" abroad (@ExpatriationLaw) January 10, 2023
Should you delay your renunciation until the new fee is in effect?
On January 9, 2022 there was a live hearing in Washington, DC exploring issues related to the lawsuit. During the hearing the Judge questioned the State Department lawyer about the plans to reduce the fee from $2350 to $450. It is apparent that:
1. There is no clear date on which the reduced fee will take effect.
2. There is no evidence that those who paid $2350 will be entitled to any kind of refund.
In many countries the waiting list to renounce or relinquish US citizenship continues to be long. Some of those waiting are dangerously close to being “covered expatriates” (based on the net worth test). “Covered expatriates” are generally subject to the 877A expatriation tax rules.
In most cases, those seeking to renounce US citizenship are probably best to avail themselves of the opportunity to renounce regardless of the fee on their renunciation date.
Have a question? Contact John Richardson. Citizenship Solutions.
The Reality of U.S. Citizenship Abroad
My name is John Richardson. I am a Toronto based lawyer – member of the Bar of Ontario. This means that, any counselling session you have with me will be governed by the rules of “lawyer client” privilege. This means that:
“What’s said in my office, stays in my office.”
The U.S. imposes complex rules and life restrictions on its citizens wherever they live. These restrictions are becoming more and more difficult for those U.S. citizens who choose to live outside the United States.
FATCA is the mechanism to enforce those “complex rules and life restrictions” on Americans abroad. As a result, many U.S. citizens abroad are renouncing their U.S. citizenship. Although this is very sad. It is also the reality.
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