Renouncing U.S. citizenship is not for the faint of heart. An individual might consider expatriating as a means to break with U.S. taxation on global income, and a path to a lifetime of drinks with tiny umbrellas. Given the political and social climate in the United States, current pandemic-related travel restrictions, and the recent power grid failures in Texas, expatriating may be all the more attractive.
But renunciation of U.S. citizenship is irrevocable, and leaves an expatriated U.S. citizen with no immigration status. An individual who renounces U.S. citizenship must start from scratch in regards to obtaining authorization to travel to the United States. Even if a visa is acquired, no guarantees exist that the former U.S. citizen will be allowed entry to the U.S.
For any U.S. citizen considering renunciation, no matter the unpleasantness of U.S. global income tax, nor the appeal of being permanently on island time, analysis of the U.S. immigration consequences of expatriation is indispensable.
A Second Passport
As a preliminary matter, a U.S. citizen who wishes to renounce his or her U.S. citizenship must hold nationality from another country before officially renouncing. If the individual only holds a U.S. passport, a plan must be made to acquire a second passport, whether through family ties or investment. Even if the individual already holds a second passport, an examination of whether a third nationality would be beneficial for post-renunciation immigration purposes is useful.
The expatriated U.S. citizen’s second passport must accommodate his or her need to travel to the United States. After renunciation of U.S. citizenship, U.S. visa and travel options will vary depending on the expatriating individual’s non-U.S. nationality. For instance, an E-2 visa is a highly valuable and flexible visa option, but is limited to citizens of certain countries, as is travel under ESTA authorization. A U.S. citizen seeking renunciation should thus explore which visa options will best allow the individual to fulfill his or her ongoing U.S. travel needs, which non-U.S. nationalities may be available to him or her, and whether each available passport aligns with his or her U.S. travel requirements.
This initial analysis is fundamental because expatriation is irrevocable with very limited exceptions. Although an individual contemplating renunciation may not foresee significant U.S. travel in the short or even medium term, he or she will want to be well-positioned if frequent U.S. travel later becomes necessary. Where selecting a second passport is an option, alternatives must be carefully considered.
An individual may only renounce citizenship at a U.S. Embassy or Consulate abroad, where the individual formalizes renunciation by swearing an oath in front of a consular officer.
The U.S. Department of State provides specific guidelines to consular officers regarding the form of a renunciation interview. DOS instructs its consular officers to have the United States flag present during the oath of renunciation, to have the applicant stand and raise his or her right hand during the oath, and to conduct the oath of renunciation ceremony in “a setting that reminds the renunciant of the gravity of the consequences.”
During the renunciation interview, a consular officer will explain the serious, irrevocable nature of renunciation. Often, the consular officer will also request a written statement of any reasons for renunciation. The consular officer next asks a series of questions of the individual to make sure that the individual is acting voluntarily with the intent to lose U.S. citizenship.
After taking an oath of renunciation, the individual signs a series of forms acknowledging the consequences of expatriating, and pays a processing fee. A Certificate of Loss of Nationality (“CLN”) is subsequently forwarded to the individual or counsel as evidence of the renunciation.
Post- Expatriation U.S. Immigration
Once an individual receives his or her CLN, he or she will be treated as a foreign national for the purposes of U.S. immigration law. The individual will not have any right to travel to the United States, and thus must apply either apply for authorization to visit the U.S. under the visa waiver program, or for a visa, depending on which passport he or she holds.
An expatriated U.S. citizen will likely meet the particular requirements for ESTA authorization, a B-1/2 visa, or an E-2 visa without issue. Two important, fundamental considerations exist for any visa applicant, however, including an expatriated U.S. citizen: whether the individual has “nonimmigrant intent,” and whether the individual is “admissible” to the United States.
- Nonimmigrant Intent
At a minimum, to qualify for a visa, the individual must demonstrate “nonimmigrant intent”: that he or she intends to travel to the United States only temporarily. A former U.S. citizen applying for a visa would need to show a permanent residence outside the U.S., professional and personal ties outside of the U.S., and specific reasons to leave the U.S. after a set period of time. For an individual who has recently renounced U.S. citizenship, this requires a detailed weighing of all personal, professional, and financial ties in the U.S., and abroad.
Additionally, a visa applicant must be “admissible” to the United States. “Admissible” is a term of art that describes who may or may not travel to the United States based on certain characteristics or having committed certain acts. Whether an individual is admissible requires detailed legal and factual analysis. An individual contemplating expatriation should be counseled on his or her admissibility to the United States as far in advance of any renunciation as possible. Failure to consider all grounds of inadmissibility and whether they may apply to an individual could lead to a permanent ban from returning to the United States.
An individual, or even his or her counsel, may read the grounds of inadmissibility, and conclude that he or she would not be denied entry to the U.S. U.S. immigration law is highly complex, though, and commonly understood definitions of words may not apply in the immigration context. For example, an individual who has had a criminal record “expunged,” or who has entered into a deferral program, may still be inadmissible to the United States because immigration law has its own definition of what constitutes a criminal “conviction”.
Furthermore, some immigration penalties are triggered by mere conduct. Long-held professional and personal ties, travel to certain parts of the world, and even certain types of scientific and academic training, while entirely benign for a U.S. citizen, may render an expatriated citizen inadmissible to the United States. And, U.S. consular officers and border officials have extraordinarily wide discretion to make factual and legal determinations that are often not formally subject to appeal or reconsideration.
An individual considering expatriation may also mistakenly assume that certain categories of inadmissibility do apply. One ground that frequently calls the attention of a U.S. citizen considering renunciation is the inadmissibility of any individual who has renounced U.S. citizenship for the purpose of avoiding U.S. tax. This inadmissibility category is generally not applicable to a U.S. citizen who renounces citizenship because expatriating U.S. citizens (and in some cases green card holders) are subject to an exit tax based strictly on objective factors.
Additionally, consular officers do not have access to U.S. tax records.
This means that the only way a consular officer could find that an individual has renounced U.S. citizenship for the purpose of avoiding U.S. tax is if the individual makes a statement saying as much. An individual planning to expatriate is thus well-advised to not use the word “tax” during any interaction with a consular officer, or at U.S. customs, to refrain from making social media posts regarding the U.S. tax system, and to generally keep any tax-related conversations privileged.
Renunciation of U.S. citizenship may at times appear attractive. A clear-eyed understanding of immigration consequences of renouncing U.S. citizenship before taking any initial steps is fundamental. By analyzing how renunciation will impact future U.S. travel plans, an individual may make a well-informed choice about his or her U.S. citizenship.
If you would like to discuss renouncing your U.S. citizenship, expatriating or green card status, the effects of expatriating, or a second passport, contact us for a consultation.