Category Archives: 1947 Canada Citizenship Act

The “Exit Tax”: Dual US/Canada citizen from birth, no Canada citizenship today = no exemption to US “Exit Tax”

The above tweet references a “guest post” written by Dominic Ferszt of Cape Town South Africa. The post demonstrates how the “dual citizen from birth” exemption to the S. 877A “Exit Tax” relies on the citizenship laws of other nations. In some cases those laws of other nations are arbitrary and unjust. If these laws were U.S. laws, they might violate the equal protection and/or due process guarantees found in the United States constitution. For example, Mr. Ferszt describes how the “dual citizenship exemption” to the “Ext Tax” is dependent on South African “Apartheid Laws”. He describes a situation where a “black” U.S. citizen from birth is denied the benefits of the dual citizen exemption to the Exit Tax, which are available to a “white” dual citizen from birth. (During the “Apartheid Era” Blacks were not entitled to South African citizenship.)

So, what’s the S. 877A “Exit Tax”  dual citizen exemption and how does it work?

The dual citizen exemption, which I have discussed in previous posts,  is found in Internal Revenue Code S. 877A(g)(1)(B) and reads:

(B) Exceptions An individual shall not be treated as meeting the requirements of subparagraph (A) or (B) of section 877(a)(2) if—
(i) the individual—
(I) became at birth a citizen of the United States and a citizen of another country and, as of the expatriation date, continues to be a citizen of, and is taxed as a resident of, such other country, and
(II) has been a resident of the United States (as defined in section 7701(b)(1)(A)(ii)) for not more than 10 taxable years during the 15-taxable year period ending with the taxable year during which the expatriation date occurs, or

Entitlement to the “dual citizen exemption” depends entirely on the citizenship laws of other countries …


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Relinquishing US citizenship: South African Apartheid, the Accidental Taxpayer and the United States S. 877A exit tax

Introducing this “guest post”

This guest post is written by Dominic Ferszt of Cape Town, South Africa. I first became aware of Mr. Ferszt when, in October of 2014, his post: “The Accidental Tax Invasion” was published in Forbes. I have discussed various aspects of “citizenship-based taxation” with him since. I am very pleased that he has accepted my invitation to write this “guest post” for publication at Citizenship Solutions. His post exposes an aspect of “citizenship taxation” and the S. 877A U.S. expatriation tax that has not (as far as I am aware) been discussed before. Those who did NOT acquire “dual citizenship” at birth because of discriminatory laws (example British and Canadian laws saying that citizenship could be passed down from the father but not from the mother) will find this post extremely interesting and relevant.

Without further adieu …

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Apartheid and the Accidental Taxpayer

How the United States Congress has passed legislation which imposes a tax obligation in accordance with the discriminatory policies of foreign nations; and how this might offer a glimmer of hope to millions around the world who feel unjustly targeted by FATCA or the IRS.

By Dominic Ferszt, Cape Town

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The S. 877A “Dual Citizen” exemption: The 1947 Canada Citizenship Act – Am I still a Canadian or did I lose Canadian citizenship?

Introduction:

This is the 4th of seven posts analyzing the “dual citizen exemption” to the S. 877A Exit Tax which is found in S. 877A(g)(1)(B) of the Internal Revenue Code. Please remember that the “dual citizen exemption” is available ONLY to those who meet the “five year tax compliance test”.

1. What is the S. 877A(g)(1)(B) “dual citizen exemption” and why does it encourage those “born dual citizens” to not renounce U.S. citizenship?

2. The history of Canada’s citizenship laws: Did the 1947 Canada Citizenship Act affirm citizenship or “strip” citizenship and create @LostCanadians?

3. The S. 877A “dual citizen” exemption – I was born before the first ever Canada Citizenship Act? Could I have been “born a Canadian citizen”?

4. The S. 877A “Dual Citizen” exemption: The 1947 Canada Citizenship Act – Am I still a Canadian or did I lose Canadian citizenship? (The “Sins Of The Father”)

5. The S. 877A “Dual Citizen” exemption: The 1947 Canada Citizenship Act and the requirements to be “born Canadian

6. “The S. 877A “Dual Citizen” exemption: I was born a dual citizen! Am I still “taxed as a resident” of Canada?

7. The S. 877A “Dual Citizen” exemption: “MUST certify tax compliance for the five years prior to relinquishment

Was I a “Canadian Citizen” at birth and/or Am I still a Canadian Citizen?

The 1947 Canada Citizenship Act and loss of Canadian Citizenship

Canada Citizenship Act 1947

Pursuant to S. 16 and S. 18  of the Canada Citizenship Act, one could lose Canadian Citizenship if your “responsible parent” became naturalized as a citizen of another country.

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The S. 877A “Dual Citizen” exemption: The 1947 Canada Citizenship Act and being “born Canadian”

Introduction:

This is the 5th of seven posts analyzing the “dual citizen exemption” to the S. 877A Exit Tax which is found in S. 877A(g)(1)(B) of the Internal Revenue Code. Please remember that the “dual citizen exemption” is available ONLY to those who meet the “five year tax compliance test”.

1. What is the S. 877A(g)(1)(B) “dual citizen exemption” and why does it encourage those “born dual citizens” to not renounce U.S. citizenship?

2. The history of Canada’s citizenship laws: Did the 1947 Canada Citizenship Act affirm citizenship or “strip” citizenship and create @LostCanadians?

3. The S. 877A “dual citizen” exemption – I was born before the first ever Canada Citizenship Act? Could I have been “born a Canadian citizen”?

4. The S. 877A “Dual Citizen” exemption: The 1947 Canada Citizenship Act – Am I still a Canadian or did I lose Canadian citizenship? (The “Sins Of The Father”)

5. The S. 877A “Dual Citizen” exemption: The 1947 Canada Citizenship Act and the requirements to be “born Canadian

6. “The S. 877A “Dual Citizen” exemption: I was born a dual citizen! Am I still “taxed as a resident” of Canada?

7. The S. 877A “Dual Citizen” exemption: “MUST certify tax compliance for the five years prior to relinquishment

 

Bubblebustin, comments at the Isaac Brock Society:

Being a non-resident US citizen is never about making good decisions for one self – it’s about making the least-worst ones. The fact that I will never be subjected to the US exit tax as long as I remain US tax compliant may reduce the urgency to renounce, but also gives me one other thing to consider when making those least-worst decisions.

Interesting that Canada amended its Citizenship Act in 2009 to allow more people to claim Canadian citizenship partially in response to the Canadian border baby passport crisis in 2007:

http://www.cbc.ca/news/canada/manitoba/border-babies-face-fight-for-canadian-citizenship-1.656376

…and the same year the HEART Act became effective.

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The S. 877A “dual citizen” exemption – Born before 1947, Could I have been “born a Canadian citizen”?

Introduction:

This is the 3rd of seven posts analyzing the “dual citizen exemption” to the S. 877A Exit Tax which is found in S. 877A(g)(1)(B) of the Internal Revenue Code. Please remember that the “dual citizen exemption” is available ONLY to those who meet the “five year tax compliance test”.

1. What is the S. 877A(g)(1)(B) “dual citizen exemption” and why does it encourage those “born dual citizens” to not renounce U.S. citizenship?

2. The history of Canada’s citizenship laws: Did the 1947 Canada Citizenship Act affirm citizenship or “strip” citizenship and create @LostCanadians?

3. The S. 877A “dual citizen” exemption – I was born before the first ever Canada Citizenship Act? Could I have been “born a Canadian citizen”?

4. The S. 877A “Dual Citizen” exemption: The 1947 Canada Citizenship Act – Am I still a Canadian or did I lose Canadian citizenship? (The “Sins Of The Father”)

5. The S. 877A “Dual Citizen” exemption: The 1947 Canada Citizenship Act and the requirements to be “born Canadian

6. “The S. 877A “Dual Citizen” exemption: I was born a dual citizen! Am I still “taxed as a resident” of Canada?

7. The S. 877A “Dual Citizen” exemption: “MUST certify tax compliance for the five years prior to relinquishment


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Did the 1947 Canada Citizenship Act affirm citizenship or “strip” citizenship and create @LostCanadians?

Introduction:

This is the 2nd of seven posts analyzing the “dual citizen exemption” to the S. 877A Exit Tax which is found in S. 877A(g)(1)(B) of the Internal Revenue Code. Please remember that the “dual citizen exemption” is available ONLY to those who meet the “five year tax compliance test”.

1. What is the S. 877A(g)(1)(B) “dual citizen exemption” and why does it encourage those “born dual citizens” to not renounce U.S. citizenship?

2. The history of Canada’s citizenship laws: Did the 1947 Canada Citizenship Act affirm citizenship or “strip” citizenship and create @LostCanadians?

3. The S. 877A “dual citizen” exemption – I was born before the first ever Canada Citizenship Act? Could I have been “born a Canadian citizen”?

4. The S. 877A “Dual Citizen” exemption: The 1947 Canada Citizenship Act – Am I still a Canadian or did I lose Canadian citizenship? (The “Sins Of The Father”)

5. The S. 877A “Dual Citizen” exemption: The 1947 Canada Citizenship Act and the requirements to be “born Canadian

6. “The S. 877A “Dual Citizen” exemption: I was born a dual citizen! Am I still “taxed as a resident” of Canada?

7. The S. 877A “Dual Citizen” exemption: “MUST certify tax compliance for the five years prior to relinquishment

Last Friday I was in Ottawa. I walked into a bookstore and saw the book: “The Lost Canadians” by Don Chapman.

lostcanadians

It is a fascinating book. Once again, see how important citizenship is. Citizenship is “invisible” until your citizenship or lack thereof creates problems in your life. Don Chapman’s book “The Lost Canadians” is a history of the problems caused by Canada’s first citizenship act – the 1947 Canada Citizenship Act. Many (but not all) of the problems were caused by  situations where, according to the 1947 Canada Citizenship Act:

  1. According to S. 16 of the 1947 Canada Citizenship Act, a minor would lose his/her Canadian citizenship if the responsible parent became a citizen of another nation and in so doing lost her/her Canadian citizenship; and
  2. According to S. 5 of the 1947 Canada Citizenship Act, a person born in wedlock outside of Canada to a father who was NOT a Canadian citizen and a mother who WAS a Canadian citizen never acquired Canadian citizenship by birth. (Note that in the Benner case the Supreme Court of Canada ruled that this distinction violated S. 15 of the Canadian Charter Of Rights And Freedoms.) This injustice, which meant that those born in the U.S. did NOT acquire dual citizenship at birth (think of the definition of “covered expatriate” of the S. 877A “Exit Tax” rules),  was “fixed in the 2009 changes to the Canada Citizenship Act.
  3. According to S. 6 of the Canada Citizenship Act, some Canadians born outside of Canada had to reside in Canada on their 24th birthday. The failure to meet this residency requirement meant that they “lost” their Canadian citizenship.

These injustices were the reason for the 2009 changes to the Canada Citizenship Act.

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