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  1. In theory you should be able to enter and exit without problems. But bureaucracies in general are broken. Border bureaucracies exponentially so.

    Problems may happen.

  2. So if one is successful at giving up their US citizenship, are you banned from entering the US on a Canadian passport? I am sure that it will be flagged at the border.

  3. @Canadian Citizen,

    The way you know what the exit tax law says when it applies to you. There are a number of ways in which an Accidental American could drop citizenship without incurring the exit tax. The easiest one is to come in below the financial thresholds, of which the US$2 million net worth test is primary. If your net worth is below this number, you can escape tax free. Paperwork required of course.

    For people who are wealthy (as defined as net worth greater than US$2 million) there are other avenues to take. Including the exemption for dual citizens who were citizens at birth of another country.

    It’s just a matter of talking to someone who knows his/her stuff, telling your story, and getting an answer.

    The alternative is to figure it out yourself. This is possible. Tax law is not a black art reserved for the priesthood. Anyone with a bit of patience and a mathematical brain can figure it out. You need the math skills for the logic required, not for adding and subtracting numbers). I took a course in Symbolic Logic in philosophy during college. That’s exactly what you need. Alternatively, a good sixth grade English teacher who can teach you how to diagram a sentence will do. 🙂

    Go look at Section 877A of the Internal Revenue Code. Notice 2009-85 is the only other plausible source of information from the government about this. You can find links and other information at,,id=97245,00.html

  4. How would a Canadian like the accidental american above go about finding out whether or not they would be subject to the exit tax. I feel like a lot of Canadians want to get rid of US citizenship but are worried that they will be subject to hundreds of thousands in dollars in exit tax based on a simple question of whether the recent Canadian legislation makes them a dual citizen at birth.

    I guess I am wondering if there is any way that an accidental american could know with certainty that they would not be subject to exit tax based on the new Canadian legislation before choosing to renounce US citizenship, as the exit tax would apply to people who would otherwise not owe estate tax.

  5. I believe that Canadian expats were doing VDs because they:
    – think this is somehow a Canadian law
    – think that Revenue Canada will enforce US penalties
    (the public statements that they could not and would not were late breaking news (mid-August)
    – they and/or their advisors do not fully understand the implications
    – fear they will be arrested within the US. There is lot of urban myth and rumor about this; an informed legal opinion on likelihood or due process to actually arrest a cross-border traveler is welcome!

  6. I would not apply for a private letter ruling in advance except in exceptional circumstances.

    As far as Section 877A and the exit tax is concerned, there are things that are clear. And there are things that are unclear. And there are things that are not addressed at all. I would not expect the IRS to issue additional guidance or regulations or anything for quite a while.

    The gates are slowly closing. Run like hell and get out while this is happening. Take advantage of the fog that exists right now.

  7. I don’t understand why this Canadian would do voluntary disclosure. The Canadian government needs to step in and stop accidental Americans from doing this, by making a clear statement to the IRS to back the f-up. I am far from an accidental American and when I saw that this was an unjust shake down, I just simply said that the IRS can go to the devil.

  8. Ok. As the following like shows the US took the position that Canadians were not dual citizens at birth, but now has taken the statement off of its form.

    Do you think it is just a way to lure people into paying an renouncing citizenship so that they can collect the exit tax in ambiguous situations like this. Would it be possible to get an advance private letter ruling to figure out whether one would be liable?

  9. The question of whether you are a citizen of another country “at birth” is an interesting and open one. (The fact that it is up in the air for interpretation is a known issue at the IRS. So there’s no harm in addressing the problem head-on.)

    My sense is that you’d look at the laws of the country in question to see what’s there. If the basic right to citizenship is established at the moment of birth, then later paperwork is just clerical stuff that confirms reality. The later paperwork doesn’t CREATE the citizenship at that moment.

    But this is nebulous. At what point does the paperwork requirement shift from being merely clerical (“You were a citizen all along, and now this piece of paper proves it”) to being the event that creates citizenship? There is no easy answer here.


  10. This is an interesting question.

    Prior to 2009 the US took the position that people born in the United States of Canadian parents between January 1, 1947 and February 15, 1977 did not acquire Canadian citizenship at birth, but rather through subsequent registration (SEE old form at )

    However, the new Canadian Citizenship was passed and retroactively said that all Canadian citizens born between January 1, 1947 and February 15, 1977 is “deemed to be a citizen from the time that he or she was born?”
    Therefore, would this “at birth” section exempt somebody who originally had to register as a Canadian citizen , but since 2009 has been considered a Canadian citizen from birth under Canadian legislation that says she is “deemed to be a citizen from the time that he or she was born?
    In other words, would that person be considered “at birth a U.S. citizen and a citizen of another country” under the Expatriation Tax Act.

    I guess this depends on how the IRS defines dual citizenship “at birth” and whether it is different than from “birth”. Does anyone know the answer?

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Tax laws change over time, and the information in this post above may be less accurate today than it was at the time of the last revision. This post is not tax advice for your specific situation. Please contact an international tax professional to get personalized advice for your situation.