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Hi from Phil Hodgen.
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This week's question has to do with a non-tax issue. It comes from reader S.T.:
I have a question of curiosity; if a citizen of a country expatriates without gaining citizenship within another country, where does that put them? I'd assume there are a ton of negative legal ramifications that would go with this but I'm not sure. Also; where could they lawfully reside? International waters only? Antarctica?
Short answer: we have seen this, and you're right–there are a ton of negative legal ramifications.
As I said, we have clients who have done this: renounced U.S. citizenship before acquiring citizenship in another country. I am impressed by the boldness of the people who voluntarily drop the U.S. passport before acquiring a new passport. I would not be so bold.
And the obligatory disclaimer: I know tax stuff, not immigration law, and certainly not the immigration laws of every country in the world.
Treat this as a sharing of meagre information on an unusual topic. Your input is welcome if you know more than me.
The State Department strongly discourages you from renouncing your U.S. citizenship, especially when you do not have alternate citizenship. It is useful for me to quote the Foreign Affairs Manual. The relevant portion is 7 FAM Section 1215 (PDF), quoted here in full:
a. Persons who renounce their U.S. citizenship or commit any statutory act of expatriation intending thereby to relinquish such citizenship should understand that, unless they already possess a foreign nationality or are assured of acquiring another nationality shortly after completing their renunciation, they will become stateless and severe hardship to them could result. In the absence of a second nationality, those individuals would become stateless. Even if they possess permanent resident status in a foreign country, they could encounter difficulties continuing to reside there without a nationality.
b. The U.S. Government generally cannot accord stateless former U.S. nationals the consular assistance that is provided for U.S. citizens and U.S. noncitizen nationals pursuant to the Vienna Convention on Consular Relations (VCCR), U.S. statutes and regulations, and customary international law.
c. Stateless former U.S. nationals may also find it difficult or impossible to travel as they may not be issued a U.S. passport, and would probably not be able to obtain a passport or any other travel document from any country. Further, a person who has renounced U.S. citizenship will be required to apply for a visa to travel to the United States, just as other aliens do. If found ineligible for a visa, he or she could be permanently barred from the United States.
d. Expatriation will not necessarily prevent a former citizen's deportation from a foreign country to the United States, nor will it necessarily exempt that person from being prosecuted in the United States for any outstanding criminal charges or held liable for any military obligations or any taxes owed to the United States. The fact that a person has been rendered stateless does not serve to nullify the individual’s expatriation if the renunciation is done voluntarily and with the intention to relinquish U.S. nationality.
e. In making all these points clear to potentially stateless renunciants, the Department of State will, nevertheless, afford them their right to expatriate. We will accept and approve renunciations of persons who do not already possess another nationality. It should be noted, however, that if a foreign state deports such individuals, he or she may find themselves deported to the United States, the country of their former nationality.
The key paragraph is Section 1215(e), where the State Department explicitly says that becoming stateless after renunciation of U.S. citizenship is possible. Emphasis is added by me.
In the instances we have seen, the individual has acquired a permanent resident visa in another country. This means he or she has a place to live–legally. Further, the conditions of the permanent resident visa only require that the person wait out the required number of years in order to qualify to become a citizen of that country.
There is also an implicit assumption that the person keeps out of trouble and that the politics of the country remain reasonably stable until citizenship is obtained. These are risks that you may or may not want to assume for yourself. Countries do change their laws from time to time. And what "keep out of trouble" means can vary from place to place.
If you are thinking of declaring yourself stateless, these are risks that you should consider.
The key problem is travel. As near as I can tell, these people are landlocked in the country of permanent residence until they acquire citizenship in that country and therefore have a passport issued to them.
"Travel documents" are in theory possible to get. These are documents (usually they look like passports, but not always) that are issued by a country to a person. They (in theory) permit travel–and re-entry into the country of issuance–but do not assert that the individual is a citizen or national of that country.
The classic document is the one issued to residents of Palestine. Leaving aside the political implications and aspirations embedded in such a document, the Palestinian passport will allow a holder to travel to a number of countries.
I know of at least one instance where a Native American nation–asserting its sovereignty under its century-old treaty with the United States–issued its own passports and a number of its members travelled internationally using those passports. This event will be shrouded in attorney-client confidentiality. Don't ask.
The reality is different from theory. Everything I know about travel documents (i.e., something issued by a country allowing you to travel but not confirming your citizenship of that country) is that they are difficult or impossible to obtain, and give you limited mobility if you happen to get one.
If you renounce U.S. citizenship, you are committing yourself to remaining in a single location until you acquire a new citizenship. No travel.
For a horror story, look at this report from cnn.com where a U.S. resident (citizen of the former USSR) and stateless person was trapped in American Samoa. Ultimately he was allowed to re-enter the United States on a humanitarian parole.
FWIW, you can follow Mikhail Sebastian's Tumblr if you want to keep up with the story–which is still ongoing as of mid-2014.
What's the worst that can happen to a stateless person? I see three possibilities:
There is, unfortunately, no definitive answer I can give you. We do a lot of U.S. expatriation work–handling the projects as well as giving advice to people who then do the work themselves. As part of that work, we have seen people renounce U.S. citizenship and become stateless.
Me? I wouldn't do it. I would do the footwork to get a second passport, then I would give up the U.S. passport. The travel restrictions are something I might be able to live with (don't leave the country for five years–this can be done). However, the political and life risks of maintaining permanent residence until I qualify for citizenship in the country where I have permanent resident status–that's troublesome. I would consider it in only the most stable of stable democracies. Even then, I would continue to be puckered up with anticipation until I had the new passport in hand.
Now of course is a prudent moment to remind you that this is not legal advice, and 10 minutes after you read this the IRS will do something to make this completely outmoded. Plus Congress will pull some hair-brained idea out its bureaucratic posterior and change everything about immigration law and enact it before you can wake up for your morning coffee.
Next Tuesday there will be another expatriation-related question and answer. Send yours in. 🙂
You seem to forget about the 1954 Convention relating to the Status of Stateless Persons (lots of fun to be found on nostate.com). While the US has not signed such convention, stateless persons should get an immigration status in countries which did.
Further, for renuciants who come back to the US, I believe that there was a US Supreme Court case (Gary Davis vs the US) stating that a former US citizen now stateless cannot be deported (even thought if strictly speaking he doesn’t have an immigration status in the US) and that it formed the basis for not only Gary Davis living in Vermont until his death but also him coming to the US www.youtube.com/watch?v=m8asYX9yXoY (the guy proudly shows his “World passport” but my understanding is that it is the supreme court decision – and the DHS supervisor’s knowledge of it that lets him in).
My response to O.W. was to thank him for the introduction to nostate.com — this is a new one for me. Also, the U.N. solution and the World Passport is possible but I imagine that most people don’t want to go through the pain, agony, and uncertainty of those processes. But yes. These possibilities exist. I do not have first-hand knowledge of their use. Thanks, O.W.