This week’s topic veers off the tax track and into one of the forms that is used for renouncing citizenship: Form DS-4079. Today we talk of getting a government job and the intricacies of 18 U.S.C. §1481(a)(4)(A).
Getting a government job in another country might make you lose your U.S. nationality. Answer Question 11 on Form DS-4079 carefully. And consider the tax consequences of your answer: a retroactive expatriation date almost certainly makes you a covered expatriate for the exit tax laws.
Relinquishing Citizenship by Employment
There are a number of ways in which a U.S. citizen can lose his or her nationality. See 8 U.S.C. §1481(a) for the list. Almost all of the ways to lose citizenship require an action and an intention: you do something with the intention of terminating U.S. citizenship.
(The one I am not sure about is 8 U.S.C. §1481(a)(7) which is the one where you commit an act of treason, try to overthrow the U.S. government by force, etc. etc. Presumably you would have to voluntarily commit those acts in order to be convicted of treason, so maybe the requirement of voluntariness is baked into those actions as well.)
Taking a job with another government is one of the actions you can take that will terminate your U.S. citizenship. You are considered to lose your U.S. nationality by voluntarily and with the intention of terminating U.S. citizenship
A person who is a national of the United States whether by birth or naturalization, shall lose his nationality by voluntarily performing any of the following acts with the intention of relinquishing United States nationality—
* * *
(4)(A) accepting, serving in, or performing the duties of any office, post, or employment under the government of a foreign state or a political subdivision thereof, after attaining the age of eighteen years if he has or acquires the nationality of such foreign state[.]
See 8 U.S.C. §1481(a)(4)(A).
It seems pretty clear, right? If you are a citizen of that other country and you get a job working for the government, you are considered to have lost your U.S. citizenship. Umm, no.
“Voluntary” is Presumed
The law presumes that an act of expatriation is voluntary. See 8 U.S.C. §1481(b), which says:
Whenever the loss of United States nationality is put in issue in any action or proceeding commenced on or after September 26, 1961 under, or by virtue of, the provisions of this chapter or any other Act, the burden shall be upon the person or party claiming that such loss occurred, to establish such claim by a preponderance of the evidence. Any person who commits or performs, or who has committed or performed, any act of expatriation under the provisions of this chapter or any other Act shall be presumed to have done so voluntarily, but such presumption may be rebutted upon a showing, by a preponderance of the evidence, that the act or acts committed or performed were not done voluntarily.
Emphasis added by me.
“Intention” is Presumed
Everything is driven by intention. When you took that government job in another country, did you take it with the intention of relinquishing your U.S. citizenship?
The question of intention is not so clear. If you take a job that is not a policy-level job, the presumption is that you intended to keep your U.S. citizenship. See 22 C.F.R. §50.40(a), which says:
In adjudicating potentially expatriating acts pursuant to INA 349(a), the Department has adopted an administrative presumption regarding certain acts and the intent to commit them. U.S. citizens who naturalize in a foreign country; take a routine oath of allegiance; or accept non-policy level employment with a foreign government need not submit evidence of intent to retain U.S. nationality. In these three classes of cases, intent to retain U.S. citizenship will be presumed. A person who affirmatively asserts to a consular officer, after he or she has committed a potentially expatriating act, that it was his or her intent to relinquish U.S. citizenship will lose his or her U.S. citizenship. In other loss of nationality cases, the consular officer will ascertain whether or not there is evidence of intent to relinquish U.S. nationality.
Let’s look at what it means to take “policy-level” employment with another country’s government. The answer? It isn’t clear, even to the State Department. See 7 FAM 1285(a), where the State Department basically (yet it still waffles!) says that a head-of-state or foreign minister position probably shows an intention to relinquish U.S. citizenship, but everything else . . . well, we will have to kick it back to Washington DC for further consideration.
Very few people on the planet are heads of state or foreign ministers. Let’s ignore policy-level people for the rest of this email.
Non-Policy Level Positions
Most people reading this and thinking about their government posts will be employed at a non-policy level in their country’s government. In that case, the basic presumption applies: the State Department presumes that the job was taken with the intention of retaining U.S. citizenship—not with the intention of relinquishing U.S. citizenship. See 7 FAM 1281(d) which says, in relevant part:
If a consular officer becomes aware that a U.S. citizen/noncitizen national accepted a nonpolicy-level position in the government of a foreign state and the individual does not advise you that his or her intent was to relinquish U.S. nationality, the administrative presumption of intent to retain citizenship applies.
Consistent with the basic presumption and the rule in 22 C.F.R. §50.40(a), the burden of proof would be on you to show that your intention was to relinquish citizenship.
I just want to throw an extra disclaimer in here: this is exceedingly murky. Don’t go running around the internet saying “Phil says I’m not a citizen of the United States anymore!”
That’s not what I’m saying. I am just taking a pointed stick and poking the hibernating bear that is 8 U.S.C. §1481(a)(4)(A) and making it growl. If you want the bear to come out of the cave you’re going to have to do the hard work yourself.
I am throwing a light on one of the lesser-known ways in which people lose U.S. citizenship, and in particular I am illuminating the key component of that method of relinquishing citizenship—your intention.
Now that we have brandished the clove of garlic and driven the wooden stake through the vampire’s heart, let’s continue with the discussion.
Intention, action, and voluntariness. These are the three things you need if you are trying to establish an earlier expatriation date based on taking a government job in another country.
If you are contemplating this method of expatriation, you should be prepared to spend time and money before you file the paperwork. Do it right so that when you talk to the Embassy official and present your paperwork, your application looks obvious to that official and the outcome is foregone, given their internal guidelines.
The tax consequences of expatriation are determined by your expatriation date. While your first reaction might be that it is a good thing to establish an expatriation date sometime in the past, it ain’t necessarily so.
For example. If you somehow establish your expatriation date occurred a few years ago (let’s say in 2011), the State Department will issue a Certificate of Loss of Nationality that says so. Great. Now let’s go deal with the Internal Revenue Service.
By definition if you are getting a Certificate of Loss of Nationality in 2014 that says you expatriated in 2011—you didn’t file the right tax paperwork (Form 8854 to be precise) on time. This makes you a covered expatriate, with an expatriation date in 2011. This might cost you some money for taxes, penalties, and interest.
Again, a quickie disclaimer. A retroactive expatriation date is neither good nor bad in its tax effects. You must do the hard work and run the numbers.
Form DS-4079, Question 11
All of this brings me back to Form DS-4079 and Question 11. Answer it truthfully and correctly. Disclose all of your government jobs here. (If you lie here, imagine the impact on the Embassy official who finds you are not telling you the truth. This might derail your attempt to relinquish your U.S. citizenship.)
Question 11(b) gives you the power to declare your intention—did you take the job with the intention of relinquishing U.S. citizenship. This is the place where your answer matters.
Not Legal Advice
This isn’t legal advice to you, of course. Would you make life-altering decisions based on a random email you got from some guy you found on the internet? Nope. Me neither. Go hire someone. March through the analysis and figure out what is best for you.