Renouncing citizenship to avoid taxes

With concern over higher tax rates in the United States relative to some low tax destinations such as Singapore and Belarus, and the rise of economic citizenship in many emerging countries around the world a record number of United States citizens have sought to renounce citizenship to avoid taxation. Many have even inquired about “relinquishment” without full “renunciation” to avoid paying U.S. taxes while still preserving U.S. citizenship and its benefits.

Renouncing U.S. citizenship to avoid US taxes*

With concern over higher tax rates in the United States relative to some low tax destinations such as Singapore and Belarus, and the rise of economic citizenship  in many emerging countries around the world a record number of United States citizens especially those who identify themselves as investors have sought to renounce citizenship to avoid taxation.  Many have even inquired about “relinquishment” without full “renunciation” to avoid paying U.S. taxes while still preserving U.S. citizenship and its benefits including the ability to confer immigration and citizenship benefits to others.

Loss of Citizenship

Section 349 (a) of the Immigration and Nationality Act set out the expatriation acts by which a national of the United States by birth or naturalization can lose United States nationality. Formal or official renunciation at a U.S. consulate [Section 349 (a) (5)] is one means of losing United States nationality but it not the only means. Some United States citizens with dual nationalities who hold political office abroad may lose United States nationality when they take an oath of allegiance to a foreign state, if the act of taking the oath was done with the intent of relinquishing United States nationality.

Renunciation can make a former citizen ineligible for a U.S. visa

The Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (IIRIRA) added a new ground of inadmissibility for certain former citizens who renounce citizenship to avoid paying taxes. Section 212 (a) (10) (E) of the Immigration and Nationality Act states

“Any alien who is a former citizen of the United States who officially renounces United States citizenship and who is determined by the Attorney General to have renounced United States citizenship for the purpose of avoiding taxation by the United States is inadmissible.”

But the ground of inadmissibility in Section 212(a) (10) (E) applies only to renunciations of U.S. citizenship that took place on or after September 30, 1996. Furthermore the statute requires specific intent to avoid paying U.S. taxes. Specific intent requires that the former U.S. citizen subjectively desired loss of U.S. citizenship to avoid paying U.S. taxes. Therefore the reason for renouncing U.S. citizenship is important. Public statements about the reason for renouncing US citizenship may come back to bit. But the surrounding circumstances of the renunciation may still prove specific intent to avoid paying U.S. taxes even if the former U.S. citizen was silent on the issue.

The regulations effecting the statute state that “an alien who is a former citizen of the United States, who on or after September 30, 1996, has officially renounced United States citizenship and who has been determined by the Secretary of Homeland Security to have renounced citizenship to avoid United States taxation, is ineligible for a visa under INA 212(a) (10) (E).” 22 CFR 40.105. But the statute has been criticized both for the ambiguity of its language and as a possible violation of international law.

Role of U.S. consulate

The role of the State Department and the consular officer is very limited in implementing this ground of inadmissibility. The extent of coordination between the Internal Revenue Service and the immigration agencies is unclear. But unless the applicant appears as a hit in the consular lookout system revealing a finding of inadmissibility under INA 212(a) (10) (E), a consular officer is required to assume that the visa applicant is eligible. So persons who renounce to avoid U.S. taxes may slip under the radar.

Conclusion

Renouncing U.S. citizenship is a very serious decision and is not just a matter for high net worth individuals. Choosing to live abroad as over 6 million Americans do, is not the same as renunciation.As with many areas of immigration law the general rules seem simple but the details and exceptions to the rules are complex and confusing. So look before you walk on thin ice. Before renouncing citizenship consult with both an immigration attorney and a tax attorney to evaluate the specific circumstances of your case as each case is unique. Under current immigration law even if you are found inadmissible a discretionary waiver may be available for non-immigrant admission into the United States.

If you have any questions please speak to a qualified immigration attorney. Feel free to email me at info@immigrationnavigator.com. I also urge you to subscribe to this blog or the RSS feed so you can see when new articles are posted.

*CIRCULAR 230 NOTICE: IRS Regulations require us to inform you that any tax advice contained in this communication (including any attachments) was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transactions or matter addressed herein.

Resources for additional information

1. Laura Saunders, Should you renounce Your U.S. citizenship W.S.J. , May 18, 2012

2. 77 Fed. Reg. 25538 – 25545 (April 30, 2012)

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Immigration fraud by changed activities on a B-2 visa – the 30/60-day rule

When the stated purpose for which a person applies for a non-immigrant US visa or seeks admission at a port of entry is different from his activities within a given time an immigration officer may infer that the person committed fraud or misrepresentation at the time of the visa application or upon seeking entry.

“Say one thing and shortly after do another”

The 30/60-day rule

Misrepresentation by changed activities

When the stated purpose for which a person applies for a non-immigrant US visa or seeks admission at a port of entry is different from his activities within a given time an immigration officer may infer that the person committed fraud or misrepresentation at the time of the visa application or upon seeking entry.

The violation of status within certain periods of time after issuance of the nonimmigrant visa or admission to the US may indicate fraud or misrepresentation.

The special rule under which an immigration officer may infer misrepresentation or fraud in such a case is known as the 30/60 day rule. It is important to note that even though an officer may infer misrepresentation, legal proof of misrepresentation needs more than just a mere inference. It requires that the misrepresentation is proved by both direct and circumstantial evidence.

A person who commits a misrepresentation is inadmissible and may be denied admission (including adjustment of status) under INA 212 (a)(6)(C)(i).

What changed activities?

An immigration officer applies the 30/60 day rule and invoke inadmissibility under INA 212 (a)(6)(C)(i) when for example a B2 non-immigrant states on a visa application/interview or upon entry that his purpose is tourism or to visit relatives and violate his status by:

(1) Actively seeking unauthorized employment and, after, becomes engaged in such employment;

(2) Enrolling in a program of academic study without the benefit of the proper change of status;

(3) Marrying and taking up permanent residence; or

(4) Undertaking any other activity for which a change of status or an adjustment of status would be required, without the benefit of such a change or adjustment.

The 30/60-day rule

0-30 days – Presumption of misrepresentation – if the foreign national violate his Non-Immigrant Visa status within 30 days, the offer may presume a misrepresentation in seeking a visa or entry.

30-60 days – No presumption but the officer must look at the facts for reasonable believe of a misrepresentation. The foreign nation may present evidence to refute misrepresentation.

More than 60 days – If the violation occurs after 60 days the conduct is not a basis to invoke INA 212 (a)(6)(C)(i).

Conclusion

The 30/60- day rule is just one more reason to seek legal advice from an immigration law attorney before taking any action that could have immigration consequences.

If you have any questions please speak to a qualified immigration attorney. Feel free to email me at info@goodinlaw.net. I also urge you to subscribe to this blog or the RSS feed so you can see when new articles are posted.

 

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Can you afford not to hire an immigration attorney for your case?

Some persons dealing with an immigration matter such as applying for a spouse to come to the United States, may ask, ‘Do I really need a lawyer?’, or ‘Can’t I just handle the paperwork myself?’ Unfortunately, the denial rate for applications or petitions filed without an attorney is higher than many realize. The cost in time and money to fix immigration problems that could be avoided is astronomical.

Do I need an immigration lawyer?

Some persons dealing with an immigration matter such as applying for a spouse to come to the United States, may ask, ‘Do I really need a lawyer?’, or ‘Can’t I just handle the paperwork myself?’ Unfortunately, the denial rate for applications or petitions filed without an attorney is higher than many realize. The cost in time and money to fix immigration problems that could be avoided is astronomical.

Let me give you an example. Paul is a US citizen from the Philippines. On a trip to the Philippines he met a beautiful woman and they got married. Paul consults a lawyer who offers free consultations only to find out that the lawyer charged $2500 for the case. After recovering from the shock Paul goes to an immigration consultant to fill out papers for only $500. Paul expected to see his wife in less than a year. But unknown to him the divorce from his former wife was not final. His I-130 petition was rejected. Paul  spent thousands of dollars to return to the Philippines to complete his divorce. He also has to spend some more money to remarry the woman he thought was his wife. If Paul had consulted an immigration attorney from the beginning he would be thousands of dollars richer and reunited with his wife a lot sooner. He would have avoided strain on his relationship from a very long separation. The time they could have spent together is gone forever and money cannot bring it back.

The odds are not in favor of a person filing on his own or using a notario because immigration laws are complex and constantly changing and there are many factors that are not widely known that can affect eligibility and lead to a denial. Minor errors that seem trivial to most people can cause the denial of a visa. Other denial factors include a case without legally sufficient evidence, misrepresentations, a failure to register a change of address, in absentia orders of removal which the applicant does not know about and security grounds. And that is just the start!

Immigration laws are nearly as complex as the tax code

Immigration laws are so complex that one United States District Judge in describing the complexity of immigration laws said, “The statutory scheme defining and delimiting the rights of aliens is exceedingly complex. Courts and commentators have stated that the Immigration and Nationality Act (the “INA”) resembles “King Mino’s labyrinth in ancient Crete,” [and] and is “second only to the Internal Revenue Code in complexity.” Chan v. Reno, 1997 U.S. Dist. LEXIS 3016 *[5] (S.D.N.Y. Mar. 14, 1997).

How an immigration attorney can make your life easier?

For you to get your immigration case approved a thorough understanding of the immigration laws behind the forms is critical. Your case must also be supported by legally required and persuasive evidence to prove eligibility to adjudicators. Additionally it must address any grounds for removal. In fact some foreign national who make applications  (e.g. for asylum, deferred action or adjustment of status) without competent legal advice may be at risk of deportation without knowing it.

A competent immigration lawyer understands that getting your application approved requires an in-depth understanding of your specific facts to find the right legal course of action for you under the immigration rules. The immigration attorney will help you determining the potential risks, and legal issues that arise from your actions. The best ones will also help you prepare for critical immigration interviews at US consulates, ports of entry and at the USCIS.

Though no ethical immigration attorney can guarantee results, a licensed immigration attorney who is a member of the American Immigration Lawyer’s Association will use his or her best efforts to help you avoid denial and delays and get your US visa, green card or US citizenship case approved.

If you run into problems with an immigration or visa application, a form filling service cannot represent you before the USCIS, the National Visa Center or the US consulate. In short, a form-filler cannot contact any government agency on your behalf; only a licensed attorney can do this.

Conclusion

When your future and your family’s future in the United States is on the line, this is not a time for pinching pennies. A cheap attorney may not spend much time on your case because attorneys bill based upon an estimate of the time it will take to complete the case. An adjustment of status case for $750.00, may mean that the attorney will spend only three hours on your case and will not  give it the attention it deserves.

If you have any questions please speak to a qualified immigration attorney. Feel free to email me at info@visalawdc.com. I also urge you to subscribe to this blog or the RSS feed so you can see when new articles are posted.

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The unlawful presence bar to re-admission into the US

Unlawful presence is often a problem for certain persons (e.g. those who entered without inspection or entered on a C1, C1/D or D visa) who are prevented by law from adjusting or changing status in the US but who the law requires to leave the US to apply for a visa at a US consulate.

Unlawful presence is a bar to re-admission after the person leaves the United States and seeks a visa or permission to renter the United States. It is especially a problem to the immediate relatives of US citizens who cannot adjust status but must leave the United States and seek an unlawful presence waiver abroad before they can be issued an immigrant visa. The wait times to get an unlawful presence waiver approved can take many months or more than 1 year during which time the foreign nationals must stay outside the United States and be separated from their immediate US family. Unlawful presence is not a problem for a B visa holder who marries a US citizen, does not leave the United States and seeks adjustment.

Unlawful presence

Unlawful presence is often a problem for certain persons (e.g. those who entered without inspection or entered on a C1, C1/D or D visa) who are prevented by law from adjusting or changing status in the US and who the law requires to leave the US to apply for a visa at a US consulate. It is also a problem for some persons who overstayed in the United States and later seek a visa to return to the United States.

Unlawful presence is a bar to re-admission after the person leaves the United States and seeks a visa or permission to renter the United States. It is especially a problem to the immediate relatives of US citizens who cannot adjust status but must leave the United States and seek an unlawful presence waiver abroad before they can be issued an immigrant visa. The wait times to get an unlawful presence waiver approved can take many months or more than 1 year during which time the foreign nationals must stay outside the United States and be separated from their immediate family in the United States. Unlawful presence is not a problem for a B visa holder who marries a US citizen, does not leave the United States and seeks adjustment.

What is unlawful presence?

Under the law a foreign national is unlawfully present if the person over-stays an authorized period of stay, or is present without being admitted or paroled. INA 212 (a) (9) (B) (ii).  Basically the person has no permission from the immigration authorities to be in the US or stay in the US whether it is that the end date on an I-94 has passed or the person has violated the terms of a visa such as a F-1 student who is no longer enrolled in school or a J-1 who is no longer taking part in an exchange program. In the case of a person in F-1 or J-1 status however he or she does not begin to accumulate unlawful presence until an immigration judge or immigration officer finds lawful presence.

The time for which a person is unlawfully present is legally important.

3-year and 10-year bars to readmission

Aliens who accumulate unlawful presence may be subject to a 3-year or 10 –year bar depending on the period of their unlawful presence.

180 days but less than 1 year

If an alien is unlawfully present for more than 180 days but less than one year and voluntarily departs before the start of removal proceedings such a person is barred from readmission into the United States for 3 years. Note that the bar is triggered after a voluntary departure even if the alien is granted advance parole.

More than 1 year

If the alien is unlawfully present for a year or more, then departs or is removed (deported), he or she is barred from re-admission for 10 years.

For the purpose of the 3-year or 10 year bar unlawful presence is not counted in total meaning, a person who over-stays for 3 months, leaves, re-enter and over-stays again for 4 months for a total time of more than 180 days is not subject to the 3-year bar. But if the same person over-stayed by 7 months on the second occasion, he or she would be subject to the 3-year bar.

Statutory exemptions

The law exempts certain period from counting towards unlawful presence.  The time during which a person is a child under the age of 18, or a bona fide application asylum is pending (unless the applicant works without authorization), under INA Section 301 family unity protection or a battered spouse or child who can prove a real connection between unlawful presence and abuse is exempt and no unlawful presence accumulates while these conditions apply.

Tolling (or suspension of) unlawful presence for good cause

The law tolls or suspends unlawful presence for no more than 120 days under certain conditions. Unlawful presence is tolled or suspended for a person who is lawfully admitted or parole into the United States, and who files a proper application for an extension of stay or change of status, and who was not employed before the application or while the application is pending.

Persons who file a proper application for adjustment of status are not subject to the 120 limitation on tolling but have the unlawful presence suspended while their application is pending.

Conclusion

The unlawful presence bar is just one more reason why foreign nationals should periodically consult an immigration attorney for advice. The cost of not knowing is very expensive. A person who is subject to the unlawful presence bar may seek a discretionary waiver. Waivers and the notice of intent to change the waiver regulations for aliens with qualifying United States citizen relatives will be the subject of another post.

If you have any questions please speak to a qualified immigration attorney. Feel free to email me at info@goodinlaw.net. I also urge you to subscribe to this blog or the RSS feed so you can see when new articles are posted.

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The big mistake of lying to immigration to get a visa or green card

A finding of either fraud or misrepresentation makes an alien inadmissible under INA 212 (a)(6)(C) (i). Most cases involving inadmissibility under this ground involve misrepresentation and not fraud because fraud is often more difficult to prove. The penalty for fraud or material misrepresentation is lifetime ban from the United States unless the foreign national can get a hardship waiver. Additionally a foreign national who makes fraudulent statements or use fraudulent documents (e.g. using a passport and visa issued to a family member) to get admission into the United States may be subject to criminal prosecution and imprisonment. The foreign national may also be subject to a civil document fraud order by an administrative law judge for making or using false documents, or using documents issued to other persons.

Lying to Immigration

Under Section 212 (a)(6)(C)(i) of the Immigration and Nationality Act , a foreign national is inadmissible to the United States if he or she willfully or fraudulently misrepresents a material fact to a consular officer or DHS official (e.g. in answer to an immigration interview question) in attempting to, or in obtaining a visa, or documentation, admission into the United States or other benefit under the Immigration and Nationality Act.

Visa or Immigration Fraud

A foreign national makes a fraudulent statement when he makes a false representation of a material fact with knowledge that the statement is false and with the “intent to deceive” a consular or immigration officer. Fraud also requires that the immigration or consular officer believed the misrepresentation and acted upon it. See Matter of G, 7 I & N 161, 1956.

Material Misrepresentation

Material misrepresentation on the other hand merely requires a willful misrepresentation. A statement is material if the U.S. official might have found the foreign national inadmissible if the official knew the truth. Unlike fraud, misrepresentation does not need a finding of “intent to deceive” the U.S. official or that the official believed or acted upon the misrepresentation. See Matter of S and B-C, 9 I & N 436, 448-449 (A.G. 1961) and Matter of Kai Hing Hui, 15 I & N 288 (1975).  Therefore a person may be found to be inadmissible under INA 212 (a)(6)(C) (i) even though his conduct does not rise to a finding of fraud.

Penalty

A finding of either fraud or misrepresentation makes an alien inadmissible under INA 212 (a)(6)(C) (i). Most cases involving inadmissibility under this ground involve misrepresentation and not fraud because fraud is often more difficult to prove. The penalty for fraud or material misrepresentation is lifetime ban from the United States unless the foreign national can get a hardship waiver. Additionally a foreign national who makes fraudulent statements or use fraudulent documents (e.g. using a passport and visa issued to a family member) to get admission into the United States may be subject to criminal prosecution and imprisonment. The foreign national may also be subject to a civil document fraud order by an administrative law judge for making or using false documents, or using documents issued to other persons. A foreign national using fraud or misrepresentation to enter or seek unlawful entry into the United States may be fined or imprisoned or fined and imprisoned under 8 U.S.C. 1325(a).

Immigration Fraud and Misrepresentation

Misrepresentation defined

A misrepresentation is a statement or assertion which does not match the facts. A misrepresentation can be oral, in written application or in submitting evidence which has false information (e.g. presenting false immigration documents to border patrol to gain admission into the United States). Misrepresentation requires some affirmative action on the part of the foreign national. Silence or a failure to volunteer information does not necessarily constitute a misrepresentation.

A misrepresentation may also be found where a foreign national conduct is inconsistent with representation made at the time of a visa application or admission (e.g. a person admitted in B2 status who applies for adjustment of status within 3 weeks of admission as a tourist)

For an alien to be inadmissible under the Immigration and Nationality Act on the grounds of misrepresentation he must have

  1. Made a misrepresentation
  2. The misrepresentation must have been willful
  3. The fact misrepresented must have been material – the foreign national might have been found inadmissible if the truth facts were known to the U.S. official, and
  4. The alien used fraud or misrepresentation  in attempting to, or in obtaining a visa, or documentation, admission into the United States or other benefit under the Immigration and Nationality Act.

Misrepresentation by an attorney or other agent – The “It was not me” defense

If foreign national can be charged with a misrepresentation even if an attorney or (e.g. a notario) made the misrepresentation in a visa or immigration application., provided that the foreign national was aware of the action. Oral statements made on behalf of the applicant similarly do not shield him or her from misrepresentation, if he or she was aware of the misrepresentation.

Timely retraction and hardship waivers

A timely retraction of a fraudulent or willful misrepresentation is a defense to this ground of inadmissibility if the retraction is voluntary and without delay.

A narrow waiver may also be available from the Attorney General under INA 212 (i) to an immigrant who is the spouse, son or daughter of United States Citizens or a lawful permanent resident, if the applicant can prove that the refusal of admission to the United States would result in extreme hardship to the spouse or parent.

In the case of a VAWA self-petitioner charged with inadmissibility under INA 212 (a)(6)(C),  the waiver provision has broader. The self-petitioner must present evidence to prove that refusal of admission to the United States would cause extreme hardship to him or her personally, or the his or her United States citizen or lawful permanent resident parent or child. One of the most important thing to know about hardship waivers is that they are discretionary and are not obtainable as a matter of right.

If you have any questions please speak to a qualified immigration attorney. Feel free to email me at info@goodinlaw.net. I also urge you to subscribe to this blog or the RSS feed so you can see when new articles are posted.

 

 

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