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Accidental Americans take the U.S. State Department to Court

 

1/ To contest the exorbitant fees claimed by the State Department as part of the waiver procedure :


PARIS – The « Association of Accidental Americans (AAA) » and 20 accidental Americans of 10 different nationalities* have filed a complaint against the United States Department of State (DOS), alleging that it has violated the U.S. Constitution and international law by charging a fee for individuals to renounce their American citizenship. The complaint has been filed with the District Court of Columbia in Washington D.C.

According to the plaintiffs**, the right to renounce U.S. nationality is a fundamental, constitutional, natural and inherent right under the U.S. Constitution. The State Department’s fee is “essentially forcing U.S. citizens to remain U.S. citizens against their will.”

The fee was introduced at $450 in 2010 and was increased fivefold to $2,350 in 2014. This was ostensibly to cover service costs, according to the DOS. But the timing coincided with the passage of FATCA, which was clearly expected to incite Americans to give up their U.S. nationality.

The fee violates not only the Due Process Clause of the Fifth Amendment of the U.S. Constitution, but also the First Amendment guaranteeing freedom of expression, and the Eighth Amendment precluding excessive fines to punish individuals wishing to sever all connection with the U.S., the complaint states. For 200 years prior to 2010, U.S. nationals could renounce their citizenship free of charge. The complaint also alleges violation of the U.S. Administrative Procedure Act, as well as international law.

« As Thomas Jefferson stated in the Bill Declaring Who Shall be Deemed Citizens of This Commonwealth of June 18, 1779, giving up nationality, or voluntary expatriation, is a natural right which all men have. » said Fabien Lehagre « The U.S. administration is not above the laws and Constitution of the United States. It cannot deprive us of the fundamental right of renunciation. »

The plaintiffs in the case are led by Fabien Lehagre, president of the Paris-based AAA. Lehagre created the association in 2017 to defend Accidentals from the damage they suffer as a result of the U.S. 2010 Foreign Account Tax Compliance Act (FATCA). Lehagre and the AAA also campaign actively against the fee for renunciation and on several other issues.

CONTEXT

The millions of Accidental Americans around the world are individuals who acquired U.S. citizenship by accident of birth, but maintain no or minimal ties with the U.S. Many have never lived there beyond childhood, have neither worked nor studied there, and often have no U.S. social security number. The majority of them do not speak English. Accidental Americans pay taxes in their country of residence under national laws. Only the United States and Eritrea base their tax system on citizenship instead of residency. Although Accidentals are also required to file income tax returns in the U.S., they have not done so because they did not know they were supposed to. Until FATCA came into force, many did not even
realize they were U.S. nationals.

Because they have no social security number, many Accidental Americans are being denied bank accounts, mortgages, life insurance and start-up loans in their home country. Even Americans who have a social security number have been victims of discrimination by foreign financial institutions. In 2014, a Democrats Abroad survey estimated that the bank accounts of 1 million Americans living abroad had been closed because of FATCA. Some Accidentals have been refused promotion to senior positions, and others have been hit with huge fines and back taxes for non-compliance with U.S. tax laws.

« Politicians only talk about FATCA in relation to bank accounts, » says Kevin P., an Accidental American who lives in Austria.
« But the problem is much wider. I am a freelancer, and my personal finances are in danger because I am refused investments of all kinds that would protect my future. Ihis is why I want to renounce U.S. citizenship.”

*The 10 nationalities are : Australian, Belgian, British, Costa Rican, Dutch, French, German, Irish, Italian, Tunisian,
**The Plaintiffs are being represented by L. Marc Zell and Noam Schreiber of the international law firm, Zell & Associates
International Advocates, LLC

Below are the several documents related to this first complaint against the State Department.

December 8, 2020

April 26, 2021

June 17, 2021

July 16, 2021

August 19, 2021

Rough timeline of our legal case : 

1. Before June 22, 2021: AAA files its opposition to the DOS's motion to dismiss 

2. August/September 2021: DOS files its reply to AAA's opposition.

3. November 2021-February 2022: Court issues judgment (the court may schedule an oral argument before rendering a decision).

---60 days to file an appeal-- 

4. January 2022-April 2022- Appeal must be filed. 

At this point the Appellate Court will fix a briefing schedule. It is hard to predict what the schedule would look like and when an oral argument would take place. For the sake of your meeting, assume that if the appeal is filed in April 2022, a judgment would be rendered between 6-12 months from that time. 

After that, we (or the gov't) would need to consider whether we would go to the Supreme Court. 


Miscellaneous documents

2/ To Contest the Constitutionality of the U.S. Government’s Suspension of Voluntary Expatriation Services

PARIS – The Association of Accidental Americans, a French non-profit society, together with nine individual plaintiffs, today have filed a complaint against the United States Department of State alleging that it has violated the U.S. Constitution by suspending voluntary expatriation services in U.S. embassies and consulates around the world.

Plaintiffs, U.S. citizens, some residing in Europe and Asia, wish to renounce their U.S. citizenship due to the U.S. government's discriminatory treatment of its citizens residing abroad.

According to the plaintiffs, the right to renounce U.S. nationality is a fundamental, natural and inherent right protected by the U.S. Constitution. The State Department’s suspension of renunciation-related services is forcing plaintiffs to remain U.S. citizens against their will.

Most U.S. citizens, especially those residing in the United States, cherish their citizenship.  However, for the nine million U.S. citizens living abroad, recent legislation and regulations have transformed U.S. citizenship into a financial nightmare.  Ever since the passage of the Foreign Account Tax Compliance Act (“FATCA”)  — a bulk data collection program requiring foreign financial institutions to report to the IRS detailed information about the accounts of U.S. citizens living abroad– U.S. citizens abroad have been treated as financial pariahs by foreign financial institutions. In many countries, banks have closed or frozen accounts maintained by U.S. persons.  Elsewhere, banks refuse to provide basic services to U.S. citizens, imposing unreasonable limitations on their ability to carry out their daily affairs.   Also, unlike their fellow citizens residing in the United States, thanks to FATCA, the privacy rights of overseas Americans are severely infringed.

Precisely when many overseas Americans are seeking freedom from the strictures of FATCA, the U.S. government, under the guise of the COVID-19 pandemic, has suspended all services required to effect formal expatriation under U.S. law.

According to the Complaint, COVID-19 cannot justify the blanket suspension of renunciation services.  In fact, many U.S. missions have recommenced providing non-immigrant visa services for foreign nationals, while at the same time continuing to suspend renunciation services for U.S. citizens. The Plaintiffs argue that in so doing, the U.S. government is discriminating against its own citizens in favor of non-resident aliens, making a mockery of American citizenship.

Moreover, according to the plaintiffs, even in the rare cases where a U.S. embassy or consulate has not formally suspended renunciation services, applicants are still forced to wait months just to schedule an appointment to take the renunciation oath. What is more, there is no assurance – even after the appointment is scheduled – that the appointment will be kept.  During all this time, Plaintiffs and others similarly situated are being forced against their will to remain U.S. citizens in violation of their Fifth Amendment Due Process rights.

The Plaintiffs also make claims under the Administrative Procedure Act.

Statement by Fabien Lehagre, founder and president of the Association of Accidental Americans:

"FATCA and other related laws targeting and placing heavy burdens on U.S. citizens abroad have left accidental Americans with little choice but to renounce U.S. citizenship. The government has already illegally burdened exercise of the right to renounce by imposing a record-high $2,350 fee as a precondition to exercise this right. My organization is currently challenging this fee in federal court. Now, the U.S. government is placing additional restrictions on renunciation by indefinitely suspending the services required to effect renunciation.'"

“Accidental Americans” are persons deemed to be U.S. citizens because they happened to have been born in the U.S. but who have lived all of their lives abroad as citizens of another country. The Association of Accidental Americans represents thousands of these “accidental Americans.” 

However, not all of the individual plaintiffs that are participating in this lawsuit are accidental Americans. Some have lived a significant amount of time in America but still wish to renounce their citizenship due to the hardships imposed by the U.S. government on U.S. citizens residing abroad.

The Plaintiffs are being represented by L. Marc Zell and Noam Schreiber of the international law firm, Zell & Associates International Advocates, LLC.

Below are the several documents related to this second complaint against the State Department.

December 8, 2021

Rough timeline of our legal case : 

More details to come soon.