Renouncing US citizenship? How the S. 877A “Exit Tax” may apply to your Canadian assets – 15 Parts



There is much discussion of the U.S. rules which operate to impose taxation on the residents of other countries and income earned in those other countries. You will hear references to “citizenship taxation”, “FATCA Canada“, PFIC, etc. It is becoming more common for people to wish to relinquish their U.S. citizenship. The most common form of “relinquishment is renunciation”. The U.S. tax rules, found in the Internal Revenue Code, impose taxes on everything. There is even a tax on “renouncing U.S. citizenship”. I don’t mean the $2350 USD administrative fee which everybody has to pay. (Isn’t that really a tax?). I mean a tax on your assets. To be clear:

You must pay a price to NOT be a U.S. citizen.

This tax is found in S. 877A of the U.S. Internal Revenue Code.

It’s defined as the:

“Tax responsibilities of expatriation”

Few people are aware of this tax. Fewer still understand how it works. As FATCA operates to enforce U.S. taxation on many Canadian citizens, and increasing numbers wish to NOT be U.S. citizens, the importance of understanding the U.S. “Exit Tax” increases.

It is particularly important to understand what triggers the “Exit Tax”. You will be subject to the “Exit Tax” if you are a “covered expatriate”. You must know what that means and why, sooner or later, everybody will become a “covered expatriate”.

The “Exit Tax” is not a simple “token tax”. For Canadians, the tax can be a significant percentage of their net worth. Furthermore, the tax is payable NOT on actual gains, but on “pretend gains”. (Where would the money come from to pay the tax?)

Hang on to your seats. You will shocked, amazed and horrified by this.

Since the advent of FATCA in Canada, this issue is increasingly important.*

To be forewarned is to be forearmed!

This is a 15-part series which is designed to provide you with some basic education on:

How the U.S. S. 877A Exit Tax rules work; and

How they particularly affect Canadians with a U.S. birthplace, who lived most of their lives in Canada.

This will be covered over a 15 day period in a “15-part” series.

Although this series began on “April Fools Day”, I assure that this is NOT a joke.

Continue reading Renouncing US citizenship? How the S. 877A “Exit Tax” may apply to your Canadian assets – 15 Parts

It’s Time to Consider Litigation Against U.S. Citizenship-based Taxation

As interest in a possible CBT suit grows, we would like to discuss CBT as an issue in and of itself, as raised in this series of posts “Cook v Tait 1-23.”

These will be available online at:

Over the last few years, some of these have been posted at Brock, some at while others have appeared elsewhere.

We are close to announcing that a lawsuit will be filed (not necessarily by Brock or not necessarily the Alliance for the Defence of Canadian Sovereignty) but by a small group of individuals who feel this is absolutely necessary in order to cut at the heart of/the source of, how the US abuses the lives of expats and their families. We really want to know your thoughts, opinions, suggestions and ideas on exactly how this affects your life.

Please send your submissions to


We see this as an extension of what we fondly call “The Book.”

CBT in and of itself, may not be unconstitutional. What what we believe IS unconstitutional are aspects of CBT that are in violation of the 14th amendment and Afroyim v Rusk (1967) and other specific sections of the U.S. constitution.

The Supreme Court of the United States has made it clear that:

1)U.S. citizenship belongs to the person; and

2)The U.S. Government may not directly “strip” people of their U.S. citizenship without their consent; and

3)The U.S. Government cannot make laws or engage in conduct which results in the “forcible destruction” of citizenship.

i.e., the U.S. government cannot take actions that are cause for the loss of citizenship. We have more than aptly demonstrated that the US is indeed, doing exactly that (via our Senate Finance Committee submission).

It is perfectly clear that the U.S. Government is forcing people to renounce their U.S. citizenship. This is the result of: unjust taxation policies, unreasonable, unfair and unjustifiable reporting requirements (not to mention the cost) and FATCA induced bank account closures. To be clear: it’s becoming almost impossible to live as a U.S. citizen (tax compliant or not) outside the United States.

We are not going to wait and decide based upon any recommendations that the Senate Finance Committee may advise (due by the end of May). Even if they do decide to recommend a move to RBT for individuals, it is not at all a certainty that it will result in the appropriate legislation. We know some Republicans feel they cannot work toward legislation until there is a sitting Republican president. That is not assured and again, if it does happen, will not take place until after Jan 2017. That adds nearly two more years to the 5 expats have been fighting this situation. We see no particular advantage in waiting to launch this suit.

Please pass this information on by sharing in Facebook, tweeting in order to continue reaching out to the many who still are unaware of what is happening.

We also will be available at:

Twitter: @citizenshiptax (page)