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‘Accidental Americans’ Sue Over Fee to Renounce U.S. Citizenship

Dec. 9, 2020, 3:13 PM

An advocacy group representing overseas U.S. citizens sued the State Department over what it argues is an unconstitutional fee Americans must pay to renounce their citizenship.

State established a $450 fee for processing renunciation requests in 2010, which the complaint cites as the first time in U.S. history the government imposed a fee as a precondition to expatriate. That fee was later increased to $2,350, a move State said was necessary to cover what amounts to a “close and detailed case-by-case review.”

The Paris-based Association of Accidental Americans, in a lawsuit filed Tuesday with the U.S. District Court for the District of Columbia, argued that the fee is “essentially forcing” people to remain U.S. citizens against their will.

“As such, Defendants’ actions are reminiscent of the feudal system in which perpetual allegiance was born out of and for which this Country fought to change and revolutionize,” the group said in its complaint.

The lawsuit alleges that establishing, then raising the fee violated the first, fifth, and eighth amendments, as well as the Administrative Procedure Act—the law that establishes rulemaking procedures for federal agencies.

The association noted in a Wednesday statement that the timing of the fee increase coincided with the enactment of the Foreign Account Tax Compliance Act, which imposed stringent new reporting requirements on Americans residing overseas.

Many of the people affected by FATCA and U.S. income tax reporting rules received their U.S. citizenship by having been born in the U.S. to foreign parents, even though they have never worked or lived in the country and don’t think of themselves as American.

The State Department didn’t immediately respond to a request for comment on the lawsuit. The Association of Accidental Americans is represented by Zell & Associates International Advocates LLC.

The case is L’Association des Américains Accidentels v. U.S. Dep’t of State, D.D.C., No. 1:20-cv-03573, filed 12/8/20.

—With assistance from Jeffery Leon.

To contact the reporter on this story: Hamza Ali in London at hali@bloombergtax.com

To contact the editors responsible for this story: Meg Shreve at mshreve@bloombergtax.com; David Jolly at djolly@bloombergindustry.com

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