The Paris-based Association of Accidental Americans (AAA) – along with the 20 "accidental Americans" of 13 different nationalities with which it is jointly challenging the U.S. government in court over the "astronomical" US$2,350 fee that the U.S. currently charges those wishing to renounce their American citizenship – today filed a "reply memorandum" in connection with the case, in support of their motion for partial summary judgment.
In their motion, the AAA and its fellow plaintiffs formally ask the court to rule that the right to voluntarily renounce U.S. citizenship is a "fundamental right," the AAA said, in a statement.
The filing is the latest development in a case that dates back to December, 2020, when the AAA and its fellow plaintiffs filed their complaint in U.S. District Court in Washington against the U.S. State Department, alleging that the US$2,350 fee the U.S. currently charges those wishing to renounce their American citizenship violates the U.S. Constitution and international law.
In their complaint, as reported, the "accidentals" argued that the right of an individual to renounce their U.S. citizenship was a "fundamental, constitutional, natural and inherent right under the U.S. Constitution."
In their latest filing, the AAA and its fellow plaintiffs also detail why the U.S. State Department's arguments in the matter thus far are flawed, and note that the current renunciation fee structure is "exorbitant and far exceeds the real costs of processing a citizen's renunciation, and losing what, if any, tax revenues they contribute from overseas.
Summarizing their position, the AAA and its fellow plaintiffs said they had "requested that court deny the government’s motion to dismiss" their complaint, and asked as well for the court to "grant their own motion for partial summary judgment on their constitutional and international law claims."
Fabien Lehagre, founder and president of the Association of Accidental Americans, said: "We remain optimistic about the ultimate disposition of this landmark case, concerning the rights of accidental Americans abroad.
"All the issues have been thoroughly briefed by our attorneys, and the government, and all that remains is a fair judgment by the court."
The AAA and its fellow plaintiffs are being represented by L. Marc Zell and Noam Schreiber of Zell & Associates International Advocates, LLC.
It wasn't immediately known where a copy of the "reply memorandum" filed today might be read and downloaded. However, other documents in the case are available on the AAA's website, and may be viewed by clicking here.
More than 300,000 European 'accidentals'
Although many U.S. expatriates struggle with the costs of renouncing their U.S. citizenships – which can include an "exit tax" on their assets if their wealth is above US$2 million, in addition to fees for help in renouncing typically paid to U.S. tax specialists and renunciation assistance experts – accidental Americans are particularly unwilling to pay it, as they normally have lived their entire lives outside of the U.S., with some never having even set foot there, and thus have never received any financial benefits as a result of their American status.
There are estimated to be more than 300,000 such accidentals in Europe, of which more than 40,000 are believed to live in France, where Lehagre, pictured left, a California-born accidental whose French father brought him back to France at the age of 18 months, founded the AAA in 2017. The organization currently has around 1,180 members.
One of the most famous "accidental Americans" is UK Prime Minister Boris Johnson. He became the unwilling poster boy for the category some years ago, when his fury at discovering that he owed tax to the U.S. government after selling his London home made headlines, as reported. He subsequently renounced his U.S. citizenship, in 2016.
History of the fee
As Lehagre and his fellow plaintiffs point out in a summary of their complaint, for some 200 years prior to 2010, U.S. nationals were able to renounce their citizenships free of charge, as is still the case in many countries.
The U.S. only introduced a fee, of US$450, in 2010. This was increased fivefold in 2014, however, to the current US$2,350 (€1,945, £1,765), which was explained at the time as being necessary to cover the increased costs of handling such renunciations.
Because this increase coincided with a significant increase in the numbers of those giving up their citizenships – as Americans permanently resident overseas began to react to increased tax filing and tax paying demands being made on them in the wake of President Obama's 2010 tax-evasion prevention law known as FATCA – the hike in the renunciation fee was viewed by some as a U.S. government strategy to extract as much as possible from those heading for the citizenship exit door.
- France's tweaks to its 'droit au compte bancaire' seen to make opening French bank accounts (slightly) easier for Americans
- Questions being asked of EU officials about continued silence over FATCA's GDPR compatibility concerns
- IRS Commissioner Rettig says he supports 'reciprocal FATCA'
- State Dept seeks dismissal of 'accidentals' legal case relating to suspension of voluntary expatriation services
- French finance minister Le Maire insists FATCA is very much on EU's 2022 agenda...