Guest Post from Immigration Lawyer – Mr. Jan Bejar –
It seems that many individuals think there is an important distinction, legally speaking for U.S. federal tax purposes.
In sum, I am of the view that both terms are in effect interchangeable for federal tax purposes.
The important time reference under the law of IRC Sections 877 and 877A is the “expatriation date” as defined in Section 877A(g)(3) – which focuses on specific dates tied to meetings or events with the U.S. Department of State.
Indeed the tax statute uses the terms “renounce” and “relinquish” in the same breath.
The key terms of the statute are set out below:
(3) Expatriation date
The term “expatriation date” means—
(A)the date an individual relinquishes United States citizenship, or
(B)in the case of a long-term resident of the United States, the date on which the individual ceases to be a lawful permanent resident of the United States (within the meaning of section 7701(b)(6)).
(4) Relinquishment of citizenship
A citizen shall be treated as relinquishing his United States citizenship on the earliest of—
(A)the date the individual renounces his United States nationality before a diplomatic or consular officer of the United States pursuant to paragraph (5) of section 349(a) of the Immigration and Nationality Act (8 U.S.C. 1481(a)(5)),
(B)the date the individual furnishes to the United States Department of State a signed statement of voluntary relinquishment of United States nationality confirming the performance of an act of expatriation specified in paragraph (1), (2), (3), or (4) of section 349(a) of the Immigration and Nationality Act (8 U.S.C. 1481(a)(1)–(4)) . . .
As Mr. Jan Bejar said in his guest blog, renouncing citizenship is a way to relinquish it, so when discussing this form of relinquishment, the two words can be used interchangeably.