The Paris-based Association des Américains Accidentels (Accidental Americans Association, or AAA) has launched a crowd-funded campaign to finance a legal challenge to what it says is the "exorbitant" US$2,350 fee that the U.S. charges those wishing to renounce their U.S. citizenship.
The organization has been highly critical of the fee in the past, as it says that many of its members struggle to afford such a sum, which is equal to around €1,965 or £1,768. Until 2015 it was just US$450, and until 2010, free, as it still is for nationals of some other countries.
In addition to seeking money for its challenge, which it plans to file against the U.S. State Department, the AAA is also calling for accidental Americans of "as many nationalities as possible", meaning not just those who live in France or have French citizenship, to join its legal challenge, via its Facebook account.
The sign-up page for donations is on the AAA's website, where the fund-raising goal is €$20,000 (roughly US$24,000). As of yesterday, according to the group's Twitter feed, donations stood at around €8,070.
Such "accidentals" don't regard themselves as Americans and, since the U.S. has begun coming after expats in recent years for tax returns it says they have always been obliged to file but until recently, few did, increasingly have been seeking to lose their U.S. citizenship status.
It has become more difficult and expensive in recent years to renounce, however, even as the IRS has ramped up its targeting of Americans with overseas bank accounts – including accidentals and other expatriates – with the help of the 2010 U.S. anti-tax-evasion law known as FATCA.
Earlier this year, the AAA's U.S. born and France-resident president and founder, Fabien Lehagre, called on U.S. Secretary of State Mike Pompeo in a letter to "drastically...reduce the costs associated with the renunciation procedure", in order that so-called accidental Americans could give up their U.S. citizenship if they wished to.
At the same time, as Lehagre noted in a recent statement announcing the AAA's legal challenge, because of their U.S. citizenship status, "accidental Americans around the world are being denied access to financial services in their country of residence, such as opening bank accounts, taking out a mortgage and contributing to pension schemes" as a result of FATCA, which obliges non-U.S. banks and financial institutions to provide information to the U.S. tax authorities on their U.S. information about their American customers’ bank accounts.
In order to do this, such institutions since the beginning of 2020 have needed to provide the U.S. authorities with the Social Security or "Tax Information" numbers of the individuals in question, which accidentals often don't have.
In his statement, Lehagre said the plan was to launch the legal challenge, against the U.S. State Department, in the U.S. sometime after this November's U.S. presidential election, and that it would be based on the argument that "the right to renounce one's citizenship, [or] to 'expatriate', is a fundamental right protected by the U.S. constitution."
"By imposing a disproportionately-high fee upon accidental Americans [as well as] to American expatriates to exercise that right, the U.S. government, and in particular the Department of State, is unlawfully infringing upon and abridging [this] fundamental right," he added.
The crowd-funded legal campaign, which is being orchestrated on Facebook, represents the AAA's first legal challenge to focus on the U.S. courts. However, it has filed numerous legal challenges and complaints at the French and European levels over the years – thus far, without success, apart from receiving considerable publicity and media coverage.
Last July, for example, France's top administrative court, the Conseil d'Etat, ruled that the way France allowed the information of French citizens who were also American citizens to be provided to the U.S. authorities under FATCA could stand, and didn't need changing or to be scrapped; the AAA promptly followed this up a few months later with a similar complaint filed with the European Commission, arguing that France was breaching EU law in the way that it was using an inter-governmental agreement with the U.S. to enable FATCA to be enforced.
This past July, the AAA filed its second complaint in two years in a Paris court in which it alleged that the way France's banks go about complying with FATCA – particularly those that offer online banking services – was making it difficult if not impossible for French accidental Americans to maintain a bank account in their own country. It said it was obliged to file a second complaint because the courts had failed to investigate its previous complaint. A legal challenge in Luxembourg against FATCA is also being considered.
In January, accidental Americans in the Netherlands called for "urgent action" over the freezing of their bank accounts due to FATCA, during a hearing with Dutch lawmakers.
Today, according to reports, the situation remains unresolved there as well as elsewhere across Europe, and those accidental Americans affected by the reluctance of European banks to have them as clients are continuing to struggle, resulting in what appears to be considerable and growing support for the AAA and its crowd-funding efforts. Across Europe there are estimated to be between 300,000 and 500,000 so-called "accidentals".
Lehagre, pictured above at an EU hearing on FATCA last year, founded the AAA in 2017. He had been born near San Francisco, but came to France at the age of 18 months with his (French) father, and founded the organization after becoming increasingly frustrated by the growing demands of the IRS as the effects of FATCA began to make life difficult for him and others like him.
The financial challenge many accidental Americans are forced to confront when they feel they need to renounce their citizenship was illustrated earlier this year when a 34-year-old, U.S.-born Dutchman announced he was looking to finance his renunciation through crowd-funding, and posted a GoFundMe.com petition in an effort to raise the €4,269 he calculated that he'd need to do it.
As reported, Sean Vink explained that he was being forced to renounce because his Dutch bank account – "the only one I've ever had" – "is considered a Foreign Account by the United States IRS", and, under new regulations that took effect earlier this year, he was in danger of having his bank account frozen or potentially even closed as a result.
His GoFundMe pitch was, and still is, headlined "Save me from the USA IRS". As of today, he is still €2,995 short of his target.
- The Schroders podcast, featuring Heale and Saxer: 2010's 'Fear and Total Confusion Act,' and other U.S. expat challenges
- BBC World Service takes a 4th of July look at U.S. 'taxation' and 'representation' of its expats
- Switzerland's tax authority again issues reminder on disclosure of U.S.-client account details
- Assn' of Accident'l Americans responds to State Dept in renunciation fee legal challenge
- Setback for FATCA reciprocity advocates in France, as Assembly fails to approve amendment