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an ongoing series by Thomas E. Kennedy and Walter Cummins
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IT HURTS MY HEART:
On Renouncing American Citizenship
Essay by Christina Warren
with Photographs by Lars Deutschlaender
Kleine Schanze Park, Bundeshaus to the left
and through the Kleine Schanze, a park bordering the Bundeshaus and offering views of the Alps. I have taken this walk countless times, passing the embassy, sometimes stopping to light a candle at the Dreifaltigkeitskirche, a catholic church located just outside the Kleine Schanze.
On June 12th, 2014, on our third hot day of what had been so far a cool, rainy summer, I am taking this walk with my Swiss husband. He is dressed in a weather-appropriate ‘Move Ya Body’ t-shirt and floppy shorts. Heeding my mother’s advice to dress nicely, I have elected to wear a weather-defiant conservative suit and simple blouse. This time we will not pass the embassy, but instead, will stop to enter it for the very first time. I have a 2:30 p.m. appointment to renounce my citizenship.
U.S. Embassy in Bern
We had left early, expecting the normal long line of people waiting for visas. There is no one. My husband walks me to the labyrinth of barriers set up to keep the lines organized. For security reasons, he will not be allowed in and for security reasons I only have the appropriate documents with me: my American passport, my Swiss passport, a copy of the pre-appointment questionnaire, my renunciation fee of $450 (which would be raised to $2350 in September 2014), and just in case—the other information documents the embassy sent informing me that this step, when taken, is irrevocable. Unseen, but certainly there, is an enormous pressure in my chest. My breathing is shallow.
I check the door. It is locked. As I turn to my husband, a security guard opens it. I fumble with my passport, look back at my husband and go to him for one last kiss. He will meet me after 3:00 p.m. when this is over.
The guard speaks African-accented English. He walks me through the security process. “Put your documents in this box, please.” He seems friendly and kind. I put my things in a plastic box like those used at airport security.
“Do I need to put my jacket in it, too?” I am shaking. Not hearing what he says, I take it off and put it in. He asks me to take off my watch and put it in the box. I can keep my wedding ring and my shoes on.
Before I walk through a metal detector, he asks me to take off my belt. I fumble again.
“You can leave it on.” His voice is soft.
I swallow tears as I walk through the metal detector. He then scans me with a wand—front and back—with my arms open and out by my sides. Nothing beeps.
In Dutch-accented English, his colleague takes me through the inventory of things in my box. She asks me if I want to leave my sunglasses at this station. Confused, I look at the documents and sunglasses I am holding in my hand. “No, thank you. I can manage.”
The next step takes me through a door and back outside. I go down a small ramp and find a door. There is a lone security guard there.
“I have a two-thirty appointment.” My throat feels dry.
“Take a seat there,” he says, pointing to a row of chairs and then adds, “Don’t put your sunglasses on.” They are still in my hand.
I am surprised to see someone else sitting there. I take a seat next to a woman dressed more in keeping with the summer season, a thin folder of documents in her hand. She doesn’t look at me; her focus is straight ahead. I blink hard and swallow.
There is a man at the window talking to a white-haired official. He raises his hand, takes an oath, turns and leaves. He is smiling. I wonder if he is an “accidental American,” one of those citizens who are born in the USA to alien parents, but raised elsewhere. Their only tie to the US is their place of birth; but whether they know it or not, their obligations, for example, to file annual income tax forms, are the same as non-accidentals.
The white-haired embassy official calls a name. The woman stands and goes to the window. She is asked to sign documents, and raise her hand to “swear or affirm” that the information given is true to the best of her knowledge. From what I can hear of her accent, I can tell she is a native Swiss. In less than five minutes it is over. She isn’t smiling as she leaves. The white-haired man disappears. I realize I have just witnessed a renunciation. Two, in fact.
Except for the security guard, who discreetly looks up every now and then, I am alone in a sterile narrow room that looks much like a bank. In front of me are four “bank-teller” windows. On the wall to my right are two framed posters that I won’t remember when this is over. To the left of the windows are simple A-4 signs, one reminding citizens to “Remember the past, think of the future and vote.” I notice little brass plaques next to each of the “teller” windows. They seem to say, “Smile you are not a criminal.” Puzzled I get up to examine them more closely. They actually say, “Smile you are on camera.”
I check the time. My appointment won’t be for another 10 minutes. The pressure in my chest is uncomfortable. I breathe consciously in an attempt to ease it away. A lady in a wheelchair appears on the embassy employee side of a window and calls my name. She asks for my passports and gives me a “Certificate of Loss of Nationality Information Sheet” and says I can read it later. Her accent is American. It is time to pay, but I don’t pay her. Instead I am instructed to go around the corner to booth four and ring the bell. The cashier will come and take my money along with a second document the lady gives me. I do as I am told.
Booth four is dark. There is a blind drawn on the other side of the window. I have trouble finding the bell, but then realize that it is the flat thing much like the doorbell that had been on our front door back in Mississippi. I press it. Nothing happens. I notice a sign saying they don’t accept notes printed before 2006. Surprised, I look at my bills; one of them is from 2003. I check the documentation I had been sent. It says that no bills printed before 2000 will be accepted. I am relieved. I’ll just have to show them my papers and stand my ground. I press the button again. Nothing happens. I ask the security guard if the bell works. He smiles and says yes. Finally, the blinds are raised, and I am reminded of “The Wizard of Oz.” I point out the differences in information and that I have a bill from 2003. She apologizes and explains that they had just changed the rules. She sounds British. I pay and she tells me I will get my receipt after my interview. I go back to the chairs and wait.
The woman in the wheelchair brings a file to the farthest window at the right. The white-haired man reappears and calls my name. I approach the window. He greets me with a polite, “How are you today?” and I give the standard response—fully aware that our exchange is bizarrely out of place. He asks me to sign two sets of two documents each. I sign the first set and realize I haven’t read what I signed. I glance through them and then sign the second set. Eye contact is minimal.
“Raise your right hand.”
I do as I am told.
“Do you swear or affirm that all the information presented here is correct to the best of your knowledge?”
I repeat, using “affirm” rather than “swear.” He explains that my documents along with my passport will be sent to the State Department for approval. Once that is done I will receive a Certificate of Renunciation along with my canceled passport. He gives me my Swiss passport and my receipt. It is marked 2:37:01 PM “Renunciation of,” “Customer Copy” and “All Transactions are Final – No Refunds.” As I prepare to leave he says, “Thank you.”
Words catch in my throat, “I don’t know how to say ‘you’re welcome’ under these circumstances.”
“That’s OK, I understand.”
As I am leaving, the security guard wishes me a nice day. I put on my sunglasses. I walk up the ramp and to the second door. The other two security guards are still there. They too wish me a nice day. I don’t remember how I answer.
Outside the building, I look at my watch; it is 2:45p.m. My renunciation had taken all of 15 minutes. My husband is not there yet, but I know where to find him. After standing at the edge of the street waiting for cars to go by, I finally cross into Flora Park. It is the same as it had been less than 20 minutes before. In the soundtrack of my mind, I hear Peggy Lee singing, Is that all there is, my friend… The pressure in my chest is gone. I am breathing easily.
The questionnaire I had filled in prior to renunciation had asked if I would like to make a written statement as to why I was choosing to renounce. I had declined that opportunity, but I had given it a lot of thought. Why had I chosen to do this? Why had I taken a step that is absolutely final?
Most statesiders don’t know that non-resident US citizens have always been required to file income tax returns with the IRS. There is a Foreign Earned Income Exclusion, which may vary depending on how much time the non-resident spends in the States, and it is possible to make deductions. One normally only has to pay taxes on the difference if there is less tax paid in the host country. It can be pretty straightforward, but becomes more complicated as one acquires property or has investments. Double taxation is still possible—especially when it comes to retirement savings and pension funds.
In 2008 Swiss banks came under increasing pressure after a scandal involving the Swiss bank, UBS. It wasn’t long before all non-resident US citizens living in Switzerland began feeling the side-effects. It had become a burden for Swiss banks to have American clients. Mortgages were canceled and accounts closed. Swiss citizens living in the USA also began feeling the squeeze. Swiss banks wrote letters to these expat Swiss requesting that accounts be closed and safety deposit boxes emptied. Ties with the USA had become a liability for account holders.
The Foreign Account Compliance Act or FATCA became law in 2010. FATCA not only requires foreign financial institutions to report all accounts held by US citizens, it also targets US citizens about foreign financial assets and offshore assets. By law all US citizens must report all foreign accounts to the US government regardless of where they live. For me, this is not a simple process. There is form 8939 in addition to the Report of Foreign Bank and Financial Accounts or FBAR (formerly known as TD F 90), both of which are sent to the “Department of the Treasury Financial Crimes Enforcement Network.”
I am not a criminal.
I work hard and I pay taxes. My bank is not a Foreign Financial Institution. It is a Swiss bank and, since I live here, I consider it a Domestic Financial Institution.
I am one of those US citizens who had not been regularly filing my income tax forms. I knew that I earned under the foreign earned income exclusion, so I wasn’t too worried about it. But with FATCA this changed. By the end of 2012, I knew I had to do something, so I began gathering five years of paperwork. It sat in the corner of my office for a year before I finally organized it into logical units that could be scanned and sent to an accountant specializing in US tax returns. In the meantime my bank had asked me to sign a form giving them permission to send my bank data to the US authorities—including information about my husband’s and my joint accounts. My husband is a non-resident alien spouse; he is a Swiss citizen, living in Switzerland. Despite the fact that he had signed papers declaring he did not have a green card and was not a US citizen, he had to sign the same documents releasing his bank data to the US—just in case we were hiding my money in his bank accounts.
I had my paperwork ready and scanned by early February 2014. After sending them to the accountant, I asked for an estimate so that I could plan my budget. She quoted roughly
CHF 2,000 per year (about $2,240)—slightly higher than a “normal” private person because I am also self-employed and unbeknownst to me my little “entirely Swiss” company has to report to the US government as well.
I am a Swiss citizen because my mother is Swiss – from the Emmental. People from the Emmental are practical. We are taught to save money, buy only the things we can afford and if we want something we can’t yet afford, we save for it. I am not good with numbers but I can multiply both CHF2,000 and $2,240 by five, the number of years I was being billed for. CHF10,000 ($11,200) is a lot of money. I tend to be quite frugal, and after having seen the amount of money I would have to pay an accountant to be compliant, I had to call a friend to talk me off the ledge.
Fortunately, the final bill was just over half the estimated amount—still a healthy sum to prove that I don’t owe anything. Ironically, according to the tax returns, the US government owes me money—$123. I later received letters from the IRS disallowing this “refund.”
But are these laws fair? I have read the history behind them and I have read about Delaware, which seems to proudly boast that it is the nation’s tax haven. I have read about Irish Inversions—a legal, tax-avoiding maneuver saved for corporations, which are considered people except when it is more advantageous to be a corporation. And I’ve talked to the mother of a mentally disabled adult son, who having been born in the USA is an “accidental American.” Being typically Swiss they had worked and saved and put money aside for him in a trust fund, so that he could be taken care of when they were no longer here. When I talked to her, she was at a loss as to what to do because the IRS was interested in her son’s bank account. I have read about other, similar cases.
Switzerland is not a tax haven if you live and work here. We pay a lot in taxes, but we get a lot. Great public transportation. Excellent infrastructure. Excellent services. As a Swiss citizen, I can vote and if I were so inclined, I could gather signatures for a referendum. I have never done that, but I have certainly signed many petitions, and I vote.
When I began considering renunciation, some of my friends thought I was crazy. Talk to your representative they said. I didn’t have one. Should I have contacted someone in Mississippi, a state I haven’t lived in since 1985, the year I moved to Switzerland? Or perhaps someone in Indiana, a state I had never lived in but had had a contact address in? Would anyone care? How fair is the law, when you have no representative?
While reading about FATCA, I came across a quote from a senate staffer who preferred to remain anonymous, “…nobody in Congress represents overseas Americans. And government officials think this law is succeeding at catching the tax cheats. That may be worth the side effect of losing a few thousand American citizens every year. …”
What happened to “Taxation without representation is tyranny?” I am not a tax cheat, I am not a criminal, and apparently I am not worth the effort to change legislation.
For most of March and April, I alternated between anger and depression as I waited for my returns to come back. I talked to friends who had renounced and those who hadn’t. Most importantly I read and did some heavy duty soul-searching.
In his “Letter from Birmingham City Jail”, Martin Luther King Jr. wrote:
…an individual who breaks a law that conscience tells him is unjust, and who willingly accepts the penalty of imprisonment in order to arouse the conscience of the community over its injustice, is in reality expressing the highest respect for the law.
How does one show passive resistance or civil disobedience towards a law that carries consequences not just for the citizen, but also for the citizen’s non-resident alien family and for their bank? A law that some consider to be unconstitutional in that it violates the fourth amendment (unreasonable search and seizure) and the eighth amendment which prevents cruel and unusual punishment (in this case heavy fines).
Civil disobedience didn’t seem to be an option here. So I offered my resistance the only way I could, by renouncing my citizenship.
But never think that this was an easy choice.
William Faulkner wrote a short story called "Two Soldiers." In it, the older of two brothers, Pete, decides to join the army after hearing about the attack on Pearl Harbor. The younger brother, who is only nine years old, doesn’t really understand that the war is far away and is determined to go with his big brother to “chop firewood and tote water” for the troops. The day after Pete leaves the Mississippi farm to go to Memphis and join, the younger brother sneaks off and heads to Memphis as well. Despite the distance the young boy manages to find the city, get to the army recruitment center and ask for his brother. The officers realize that they need to get the older brother to talk to the young boy. When Pete firmly insists that his younger brother has to go home, the child says, “It hurts my heart, Pete.”
And that is exactly how I feel. This hurts my heart, but I could not continue to comply with a law that I feel is short-sighted, imperialistic and unjust.
Christina Warren is a former Mississippian, living in Bern, Switzerland, where she works as an English teacher and translator.