# Unexplained denial of ESTA after renunciation of US citizenship



## Emily York

Hi there, I’m a former dual UK/US citizen and current UK citizen. I have never lived or worked in America but gained citizenship via my mother who was a US national before marrying my father in the UK. After becoming aware in my mid thirties of the bizarre and frankly slightly terrifying US taxation policies and following several years of filing all the necessary paperwork and tax returns I finally was able to renounce my US citizenship on March 5 2020, just before the world shut down due to COVID-19.

I did a lot of research into the possible impact of my decision to renounce on my ability to return there for holidays to visit my american family members and all the information said that I would simply be treated like any other UK citizen who is able to travel by applying for an ESTA. 

I recently applied for an ESTA and was denied, for seemingly no reason (I even tried again in case I had made a mistake somehow). 
I wondered if anyone in a similar position had ever had this experience and if so whether they could offer any words of wisdom?
Currently my next step is to apply for a visa, which will come at a cost of about £160 and around a six month wait for an appointment at the US embassy in London. Help!


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## Bevdeforges

A couple of possibilities here. Given that the US isn't allowing anyone in (well, hardly) until November 8th or so, you may have just run afoul of the transition process to whatever the new requirements are going to be. You could try waiting until after November 1st and then try again to see if you get a different result on the ESTA system.

But, technically, the rules surrounding renunciation make it clear that you will not be allowed back in the US (i.e. will not be granted any sort of visa) if there is reason to believe that you renounced "for tax reasons." It's the IRS who gets to decide if you renounced for tax reasons, though if you submitted a statement when you renounced that included anything about the unfair tax system, it's possible you've been flagged.

The other regulation that could be tripping you up is the part of the renunciation law that says that "the attorney general" (or basically anyone working for him or her) can deny any sort of visa to someone who has renounced. It isn't super common for them to do that except for those who have taxes owing to the US (and generally speaking the amounts have to be large) or who are "notorious" cases of people who have renounced and so need to be made an example of to deter others from renouncing.

Personally, I'd sit tight and try again in early November once tourist traffic is flowing again. No guarantees - but worth a try before having to pay for a visa you could be refused.


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## Emily York

Bevdeforges said:


> A couple of possibilities here. Given that the US isn't allowing anyone in (well, hardly) until November 8th or so, you may have just run afoul of the transition process to whatever the new requirements are going to be. You could try waiting until after November 1st and then try again to see if you get a different result on the ESTA system.
> 
> But, technically, the rules surrounding renunciation make it clear that you will not be allowed back in the US (i.e. will not be granted any sort of visa) if there is reason to believe that you renounced "for tax reasons." It's the IRS who gets to decide if you renounced for tax reasons, though if you submitted a statement when you renounced that included anything about the unfair tax system, it's possible you've been flagged.
> 
> The other regulation that could be tripping you up is the part of the renunciation law that says that "the attorney general" (or basically anyone working for him or her) can deny any sort of visa to someone who has renounced. It isn't super common for them to do that except for those who have taxes owing to the US (and generally speaking the amounts have to be large) or who are "notorious" cases of people who have renounced and so need to be made an example of to deter others from renouncing.
> 
> Personally, I'd sit tight and try again in early November once tourist traffic is flowing again. No guarantees - but worth a try before having to pay for a visa you could be refused.


Thanks so much for your reply. I did check to see if the current travel restrictions would be impacting the granting of ESTAs but according to all the official information that shouldn’t be an issue (they’re actually encouraging people to apply early due to a predicted rush in November).

To clarify- my official reasons for renouncing were not technically or at least not entirely tax related; I’m certainly not in the elite “super wealthy” category and I rarely owed more than a few hundred dollars per year in US taxes; if anything it was the nightmare of spending days gathering the reams of information together each year and having to pay a US tax specialist upwards of £2000 per year to file the tax return! I don’t have any need for US citizenship and am well established in my career and personal life here in the UK with no wish to move to America.

I can’t help but suspect that I’m being somehow punished, a thought sparked by the frankly unpleasant treatment I received at my renunciation appointment at the US embassy. I might give it another go in November, just in case.
Really appreciate you taking the time to reply to my thread.


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## Bevdeforges

It may depend a bit on which Embassy you go to. I know the Paris Embassy is exceedingly nice toward those there to renounce (or they certainly were when I was there - just a few months before you renounced) and made everything go quite smoothly. A friend of mine reports similar treatment at Frankfurt. But it can always vary according to who is on duty that day. 

Plus, the idea that someone has renounced "for tax reasons" has nothing to do with anything you might have said or done. It's apparently up to the IRS to decide if they think you might have that motivation.

Still - worth making another attempt in early November to see if maybe you hit some weird sort of glitch or phase of the moon or something. It happens. Wait a few weeks or a month and it will all go quite smoothly. Let us know how things go for you and if you find out anything.


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## Italia-Mx

I wouldn't waste my time. The USA is now far from what it was when supposedly it was the greatest country in the world so you aren't missing anything. Tell your American relatives to come and visit you. It takes not having priorities in order for them to be doing any picking and choosing at this time when they let hundreds of thousands of the poorest people in the world just breeze across the southern border, no questions asked.


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## Emily York

Bevdeforges said:


> It may depend a bit on which Embassy you go to. I know the Paris Embassy is exceedingly nice toward those there to renounce (or they certainly were when I was there - just a few months before you renounced) and made everything go quite smoothly. A friend of mine reports similar treatment at Frankfurt. But it can always vary according to who is on duty that day.
> 
> Plus, the idea that someone has renounced "for tax reasons" has nothing to do with anything you might have said or done. It's apparently up to the IRS to decide if they think you might have that motivation.
> 
> Still - worth making another attempt in early November to see if maybe you hit some weird sort of glitch or phase of the moon or something. It happens. Wait a few weeks or a month and it will all go quite smoothly. Let us know how things go for you and if you find out anything.


Thanks again for the feedback; glad to know that others have fared better. I will update as things progress (hopefully in a positive direction!).


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## Nononymous

There's really no evidence that more than a handful of people have ever been denied entry to the US because they were deemed to have renounced for tax reasons. The Reed Amendment is neither enforced nor enforceable at present. Furthermore the State Department and USCIS don't have access to IRS records, so there's no way they could use a former citizen's past tax status to deny them an ESTA waiver.

I have no idea why your application was denied, but it almost certainly had nothing to do with taxes.

According to a recent Treasury audit report, 40 percent of those who renounce fail to file Form 8854 to go through the tax exit procedure, but the IRS does not have the resources to follow up and contact them. It's now very common for accidental Americans like yourself to simply renounce without ever filing US tax returns. There are no reports of these folks being singled out and denied entry. (Dual citizens born outside the US have a much easier time avoiding FATCA so they are less likely to renounce, given how simple it is for them to stay off the radar.)


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## Emily York

Nononymous said:


> There's really no evidence that more than a handful of people have ever been denied entry to the US because they were deemed to have renounced for tax reasons. The Reed Amendment is neither enforced nor enforceable at present. Furthermore the State Department and USCIS don't have access to IRS records, so there's no way they could use a former citizen's past tax status to deny them an ESTA waiver.
> 
> I have no idea why your application was denied, but it almost certainly had nothing to do with taxes.
> 
> According to a recent Treasury audit report, 40 percent of those who renounce fail to file Form 8854 to go through the tax exit procedure, but the IRS does not have the resources to follow up and contact them. It's now very common for accidental Americans like yourself to simply renounce without ever filing US tax returns. There are no reports of these folks being singled out and denied entry. (Dual citizens born outside the US have a much easier time avoiding FATCA so they are less likely to renounce, given how simple it is for them to stay off the radar.)


Thanks for your response- all very interesting. I’m still glad I was thorough in filing all my tax returns etc just in case; I’m not a big risk-taker and wouldn’t have felt safe with even the slightest chance that my case would have been flagged up somehow! It does make the ESTA denial all the more mysterious though…


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## rtho100

Hi Emily,

Would you be able to provide an update on this thread please if you have one? I am a Green Card holder who is about to rescind it as I now have Spanish residency. I’m a UK passport holder, have paid my US taxes yearly, declared foreign accounts and assets under FATCA and am about to start the process to rescind both from the legal side and the tax side.
The reason that I want to rescind it is because my wife (US citizen) and I are now empty nesters, we have property in Spain and the cost of living in Spain is far less than it is in the US. Taxation is part of that cost of living and I will be paying less tax. I will not be writing that down as a reason but it is a factor. Before everyone jumps on my back saying “are you sure about paying less tax in Spain versus the US” it’s important to know that I am a seafarer that works on rotation. Basically I work 10 weeks on, 10 weeks off and under tax law in Spain I get a considerable tax credit every year if I can prove I’m not in the country. Compared to the US I will save 10% in my tax rate which adds up. I have never spent 6 months in the US during any calendar year in the last 7 years so in theory I hardly qualify to keep my GC in the first place.

I have looked at keeping my US Green Card but my specialist expat tax lawyer informs me that the IRS would want that 10% back so it just doesn’t make sense to keep the Green Card. I haven’t held the GC for 10 years which is why it makes sense to do it now.
I will of course want to visit the US because my step children are there but I have ne we worked in the US and I never want to. Sorry but vacation time is important to me!!

My lawyers say that future ESTA’s or even B1/B2 visa applications should not be affected but this original post perhaps puts that into question. 

Any feedback is much appreciated


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## Bevdeforges

If you will no longer be living in the US, you are expected to give up your Green Card. It's a different process from that of renunciation, and depending on how long you were considered resident in the US, may cause some hassle with the IRS about exactly when you can sever your obligation to file taxes with them. But do NOT just "hang onto" your Green Card once you move - it will cause more problems than it is worth. (Granted, your US citizen wife will have to start filing as "married, filing separately" which has its own downsides.)


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## rtho100

Bevdeforges said:


> If you will no longer be living in the US, you are expected to give up your Green Card. It's a different process from that of renunciation, and depending on how long you were considered resident in the US, may cause some hassle with the IRS about exactly when you can sever your obligation to file taxes with them. But do NOT just "hang onto" your Green Card once you move - it will cause more problems than it is worth. (Granted, your US citizen wife will have to start filing as "married, filing separately" which has its own downsides.)


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## rtho100

It was never my intention to hold onto it, but it’s something that both the expat tax accountant and the Green Card renunciation lawyer asked/suggested. Once I’d explained it to them they understood.

The plan is to start this process later this month so that it coincides with the end of this tax year. I will then pay Spanish taxes from January 2022 onwards. I am still overseas at time of writing, and originally read this post when the OP posted it. Whilst my wife has also applied for Spanish residency through me, she will continue to work on and off in the US. We understand the different filing pros and cons but it simply doesn’t make sense financially to keep my GC especially since I’ve never really taken advantage of any of its benefits.

I’ve been a seafarer my whole working life so have never been in any country on a permanent basis.


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## Moulard

Advantages of a greencard for immigration purposes end once you have lived outside the US for a year - two if you are able to obtain a Resident Return Visa - more in a very limited set of circumstances.

Once you hit a year outside the US, or earlier if you have no intention to reside there is the time to either return your greencard to the nearest consulate along with a letter indicating your intent to abandon your permanent residency or File I-407.

While you state that you have been a green card holder for less than 10 years, what is important from a US tax perspective is if you fall under the category of a "Long Term Permanent Resident" which is defined as having been a permanent resident in at least 8 of the last 15 years. 1 day within a year counts as one of the 8. If you were unucky in your timing you could hit that trigger point at 6 years and 2 days.

If you do not meet this definition, then exiting the US tax system is pretty easy. 

If you meet the definition of a long term permanent resident, then you may wish to do some financial planning before returning the greencard if there is any chance you could be a covered expatriate

Its worth highlighting, Seafarers and Aviators have additional issues when it comes to US Taxes because international waters (or airspace) are not considered foreign for the purposes of things like the Foreign Earned Income Exclusion. The FEIE is the primary tax vehicle to reduce US taxes if in a juridiction with lower tax rates in the US... and the limits on international territory mean you may not actually be able to exclude any of your income earned while physically outside of territorial waters.

That would only leave you tax credits... But, if, after Spanish Credits, your US tax liability is greater, the way tax treaties operate you could very well continue to owe US Taxes because you would only be credited for Spanish taxes paid or accrued - you could very well end up having to top up the difference into IRS Coffers.

Unless there is some overriding factor where your spouse will benefit greatly from filing jointly, then once you have determined that you will not be a covered individual then it makes sense to hand back the physical greencard or file I-407 

Some, to avoid the issue of dual status returns (you cannot use the standard deduction), try to time this to the very start of a tax year. Others file a 1040 for the part year, and then take a treaty based position and file a 1040NR the following year. But if you are already talking with accountants then they should be able to give you sound advice on the best strategy for you given your circumstances.


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## rtho100

Thanks for the above.

I spoke to both the tax accountant and immigration lawyer and all of what you wrote was mentioned so it’s nice that all has been reaffirmed by someone else. It makes me more confident in their abilities too.

I am however more interested in whether or not I will be denied an ESTA or B1/B2 visa in the future for renouncing my GC. The B1/B2 is the visa required for yacht crew and prior to obtaining my GC was issued 2 of these visas over a 10 year period. The latter I do not require as the vessel I currently work on is Europe based but that could change. The ESTA is the more likely route over the next year or so. As mentioned previously, my immigration lawyer has never heard of an ESTA being denied especially if one renounces correctly hence the expat tax accountant and immigration lawyer. If anyone else has had issues I’m all ears.


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## Moulard

There is always the possibility of being denied an ESTA or a visa after returning a green-card. Tthe thing to remember is that won't happen simply because you returned your green-card.

You will just be treated the same as any other non-resident alien applying for a visa or a waiver. 

The fact that you were previously a green card holder with be neither a help nor a hindrance in any future application.


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## Wannabe Renouncer

Emily, any chance of an update on this? I am a UK/US dual citizen with no personal connection to the US, looking to renounce my citizenship.

My one concern is that I may end up in similar situation to yours and find myself arbitrarily unable to travel to the States at all. Would love to hear if you managed to resolve the ESTA issue, if you've managed to visit the States and what your experience was like.


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