Crossing Checkpoint Charlie
Renouncing one’s 🇺🇸 citizenship isn’t necessary to live abroad, but it ends a relationship and reminds me of crossing the Berlin Wall.
A little history
At the end of World War II, Germany was partitioned and controlled by four countries, the US, UK, France, and the Soviet Union. The Soviets controlled the Eastern part of the country, which became East Germany, and the other Allies administered the Western part, which became West Germany.
Berlin, the German capital, lay entirely within the Soviet-controlled East. Because of its special status, Berlin was jointly administered by all four allies. The US, UK, and France controlled the western part of Berlin, called West Berlin, and the Soviets controlled the eastern part, East Berlin.
Initially and for many years after the War there was relatively free movement between East and West Berlin. For example, you could take a street car across the boundary.
Over time the economy of West Berlin prospered, but that of East Germany did not. In increasing numbers East Germans began to leave for the West, many by crossing from East to West Berlin. In 1961 the flow from east to west became a flood and, at its peak, involved 2400 migrants crossing in one day.
In response, the East German government abruptly closed its border with West Germany. They went much further and began building a militarized wall to prevent East Germans from crossing to West Berlin. One could only cross at designated checkpoints, the most famous called Checkpoint Charlie. One risked being shot by crossing elsewhere.
Stopping emigration with walls and guns
In the early days of the Wall construction, there were still a few ways to get into West Berlin from the East. For example, on one street the buildings were in East Berlin, and the sidewalk below was in West Berlin. That’s where an unforgettable scene unfolded.
As residents of one apartment building were ordered to move out of their building, some began climbing out of their apartment windows and jumping to the street below. Here’s the unforgettable video of a tug of war over a woman caught between police above and West Berliners below.
Eight years later and light years from the small town where I first learned about the Berlin Wall, I found myself as a university student on a tour of Berlin. We had traveled by train from Vienna through East Germany to a station in East Berlin.
There we boarded a bus to a hotel in West Berlin. This meant crossing at the famous Checkpoint Charlie, the only checkpoint where tourists could cross from one side of the Wall to the other. I was fascinated and nervous as the bus was inspected before being allowed to continue around a series of concrete barriers past armed guards and into West Berlin.
You couldn’t take any pictures from the East Berlin side without risking having your camera seized, opened, and the film exposed by border guards. Most photos of Checkpoint Charlie were taken from the west, as was the one below.
A few days later I walked across Checkpoint Charlie in both directions with a friend, which was possible with our US passports. We wandered around a largely empty East Berlin on foot and ate lunch in a cafeteria where everyone studiously avoided interacting with us in any way.
It was dreary and depressing, so it was a great relief to walk back into West Berlin, which was crowded, bright and alive in contrast. For a glimpse of life in the East German police state watch the Oscar-winning Lives of Others movie.
Building a militarized wall to keep citizens from leaving was East Germany’s brutal, and ultimately unsuccessful, approach to preventing emigration. The government claimed it was built to keep Western fascists out, but everyone knew it was to keep its own citizens in.
What, you ask, does this have to do with the problems of Americans living abroad? Both the Berlin Wall and American emigration policies have a shared implicit goal, to discourage citizens from leaving.
Very different means are used, walls and guns in one case, exorbitant fees and a bureaucratic thicket in the other case.
You can leave, but you can’t escape
To emigrate is to leave one's country to settle in another.
Many East Germans desperately wanted to emigrate – even though it meant risking almost everything. Emigration on such a scale may have been an existential threat to East Germany. It was certainly terrible PR, and the government used brutal measures to stop it.
In contrast, an American citizen can physically leave the US to settle elsewhere without any 🇺🇸 government interference or permission. Almost 9 million Americans have done so, and have retained their American citizenship while doing so.
But there’s a catch. American expats are followed by the US income tax system, which is citizenship based rather than residency based. Regardless of where an American lives in the world they have an obligation to report their income to the IRS. Only one other country, Eritrea, follows this citizenship model.
Expat Americans must file tax returns to two jurisdictions, to their country of residence and to the US. As one might guess, this can, and usually does, get complicated and expensive.
Expats from all other countries, except Eritrea, just have tax obligations where they live.
Apart from dying, about the only way an American can escape US tax filing is to formally renounce their US citizenship.
Crossing Checkpoint Charlie
Renunciation of one’s 🇺🇸 citizenship is a complicated, expensive, and lengthy process. It’s the only way for an 🇺🇸 expat to end a relationship with the IRS, by metaphorically crossing from East to West at Checkpoint Charlie.
have citizenship in, and a passport from, another country;
have filed US tax returns for the previous 5 years;
complete an application which costs $2350 (highest in world; $100 in Canada);
appear in person before a U.S. consular or diplomatic officer in a foreign country at a U.S. Embassy or Consulate; and
sign an oath of renunciation.
That may not be all. If your net worth is over $2 million dollars (including home, savings, retirement plans, etc), you will have to pay a hefty expatriation tax, which is based on the value of all of your and your spouse’s assets. This tax could also have later implications for your children who are US citizens (more details here).
Needless to say, consulting with a renunciation specialist is a necessity before proceeding with the irrevocable step of renunciation.
Renunciation will probably you cost thousands of dollars if you consider the costs of the application, travel to the embassy, and consultation with specialized lawyers and accountants.
You may still wish to proceed with renunciation. If you do, the IRS, in a parting gesture, will include your name on a US government website listing of individuals who have renounced their 🇺🇸 citizenship.
Renunciation isn’t the Berlin Wall but…
The possible cost of renunciation pales in comparison to the mortal risks taken by those Germans who got over, under, or around the Wall. Even so, the Berlin Wall and the US citizenship renunciation process share a key dynamic.
Both were and are designed to discourage emigration and diminish emigrants. No one likes to get dumped, even governments by their emigrating citizens.