Reed Amendment (immigration)

The Reed Amendment is the common name for a provision of United States federal law (8 U.S.C. § 1182(a)(10)(E)) which attempts to impose an entry ban on certain former U.S. citizens.^[1] It was named for its author Jack Reed, and passed into law as part of the Illegal Immigration Reform and Immigrant Responsibility Act of 1996.

Though the amendment received strong bipartisan support during the committee stage, Democratic lawmakers including Daniel Patrick Moynihan and Chuck Schumer later criticised the amendment as unenforceable due to its unclear wording. Efforts at establishing procedures to enforce the amendment ran into early difficulties, and the executive branch never promulgated the implementing regulations. In 2013 and 2014, Reed made several unsuccessful efforts to insert provisions into various bills in order to update the amendment with clearer definitions of the classes of former citizens to be banned from re-entry, as well as to push the executive branch to issue regulations to enforce the amendment.

Background

The Reed Amendment added the following text to the Immigration and Nationality Act of 1952's list of "Classes of aliens ineligible for visas or admissions":^[2]

(E) Former citizens who renounced citizenship to avoid taxation

Any alien who is a former citizen of the United States who officially renounces United States citizenship and who is determined by the Attorney General to have renounced United States citizenship for the purpose of avoiding taxation by the United States is inadmissible.

This provision is located at INA 212(a)(10)(E) (8 U.S.C. § 1182(a)(10)(E)). It was introduced by then-Representative Jack Reed (D-RI).^[3]

Reed first introduced his eponymous amendment during the debate on the Immigration in the National Interest Act of 1995. He stated: "there's no attempt by this legislation to prevent someone from renouncing their citizenship", simply that people who did so for purposes of tax avoidance should "not be able to return to the United States".^[4] At the time, the issue of giving up U.S. citizenship for tax purposes was receiving a large amount of media attention, which also resulted in Congress' passage of a law to strengthen the "expatriation tax" (26 U.S.C. § 877).^[5] Reed's amendment was specifically intended to address the issue of wealthy individuals who had renounced U.S. citizenship but then later attempted to obtain residency visas to return to the United States.^[4] One example discussed was Kenneth Dart of Dart Container, who had become a citizen of Belize and then attempted to obtain a diplomatic visa to serve as Belize's new consul in Sarasota, Florida.^[3] Florida Congressmen Sam Gibbons and Dan Miller both wrote to the State Department to protest, and by October 1995, the government of Belize had withdrawn its nomination of Dart as consul. Wealthy people who renounced U.S. citizenship for tax reasons were estimated to comprise about a dozen of the roughly one thousand people per year who became ex-Americans.^[6]

The House Committee on the Judiciary approved Reed's amendment by a vote of 25 to 5, over objections from opponents of the law arguing that it was punitive, difficult to enforce, and gave too much discretion to the Attorney General. It went on to be enacted on September 30, 1996.^[4] Nevertheless, in the aftermath of the amendment's passage, Reed's fellow Democrat Daniel Patrick Moynihan made a speech on the Senate floor voicing harsh criticisms, stating: "The wording of the statute is embarrassing. How can an alien renounce U.S. citizenship? In what capacity would said alien do so officially? One assumes that a court of law would find the language incoherent and unenforceable ... This is the way we legislate at 5 o'clock in the morning 4 days before adjournment." Moynihan had long advocated for the alternative plan of modifying the expatriation tax instead to tax accrued capital gains.^[7]

Attempt at drafting regulations

The U.S. government has never issued regulations to implement the Reed Amendment.^[8] One issue with the enforcement of the law was that the Attorney General was never authorized to obtain the required information from the Internal Revenue Service in order to be able to make the determination whether a former American's loss of citizenship was motivated by tax reasons.^[9] This restriction arises from 26 U.S.C. § 6103.

According to former IRS international tax counsel Willard Yates, the Immigration and Naturalization Service and the IRS' Office of Associate Chief Counsel (International) worked together in an effort to create procedures to work around this limitation. Under their proposal, the Customs Service (now Customs and Border Protection) would have been required to check the names of all aliens appearing at U.S. ports of entry against the list of former United States citizens published by the IRS under the Health Insurance Portability and Accountability Act of 1996. Those who were identified as former U.S. citizens would be required to sign a waiver of their rights under § 6103; Customs would then fax the waiver to the IRS so that the IRS could provide Customs with tax information relating to the former citizen, in particular whether the former citizen met the asset thresholds of 26 U.S.C. § 877(a)(2), and any private letter ruling regarding whether or not the former citizen had tax motivations for giving up U.S. citizenship.^[10]

However, there were various practical difficulties with these proposed regulations. Most notably, only one IRS agent would have been assigned to handling such requests; if a former U.S. citizen arrived on a weekend, he or she might have to be detained until Monday in order for CBP to make the required determination of tax motivation, as no IRS staff might be available to respond to the request for information on a weekend. Additionally, the IRS already had a large workload drafting other guidance for former citizens and green card holders under newly-passed tax laws. In the end, the proposed regulations were never issued.^[10]

Official and unofficial enforcement

According to the Foreign Affairs Manual (FAM), due to the lack of regulations, the Department of State has no procedures in effect to implement the Reed Amendment.^[11] The FAM goes on to instruct consular officers that "[t]he role of the Department and the consular officer is very limited in implementing this ground of inadmissibility. Unless the applicant appears as a hit in the lookout system revealing a finding of inadmissibility under INA 212(a)(10)(E), you must assume the applicant is eligible." Finally, the FAM states that a person who is found inadmissible due to the Reed Amendment could request a Waiver of Inadmissibility under INA 212(d)(3)(A) to obtain a non-immigrant visa, but that no waiver is available to obtain an immigrant visa.^[12]

Since 2004, the first year for which the State Department's Report of the Visa Office included the relevant statistics, no person has been formally found ineligible for entry into the United States on the grounds of the Reed Amendment.^[13] However, Charles M. Bruce of Moore & Bruce LLP states that some U.S. consular officers may have "unofficially and improperly" applied the Reed Amendment to refuse issuance of visas to former U.S. citizens.^[9] Tax attorney Mark Nestmann of The Nestmann Group similarly states that he knows of occasional cases in which former citizens have been denied U.S. visas, with consuls citing the Reed Amendment as their authority.^[14] Joel Paget of Ryan, Swanson & Cleveland states that one such denial (against a person who renounced before the enactment of the Reed Amendment) was reversed after the renunciant's lawyer submitted a legal brief to CBP.^[15] Finally, Eugene Chow of Chow & King Associates states that in spite of the Reed Amendment, consular officers "routinely issue visas" to ex-U.S. citizens, and the State Department's Office of the Legal Adviser has reversed denials based on the Reed Amendment after being made aware of them.^[16]

Michael G. Pfeifer of Caplin & Drysdale states that it is unclear whether the Reed Amendment is intended to apply to all persons "relinquishing" U.S. citizenship by committing an "expatriating act" (all the acts listed in INA § 349(a)), or only those who specifically "renounced" by making a formal renunciation of nationality under § 349(a)(5) or (6).^[17] Nestmann states that despite non-enforcement of the Reed Amendment, he advises his clients to avoid making a formal renunciation of nationality and instead to apply to have their acquisition of non-U.S. citizenship treated as an "expatriating act" under § 349(a)(1).^[14]

Further proposals

Congress later amended the law concerning the expatriation tax, adding provisions to account for the possibility that a former citizen might spend significant amounts of time in the United States. Kirsch describes this as "implicit recognition" of the "substantative and technical problems" of the Reed Amendment.^[1] In 2004, Kirsch outlined an alternative proposal to more narrowly tailor the Reed Amendment in a way he suggested would make it enforceable.^[3] Among various criticisms of the law, Renee S. Liu describes it as "an inappropriate response" to the problem it sought to address, while Michelle Leigh Carter argued that it may "unconstitutionally infringe on the fundamental right to expatriate".^[5][18] Temple University law professor Peter Spiro also suggested that it may violate the Expatriation Act of 1868, as well as the International Covenant on Civil and Political Rights' guarantees that everyone has the right to leave any country and to change their nationality.^[19]

In May 2012, following news that Facebook co-founder Eduardo Saverin had renounced his U.S. citizenship, there was speculation that the Reed Amendment might be invoked against him, and Reed himself (by then senior RI senator) sent a letter to Secretary of Homeland Security Janet Napolitano urging her to bar Saverin from re-entry.^[20][21][22] However, Senator Chuck Schumer (D-NY) stated that the Reed Amendment "was written in a manner that inhibits its enforcement", and so he and Bob Casey (D-PA) introduced new legislation, the Ex-PATRIOT Act, which would make former U.S. citizens inadmissible to the United States and charge them 30% capital gains tax on their U.S. investments, but it died in committee.^[20][23] The following year, Reed himself, along with Schumer and Casey, moved the Ex-PATRIOT Act as an amendment to the Border Security, Economic Opportunity, and Immigration Modernization Act of 2013, but their amendment did not appear in the final version of the bill which passed the Senate in June that year, nor in the version of the bill which was introduced in the House in October that year.^[24][25][26]

In 2014, Reed used his position on the Senate Committee on Appropriations to insert language into the Senate report on the Department of Homeland Security Appropriations Act, 2015 (S. 2534) directing DHS to report, within 90 days of the act's passage, on the steps it is undertaking to enforce the Reed Amendment, including a schedule for issuing guidance or regulations, if necessary.^[27][28][29]

References

External links

• Reed's 2023 letter to Napolitano urging enforcement of the Reed Amendment against Eduardo Saverin