Technical Advice Memorandum 7605250090A, 05/25/1976, IRC Sec(s). 2105 ------------------------------------------------------------------------ UIL No. 2105.00-00 Headnote: Reference(s): Code Sec. 2105; Full Text: *** *** *** Date of death: *** No Conference Held. ISSUES 1) Was a female decedent who was born in the United States, who had married a citizen of the *** in *** and who soon thereafter had permanently withdrawn her domicile from the United States, a citizen at the time of her death in *** 2) If so, was her estate subject to the estate tax under section 2001 of the Internal Revenue Code of 1954? FACTS *** was born in *** in *** She married *** a *** subject, at *** on *** and her husband resided in *** from *** lived in *** from *** and from *** lived in *** moved to *** their final residence, in *** . *** died approximately *** years ago. Thereafter, *** continued to reside in *** until her death on *** Two daughters were born of the marriage of *** There is no evidence that the daughters have at any time claimed advantage of United States citizenship from their mother's birth. One daughter is presently a citizen of the *** and the other is a citizen of *** We have been provided with copies of various documents executed by the decedent since *** including a *** passport, in which she claimed *** citizenship and *** as her country of origin. In addition, we have been informed by counsel for the estate that *** always considered herself a *** subject and, not an *** citizen. As such, she voted in *** elections. Finally, there is no evidence *** asserted any benefit or claim of United States citizenship after her marriage in *** United States Law of Nationality Prior to passage of the Expatriation Act of 1907 (34 Stat. 1228) the United States had no legislation controlling the expatriation of its citizens. Renunciation of citizenship was regulated by the common law and was affist severely restricted. As stated by the United States Supreme Count, "The general doctrine is, that no persons can by any act of their own, without the consent of the government, put off their own, allegiance, and become aliens." Shanks v. Dupont, 3 Peters 242, 246 (1830). In 1868 Congress declared, " *** the right of expatriation is a natural and inherent right of all people *** any declaration, instruction, opinion, order of decision of any officer of the United States which denies, restricts, imparts, or questions the right of expatriation, is declared inconsistent with the fundamental rules of the republic." Act of July 27, 1868, c. 249, 15 Stat. 223. This enactment gave the nation's unconditional consent to voluntary expatriation and repudiated to the doctrine of perpetual allegiance recited in Shanks. Mackenzie v. Hare, 239 U.S. 299, 309 (1915). By 1870 the laws of almost all civilized nations, with the exception of the United States, provided that a woman who married an alien lost her own citizenship and acquired his. As was generally the case with respect to the legal status of a woman at this time, during coverture her nationality was considered merged with that of her husband. See 3 Hackworth, Digest of International Law, 246, (1942) (hereinafter cited as Hackworth). The United States did not have a uniform rule in this instance. The Department of State, as well as some courts, adopted the view of other nations that a woman relinquished her native citizenship while married to an alien. 3 Hackworth, 247, 248; Pequignot v. City of Detroit, 16 F. 211 (E.D. Mich. 1883); see also Mackenzie v. Hare, supra. Other authorities held that marriage to an alien, by itself, was not sufficient to divest a woman of her United States nationality. She was also required to remove her domicile from the country and adopt the citizenship of her husband's nation by either operation of the foreign nation's law (i.e., the merger theory set out above) or some other overt action resulting in naturalization. Comitis v. Parkerson, 56 F. 556 (E.D. La. 1893); Ruckgaber v. Moore, 104 F. 947 (E.D.N.Y. 1900) In re Wright, 19 F.S. 224 (E.D. Pa. 1937). Still another view of the pre-1907 law was expressed in Petition of Zogbaum, 32 F.2d 911 (S.D. 1929). In that case the court held that a woman who married an alien and lived abroad could not be expatriated absent a specific statute granting such authority. However, the decision further stated that upon termination of the marital relation the woman was free to "resume" her citizenship by returning to the United States. 32 F.2d at 913. This second part of the court's holding casts some doubt on the efficacy of the first. The court failed to explain why, if the woman had not relinquished her citizenship during coverture, it was necessary for her to return to the country to resume citizenship. (See further discussion on reversion of citizenship below) The United States moved to settle this issue with some foreign nations by treaty. As noted in Guest v. Perkins, 17 F.S. 177, 178 (D.C. 1936), the Convention of May 13, 1870, between the *** provided as follows: "Citizens of the United States of America who have become or shall become, and are naturalized according to law within the *** dominions as British subjects, shall, *** be held by the United States to be in all respects and for all purposes *** subjects, and shall be treated as such by the *** " (16 Stat. 775, art. 1). In the same year the *** of 1870 provided that a "married woman shall be deemed a subject of the State of which her husband is for the time being a subject." Reading these laws in conjunction with 7 and 8 Victoria C. 66 (1844), which granted citizenship to women married to subjects of the Crown, it appears an American woman relinquished her citizenship upon marriage to an English national and acquired *** citizenship in its stead. Guest v. Perkins, supra at 178-179. In 1907 Congress acted to further resolve the conflicting views on nationality by the act of March 2, 1907, 34 Stat. 1228, section 3, which stated: *** (A)ny American woman who marries a foreigner shall take the nationality of her husband. At the termination of the marital relation she may resume her American citizenship, if abroad by registering as an American citizen within one year with a consul of the United States, or by returning to reside in the United States, or, if residing in the United States at the termination of the marital relation, by continuing to reside therein. Although the courts have held the act inapplicable to pre-1907 marriages, examination of the statute's legislative history and the cases discussing it sheds some light on the earlier common law rule. The effect of the law, as explained by its supporters, was believed to be merely codification of the existing rule. 41 Congressional Record 1465; Perez v. Brownell, 356 U.S. 44, 69-73 (1958) (dissenting opinion, Warren, C.J.), overruled Afroyim v. Rusk, 356 U.S. 44 (1958) (dissenting opinion favorably cited); 3 Hackworth, 246, 247, 253. Reviewing the decisions and legislation from the latter period of the 19th Century through the early 20th Century leads to but one conclusion: An American woman who married an alien in 1906, and who left the United States immediately thereafter, relinquished her citizenship during the period of the marriage. The authorities might disagree as to whether marriage alone effected expatriation, but virtually no disagreement arose when such act was coupled with removal of domicile. Upon termination of ammarriage entered into prior to 1907 a woman did not spontaneously regain her nationality. To revert to United States citizenship she was required to return to the "jurisdiction and allegiance of the United States." Foreign Rel. U.S. 1890, 301 quoted in Perez v. Brownell, supra at 71, n. 23. To accomplish such return courts held that a woman must resume her domicile in the United States. In re *** 4 F.2d 541, 542 (Mass. 1925); *** 20 F.2d 957, 958 (E.D. Mich. 1927); but see In re *** supra (reversion of citizenship denied). In 1922 Congress declared that automatic expatriation of women marring aliens was no longer necessary. Section 3 of the Cable Act of 1922, 42 Stat. 1022, repealed section 3 of the Expatriation Act of 1907, supra., and provided that thereafter a woman marring an alien would not lose her United States citizenship unless she made a formal renunciation before a court of competent jurisdiction. No provision was made, however, for prior marriages. This oversight was remedied by the Act of June 25, 1936, 49 Stat. 1971, substantially re-enacted as title 8 United States Code section 1435(c)(1), which provided that a woman who was believed to have lost her citizenship solely by reason of marriage to an alien prior to September 22, 1922, and whose marriage had terminated, might reacquire United States citizenship by taking a prescribed oath before a diplomatic officer of the United States or a court of competent jurisdiction. One judicial decision has held the 1936 Repatriation Act inapplicable to pre-1907 marriages in the belief that expatriation in those instances resulted not only from marriage but also from removal of domicile. In re Wright, supra. The court reasoned that since the 1907 and 1936 enactments spoke in terms of the marriage alone affecting nationality, repatriation of women who removed their domiciles was not contemplated by Congress. In view of the legislative history of the Expatriation Act of 1907 (which the court did not discuss), the Wright decision should not be accorded great weight. The authorities cited above contain virtually no discussion of dual nationality, that is, simultaneously holding citizenship in two nations. Initially, this status was not looked upon favorably and resulted from conflicts between the laws of citizenship of nations. 3 Hackworth 352; see also Shanks v. Dupont, supra. As can beeseen from the decisions previously cited, a woman who married an alien was not normally accorded dual national status. Although, one limited exception was provided. If prior to marriage a woman held dual nationality (as the result of birth or naturalization, when permitted), then marriage to an alien of similar citizenship did not result in loss of United States nationality. 3 Hackworth 248. Within the past ten years the laws of nationality and expatriation have undergone considerable change. In 1967 the United States Supreme Court held that Congress did not have constitutional authority to take away an American's citizenship without his assent. Afroyim v. Rusk, 387 U.S 253 (1967). The court thereby voided a section of the Nationality Act of 1940 which provided expatriation for committing certain acts abroad, viz., in this case voting in a foreign election. Decisive and unequivocal evidence of subjective intent to renounce citizenship must now be found to effect expatriation. Although the Afroyim decision did not discuss expatriation of women marrying aliens prior to 1922, the holding was sufficiently broad in scope for one to question the constitutionality of such law. The First Circuit Court of Appeals considering this issue has held that Afroyim mandates a finding that the Expatriation Act of 1907, supra (which provided for loss of citizenship upon marriage to an alien), was unconstitutional. Accordingly, women who married aliens between 1907 and 1922 did not lost their American citizenship. Rocha v. I.N.S., 450 F.2d 946 (1st Cir. 1971). A reasonable extension of the Rocha rationale leads to the conclusion the pre-1907 law (including treaties) dealing with alienage and expatriation was also unconstitutional since the 1907 act was merely intended to codify the pre-existing common law rule. Accordingly, women who married aliens prior to 1907 did not, in fact, lose their citizenship. Accordingly, women who married aliens prior to 1907 did not, in fact, lost their citizenship. The Estate Tax Section 2001 of the Internal Revenue Code of 1954 imposes a tax on the transfer of a taxable estate, as defined in section 2051, of every decedent who dies after August 16, 1954, and who was a citizen or resident of the United States at the time of death. The estate of a non-resident alien is subject to the estate tax under sections 2101 and 2103 of the Code. The Internal Revenue Code does not contain either a precise or generally applicable definition of citizenship. The general law of the United States determines who shall be classified a citizen for the estate tax. However, there are limited circumstances in which the actual citizenship of an individual is not given full recognition for purposes of the tax. In Revenue Ruling 75-357, 1975-34 I.R.B. 8, the Internal Revenue Service considered the case of an American Woman who married a *** subject in 1910. Under the Expatriation Act of 1907 she was considered to have thereby forfeited her U.S. citizenship and acquired the citizenship of her husband. Reviewing two recent judicial decisions, Afroyim v. Rusk, 387 U.S. 253 (1967), and Rocha v. I.N.S., 450 F.2d 946 (1st Cir. 1971) (discussed more fully above), the Revenue Ruling concluded that the Expatriation Act of 1907 was unconstitutional and the courts would restore citizenship retroactively. For this reason, absent evidence of subjective intent to otherwise renounce U.S. citizenship, a woman who married a British subject in 1910 was at all times a citizen subject to both the income and estate taxes of the United States. To ameliorate the impact of this ruling, the Service provided that no one in these circumstances would be liable for income taxes prior to January 1, 1976, and no estate of such individual would be liable for estate taxes if the decedent's death occurred prior to January 1, 1976. This exception is not available to individuals who have exercised a specific right of citizenship after committing a the act believed to have resulted in expatriation. See also Rev. Rul. 70-507, 1970-2 C.B. 1. In U.S. v. Matheson, No. 74 Civ. 2437 (S.D.N.Y. 1975), 36 AFTR 2d 75-5014, the executor of the Estate of *** claimed the decedent was not liable for income taxes during several years she was alleged not to have been a U.S. citizen. In 1919 the decedent married an alien and removed her domicile from the United States. The Department of State erroneously, informed her in 1934 that she lost her citizenship as a result thereof and must undergo naturalization to regain U.S. nationality. Instead, in 1944 the decedent applied for and was granted citizenship by *** being then married to a *** . Concealing this facts she applied for and received a U.S. passport in 1947 claiming to be a U.S. citizen. This passport was renewed several times and the decedant lived abroad using it until her death in 1969. The executor requested a refund of income and gift taxes for 1966-1969 claiming the decedent had been a non-resident alien during those years. The estate's position was that the *** naturalization resulted in forfeiture of U.S. citizenship which was never reinstated. However, in addition to finding that the decedent may have held dual national status, the court held she was estopped from denying U.S. citizenship as the result of claiming such status, and the benefits thereof, from 1947 to 1969. 36 AFTR 2d at 75-5014. But see U.S. v. Rexach, No. 75-4127, December 8, 1975, 37 AFTR 2d 76-437 (2d Cir. 1975) in which retroactive reinstatement of citizenship was not recognized for tax purposes because the Department of State had led decedent to believe she was an alien and she did not claim any benefits or status of U.S. citizenship thereafter. It can be seen that in those cases in which the United States has erroneously led an individual to believe his citizenship has been forfeited, and the individual thereafter did not exercise any right of citizenship, both the Internal Revenue Service and the courts have declined to impose tax liability for the period during which citizenship was retroactively restored. Conversely, if the individual exercised any right of U.S. nationality after being erroneously informed of expatriation, he will be treated as a U.S. citizen for the period during which U.S. rationality was claimed. DISCUSSION As noted previously, prior to 1907 the law regarding expatriation in this country conflicted in some cases. However, with respect to the facts of *** case, there can be little doubt about her status in 1906 and many years thereafter. The great weight of authority supports the conclusion that upon her marriage to an *** subject, and removal of her domicile to *** relinquished her United States nationality and acquired *** citizenship. Upon termination of the marriage *** could have resumed her U.S. citizenship by returning to this country, or, after *** , by taking an oath of allegiance either here or abroad. *** husband died approximatel *** years ago. She continued thereafter to reside in *** and took no steps to voluntarily resume United States citizenship. In fact, from the period of *** to her death there is no evidence *** ever claimed U.S. citizenship. In Revenue Ruling 75-357, supra, among others, the Internal Revenue Service has recognized the substantial changes which the law of expatriation has recently undergone. The Service noted that the effect of Afroyim and Rocha was to retroactively reinstate citizenship for individuals who were believed expatriated under the act of 1907. As we have concluded above, these decisions have the same effect on individuals who had married aliens prior to 1907. However, the retroactive change in status of those who married after 1907 is not, for Federal estate tax purposes, recognized in the case of individuals who died before January 1, 1976, and who have not exercised any right of citizenship since marriage to an alien. Rev. Rul. 75-357. The rationale of this ruling applies to *** The convention of May 13, 1970, which concerned the status of U.S. citizens who became *** subjects, and the decisional law of the period, provided for *** expatriation upon her acquistion of *** citizenship by marriage. The effect of this law was the same as the act of 1907 (which was intended to codify the pre-existing rule). For this reason, and because *** did not exercise any right of U.S. citizenship after marriage, the relief provided by Revenue Ruling 75-357 should be extended to her estate. CONCLUSIONS 1. Based upon the facts presented, *** was a citizen of the United States at the time of her death in *** 2. For purposes of section 2001 of the Internal Revenue Code of 1954 her United States citizenship will not be recognized. Therefore, her estate is not subject to the estate tax under section 2001. See also: revrul75-357 PLR8138071 IRS-GCM36736