ACCIDENTAL US CITIZENS

Children born outside of the US who have at least one US citizen parent may be surprised to learn that they are US citzens — and have always been required to file US tax returns, FBAR forms and Form 8938. (They may qualify for FBAR penalty relief under the procedures outlined in IRS release IR-2012-65.)

Here is the rule on citizenship. It all depends on how old the children are, and how long the parents lived in the US before each child was born.

A. If the child was born after 11/14/86 (i.e., turns 26 after 11/14/2012), the child is a US citizen if ALL of the following are true:
1. The person’s parents were married at time of birth
2. One of the person’s parents was a U.S. citizen when the person in question was born
3. The citizen parent lived at least five years in the United States before the child’s birth
4. A minimum of two of these five years in the United States were after the citizen parent’s 14th birthday.

B. If the child was born between 12/24/52 and 11/14/86 (i.e., is at least 26 but not more than 60 on 11/14/2012), the child is a US citizen if ALL of the following are true:
1. The person’s parents were married at the time of birth
2. One of the person’s parents was a U.S. citizen when the person was born
3. The citizen parent lived at least ten years in the United States before the child’s birth;
4. A minimum of 5 of these 10 years in the United States were after the citizen parent’s 14th birthday.

Thus, US citizens living overseas should advise their children that they may also be US citizens with rigorous US tax reporting obligations.

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