If a foreign country's company or other organization that is not the US government asks if I'm a citizen of the US, am I required to state that I am?

I understand that any and all penalties that the foreign entity can enforce upon me for lying would be my responsibility, but I am a liable for anything under US law?

I was looking for a basic general answer to this under US law, but if you want a specific case here we go:

Expats have always been required to register any foreign 'bank account's that run a balance of over $10,000 in any given tax year. What the IRS calls a 'bank account' is at times a mystery. Regular checking and savings are of course bank accounts. But, sometimes pension accounts and even certain kinds of life insurance can be seen as bank accounts if certain conditions are met.

In 2010, Congress passed FATCA which took effect in 2014. This made it mandatory for foreign banks to report the balances on all accounts held by US citizens that exceed $50,000 or risk heavy penalties of 30% withholding on foreign exchanges. Most countries complied. What this means is that a bank, a foreign entity is basically forced to report full personal details as well as balances of anyone that meets those guidelines. This is a lot of extra work, so banks and other entities offering similar financial implements have started to reject US clients. Some expats that were caught unaware of these requirements have been slapped with massive penalties (50% of a year's balance). This has led to a spat of US citizens forfeiting citizenship and the US state department in turn making it more difficult and expensive to forfeit citizenship.

So, given the above situation. Couldn't one not disclose they were a citizen of the US considering the bank does not require one to do so to normally open an account?

Answering truthfully may mean the account is rejected or closed at a later date. Meaning that one might lose potential benefits or have to pay penalities with the bank or insurance company for early withdrawal. It could also mean one more account that the expat has to remember and report every year or face penalties.

  • This is very helpful. In that context, failing to answer truthfully is basically a form of U.S. tax law evasion as well as money laundering per US law, and not answering truthfully is a serious felony offense. Also, in the interests of accuracy, the penalties for forfeiting U.S. citizenship are a result of Congress and the U.S. Treasury Department, not the U.S. Department of State which merely plays a secondary role in implementing statutes and rules established by others. In contrast, no one would fault someone kidnapped by ISIS for lying about their nationality (which could save their life). – ohwilleke Nov 12 '16 at 16:34

It depends partly on where you are. If you're in the foreign country and they have a law compelling you to answer any questions asked by their government or some company, they you have to answer the question. Whether lying has any legal repercussions depends on the laws of the country, so you'd have to narrow it down a bit.

If you're in the US, the only context where you can be compelled to answer a question is when ordered to do so in court (giving testimony), and you have 5th Amendment immunity from being forced to testify against yourself. If you are granted immunity from prosecution, then they can compel you to testify (answer the question).

If a foreign entity asks you whether you are a US citizen, you can decline to answer. You can also make up any answer you want, and generally not run afoul of US law (though you could run into problems in that country). There are state and federal laws about making false statements in official investigations, which would not be applicable to what you describe. There is no general law that says you must always tell the truth. However, making a false statement could be part of the crime of fraud, so it would depend on the context of your statement, i.e. are you misrepresenting your citizenship in order to get something of value.

In light of the topical update, again there may be country-specific penalties in country for lying about citizenship, and tax evasion is against the law here, which is true whether or not you lie. FATCA specifies a duty to disclose (sect. 6038d), which is not tied to truthful reporting of citizenship (in other words, there is no point in lying to the bank because non-reporting is still a crime). But: this law probably brings the lie with the scope of 18 USC 1001 ("Martha's Law"), which makes it a crime to conceal a material fact "in any matter within the jurisdiction of ...the United States". This means and has been held to mean not just that you can't lie to federal officers, you can't lie to anyone who reports your information to the federal government.

FATCA also says "we don't care if it's a crime to report being an American in that country", so inconveniences certainly are not a defense.

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  • The fifth amendment only allows refusal to answer for criminal incrimination, not civil incrimination – Dale M Nov 12 '16 at 21:43

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