I also wonder about the tax implications is she should be gifted any inheritance in Australia.
Inheritances and gifts are not considered income by the IRS, so there will be no taxes on the inheritance itself * although there may be a reporting requirement. Estate taxes are paid by the estate, not the heirs. There are certain circumstances under which a non-resident, non-citizen’s estate must file an estate tax return ( and potentially pay estate taxes) but those involve US- situated property and are required no matter the status of the beneficiaries.
* Income produced by the inheritance will be treated the same as if it wasn’t inherited - for example, someone who inherits a copyright and receives royalties will be taxed the same as if they were the original copyright holder.
The banking requirements could have some career limiting implications.
Want to open your own small business in your home country outside the US? You have to find a bank that is willing to take you as a client and provide you with a bank account that meets the US reporting requirements
You got a promotion and the new job involves signing authority in a bank account for the business? Oh-oh you have to explain to your employer that they’re going to have to be filing all sorts of financial info to meet US requirements.
All of this even if your business or employer does zero business in the US. It’s the extra-territorial application of US law to banks around the world. And many of those banks won’t do it.
Yes, we’ve run into that opening a bank account and getting a mortgage in Europe.
Its isn’t me…(It is, as someone pointed out Eva Luna…I’m happy to be confused with her though).
Oops. Sorry to bug you unnecessarily.
Wow, I get exactly the same thing. My mother never had a passport until she felt she needed one just in case she had to come ‘rescue me’ from the evils of the Old World. She has never visited me over here, reminding me that her grandparents spent their entire lives trying to get out of Europe, so why would she ever want to visit? 
Actually, I had heard that the US only allows dual citizenship if you get the second (non-US) citizenship through marriage. Apparently you are not permitted to adopt another country just because you want to. Have you heard this?
The US does require renouncing or else you are a US citizen forever and required to pay taxes forever. The US cannot make you renounce another citizenship nor can the US stop you from gaining another citizenship through marriage or residency or any other way. The US doesn’t “recognize” other citizenships but cannot limit you or demand you relinquish. For example, my daughter, at birth, became both a US citizen and an Australian citizen because I am American and dad is an Aussie. Years later, my husband got his US citizenship but is also still an Aussie citizen. Other countries also have paths to citizenship which have no bearing on your US citizenship.
To be clear: some countries do not honor the premise of dual citizenship, or do so only to a limited extent. In such a country, if you pursue naturalization, forfeiting your American citizenship may be necessary. For example, if you naturalize as a German citizen, you will be required to relinquish your status as an American unless you qualify under certain narrow restrictions.
Is this actually the case? From my understanding, if you are born abroad, having a US Citizen parent allows you to become a US Citizen, but does not automatically confer it. I know people have to go to the US Embassy and fill out paperwork to get a Consular birth Certificate for their non-us born child. For other countries, it might be different, but for the US at least, I think you have to fill out the paperwork, and even then, in the case of naturalized citizens with a non-us born child, it might not be enough.
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I believe the paperwork is to document the US citizenship that the child was born with, not to apply for citizenship. If you are born in the US , your birth certificate is proof of citizenship. If you are born in say, Iceland to US citizen parents, your parents would have reported the birth to the consulate to have documentation but that doesn’t mean you aren’t a citizen if they didn’t - it’s just harder for you to prove.
I spent the first 22 years of my life in the US, married an Indian national and had two kids in Switzerland. Because only one parent was American and the kids were born abroad, my understanding is that they were stateless at birth. I had to prove to the US government that I was sufficiently American to be able to pass on the citizenship to my kids. To do this I needed to fill out a form detailing every single day of my life that I spent on US soil, and this had to add up to at least 5 years. With proof!
If it was less than 5 years, my kids could not be American. They would in this case have remained stateless until they obtained Swiss nationality (I was not yet Swiss at that time). I would have thought this was in violation of some international convention, but maybe not…
My daughter was born in the US and has a US passport. She automatically has US citizenship and Aussie citizenship, but we did need to fill out paperwork to get her Aussie passport. So she now has both passports. I grew up in the USA, so had over 30 years of living there, my husband grew up in Oz and lived there for over 25 years. We’ve lived in 4 countries together now. Our son was adopted from Russia and as soon as the plane touched down in the US, he was considered a US citizen. We turned in paperwork at customs and and his CofC was mailed to us. He is still considered a Russian citizen until he’s 18. However, Oz is not recognizing him as an Aussie citizen because he was adopted so we have been unable to get him an Aussie passport. Crazy.
Wow - I’ve never heard of that situation!
It’s probably not all that common for it to happen - but the intent is basically to prevent US citizenship from being passed on for generations of people who spent little or no time in the US. The physical presence requirement varies based on details - but the idea is so that someone will not end up being a US citizen simply because one of their grandparents was. If I was born in the US , moved to Italy when I was 21 , married a non-US citizen and had a child in Italy , that child would have had US citizenship from birth* because I lived in the US for the required amount of time. But if that child didn’t live in the US for the required amount of time , my grandchild will not be a US citizen from birth.
* There would of course have been paperwork and proof required to document this.
There is an international protocol relating to the status of refugees, but it does not require the country of residence to automatically grant anyone citizenship, as far as I know. I know people who had triple citizenship at birth, and others, as you note, are stateless and have to apply for nationality based on circumstances like nationality of a parent (you merely being born in the US does not automatically confer citizenship, though), or long-term residence (Switzerland is one of those places where it can take 10+ years to become naturalized, but time counts double for children, or something like that).
Interesting. In Ireland, you can get citizenship without any residency if one of your grandparents were born there. I understand Portugal offers a path to citizenship through purchasing property.
Yeah, actually the reason I used Italy in my example is because I am eligible for Italian citizenship even though none of my grandparents were born there or were even Italian citizens - my great-grandparents were. But the thing is countries that transmit citizenship for generations like that don’t usually have birthright citizenship - so if two US citizens not of Italian descent have a child while living in Italy, that child will not have Italian citizenship by birth.
I don’t think this is accurate. There was someone up-thread that mentioned it happened to their daughter even though they were Canadian and only had her in the US due to being there at the time of birth. There is even an association now for accidental Americans, people who did not realize they were born American because their parents were in the US at the time, but have lived elsewhere (and not come to visit) since.
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