Ask your questions about Renunciation and Relinquishment of United States Citizenship and Certificates of Loss of Nationality.
Please note that the guidelines for this discussion are published here.
Ask your questions about Renunciation and Relinquishment of United States Citizenship and Certificates of Loss of Nationality.
Please note that the guidelines for this discussion are published here.
@Schubert1975 and others above
Isn’t it interesting that for all of those, such as Mr. Ladybug and others, who received their CLN without asking for it, the IRS never contacted them to file tax returns. Perhaps it is the case that pre-1986 (or pre 1994) expatriating acts resulting in loss of citizenship, do not require the filing of IRS and Treasury Dept. forms.
I have recently been notified by a college friend, who became a citizen of Canada in 1974, that she was notified by DOS approximately 8 – 10 years later that it had come to their attention that she had taken out citizenship in Canada and thus might have lost her U.S. citizenship. She did not respond and just like Mr. Ladybug, she received a CLN in the mail. She was not asked to bring up to date her tax filings.
On a sad note, this same friend, in the early 90’s was told that she possibly could “get back” her U.S. citizenship. She hired an American immigration lawyer, paid $2,500 to him; he explained to DOS that she had become a Canadian for economic hardship reasons and they re-instated her citizenship. Now how sad is that! She is now caught up in this mess – has a U.S. passport she travels to the States on but has not been filing U.S. tax returns.
@Tiger
Interesting story about your friend, especially since the cover letter that came with my CLN says that I have a right to appeal the CLN to a Board of Review of the Passport Office, but that “your appeal must be based on other than hardship or humanitarian grounds; otherwise, it cannot be entertained.” The cover letter went on to say that an appeal had to be based on a statement under oath, with documentary evidence, providing new or additional evidence that would constitute legal grounds for belief that my case merits a reveral of the decision. So I guess your friend was “lucky.” They must have relaxed that. I have trouble imagining what grounds would work under the old rules, if not hardship or humanitarian. Coercion at gunpoint (need a signed oath by the gunman)? Temporary insanity (maybe a shrink would sign something)? Bad legal advice (good luck getting a lawyer to admit that in writing)? I’ve heard the Board of Review almost never, if ever, granted an appeal back then, don’t know if they even do now. Moot point; I’ll never ask for my USC back. I’m 100% Canadian, will only live here, and will be buried here.
Bottom line: before 1986, becoming a foreign citizen was an automatic loss of US citizenship, and most folks didn’t have a snowball’s chance in Hell of getting it back. And we all knew and understood this when we became Canadians, and we didn’t care. I guess Exceptional America has trouble wrapping its collective mind around the fact that some people really don’t want to be Americans. And taxation wasn’t the reason. There were lots of other reasons. There still are.
@ Schubert1975
I believe what happened in the case of my university friend was that she applied in the 90’s, through a lawyer to “get back” her U.S.citizenship. His argument with DOS was that when her marriage broke down and resulted in divorce she became a single mother with the need to support her two children. As she was trained as a “social worker” and most of those jobs were with government, it was necessary for her (due to economic reasons) to become a Canadian citizen. Richards v. Secretary of State had tried to prove he had economic reason to the 9th circuit court (1985). Richards was denied based on the fact that he had been a teacher in Canada and did not need Canadian citizenship for that job.
However, by the time my friend tried the same reasoning, DOS had issued (in September,1990) a policy statement which dealt with loss of nationality. The policy statement indicated that DOS would presume a person intended to retain U.S. citizenship where they became naturalized in a foreign country or took a routine oath of allegiance or accepted non-policy level employment with a foreign government.So I believe it was her timing of her request to again be a dual citizen.
I don’t believe her case changes anything for those of us who firmly believe we are no longer Americans and we became Canadians fully intending to relinquish our U.S. citizenship.
I have a question and greatly appreciate views of more experienced member in the forum. If some one is a dual citizen and wishes to renounce US citizenship, what is the best option? (i) File five years of back taxes and renounce citizenship or (ii) first renounce citizenship and then file five years back taxes.
Is there any rule against renouncing first and then filing five years back taxes? Please assume the exapat have been living in his country (outside the USA) for no less than 10 years and not filing taxes, but owe no taxes and assets are less than 2 million.
I greatly appreciate experiences of people who filed 5 years of taxes after relinquishing US citizenship. Thank you all in advance.
Depends on how much you want to be a test case. Most everyone says you have to file five years back PRIOR to renouncing. However, I have seen from different sources that they cannot technically stop you from renouncing if you haven’t filed five years back.
I read on web that, some people first renounced and then file for five years back taxes before filing form 8854. If no one yet filed 5 years back taxes after renouncing, then my information is wrong.
I remember some one stated in some other thread in this website that he/she renounced and discussed with US consulate officer to file back taxes. I could not locate that post now.
Many dual citizens planning to renounce may be looking at this thread to find least painful way to renounce US citizenship. I am sure many of them have the same question and looking for definitive answer. It would be helpful to renounce ASAP and then take necessary time to gather all old tax data and file back taxes properly.
@jay- there is no linkage between the acts of renouncing/relinquishing and filing taxes. The process of relinquishment itself requires that you not have filed U.S. taxes since the filing of taxes is an acknowledgement of U.S. citizenship. Both renouncing and relinquishing are voluntary self expatriating acts and as such the right to take either of those acts is not dependent upon prior tax filings. And as previously stated the very act of filing would negate any claim to relinquishemnt.
@Johnnb
In your above post, what did you mean by “we affirmed to 4081”. Did that mean you only had to sign the form in front of the consulate employee?
@recalcitrantexpat: Thank you for the information. So a dual citizen can first renounce and then file past five years taxes. Some dual citizens can’t relinquish because they may have been in position of US valid passport and didn’t relinquish US citizenship when they acquired dual-citizenship of another country. Also some kids born abroad to US citizens and their US-citizen parents applied for SSN and passport.
This information is very valuable for many dual-citizens who are in the process of renouncing US citizenship. Any first hand experience is really appreciated. Very few people can take that risk or afford to be a test case (as TIM pointed out above). Confirmation from some one who filed 5 years back taxes after renouncing would be valuable.
I wonder how they would react to five blank 1040s and no FBARs, since I have had absolutely no filing requirement the past five years. I plan to renounce, file a 1040 for this year, two FBARs for this year and form 8854. I fail to see what problem they could have with that if it was entirely legal for me to have had no contact with them the past five years and I can’t imagine how they could levy a penalty or fine. If they do though and its not outrageous I will just pay what they want – I want to be fully, legally detached as quickly as possible and would, if I am honest, be willing to pay even much more than the 450 dollars currently to get rid of US citizenship asap, especially if it meant that the CLN would come quicker!
Jay – One concrete example is worth a thousand suppositions.
Veilleux and her sister travelled to the U.S. consulate in Calgary earlier this month to renounce their U.S. citizenships, which Peterson said was wise, because it stops the clock on tax obligations.
http://usxcanada.wordpress.com/2011/08/25/2011-aug-25-welch/
This news item leads straight back to the topic of the opacity and inconsistency among consulates/embassies — and perhaps even to variability at the same consulate over time!
Compare the Calgary practice of August 2011 with the Vancouver ask of all applicants in early 2012 about tax filing:
(c) When was the last time you filed U.S. Tax Returns? If so, which year and which form did you file?
The decreasing separation between Dept of State and Dept of Treasury/IRS has been a theme in other postings — especially see
http://usxcanada.wordpress.com/perspectives/#passport
@usxcanada: You are right “One concrete example is worth a thousand suppositions.” That is exactly what I am looking for.
But no where any of the links mentioned, when they filed 5 years back taxes (i.e. before or after relinquishing citizenship). I looked all the links, but failed to find conclusive answer.
Also it is a good point: “Veilleux and her sister travelled to the U.S. consulate in Calgary earlier this month to renounce their U.S. citizenships, which Peterson said was wise, because it stops the clock on tax obligations.”
That is the reason I wanted to renounce ASAP. In my local consulate there is no waiting, one can just walk in and get an appointment. Then spend few months time to carefully collect all tax and FBAR data for filing 5 years back taxes. I can’t afford a lawyer and I believe don’t owe any taxes.
@ Jay, It is illegal to make tax compliance a pre-requisite for expatriation. Just for your information. Thus, the current crop of laws that make tax expatriation a second process are really unconstitutional (violation of fundamental right of expatriation established by the Declaration of Independence); a violation of the 1868 Expatriation Act; a violation of international law.
Why worry? Do you have significant assets in the United States? Do you have ANY assets in the United States? Do you need to be able to travel to the US?
In any case, the State Department makes a decision on your case based on your paper work, and they do not have access to your IRS records (not yet in any case); then they send out a CLN and inform the IRS. So you DO NOT have to be in tax compliance to expatriate. Even during the process they inform you that expatriation does not relieve you of your tax obligations. (They do not mention that expatriation may make it basically impossible to ever collect from you).
@Tiger: 4081 is the form where they try to impress upon you the seriousness of giving up US citizenship. They are compelled to read it to you or ask if you have read it and then have you sign it. It includes a couple of checkboxes where you swear or affirm that you have read or had it read to you and in what language. Not being religious we chose to affirm rather than swear. (One is so help me God and the other is under pain and penalty of perjury.)
Petros: Thank you for helping dual citizens and other expats trapped in this tax mess. I like to do every thing legally. As you already know most people in the forum want to be compliant. Unfortunately dual-citizens who want to be compliant entered OVDI suffered more than dual-citizens ignorant or ignored about FBAR. I never knowingly broken a law and I don’t want to break a law now. I don’t owe any taxes, so there is no reason to break a law. My two mistakes are (i) not knowing about FBAR and (ii) not knowing that I need to file taxes, even when there is no taxes are due.
I haven’t visited USA in past 8 years and can avoid visiting USA in the future, if IRS tries to impose unreasonable and unconstitutional FBAR fines. But I wish to file taxes, since it is reasonable law and being a US citizen I am obligated to know and obey all reasonable laws. Also I wish to have an option to visit USA to see friends and family. Also I have some funds in 401k savings in the USA, which are not much. If it is possible, I like to renounce first and then file back taxes for 5 years. So I like to know, if any one else have renounced prior to filing 5 year back taxes.
@ Jay Actually extra-territorial taxation is not reasonable, nor is it constitutional.
This is a situation which comes down to this: When lawbreakers make the rules, then those who wish to be in compliance to the laws must decide which laws, of the many contradictory laws they will obey. I’ve decided, living in Canada, that I will live by the rules in Canada and insist upon my United States constitutional RIGHTS to do exactly that. The Ninth Amendment recognizes the right of expatriation.
In your case you must do what you have to to protect your ability to go to the United States and not lose your 401K savings. But realize it is next to impossible for them to know anything about your financial situation outside the United States: unless you tell them–or your bank tells them.
@petros- Does the State Department inform the IRS directly or is it the case that the State Department publishes the names of those who have lost their citizenship and that the IRS has the responsibility to go and consult this list?
I thought that the latter was the case and not the former.
@ recalcitrant What I’ve read is that the State Department sends word to the IRS that they have issued CLNs to such and such persons, and then the IRS publishes their names (before or after tax compliance??) as having expatriated. The IRS contacts the individuals in questions and threatens them with fines if they don’t file a 8854 and all that is required.
@petros- although it may true that collection may not be possible the other truth, as Roy Berg informed us, is that there is no Statute of Limitations on tax obligations. In Mr. Berg’s seminar he said that this means that when you die your tax obligations don’t die with you but that they become an obligation of your estate. The executor of your estate then becomes responsible for paying these taxes, either from the proceeds of the estate or from his/her person.
It would seem to me that in a case of expatriation where taxes are owing that it would be the mature and fair thing for the U.S. to not levey any penalties, thus rolling them into the tax obligations, but to be content to merely collect the tax owed.
@Schubert, Blaze, Arrow
I received an email this morning with the attachment of my citizenship file (from Oct.1972). The document is 8 pages long and on the final page it has the 2 oaths (the oath of allegiance and the oath of renunciation), signed by me. As Schubert said in a much earlier post regarding his wife’s file, it is blurred and difficult to read but it is legible.
Considering that I sent my request to the Privacy Commissioner on Jan. 31, 2012, I was pleased to receive it this quickly. Pleased enough that I phoned the specific person’s phone number (it was in the attached letter) and thanked her for their quick reply.
I still do not know whether I will go to the consulate to apply for a CLN but I am now prepared to show this to my financial advisor.
Tiger: That’s great news. With my wife’s appointment next week I’ll make do with the copy of the oath I got off the web. I’m pinning our case on the fact that in 1974, Sec. 349 of the INA states clearly that you SHALL lose your citizenship when swearing allegiance to another country. I actually copied that language as an answer to one of the questions on the form I filled out for my wife.
Great news Tiger. Sorry to have missed your phone call this morning. I haven’t received my original oath, etc from my citizenship and I sent my request on January 25. Maybe the delay is because I didn’t give them my e-mail address.
I did, however, receive good mail this morning from CIC. I had lost my citizenship card and also didn’t still have my original paper copy from 1973 (I think I had to turn it in when I got the wallet sized photo card in 1986). I applied for another one January 16. CIC said processing time for replacement would be 10 months, but it was less than 2.
I was expecting another photo wallet certificate (because I had to send signed photos with the request). Instead, today, I received a larger paper certificate different, but similar to the original one. It is dated the day of my ceremony: April 27, 1973.
CIC sent a letter advising they are no longer issuing wallet size cards. I don’t know why I had to send a photo because there isn’t one on the certificate.
So, I have definite proof of the date. I also will be able to use this in four years for OAS.
I’m going to the bank tomorrow to put it in my safety deposit box!
Isn’t it wonderful to be treated efficiently, effectively and with respect by our government? IRS could learn a lot from Canada.
@Tiger
That’s super news about the renunciation oath being in your file! It also means the oaths should also be in Blaze’s file and anyone else who became a Canadian citizen back when Canada still required new citizens to renounce their previous nationalities (which by the way the US STILL does even today!).
That oath, coupled with the FACT that everyone who became a foreign citizen before 1986 automatically lost their US nationality unless they could make a compelling case why they shouldn’t, seems to me like a slam-dunk for your getting a CLN.
That oath isn’t necessary IMO for anyone who became a foreign citizen before 1986, but it sure cements the point doesn’t it!
I’ll be you’ll sleep very soundly tonight!
@ Arrow, Blaze and Schubert, Thanks to all of you for the response. I actually did a little “dance” around my office chair when I opened the email. Blaze I am sure yours will be in soon. When I phoned the office in Ottawa to thank them, I asked if they also sent a copy through the mail and the response was no, when they had an email address it was sent that way and would therefore be quicker.
As I have said before, still don’t know if I will be applying for the CLN, but I am hopeful that at least my bank will accept this as proof of my relinquishment.
Could someone please remind me how to apply for copies of citizenship file and canadian naturalization certificate?