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.
Michael
Bulletin 2009-45 only give advice for covered expats and not the uncovered. But, Publication 519 seems to me to indicate that you are correct in filing a dual status return if you are uncovered. On Phil Hodgen’s tax blog, he seems to interpret Pub. 519, that way. Here is the link. Look down at his answer to KalC.
http://hodgen.com/the-exit-tax-paperwork-for-people-who-have-never-filed/
Is there a way to restart this thread from a later date. On my iPad, I have to scroll down from Jan and it takes forever.
I’m not as optimistic as buswhacker (May 19) is that the State Dept. will issue a back-dated CLN or that the IRS will accept that. IRS rules seem clearly to be that it’s the date that relinquishment is REPORTED to a US consulate that matters to IRS. I have almost been persuaded by bushwhacker’s story and others to do the consular relinquishment thing, but until I can be sure that will satisfy the IRS, I don’t want to start the process. Not that I would owe them anything (though who knows what they might decide), but as a non-US citizen for over 30 years, I don’t want to waste more of my remaining life doing their almost incomprehensible paperwork.
@AnonAnon
I’m relatively sure that the IRS will NOT accept a back-dated CLN. Through relatively recent pieces of legislation, the US has effectively carved out two categories of citizenship, one defined by the State Department, the other defined by the IRS. While the state department will indeed give you a CLN dated the year you committed your expatriating act, the IRS will still consider you a citizen for tax purposes until you’ve filled out their forms, filed back returns, etc.
But getting the CLN still has value. You can wave it in front of a US border guard as proof that you are no longer a US citizen (and therefore cannot possess a US passport). The dange still resides in whether or not the IRS and Customs/border data bases are sufficiently linked to ID you as a tax evader. I don’t think it’s there yet, but it’s probably coming.
But you can offer up the CLN to a bank manager who wants some proof that you are not a US citizen/person as he tries to comply with FATCA (should that day ever come). With that, the bank manager won’t likely declare you as recalcitrant and try to close out your accounts. That’s the real value of the CLN, in my opinion.
DW
@Arrow The importance of the Isaac Brock Society is to make sure that people know what their rights are. A person who receives a back-dated CLN before the years 1995, has no filing obligations, as their expatriation dates before the moment when they need to inform the consulate of their expatriation in order to “expatriate for tax purposes”. In any case, the IRS requirements are ridiculous for a person whose expatriation is acknowledged as happening so long ago, and they would never, stand up in court.
What are they going to do? Arrest every Canadian who expatriated decades ago as they cross the border–because they didn’t file their taxes? I don’t think the IRS has a practical and certainly no legal means of forcing people who have clearly expatriated to pay taxes or do any filings.
The problem is that so few people know their rights and are willing to allow themselves to be intimidated by little articles that appear in the Canadian papers that say they are tax cheats who have to come clean. If we just stood up for ourselves and stopped apologizing, we would be standing on firm grounds.
@AnonAnon
Arrow is correct. The two departments of the same government, have two different nationality laws. DOS will issue the back-dated CLN and IRS will then expect you to file 5+ years of tax returns. As Arrow said, the CLN does have value both with your bank and possibly at any border crossing. There is also the possibility that the IRS is so over-worked they will never get around to contacting you for any tax returns. If they do, you can ignore them.
AnonAnon If you have been a non-US citizen for over 30 years, that means to expatriated prior to 1986, right? Prior to 1986, a US citizen was considered to have “permanently and irrevocably” relinquished US citizenship by becoming a citizen of another country.
There was a Supreme Court decision in 1986 which overturned that long long-standing law. However, many of us who relinquished prior to 1986 maintain we are no longer US citizens. Our position is they cannot retroactively restore our citizenship without our knowledge of consent. Some people have been told by Consulates CLN will be back-dated.
Also, your action was prior to 1995. IRS did not require reporting to DOS until 1995, so that requirement should not apply to you.
Now, I give this information from my personal knowledge (much of which I’ve learned here, but the “permanent and irrevocable” part was told to me by US Consulate when I became Canadian citizen in 1973).
However, like you, I am staying away from US Consulate and IRS. I’m not prepared to do anything to let them know where they can find me. For me, that’s like calling a long-divorced abusive spouse who is still enraged I left decades ago and saying “Here’s where I’m happily and safely living now. Come find me.”
Others have made different decisions. We all need to do whatever is right for us–and stick together and support each other.
@Petro
I read your post after I had already posted above. Of course, I forgot that wonderful 1995 date and AnonAnon certainly falls into the catagory of pre-1995 expatriation. Thanks for the reminder
@Petros, Tiger: It seems the three of us were writing and posting at the same time, so we may have duplicated.
As my Gram always said “Great minds think alike.” Gram was a patriotic American, but she was a wise woman. As the daughter of a suffragette, Gram would be outraged at how US today is treating its former and current citizens.
@Tiger, @petros, @Blaze
I appreciate what you are all saying, and the significance of 1995 and 1986. All I’m saying is the IRS will cheerfully ignore all that — and they have some legal authority now in that regard — if they think they can get their clutches on you. Will they chase us minnows? Stephen Mopsick thinks not, and he’s probably right.
But none of this is written in stone, all of it is subject to a wide variety of interpretation, and none of us is a tax or immigration lawyer. At the end of the day we’ve all got to make decisions on what we as individuals think is the most appropriate scenario.
We can all hope that sanity will return down there some day, but we’d be very foolish to hold our collective breath waiting for it.
@Arrow: We would all die trying to hold our collective breathes.
Then IRS would try to seize a large chunk of our estates. Mine isn’t very big, but I’m not prepared to let IRS have a penny of it. Yet, with my American sister being one of my beneficiaries, that could very well happen.
I’m afraid to talk to my lawyer or accountant about it for fear they will tell me I need to get current with IRS (not going to happen!)
@Arrow: Did your wife ever have the second appointment to relinquish, which Vancouver Consulate insisted was necessary?
There’s are strong echoes of Joseph Heller and Franz Kafka going on with all this. I’m not a U.S. citizen because I became a Canadian citizen in 1979 and have behaved in no way like a U.S. citizen since then. Yet to prove it to their satisfaction, I would have to resume behaving like a U.S. citizen. And I don’t suppose that anyone there, least of all at the IRS, understands the difference between expatriation to avoid tax and expatriation to avoid the annual chore of filing tax forms to prove that one owes no tax.
@ Arrow, I don’t disagree with you at all. In fact, I agree. But too many of us have made it too easy for the IRS by ceding our rights.
Calgary, for example, became a US citizen again because of harassment by border guards. She knows better now. If she had stood up for her rights back then, though, we wouldn’t have her participation at Isaac Brock.
Hi, Arrow.
And, re second appointment to relinquish, we again need to ask why the discrepancy from Consulate to Consulate, Country to Country?
Thanks for all your input and congratulations on the Vancouver Sun contribution. We appreciate your voice on behalf of all of us!
Yes, Petros, a small voice that I hope a few others will hear and heed. I’m the prime example of what not to do!
@anonanon- but it is so much more than the filing of the forms in order to show that you owe no tax. It is also all of the ancillary constraints that are placed upon your financial life. Such as the investment restrictions that virtually guarantee you a life of financial mediocrityat best or poverty at worst. It is having to live a double life where you are actually opposed to yourself because there is this American side of you that won’t let you do what the (insert your country of residence) allows you to do.
In order to be sure that you will owe no tax your have to live according to IRS rules. The thing is that at the end of your working life when the majority of your income is passive income you will be paying a lot of tax to the U.S. on an income that barely keeps you alive.
In the end U.S. citizenship is nothing more than a “dunsel”- a part which serves no purpose (Star Trek reference).
Has anyone else had trouble getting an appointment? The consulate near me won’t give me an appointment, even if it is way in the future. They keep saying “we’ll contact you”. They’ve done so once and offered me an appointment literally 3 days later that I couldn’t accept and now I’m back on their waiting list with no response yet. I hate that they won’t give me an appointment so that I can plan in advance for the time. I would be less angry if they said “sorry, we’re booked until whatever month, but here is a date that we can offer you”. Are they stalling?
@donpomodoro- I declined my first appointment because it wasn’t going to work out scheduling wise but after doing that I regretted having done so. If I had kept that appointment in Nov. of 2011 I would not have had to fill out form 8938 now.
In the time that elasped between that initial cancellation and my next opportunity I came to the conslusion that there is “never” going to be a completely opportune time. I resolved to myself that making any appointment was better than making none and that whatever else was on conflict would have to be set aside.
I have given the same advice to my children. That, after marriage, this will probably be the most important act that they will perform in their lives and that they cannot wait for the best time to do it.
Those are my thoughts on the matter. Obviously you can do what you want.
@recalcitrantexpat – Your points are good ones, but do you think it’s better to formally relinquish and take one’s chances with the IRS, or ignore the IRS after relinquishing, or not start the whole process at all? I’m now inclining toward the last of those choices.
@anonanon- I have chosen to go the former route rather than the latter. There are no easy choices, all three are fraught with their respective risks. If the U.S. were behaving in a rational manner it would be possible to place a bet, but as we have seen with Mr. Saverin, the game is rigged and is constantly being manipulated in such a way as t prevent any of us from acheiving any closure.
Both the IRS and Congress are guilty of doing the same thing which is moving the goal post.
The prospects of being able to come into “complete” compliance after living abroad for 27 yrs. and not filing any returns is extremely low and otherwise prohibitively expensive for the ordinary person. I guess that in the end I am in agreement with Phil Hodgen and his advice to what you can to acheive closure on your act of exaptriation.
@Blaze
No second interview yet, and it has now been nearly 12 weeks. She sent an email a week ago seeking an update, and there has been no response so far. I’m not sure what’s happening down there, but I’m wondering if we will have to book a second appointment and ask in person. I tried the phone once and got nowhere fast. If anyone has a useful phone number for the Vancouver consulate, I’d love to see it.
DW
I formally relinquished because I cross the border somewhat frequently to see family, probably at least three or four times a year. I contemplated the risks others have pointed out and determined that the benefits outweighed. I will not go into hiding and will challenge this ridiculous IRS scam just like the courageous Isaac Brock did, fighting off the Americans 100 years ago! I truly believe I am only Canadian now, have never carried out any actions in over 30 years to reclaim my US citizenship, and have sworn allegiance to Queen & this terrific country of Canada, now my home!! I owe absolutely nothing to the IRS. Some may interpret my actions as reckless and foolhardy, but I will stand up for what I believe is right. And I hope others will join me.
@Arrow: I think the Vancouver Consulate must be a disaster. That is where I dealt when I became a Canadian citizen. After Ladybug (where has Ladybug been recently?!) posted her husband’s letter, I was sure I had received one like it from Vancouver Consulate, but just threw it away because I already knew I had lost US citizenship.
So, I wrote to Vancouver Consulate to see how I could get a copy. They told me they couldn’t reply due to the Privacy Act. I replied the information is about me and was sent to me, so I have a right to it under FOI. They ignored me.
I then wrote to National Archives and Records Agency (NARA), which maintains records more than 25 years old. They have some Consulate records, but the most recent from Vancouver are from 1966.
With some trepidation, I wrote to FOI at DOS and asked how I obtain information from Vancouver Consulate in 1973. Not surprisingly, I have had no response.
Vancouver Consulate seems to be the only one which requires two appointments to relinquish. But, Don Pomodoro doesn’t seem to even be able to get one appointment in Belgium (I think that’s where he’s trying).
It’s easy for DOS to say there aren’t that many renunciations/relinquishments when they won’t let people make appointments to do it–or in your wife’s case, incorrectly tell you that she needs two appointments, but then not respond to requests for the second one.
In the meantime, IRS can catch people in their snare because they can’t get the needed appointments with DOS. Nothing surprises me about US anymore.
@Bushwacker: I don’t think you’re foolhardy or reckless. We all need to do what we think is best to protect ourselves–because no one in DOS or IRS is going to give us a correct, honest or ethical answer to what are actually simple questions.
Fight on!