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.
@Em, I got my I-407 back from London with almost indecent haste. Under a week for the complete turnaround if I recall correctly. This was a couple of years ago, so maybe a backlog has developed since then. Three months though sounds extreme to me. I guess you just need to keep prodding them. Maybe a call to or mention of the USCIS Customer Assistance Office will spur them?
Legally I think you can claim the date you sent the form as your official surrender date, even if it takes USCIS some glacial timeframe to send back the receipt. Please don’t take my word for it though. I’m just some random bloke on the internet.
As to what to do with the stamped and returned I-407… frame it and hang it on the toilet wall?
@ Watcher
Ah, so you are the one I vaguely remembered mentioning getting your I-407 very quickly. I will keep prodding and if it ever comes I will store it behind the toilet tank. Sorry but I’m getting rather fed up with the wait. I’m not asking much here — a signature and a stamp. It’s a simple form (glory be) and it shouldn’t take but a couple of minutes to process and send back to me in the stamped self-addressed envelope I provided (fun finding US stamps in Canada — I salvaged them from US mail that skipped through cancellation). I wish I’d sent it to London now but the address the US Consulate in Calgary provided was in Mesquite, TX so that’s what I used (that’s where they send theirs to). I’m actually hoping it will be dated back to my actual return to Canada — if they can do that with CLNs they should do it for I-407s. We’ll see I guess.
*What is an I-407?
*On the DS-4079 form, where it asks about what passport do you use entering the U.S., I have only used my Canadian passport to enter the U.S. since obtaining Canadian citizenship over 10 years ago and my U.S. passport expired about the same time .. the U.S. border guards tell me it is acceptable, but I just saw this quote on the U.S. Dept of State website: “Most U.S. citizens, including dual nationals, must use a U.S. passport to enter and leave the United States.” – will this jeopardize my DS-4079 application, what answer/clarification do I provide?
@Gavriel: You should tell them that you use your Canadian passport only.
Don’t let the State Department note scare you. The whole point of filling out DS-4079 is to prove that you are not a dual national, but that you are a Canadian only. You want to let them know that since the day you obtained Canadian citizenship, you’ve been acting as though you lost U.S. citizenship. Remember, you are not applying to give up U.S. citizenship (“renunciation”) — you have already lost it (“relinquishment”), and the only thing you are doing now is belatedly informing the U.S. government of the fact that you have lost it.
Entering the U.S. on a non-U.S. passport is a behaviour that’s consistent with having lost U.S. citizenship. In contrast, entering the U.S. on a U.S. passport (or voting in U.S. elections) would be inconsistent with your claim that you are no longer a U.S. citizen. If you told them you used a U.S. passport they would reject your relinquishment claim.
@ Banany
An I-407 (aka Abandonment of Lawful Permanent Resident Status) is a green card holders get-out-of-jail pass, much the same as the CLN is for US citizens. If you want to understand a bit more about read it read “My Story” below in the Participant’s Section. I refer to my old green card as being kryptonite for good reason.
*Question on timing – If renunciating in January of 2013, when should the form 8854 be filed, at the same time as the renunciation at the embassy or by April 15 2014? Also should the 1040 for taxable year 2013 be filed in January of 2013 or by April 15 2014? .. if I don’t file the 8854 in 2013, which would show no covered expatriate status and no exit tax, will my name still be published in the Federal Register of renunciants for the 1Q of 2013? .. also, would the certification of tax compliance for preceding 5 years be 2008, 2009, 2010, 2011, and 2012 (assuming one files the 1040 say in January of 2013 for taxable year 2012)?
Form 8854 is due the same time as your last tax return, and is supposed to be handed in with it. That is according to the Instructions for Form 8854, if I am no mistaken. This form is usually available only around January after the year that you renounce. So if you renounce in January 2013, then you would file it by June 15, 2014. But if you didn’t meet the filing threshold in 2013, since you only had less than a full month of income in 2013, you might be able to file the last 1040 for 2012, in which case you could file the 8854 in 2012. Not sure about that one. Others might know.
As for the second question, the certification would be for the final 5 years of tax citizenship. I don’t know if less than one month can count as I suggested above. May be the Form 8854 instructions would clarify that matter.
Not sure if this question was answered earlier, but someone was asking if they have to file the 8854 form once they get their CLN .. which begs the question, if you get the CLN but do not file the 8854 or if you do file the 8854 in 2014 for the 2013 year for a relinquishing/renunciation in say early 2013, aren’t you then under the FATCA regulation in either case? .. see instructions on 8854 where it says until the 8854 is filed and received, even though you have the CLN you are still considered a U.S. citizen for tax purposes.
*A bigger question for CanadianRenunciating… other than a backlog at a CDN consulate, why are you waiting until 2013 to get out? As has been said many times on IBS… get out while the going is somewhat good. FACTA starts January 1, 2013.
@CanadianRenunciating: …see instructions on 8854 where it says until the 8854 is filed and received, even though you have the CLN you are still considered a U.S. citizen for tax purposes.
Make sure you are looking at the right part of the 8854 instructions; they’re terminally confusing. Between June 2004 and June 2008 the later of your CLN and 8854 set your “tax expatriation” date, and you had to send an “initial” 8854 completely separately from your annual return to make expatriation stick. After HEART in 2008 the earlier of the two sets your “tax expatriation” date, and the first 8854 isn’t needed until you file your final return.
@All
I am about to (hopefully) receive a CLN, but this thread has made me confused. I thought that by renouncing I would no longer be considered a”US person” after the backdated date of renunciation and that the 8854 was just to log me out of the tax system for anything relevant up until that date. Am I still considered to be a US person or US taxable “citizen” then until they release the forms for this year so that I can file this thing ASAP? Should I hold off opening any new bank accounts if I am still a US person? Can I provide my banks with the CLN now and honestly say that I am not a “US person” finally or is the nightmare not over yet?
And if you are still a “US person for tax purposes” until the 8854 is submitted, when does this distinction finally get removed? When you send the form, when they open it a year later…what do you do if you send it and never hear back from them…?
I am very annoyed as I have tried to do everything possible to remove “US person status”: No US assets or income, citizenship renounced, never visit the US, no dollar holdings anywhere in the world etc. Why can’t this ever end :/
@Don, And if you are still a “US person for tax purposes” until the 8854 is submitted…
Calm down. You’re okay. Incredible though it seems — and decidedly in contravention of accepted international law — before HEART it was indeed possible to still be a US person for tax purposes even after renouncing or surrendering a green card. But no longer. There’s a good article on the history of all this here. This is the bit you want:
Because form 8854 has to cover pre-HEART cases its instructions also partly cover the “old” rules. It’s entirely unsurprising that people reading them can get the wrong end of the stick. If you go through it carefully though you should find you’re in the clear.
Of course the whole thing is complete BS anyway. But the best way to play it is to send the IRS as much paperwork as is needed and as little actual cash as possible, while working to make it all go away. Which is what you’re doing.
@Watcher
Thanks for that clarification. It definitely looks like I was mixing up the two different renunciation processes.
Has anyone ever actually been contacted after filing the 8854 if they did not owe any tax nor were a covered expatriate? Do they send some sort of proof that they have reviewed the documents or are you only contacted if you owe something?
The consular part of the renunciation process is so much easier to understand and streamlined than the IRS part…Why can’t they combine this somehow so that you can do everything at the consulate and not have to wait half a year to completely finish the process? Definitely seems designed to dissuade anyone from renouncing due to how convoluted everything is!
@Don, Why can’t they combine this somehow so that you can do everything at the consulate…
The simple answer is because the IRS is not the DOS.
The more nuanced answer is that the tax forms you need to complete the whole thing aren’t even designed yet. You’ll have to fill out a 1040 for the year up to your date of renunciation, and the IRS won’t release 2012 forms for ages yet. Often can’t, in fact, because congress is soooo sloooow with things like AMT law patches that the rules for the current year often aren’t set until after the year has ended.
The most nuanced answer is that the US likes to make the process into the punishment. There’s probably some of that too. But mostly it’s just the nature of the beast. There aren’t enough renunciations (yet) to make streamlining a simple process worthwhile.
Just play along. It might help to use last year’s tax forms to “mock up” your final return for this year, at least up to the point where you start to calculate exemptions and taxes due. That way you don’t have to try to reconstruct everything six or nine months after, but can get it on paper while it’s fresh in your mind. You won’t be able to use this return, but the chances are that the 2012 forms will look very much like 2011’s, just with different exemption and exclusion amounts, so completing it will be mostly a copy of your “mock up” perhaps with a couple of different numbers at the end.
Doing it this way will also help with the feeling of completion. Even though you can’t yet send it in, you’ll know that it’s 95% done and ready to go. That will leave you much more relaxed about waiting for the final step next Jan/Feb/Apr. Then it’ll be simply copy onto the real forms, mail, and celebrate.
@CanadianRenunciating – FWIW the only thing
I’d change about my renunciation is doing it early in the year rather
than later – if I’d done it in late 2011 I’d have all the tax paperwork
sent in by now. The way it happened, I have to wait until all the 2012
IRS forms are issued. If you have the choice, I’d definitely do it before the end of the year
*As far as I can see I would be a covered expatriate as I haven’t ever filed any US tax returns, have British nationality since birth, file tax returns in the UK and have lived outside the States since 1969. This is from the renunciationguide.com site:
Compliance Test
The expatriate does not certify that he met all U.S. tax obligations for the five years before expatriation.
If any one of these tests applies to you on the date of your expatriation, then you are considered a “covered expatriate” and the provisions of the exit tax, or “billionaires’ amendment” as Senator Kennedy named it, apply to you.
There is only one exception for adults. If you received citizenship of both the U.S. and some other country at birth, if you continue to hold the citizenship of that country, if you are taxed as a resident of that country, AND if you have been a resident of the U.S. for no more than 10 of the 15 years prior to renouncing U.S. citizenship, you’re exempted from the exit tax provision.
Are there any forms I would need to fill in for the IRS? I haven’t seen anything on the renunciation process forms or the CLN where it would make clear that I meet this criteria so how would they know I’m a covered expat? I’m wondering as I’m getting ready to start the process off and need to know what docs/info I can present to my Swiss bank to keep them happy while I wait for the process to run it’s course. Even though the Bern Embassy has increased staff to deal with renunciations I doubt I’d have a CLN in my hands by the start of 2013 to show the bank when they come asking about compliance.
@Medea Fleecestealer, the IRS forces you to grass yourself up as a “covered expat” using our old friend form 8854. Specifically Part IV, Section A. I’m not sure how much use this will be to your Swiss bank, though. They shouldn’t care whether you’re covered or not. For them it ought to be a simple bright-line test: US person, or free person.
*Thanks, Watcher. I wanted to know as I think UBS is using whether you’re US tax compliant or not as their criteria for letting you keep your bank account/s, as they will have to put the new systems in to deal with US. I’m worried that they’ll come asking around at the end of this year/early next and if I say I’m not, but am in the process of renouncing US citizenship they may still close us down. I need to talk with them about the situation but need as much info as I can get to convince them it’s not going to cause them more problems if they keep us as clients. I don’t want to get into the hassle of filling in US tax forms if I can help it.
*Medea – what makes you think banks will come asking at the start of 2013? I would think they would send out inquiry forms around the 1st week of July 2013 because, under the current timelines, they can sign the agreement between Jan 1 and June 30 but the agreement becomes effective for all banks only on July 1 (2013) if they sign before July 1, so why would they send out inquiry letters when they are not yet in the agreement? .. one question I have is are only covered expatriates listed on the Federal Register or all renunciants and if so, how does the IRS know you’re a covered expatriate or not if they have not received your 8854 yet
*Well, given that the trouble UBS had with the US government over secrecy is what started this whole mess off over here I would expect them to be doing things earlier rather than later. However, I know that another bank here, Migros, is requiring any US citizens to sign an IRS W-9 form and info on that was sent out by Migros some time ago, although I think they may have changed their policy and are following the rest in dropping US clients completely. If UBS don’t do anything before July next year then hopefully, I’ll have completed the process by then and have a copy of the Oath of Renunciation to show them.
As far as I know only the two big banks here, UBS and Credit Suisse, are still accepting new US account holders as is Swiss Post Finance, but I believe they are required by law to provide an account to anyone who lives/works in Switzerland. If you apply to any of the others you’ll be rejected as will anyone in a close relationship with you even though they’re non-US. We do have a Swiss Post Finance account, but our main, pension and mortgage ones are with UBS and I don’t really want to move them if I don’t have to.
@CanadaExpat: are only covered expatriates listed on the Federal Register or all renunciants…?
Nobody knows.
@Medea, Please note that the CLN is the document that the FATCA regulations require in order to prove that you are not a US person. Unless the rules change, the regulations are not asking whether you are covered or uncovered. Thus, full compliance is only necessary if you are uncovered–if you are covered and have assets in the United States and have to pay an exit tax that’s too bad.
Thus, since I am uncovered, I went ahead with finishing my tax obligations and filed the 8854. If I were covered as result of exceeding the asset limits, and I also exceed the capital gain exemption 600K, I would not have filed 8854 because all my assets are in Canada anyway. Why incur an exit tax by telling them, when you can just simply ignore the requirement?–you’re going to be covered in any case. The only reason not to be covered, is to be able to get the IRS off your back once and for all (since they will fine you 10K that they cannot collect), or because you want again to enter the United States. In the future, after Schumer gets his Ex Patriot Act passed, all covered expatriates will be banned from the country. Thus, compliance for the covered expatriate whose assets are already not in the United States is like volunteering for martyrdom. (my non-lawyer opinion).
@Medea – do you happen to know if these Swiss banks are honouring the CLN and treating ex-US Persons with CLNs like everyone else and opening accounts for them?
@Petros, just to be clear, not all covered expats have to pay any exit tax. It’s entirely possible to be covered yet have under $600k in gains (moderately likely, or relatively easily arranged), no tax-deferred or retirement accounts (less likely, and not easily escaped), or dual citizen exception (fairly niche, but appears to apply here). But as long as there’s no tax to pay, there’s no more reason for covered expats to defy form 8854 than for uncovered ones.
Covered expats with an exit tax liability will feel justifiably angry. These are the folk who should probably just blow the whole thing off. Or they could send an 8854 but accidentally… er, forget to mention their retirement plans on it.
Re your point about Ex Patriot. It’s not clear that it will pass, but it’s a sure indicator of the direction of travel for US tax law, from bad to worse to dreadful to appalling. Supposing it does, if you don’t file an 8854 the US has no way to know if you’re covered or not, but once you’ve renounced they do know you’re an expat (in the IRS sense of the word). A missing 8854 might be a red flag at the border if/when USCIS and IRS databases become more integrated. Or maybe not. Nobody knows at this point. Personally I wouldn’t regard not filing 8854 after renouncing as a way to get round Ex Patriot. The best way round Ex Patriot is just to visit one of the other 195 countries on the planet instead.