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.
*Questions on renunciation:
1. which date is the date of the CLN reuunciation date – the date of the first consulate appt or the date of the second consulate appt when the oath is supposedly taken?
2. is there any relevance or significance in renouncing this in the next couple months or simply waiting until the beginning of the new year in 1Q 2013?
@CanadaExpat –
1) The date the oath is taken (second appointment).
2) If you want to give yourself lots of time to sort out your taxes, early next year is best. Your 8854 and so forth won’t be due until whenever the overseas filing deadline is in 2014. On the other hand if you just want to wind things up and get some closure, definitely get it done before the end of the year. I regret not doing it in late 2011 (which I could have done) instead of early 2012, which is what happened.
@CanadaExpat,
The date of your CLN for renunciation should be the date of your renunciation oath — some Consulates require only one appointment; others require two and in those, the second appointment would be the likely date of your oath and of your CLN.
If you were to renounce in 2013, if you are able to get an appointment (or two) with the Consulate you will be dealing with, you would then only have remaining tax returns for 2012, not going into 2013. It may be getting late to get two appointments finished within 2012. Given the fact that the US is prone to changing laws and fees as well as adding complexity, the choice for most of us would be “sooner rather than later” and before financial institutions start their FATCA questions on behalf of the IRS.
See the Consulate Directory Report http://isaacbrocksociety.ca/2012/03/24/consulate-visit-report-directory/ for individual relinquishment and renunciation experiences reported here.
AND
http://isaacbrocksociety.ca/2012/03/14/draft-pdf-compilation-of-relinquishment-and-renunciation-data-as-reported-on-isaac-brock/ for a database showing number of reportings here for each Consulate, those requiring one appointment, those requiring two appointments and how long it takes the actually receive that important document, our Certificate of Loss of Nationality.
CanadaExpat
You lose your citizenship by taking the oath, so the effective date would be the date of the second appointment. Unless of course its a one appointment consulate.
The advantage of doing it this year is one less year of taxes.
If you are in Vancouver you won’t have a choice. There are no open appointments at all until Febuary and they have not started accepting appointments for most of Febuary yet.
*Thanks all; using the UK FATCA IGA as a guideline, and assuming Canada signs a similar IGA say within the next 3 or 4 months, or if Canada goes with the regular FATCA regulations (not the IGA), when will the Canadian banks begin asking about the FATCA questions (like are you a U.S. person?)?
I wonder if the Canadian banks will ask “are you a US person/citizen” or “where were you born”?
*Under the “regular” FATCA regulations it would be July 1 2013 or possibly extended to January 1 2014.
@CanadaExpat: which date is the date of the CLN renunciation date…?
Just FYI… the generally excellent renunciationguide.com suggests that although it’s a grey area, your legal date of renunciation for tax purposes should be be that of your first visit. Even if you don’t take the oath until the second.
@CanadaExpat
Please note that the British agreement contains an exception for Credit Unions. If there is a Canadian agreement I would expect a similar exception.
Also note that the process for existing accounts is less stringent than for new accounts.
Finally note that the current rules only involve an electronic search of existing records, although I would expect that to change at some point.
You might want to consider transfering your banking to a credit union before this year is out to take advantage of those exceptions.
*can somebody let me know if i have to phone for appt to renounce us citizenship or can i do it by email .thnx
Depends on the consulate. Mostly seems to be by e-mail or online, as far as I’m aware. With some, you just book directly on-line under the vague category “notarial and other services” and just show up for your appointment. Others request some information before hand.
Which consulate are you planning to attend at? Someone here may be able to answer your question specifically.
Also there might be info about your consulate’s booking procedure in the Consulate Report Directory.
*can somebody let me know if i have to phone for appt to renounce us citizenship or can i do it by email .thnx Planning to go calgary hopefully before years end
Here is an email address that you can use to request an appointment in Calgary: Calgary-ACS@state.gov
For some reason, I didn’t have success either phoning for or booking an appointment online for Calgary. Someone gave me the above email address and all communications I had with Calgary by email were efficient.
P.S. Someone reported to me getting a Calgary appointment last week for the third week in October.
Good luck!
Something to consider– if a person relinquishes and in the unlikely, but not yet certain event, that the IRS decides for their purposes that the relinquishment date is the date one appears at the consulate, rather than the date on the CLN, it may be possible to claim legal fees in Canada for appealing the IRS decision. Here’s a reference from the Canada Revenue Agency:
Under paragraph 60(o), all taxpayers, including those
persons who report income from sources other than business or property (such as
salary or capital gains), may deduct fees or expenses incurred and paid for
advice or assistance in preparing, instituting or prosecuting an objection or
appeal in respect of
(c) an assessment of income tax, interest
or penalties levied by a foreign government or political subdivision thereof,
if the tax is eligible for a foreign tax credit,
A taxpayer may deduct amounts expended in connection with
legal and accounting fees incurred for advice and assistance in making
representations after having been informed that the taxpayer’s income or tax
for a taxation year is to be reviewed, whether or not a formal notice of objection
or appeal is subsequently filed.
Hi,
I went thru Ovdi 2011 and signed and sent the 901 closing agreement in June 2012. Still haven’t received confirmation of from the IRS. In the meantime I’m in the process of expatriating. My question is – would the lack of confirmation from the IRS impede renunciation of US citizenship? As far as I’m concerned I’ve taken care of all my tax obligations. Would that be correct?
Thanks for any replies/guidance.
*
Renunciation is possible without settling tax affairs. First one renounces and receives a CLN. Then one can finish any unfinished business with the IRS including final tax returns and the Form 8854. Everyone has a fundamental human right to change one’s citizenship. Thus, not even an unfinished tax affair can change the right to change one’s citizenship.
*The trick is that “persons who wish to renounce U.S. citizenship should also be aware that the fact that a person has renounced U.S. citizenship may have no effect whatsoever on his or her U.S. tax or military service obligations” http://travel.state.gov/law/citizenship/citizenship_776.html
One remains liable for US taxes and other claims by the IRS forever, in principle, or until requirements of US tax law are met.
It’s ever nastier in relation to “long-term US residents” although I know of one case in which the resident finessed the issue because he exchanged his green card for a G visa http://travel.state.gov/visa/temp/types/types_2638.html He later went back to his own country and became a minister in the government. The IRS would be unlikely to have pursued him; in any case he is now deceased.
For earlier cases (pre-1980s expatriation), the IRS makes no claim unless the expatriate asserted “attributes of US citizenship”: Rev. Rul. 75-357, PLR 8138071
*That revenue rule (Rev. Rul. 75-357, PLR 8138071) I believe though is superseded though by a latter one. I will ask someone though about this. Here is the later one.
http://hodgen.com/revenue-ruling-92-109/
I will have to ask Phil about Rev. Rul. 75-357, PLR 8138071
*What’s the risk difference between renouncing this year or in January? I’m worried about the FEIE being wrongly rejected, like how some have reported so. Here’s my situation:
I’ve been a dual citizen since birth and lived 20 years in the US and 20 years in Switzerland. My annual income has always been below $148k. I don’t have any securities, banking interest is less than banking fees. I don’t owe any US taxes, filed since 2007, filed FBAR last year, have always done the tax returns on my own and never had an audit. My total mortgage debt is around $600k, with a mortgage on a property in the US. My savings are to small to be reported on form 8938.
In my view, the US should be glad to get rid of me.
The reason I asked about the Ovdi closing confirmation for renunciation is that it has been noted at several places that some consular officers require that you certify having taken care of your tax liabilities by filing form 8854. I was also under the impression that an OK has to be received from the IRS before the US consulate will approve renunciation. (I know this whole set of rules is ridiculous but my aim is to navigate through all this as quickly as possible and be done with it).
@ Schimm, Consulates generally do not ask you about taxes. It’s not their mandate (and they have enough on their plate). The consulate officer’s job is to be sure that your decision to renounce is voluntary and that you understand the consequences of it. See DOS procedure manual.
I have heard of a few consulates asking if you have filed taxes, though. You might check the Consulate Report Directory. We may have some information on your consulate in there. The question “Do you file taxes” is on the 4079 questionnaire. It certainly should not affect the renunciation because you do not have to be in tax compliant at the time of renunciation. You do have to certify that you are tax compliance for the previous five years on your 8854, which must be filed the following June 15th.
So, my reading is that by the following June 15th you have to have performed your obligation, which is to have filed with IRS, but there’s no stipulation that one has to have settled all IRS obligations by a specific date (in fact, depending on when you mail your 2012 return, there’s a good chance no one at IRS will even have looked at it by June 15th, 2013).
You will sign form 4081 Statement of Understanding of Consequences at the time you renounce, point 10 of which is “My renunciation/relinquishment may not exempt me fromUnited States income taxation ……”
citizenship has occurred, as outlined in the DOS procedure manual for renunciation.
I don’t understand this. The consular officer doesn’t get involved with 8854, as that’s between the person and IRS, and is not completed by the person until some time after they renounce. You can’t have settled your tax liability at the time of renunciation because you haven’t filed your final 1040 nor the 8854 yet.
@Schimm, Pacifica is correct. IRS Form 8854 is to be completed after the expatriation date not before. Please refer to the Form 8854 instructions for guidance (google it to find it on the internet).
@Swisspinoy, I would think it better to renounce ASAP, and especially do not wait until January, to reduce paperwork. I don’t see why FEIE would be denied because of renunciation. Then, you do your last 1040 and your 8854 in a one time situation by June 15 (or get an extension). If you have to file for 2013, then June 13, 2014, will be the date for filing the 8854.
The IRS apparently did not deny my FEIE because I had renounced but because I didn’t fill out Form 2555 correctly. But they may have been looking for stupid errors in a vindictive spirit to punish me for relinquishing my citizenship. The IRS is either stupid or evil. Take your pick.
pacifica777, Petros and others who responded — thanks a lot for the responses. Very helpful. The mention that some consular officers may request an 8854 was read by me at http://renunciationguide.com/Renunciation-Process-Step-By-Step.html . But they do mention there too that this is improper.
Well here’s to things proceeding smoothly and thanks to all those who keep sites like these alive and provide very useful information.
Cheers.
@Schimm, thanks for mentioning the source. Please note that the scenario mentioned in the guide does not envision asking that you have already filed 8854 in advance, which is not correct procedure. It merely suggests that a consular officer ask that you will have filed your taxes (up to five years) and that you may have to provide proof of that fact. If that happens to you and is an illegal requirement. The state department official may be recalcitrant in his/her error, as we have often seen in relinquishment cases. Your recourse would be to seek an immigration lawyer, or seek another consulate near you that will not have the same requirements.
But don’t count on the consular official ignoring correct procedure and the law. Go equipped with a knowledge of your rights and report back to us what happens. You should experience no trouble in a renunciation case. But these people are both capricious and evil, as the work for the most corrupt country in the world. So be prepared.