A frequent contributor, Em, e-mailed her story to me.
I am Canadian (born in Canada). My husband is American (born in the USA) and became a Permanent Resident of Canada in 1996. We lived in the USA for 12 years after we got married in 1982. I was issued a green card that year which I never used — did not earn any wages in the USA — did not access any USA benefits — did not pay into Social Security and will not therefore be claiming it for myself in retirement. We came to Canada to visit my parents in the spring of 1994. My mother was taken to the hospital just hours before we arrived. Several weeks later she passed away but my father was not able to take care of himself and his home so I stayed to help.
I only got back to the USA on brief trips (a couple of weeks each) 3 times after that — all before the end of 1997. We had to winterize our house in the USA, bring belongings to Canada and prepare our USA house for sale (finalized in l997). I have not travelled into the USA in the past 15 years but my husband still makes frequent trips to the USA to visit his elderly mother. The years 1994 to 1997 were a particularly stressful time (my father also passed away) and the last thing on my mind was my green card status but it was a few years after I returned to Canada that I heard or read that if you did not keep your green card “active” when absent from the USA for a long period it would become null and void. All these years I have felt certain my green card was null and void. I put the card away — never used it — never realized I should have returned it and filled out a form of some kind. I just found my old green card recently and happened to discover that the IRS has a classification called “US person for taxation purposes”. Now this card has become kryptonite in my hands.
RE: USA tax filing … My husband and I have filed jointly all through the years (we included a note saying I am a Canadian citizen, formerly a resident alien of the USA) but now we’re thinking it might be best for him to file separately to allow me to be completely free of the system (I hope it’s possible). We didn’t really know how to untangle his income from mine so we just did what we thought was the right thing and declared both of our incomes on the 1040s so the numbers would match those on our Canadian returns. (We have always included a copy of our Notices of Assessment with our 1040s.) Like most couples, our accounts (merely chequing, saving and GIC), were all jointly held for many years but not so now as we decided a few years back to completely separate them with my husband having no signing authority over my individual accounts (not what we would like to do but we sensed it was better that way when we saw the change in the FBAR form).
RE: FBAR filing … My husband has always completed a FBAR with all of his individual and our joint accounts listed. I never did a FBAR for my individual accounts because I did not think I was “US person” of any kind since 1994 or at least 1997 (my last visit to the USA). Apparently the IRS considers me to still be a “US person for taxation purposes” because I still possess what I believed to be a null and void green card. I have never professed to be anything but a Canadian and I cannot afford to pay an “expert” to explain to me a safe way to disentangle me from this mess.
If I try to return my old green card at this late date to get an ALPRS (I-407) I think it might put up red flags and expose both my husband and myself to some “unknown unknowns” (audits?, penalties?, more intrusive forms?, IRS and/or Treasury Dept. harassment?). Whatever I do, I cannot jeopardize my husband’s ability to visit the USA to see his mother. (I decided years ago that I would never go to the USA for any reason.) Now FATCA hangs over our heads and yet another intrusive form (i.e. 8938) has arrived on the scene with penalties as severe as FBAR. We are in a Catch 22 despite our attempts to maintain IRS compliance. Meanwhile, the IRS continues to churn out complexities which are beyond all reason and ken and threatens everyone (including those who owe no tax) with bankrupting penalties. I simply want and believe I am entitled to complete freedom from the USA tax system. For now all I can do is tentatively trust the Canadian government to protect me from IRS penalties and hope some degree of sanity prevails in the USA regarding the large net the IRS casts out to catch the big offshore tax evaders (i.e. the “whales”) while entangling innocents living abroad (i.e. the “minnows”).
Note:
FBAR = Report of Foreign Bank and Financial Accounts
FATCA = Foreign Account Tax Compliance Act
ALPRS = Abandonment of Permanent Residence Status
Form 8938 = Statement of Foreign Financial Assets
@Em — Can’t you just mail it to Toronto? The US embassy site certainly suggests you can:
http://toronto.usconsulate.gov/visas/dhs-document-processing.html
“To mail in, include your signed I-407 form, your I-551 (Green Card), and a cover letter explaining your intent to abandon your LPR status. Mail all of these items to Visa Unit, U.S. Consulate General Toronto, 360 University Avenue, Toronto, Ontario, M5G 1S4.”
One thought, though, before you do. Are you positive you want to prod this particular sleeping dog?
@ TrueNorth
Was that a “nearby” consulate you called or the embassy in Ottawa? My husband is going to try sending an e-mail question to the embassy for me (he’s got one fairly anonymous account). (I will not divulge my e-mail to US officialdom at this time.)
@ Watcher
Thanks for that address. Nothing for sure yet but with trepidation I am considering prodding this sleeping dog. My husband is sending his appplication for Canadian citizenship off by courier next week. And after the long wait for that is over he wants to renounce. We don’t want to leave me behind an ambiguous green card situation.
@ Watcher — a do-over on last comment
Thanks for that address. Nothing for sure yet but with trepidation I am considering prodding this sleeping dog. My husband is sending his application for Canadian citizenship off by courier next week. And after the long wait for that is over he wants to renounce. We don’t want to leave me behind with an ambiguous green card situation.
BTW I live in western Canada.
@Em — I definitely understand the search for closure. It’d be a bugger to make it worse than just leaving alone, though.
Just to answer a question from your earlier posting… I filed I-407 in London by mail a few years back with no problems whatsoever. The return receipt arrived in somewhat under a week as I recall. Certainly no noticeable delay. Quite painless. And vastly less hassle than the years (literally) I spent fighting to get it in the first place.
Wow such an easy turn around in the UK. Why are they making it so difficult for Canadians I wonder? It seems they might be trying to trick people into believing the only way to do this is to have a personal interview. I definitely will try a mail/courier route first. All they can do is send it back and if they fail to return the green card I can honestly say I don’t have one.
@ Watcher
I was just thinking about my green (kryptonite) card going back and forth between them and me like a red hot potato. The imagery is kind of funny. To parody the “Two Fat Polka” — I don’t want it, you can have it, it’s too hot for me. (grin)
Oops , that’s the “Too Fat Polka”.
@Em — …or the London embassy is already overloaded with renunciations and what-have-you, so any excuse to offload some work to a back office mailing process!
In case it’s not obvious from the I-407 filing instructions… it’s a good idea to mail the thing in recorded delivery, tracked mail, or whatever Canada Post calls that service. That should do, I think. I can’t see any need for the expense of a courier. London instructions have you include a stamped and self-addressed envelope for the return receipt. I don’t see that on the Toronto embassy site, but adding one probably couldn’t hurt anyway. I’ve found it’s always best to minimize the opportunities DHS have to mess something up.
@Em I thought we had put this dog to rest. As they say in brooklyn ‘ Fugeddaboudid’
@Em, it was out of town, not Ottawa.
I asked about doing self-courier to deliver papers to a Canadian consulate. No means of courier delivery without making appointment, passing security, etc. That leaves registered mail. Their email and telephone service are total jokes, and provide signal enough that the incompetent state should be abandoned asap.
Fortress America has seven outpost bunkers scattered across Canada. Maybe they can’t get those citizenship severances processed because they have to rotate on 24 hour lookout and the only other thing they can accomplish is to get some sleep?
If we are the canaries in the coal mine, like WSJ says, can we conclude that US bureaucrats are the carbon monoxide?
Fortress America indeed! We managed to get an e-mail response from the US Embassy in Ottawa but it all came down to their forwarding our questions to Calgary and so far nothing has come from them and we can’t get past their telehell-no-option-for-me “service” either. If it’s that hard to penetrate the Calgary bunker by virtual means I certainly don’t want to present myself physically at that place. I just want to get rid of that green card, darn it!
Em, I don’t know if this will help but is the address that I corresponded with Calgary Consulate in making (and then cancelling to yet re-make) my appointment for renunciation: Calgary-ACS@state.gov
@calgary411: Question: is there a waiting line to make a renuncialton appointment in Calgary like there is in many (if not most) of the US consulates in Europe?
@ calgary 411
Yes that might help. If we don’t get a response from the forwarded e-mail we’ll give that a try. Thank you. Meanwhile, on the bright side my husband’s application for Canadian citizenship is speeding by courier to Sydney, NS. So far it’s been an easy process but it will probably take quite awhile for their deliberations.
@ Roger,
No, people seem to be getting appointments within a reasonable time at the Calgary Consulate. Also, it appears from what has been reported here, one appointment for renunciation seems the norm rather than their previous one appointment then going home to think about it all. The big delay in all of Canada seems to be actually getting the Certificate of Loss of Nationality.
I-407 ABANDONMENT OF LAWFUL PERMANENT RESIDENCE
A card holder is not required to come to the consulate. LPR card and I-407 can be sent directly to USCIS.
USCIS TSC
P.O. Box 850965
Mesquite, TX 75185-0965
@ All and calgary411
Above is the reply I just received from the Calgary US Consulate (ACS). My I-407 and green card will be on its way very soon to Texas. What a relief to not have to go to the consulate! I hope this information can help someone else. Thanks calgary411 for the ACS e-mail address.
Hi, Em and @Petros,
I’m delighted that it worked for you and thanks for posting that needed information. That information should somehow be easily accessible here if anyone is looking for it later on. Could it somehow be one of the links on the home page, Petros?
It just occurred to me why there are so many Canadians which the US regards as US citizens that are entering the US with Canadian passports which indicate they were born in the US:
That is because Canada is a visa-waiver country, so Canadians, with a valid Canadian passport, can enter the US any time they please.
But if you are a dual US citizen from Mexico, Brazil or from any other country which is not a Visa Waver country, you must have a visa issued by a US consulate stamped in your foreign passport in order to enter the US.
And if you go to a US consulate abroad and your foreign passport indicates you were born in the US, the consulate will refuse to issue a US visa and stamp it in your passport. Why? Because you are a US citizen. So the only way you can travel and enter the US is with a US passport. So instead of a visa in your foreign passport you will be issued a US passport upon presentation of a valid US birth certificate.
Canada I believe is the only visa waver country in the Western Hemisphere. Argentina was for a while, but no longer is.
I don’t know where to put this so I’m tucking it into my little corner of IBS …
Just My Own Thoughts on the War of the Terror Taxes
I’m going to try to present a metaphor and not mangle it like I usually do. It might seem crazy but this is the way I tackle a personal problem — throw all kinds of thoughts at it, all degrees of crazy, and try to pick something that is somewhat resembling sane as my solution.
I think of us (those with various degrees of connection to the USA) as wearing electronic ankle bracelets which transmit our banking positions to the IRS which then, strictly by the 32,000 page book and without skillful or nuanced interpretation, stamps our dealings as worthy of a tax or a penalty (sometimes hard to distinguish one from the other). The IRS also requires hard labour and/or cold hard-earned cash from us to maintain the battery which keeps the bracelet operational. That might be a bit vague — I just mean all that paperwork and the associated consulting fees. We need a solution to this virtual enslavement.
Now we could look solely to ourselves for a solution, take a file (little play on words there), cut the electronic ankle bracelet off, deep six it and then try to continue on with a normal life. That would be the stop earning a living, cash out all your savings and deposit the cash in a coffee can buried in the backyard, type of solution. However we’d in effect be punishing ourselves and we’d still be looking over our shoulders or searching the skies above for an IRS agent or IRS drone trying to track us down.
What would appear to be the ultimate solution will probably not be in the end. That is to expect the US gov’t to come to its senses and direct the IRS to remove our electronic ankle bracelets from our aching ankles. That would be the yippee the US gov’t has finally seen the light and abandoned citizenship based taxation, type of solution. Sorry, don’t hold your breath, because I just don’t think that will happen.
Another solution is to forcefully, by the right of our Canadian personhood, demand that the Canadian gov’t jam at least some of the signals coming from our ankle bracelets so they cannot be received by the IRS. Now this solution is not too improbable and if given enough incentive quite possible. It might mean that the Canadian gov’t would perhaps order the CRA to change our tax forms to require that RRSPs, for instance, be reported only on a special schedule and then the wage income line on the tax form would only show an innocuous total which includes the RRSP as either out or in (depending on whether or not you are making a contribution or taking a disbursement that year). That is, it would not actually indicate the presence of an RRSP and the Canadian gov’t would forbid the CRA from sharing with the IRS that a special schedule is on file, despite whatever is in the current tax treaty between Canada and the USA. The banks would of course be forbidden from releasing any information to the IRS about an RRSP account. It would be protected information. This same type of tactic could be used for other savings strategies which are perfectly legal and even encouraged by our government. Sorry but stock investment strategies are beyond my ken. Someone else would have to figure that out. However, sale of a primary Canadian residence and Canadian source inheritances could also be included in this strategy and these funds could be put in protected bank accounts just like the RRSPs. What the IRS cannot be told according to Canadian law would then be safely out of the grasp of the IRS.
The solution above is only partial and ultimately I would like to see the Canadian government give a firm NO to FATCA and be totally on the side of its citizens and residents. In other words, tell the IRS to take their shackles and shove ’em. Some might think concealing RRSPs and the like in this manner I described to be unfair but the US gov’t and the IRS are not playing fair so why should we?
@Em. I agree. The only Fatca is going to fail is of Canada and other foreign governments present a unified front against the US and say “get away from our banks. They aren’t going tell you anything becase we forbid them from doing so.” Fiurthermore you are violating our national sovereignty by subjecting our citizens, and your’s too, who live within our borders to taxation on income they earn here as residents of this country. We are enacting legislation which makes it a criminal offense to pay taxes to you on income earned within our borders.. That day just has to come. Can you imagine what it would be like every citizen of every country, living anywhere in the world had to pay taxes to every country who considers them to be its citizens?
@ Roger
Thank you for your comment. It almost sounded like you don’t think I’m totally crazy. 🙂
@Em: You’re not crazy. IRS is. Unfortunately, that is causing many of us to think we have gone insane because we believe this could not be possibly happening in a sane world.
@Roger: Thanks for your input. A Canadian newspaper today ran an article (posted on another thread by Tim) criticizing Canadian government for not using its normal “quiet diplomacy on FATCA, Volcker, etc.
We don’t need quiet diplomacy. We need our government to stand up to the bullying tactics of US.. We need them to do it now. And we especially need them to say to Canadians that Canadian banks must adhere to existing Canadian law and to reassure Canadians that Canadian law will not be changed to meet the demands of a foreign government.
France, Germany, Italy, Spain and the United Kingdom are all supportive of the underlying goals of FATCA.
http://www.hm-treasury.gov.uk/joint_intl_statement_fatca.htm
What is their interest??? It seems that the only country that would benefit from it is the US, from getting information about Americans abroad. But for these other countries, this only means compliance costs. Do you think it’s the threat of the 30% tax withdrawal on US investment?
I don’t think it is the intention of these countries to start citizenship based taxation (although with that new French socialist president, we’ll never know….). I know France wants to crack down on tax evasion, but right now, Hollande wants to focus on redefining tax treaties with countries within the EU.
I just don’t understand their interest in backing up that act.
Especially since privacy concerns are pretty important in Europe.
Comments, anyone?