My understanding is that the last date for filing Form 8854 for a 2011 expatriation is June 15, the due date, because of the automatic extension for the tax filing for a person resident outside the United States. After that date, a person could be subject to warnings or even a $10,000 non-filing fine. So be it.
Tim has suggested that there may be some high level decisions about this at a high level in the Canadian government, on this one, since it is a clear violation of Canadian citizenship rights to have to file Form 8854. I am after all no longer even an American citizen, and it hardly makes sense for me to have to file a form enumerating all my world-wide assets after having received my Form 8854. At Tim’s suggestion, I will not send the 2011 tax filing or the Form 8854 until the due date.
I have decided to send the information for my 2009 taxes that was requested and my 2010 filing separately. It will cost me two stamps. But here is my version of the Cloward-Piven strategy: (1) never file electronically; (2) never give more information than you absolutely must (so don’t attach any Canadian tax information unless necessary to establish a claim); (3) never put two or more tax returns in the same envelope. Make the IRS process the information. If you file electronically, a computer can do this for them, and then that data, with no effort on their part, can be search, collated and eventually used against you. Make it necessary that someone working for the Federal Government must at very least scan your information into a computer. Make them stand up and walk to the file cabinet where they have kept your previous returns (presuming there is no scanned version already in the computer), or at least take a few minutes to search in the computer for the information about your previous returns.
Never file FBAR electronically. Make someone in Washington at the treasury department signal your FBAR to the IRS if there is a problem. If they are receiving thousands of FBARs, they have to pay someone to scan the information into a computer. Don’t make their job easier for them.
@Petros, sounds to me like sound advice.
“Never file FBAR electronically…. Don’t make their job easier for them.”
Absolutely. And by extension, always file any tax return you have to on paper also.
One worrying development though is an IRS proposal to mandate electronic-only FBARs. At one stage they’d aimed to have this forced on everyone for this year. However, they’ve now postponed it until July 2013.
http://cranmereaccountingandtax.com/2012/mandatory-e-filing-of-fbar-delayed/
My guess is that one they have succeeded in this, the IRS will then mandate efiling for all returns of all types from abroad. That way the masses of “nil returns” they receive won’t cost them anything like they will cost you, so enabling the IRS to gloat over yet more compliance “success”
@Petros: I understand from previous posts that you were successful in relinquishing and obtaining a CLN. Were you asked to file taxes when you relinquished and for how many years? If you already have your CLN why are they asking for form 8854 now? (So they can nab you at the border for owing $10,000 if you don’t file?) It seems like no matter what we do we are caught in a trap. I apologize if these questions have been answered in previous posts.
I am hoping to make an appointment to relinquish (not renounce) soon. ( I have been living in Canada since 1971, a Canadian citizen since 2002, have never filed taxes or done anything to claim US citizenship.) I am confused about all the requirements I may be putting myself through once I make the appointment. I wish I could just ignore the whole mess and never cross the border again..
This is major problem they have with the tax process. I relinquished and received the CLN. I now must, according to their rules, file the 8854 and my final tax returns. In 2011, I counted only income up to the date of informing them of my relinquishment (April 7, 2011).
The un-collectable fine of $10,000 and whatever other taxes they might claim that I owe is what they can hang over my head.
For an early 2012 renunciation, where the renunciant just wants to end the whole complicated mess, is there any reason not to send the 2011 return, the partial 2012 return and the 8854 right now?
@royaberg?
@ broken man I found that I couldn’t find the correct forms in early 2011 to file right away. So in all likelihood, you can’t file because it has no instructions on the Form 8854 for filing for 2012 renunciation. The same will be likely true for 1040 form; I don’t know what the 2012 version become available.
@Petros: Would somerfugl’s situation be different from yours because she became a Canadian citizen more than six years ago–therefore she is beyond the statue of lmitationa.
Well, if the consulate accepts her relinquishment date of 2002, her date of expatriation for tax purposes is the date that she informs the consulate. That means she has to do the exit process, five years of swearing that she has no tax obligations and Form 8854. But FBARs should not be required because that has nothing to do with taxes and the statute of limitations is passed.
@Broken Man: I wish I could get it all done now, too. Unfortunately, there is no way to send a partial year 2012 and 8854 until the 2012 forms become available. 🙁
Just got this:
De:
“U.S.(American) Income Tax for Expatriates & US International Tax Matters”
Enviado: Ter 8/05/12 13:46
Para:
Prioridade: Normal
Assunto:
U.S.(American) Income Tax for Expatriates, Permanent Residents and Nonresidents
U.S.(American) Income Tax for Expatriates, Permanent Residents and Nonresidents
2012 Foreign Earned Income Exclusion Increased By IRS
Posted: 08 May 2012 08:40 AM PDT
The IRS for 2012 has increased the Expatriate Foreign Earned Income Tax Exclusion to $95,900. This could save single person (without any available tax credits) up to an additional.$616 in US taxes on their 2012 return over what they might pay on the same foreign earned income on their 2011 return.
Remember an an expatriate living abroad on 4/17/12 you got an automatic extension to file your return until 6/15/12. You can get a further extension to file the return until 10/15/12 by filing form 4868 prior to 6/15. If you owe any taxes at that time interest and penalties will continue to accrue (at a rather low rate) until those taxes are paid. Remember form TDF 90-22.1 (FBAR) must be filed to report your foreign financial accounts by 6/30/12 for 2011. It cannot be extended for any reason.
This combined with the fact the IRS increases the foreign housing exclusion or deduction each year for expats will provide additional benefits to those who live and work abroad for 2012. It just keeps getting better for expatriates so long as all of the special reporting forms (with high penalties for not filing) such as TDF 90-22.1, 8938, 3520, 8865, 5471, etc. are all filed in a timely manner. It is noteworthy that none of these forms are actual forms that produced more taxes, they are strictly informational and if filed, will result in no adverse consequences to the expat taxpayer. Read more on our website at http://www.TaxMeLess.com
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“It just keeps getting better for expatriates …”
Riiiight. Yes, it’s a real bowl of cherries being an American expat.
Good grief. Do these people even read what they have written before sending it?
I thought it was interesting for the same reasons …
@markpinetree – those CPAs on that taxmeless.com website should stick to doing tax returns for widows. They don’t have a clue as like most homelanders. I know a partner in a top 20 CPA firm in the States, I wrote down the term “FATCA” on a napkin in a bar – he didn’t have a clue.
Unfortunately most homelander Americans still believe the world revolves around the US – what a shock they’re in for.
I have never filed a US tax return, FBAR or any kind of form. I have renounced and waiting for a CLN. There was no mention of taxes during the renunciation. It is my understanding that DOS will supply my name to the IRS and I would assume also my address. I’m not 100% sure what I am going to do, and I keep changing my mind. But my current attitude is that they have my name and address, and if they want tax returns or other forms they can send me a letter with a specific request. Why should I have to guess?
@ TrueNorth If travelling to the United States, depending on how common your name is, is there a possibility that going from US to Canada on a Canadian passport they would never you link you to the guy that renounced?
I think that anyone named “Peter Dunn” may have trouble now, traveling to the US on a Canadian passport, until they are able to establish, hey, I’m not that guy!
@halifax pier,
There was this comment by Cecilia a while back:
Do not file an online FBAR – see this comment.
http://isaacbrocksociety.com/2012/03/16/busy-night-at-ibs-cra-reponse-on-fbar/#comment-9907
Sure enough – Harddrive crash and my 8854.pdf is gone. Does anybody have a PDF version of the 2012 Form 8854 for me please! Much appreciated if you’s drop it off to: info@schmithdigital.ch
Thanks and bests!
@Scott
The IRS publishes PDFs of past year forms: http://www.irs.gov/Forms-&-Pubs/Prior-Year-Forms
The 2012 form 8854 is here: http://www.irs.gov/pub/irs-prior/f8854–2012.pdf
Hope that helps.
Thank you Watcher – Fast and accurate! All the best 🙂