I was born in the US to Canadian parents in 1954. We moved back to Canada in 1966 when I was 12. I have a Canadian certificate of “Canadian Citizen Born Abroad”. I’m now 58. I’ve never worked in the US, never filed any US tax form, never had a US passport. My Canadian passport of course says I was born in the US. As a kid, I remember my mother saying I was a dual citizen up to a certain age. I remember going to the US consulate here in Calgary in the early 70′s. I was somewhere between 18 and 22 or so. I went to ask if I was a dual citizen and what advantage there was to it. As I recall, I was told dual citizenship didn’t really exist and that I wasn’t an American citizen.
I have no idea where I fit into all this IRS/FATCA/FUBAR business. Of course, I want no part of it.
Should I go to the US consul in Calgary and ask questions? I like the idea of some certificate declaring that I’m not a US citizen and have no obligations to any US department. Does the process of relinquishing apply to me?
I’ve spent my whole adult life believing I’m only a Canadian!
The State Department can’t arbitrarily strip a person of citizenship who has committed a potentially expatriating act. But what if the State Department told someone that they were not a citizen back in the day before the Supreme Court changed the law? Does that person then become a citizen even if they don’t want to be one?
Also, I wonder if anyone can come up with further documentation proving that a Canadian like this is not a US citizen. Such written documentation would be useful for quite a number of people if we could.
If you are really worried about FATCA and about not being able to cross the border in the future …you have two choices ..hide your head in the sand…or go to the U.S. consulate and explain your situation and ask for a CLN…if they think you qualify it will not cost you a thing to get one…if you don’t qualify..find a person that will do your U.S. taxes cheap…try H&R block we found a U.S. person there that did ours for $120 per year(we did 6 years.)..do your own FBARs…send them in with cover letters explaining your situation…now you are compliant…then you can either keep filing for the rest of your life or for the very small fee of $450 to be free at last you can renounce your U.S. citizenship …If you renounce you fill out the 8854 exit tax form when you file your last year taxes ..and since you were a Canadian at birth you are considered a noncovered person and that means no exit tax..so really that is a non issue…that is how we did it…I know a lot of people here will nit pick this ..but it worked for us!
“There is also plenty of evidence that airlines in Europe will not allow
persons using foreign passports that indicate the person was born in
the US to board flights to the US without documented proof that they are
not US citizens.”
Wow. Actually I am not surprised at all. This would be another new front in the war against fugitive slaves:
@Freeatlast
From your post I undestand that you were not tax-compliant befrore renouncing. What did the IRS say after you loaded them up with 6 years of 1040ies and FBAR’s, the last 1040 a 1040NR and the 8854? Did you ever hear anything back from them? I’m curious ’cause I’m in the same situation and If this is really all it takes then I’m calling the embassy for my renounciation package tomorrow! That last thing I need in my life now is the IRS raming an endoscope up my butt 😳
@UncleTell, FreeatLast
If I had been in a situation where I had not been compliant for decades because I was already a Canadian citizen who thought that I was actually not even an American, I would under no circumstances begin to kiss the butt of the IRS or the State Department. Perhaps, if I thought I had some reasonable argument that I could use to convince State to hand over a CLN, I perhaps would present myself at the Consulate.
I think I’d be happier trying to convince the banks that I am not a big bad pogromatic American that the FATCA legislation is looking for. Surely, the fact of living in Canada, having only Canadian nationality, earning all one’s income in Canada, having a certificate that says I am a Canadian born abroad, these things should suffice to show to the bank, “a reasonable explanation of the account holder’s renunciation of U.S. citizenship or the reason the account holder did not obtain U.S. citizenship at birth.” The US says FATCA is about catching FATCAT tax cheats in the US; they haven’t said that it’s about smoking out Canadian citizens who were unfortunate enough to have a US birthplace.
If such arguments that do not suffice with the brain-dead bank employees, well I’d leave it alone still. I would refuse to comply with FATCA and even if the bank tattles on me the IRS find out that I was born in the states; so let them send me a bill for FBAR. I’ll just refuse to pay it, and I would force the IRS to prove in a court that I am truly US citizen. Why would I start kissing their butts now, thus suggesting that they have any claim over my body whatsoever? I say this because the Canadian government will not collect from Canadian citizens. So any bill the IRS sends me would be uncollectable in any case. They will not start suing Canadians born in Canada that they have to start paying US taxes and FBAR fines, because they will get nowhere in the courts with this approach.
Now, having said this, I would sell my condo in Florida, any US held stocks, immediately, to make sure that I have no assets in the United States.
*@Uncle Tell,
I relinquished in December and then sent in 5 years of FBARs and 1040s and for 2011, a 1040 up to the date I relinquished and a 1040NR full of zeros for the rest of the year the 8854 (one with the 1040 and a copy to Philadelphia). I had a pretty straight forward situation and was able to do the back taxes on turbotax. I was able to purchase old copies of the programs from their site. I sent it all in January with letters explaining why they were late. I phoned the IRS in March and was told it was all processed with nothing owing. I also did 3520/3520a for tax free savings account and did have some problems with them. I was able to resolve the issues pretty fast and have a letter stating that they accepted my explanation as to why they were late. I know this isn’t the solution for everyone, but it worked for me and I am no longer stressed about all of this. Make sure if you decide to go this route, that you understand your own situation really well to avoid any irs traps. There are some threads on becoming compliant on this site’s forum. There’s some good info there if you choose that route.
@all, Regarding the course of action that I suggest above: Don’t you think that is exactly the approach that the Canadian government (esp. Jim Flaherty) was suggesting when it said that it would never collect taxes for the IRS from a Canadian citizen, nor would it collect FBAR fines.
REMEMBER one important RULE (ROIR): What the IRS doesn’t know can’t hurt you.
@UncleTell
This is really easier to diagram with a decision tree. Someone with better skills than me in that department might make one.
For a renunciation, there’s nothing wrong with renouncing first and filing 5.x years of tax returns, FBARs and an 8854 afterward, by the overseas filing deadline of the following year. On the 8854 you say you’re compliant for the last five years – of course you’re compliant, the wad of paper making you compliant is going in the mail along with everything else.
Alternatively, there’s the higher-risk strategy, sometimes discussed here as ‘going out in a blaze of glory,’ *if* you fall under the exit tax threshold of $636,000 in net worth, of just filing an 8854 saying baldly that you haven’t complied for the last five years, and that’s that.
The 8854 is designed to separate taxpayers into two categories (covered and uncovered) but really there are three:
– Uncovered
– Covered, paying tax (over $636,000 in net worth)
– Covered, not paying tax (under $636,000 in net worth)
They don’t do anything intelligent like making the CLN conditional on the IRS certifying that you’ve done the exit tax paperwork correctly – possibly we shouldn’t give them ideas.
There’s a lot of speculation about audit risk. If I were selecting audit targets and had limited resources, I’d pick someone within easier reach, in terms of squeezing real money out of them, than a former US citizen living abroad.
All of which and C$1.29 will buy you a coffee.
*@petros, You state “The US says FATCA is about catching FATCAT tax cheats in the US; they haven’t said that it’s about smoking out Canadian citizens who were unfortunate enough to have a US birthplace.”
Have you actually seen any official US government statement, from the IRS or anyone else in the US government that FATCA is limited to catchig FATCAT tax cheats in the US?
I don’t recall having seen this and from personal accounts others living abroad have related who have been literally “cleaned out” of their life savings as result of penalties they paid for having failed to submit FBAR reports which they had never heard of and therefore never submitted on a timely basis, this would be really important information.
The FATCA law does not have any loophole or escape clause for “unaware” dual citizens living abroad that I am aware of. And it sure has shut a lot of them out of having accounts with a long list of banks where they live in Switzerland and elsewhere.
@Petros
I don’t think that they can actually forbid the entry of a US citizen into the US since every US citizen has a fundemental right to return. What they can do is charge you a $100 “administrative fee” and make you fill out some forms.
I have no doubt this will become standard policy in the future and the forms will be turned over to the IRS for follow up.
@iamquincy
Thanks for the input. My previous post
wasn’t 100% correct, I actually started filing my returns in 2010 on
a strictly going forwards basis (didn’t file any late returns) ’cause
the EA that I consulted said, due to the fact that I owe no taxes and
my FBAR shows that I’m not the multi millionaire that the IRS is
looking for, that I should have no problems which ’til this day has
been the truth. Now some will say “why the hell did you start filing
for in the first place you numbskull???” Well to tell you the truth I
really don’t know, I guess it’s just like some other post I read
about being a deer caught in the headlights or maybe just a reflex
action? But it’s too late now to try to answer that question.
My
main worries right now are much like swisspinoy’s concerning our
mortgages. My bank doesn’t know that I’m a “US person”
’cause I’m a dual Swiss/US from birth and never thought they needed
to know I’m an american, that might be the one smart move I’ve done
so far 🙂 I’m just waiting for the day that the swiss banks start
sending questionaries out to ALL their customers asking them about
their “US personhood” while making some harsh threats if
they find out you’re not tellin the truth.
I wonder how they react if I tell em a story like spanky! 🙂
I wonder If I’m better at foolin the Swiss banks about my identity than Spanky is ! 😳
*I have crossed the US border a number of times with my Canadian passport showing a US birthplace and was always allowed to enter the US. The US birthplace was never an issue and was not even mentioned except for one trip. The border officials usually glance at my face and the passport picture to see if they match, and may never even look at the birthplace (how careful are they to look at the birthplace). In my case I had no idea that I was considered to be a US citizen until I was told on my last trip that my US birth place made me a citizen. I was still allowed to enter even after being told I was a US citizen.
I wonder if a person who has a current US passport and obviously knows they are a US citizen, and chooses to show a non US passport instead might be treated very much differently than myself. I do not recall being told that I required a US passport in the future, only that I was a US citizen.
@Roger, I said that because that is the ostensible purpose of the law as the United States presents its case to foreign nations. The ability to shake down Canadian citizen is
a fringe benefitan unintended consequence of FATCA. If they came to Canada and said, we plan to shake down your citizens, the one million who have US citizenship as we define it, and force them to come into compliance and pay taxes in the United States, precisely because we have deficit problem with our current president who continually blames the former president for his incontinent spending. How long do you think that it would take the Canadians to say “Hell No!” to FATCA? As it is, the vast majority of Canadians are blissfully unaware that this is their problem, because the United States is acting like a cheating thieving nation, a smooth talker and a player.The rule is that most US persons must use a US passport to enter the United States. The question isn’t whether border officials can invoke this rule: they can at any moment. That’s why I advise against spending a lot of money on a vacation that requires traveling in or through the United Staes–so for example a $10,000 Caribbean cruise that leaves from Miami, if one has a US birthplace and a foreign passport. One could lose a lot of money, or have to reroute to another port of call (as did Boris Johnson on his way to Mexico with his family).
It’s a crapshoot. The odds are changing. I was told in 2008 that the next time I crossed, it was to be with a US passport. I presumed a notation of that intimidation was noted to be read the next time I crossed the border. In hindsight, I wish I had done differently. If wishes were horses, beggars would fly.
@Broken Man on a Halifax Pier
‘They don’t do anything intelligent like making the CLN conditional on the IRS certifying that you’ve done the exit tax paperwork correctly…’
Please, please don’t give them any ideas. Thinking/feeling this could happen in the future (after all they are famous for changing their rules), is the reason I have booked my first appointment at the consulate.
@TrueNorth
It is actually (now anyways) illegal for a USC to enter the US on anything other than a US passport. Like calgary says, “it’s a crapshoot” though I’ll bet it will become a lot more uniform (read “difficult”) in the next couple of years.
It does not help to show a foreign passport as the birthplace is listed. Ex-I have CDN passport but it shows Dayton OH as my place of birth. The only way to prove otherwise is to have the CLN.
There are a few countries that do not require/or will leave out the birthplace however, the US will not accept such a passport.
I’m sensing that it would be really helpful to have a CLN so I could forever prove to anybody (border guards, Canadian banks suckered into FATCA, etc) that I’m not a USC.
Do I expose myself to harm (IRS, etc) by getting on their radar, by going to the Calgary consulate and attempting to obtain a CLN?
@WhatAmI
‘Do I expose myself to harm (IRS, etc) by getting n their radar, by going to the Calgary consulate and attempting to obtain a CLN’.
That is the $64,000 question for so many of us on this site. It will most definitely have to be a personal decision. I have chosen after many, many months of anguish and worry to book the appointment with the Vancouver consulate (have not lived in the U.S. since 1964 – no contact with any government department in all of that time). I needed to make a decision because the indecision was killing me.
Because all of this is so new, we don’t know yet whether those individuals who are finally receiving their CLNs will be contacted by the IRS or not. So I guess as someone else said, it is a crapshoot. One thing I do know is that I do not trust the U.S. to change the rules. Thus, I have made the decision to apply for my CLN but as I said, it needs to be a personal decision.
*Don’ be silly. Look at ‘How not to be seen’ one more time. Petros exaggerates the risk of crossing the border. You’ve been doing it for years. If you go to the consulate, they may agree that they have changed their minds and that yes you are a USC. Then you would have to renounce. Then you would have to obtain a SSN in order to file 5 years of tax returns, At least you would not be subject to the exit tax. If you qualify for the simplified procedure, you might only have to file 3 years plus 6 years of FBARS. Fugeddaboudid. Rest easy.
@WhatamI
Although I do believe it needs to be a personal decision, I also think in your situation, you might just be best to ‘Let sleeping dogs lie’.
In my case, FATCA was possibly going to prove to be a problem for me – my financial advisor was aware that I was born in the U.S. Again, in my case, I have a solid case for relinquishment. I not only performed an expatriating act (naturalization in Canada in 1972) but my oath also contained an oath renouncing former allegiances to foreign states.
As I said, only you can make the decision. Read as much as you can on this site, take your time in making that decision.
@Cornwalliscal –I don’t think that I’ve exaggerated. I understand that the rule isn’t currently enforced much on the US/Canada border. But we know of cases where people are turned backed or delayed. I would just not buy an expensive vacation that depended on being able to enter on a Canadian passport, that’s all. The CLN may not in the future be much help either, if Senator Schumer has his way (Ex Patriot Act). That could lead to a permanent ban, which may be in the works for anyone who expatriates. Thus, I have to agree completely with Cornwalliscal’s suggestion that the best thing is to do nothing (provided the one divests of US investments). Then, enter the US at your own risk.
If however a case for relinquishment can be made without renouncing, and the date can be back dated to say, 1970 something, then it may be worthwhile to relinquish, but only for the sake of the CLN. But otherwise, I’d leave this sleeping bear a wide space.
I myself relinquished because I’d already been filing and I was in compliance for many years, and I already had a SSN number. I had to exit the US tax system. But if I’d never been in it, and I was a Canadian from birth, then I wouldn’t allow the IRS the pleasure of my acquaintance. FULL STOP. FATCA notwithstanding.
*@tiger, what you consider as an expatriating act “I not only performed an expatriating act (naturalization in Canada in 1972) but my oath also contained an oath renouncing former allegiances to foreign states,” I fear the US consulate may view it differently.
It is my understanding, (correct me if I am wrong) that an oath renouncing former allegiance to a foreign state, in this case the United States, made to a foreign government (Canada) is generally not recognized as an expatriating act by the US. You have to renounce your allegiance to the US before a US consular or diplomatic officer located outside of the US in order for it to have any effect as far as losing your US citizenship. Nobody ever told Americans this was the case until fairly recently after the US Supreme Court ruled that Congress had no authority to deprive a US citizen of his citizenship and that, in order for it to be such the renunciation has to be done as described above. And, of course, the $450 fee has to be paid.
@Roger, the relinquishing act of making a pledge to a foreign state is efficacious to lose US citizenship and we have a number of people now, including Baird68, Pacifica, and JohnNB, who have received back-dated CLNs. They made their relinquishments decades ago, but only recently informed the Consulate and were issued back dated CLNs recognizing their relinquishing acts. Thus, the State Department recognizes their claim to have lost their citizenship at the time of obtaining Canadian citizenship–provided they do nothing that belies the intention to relinquish.
*Roger. You are (mostly) incorrect. It depends on your intent at the time you swore allegiance to Canada. If your intent was to relinquish, and you have done nothing since to act like an American, such as vote, pay taxes, use an American passport etc, then you have relinquished. You are no longer an American and are entitled to a CLN. If your intent was to keep your USC or you have done something silly like obtain a US passport or register your kids then you are still an American.