To be honest, 
I wasn’t sure if I was making the best decision. Some people advised against renouncing US citizenship while others recommended it. Yet, after unsuccessfully warning American politicians, I elected mission safety and handed in the blue passport.
To the left is a picture of my buddies and myself on the right, loading a ship to bring us to Somalia.
Now, it is official. I could hardly believe it when I read it, but it is true. Renouncing US citizenship saved the mortgage for our primary residence. Two days ago, the provider of my mortgage stated the following in press:
“In the mean time, we have distanced ourselves from almost all of our American customers. Currently, the bank has 5 investment accounts and 39 bank accounts belonging to US citizens. The only thing in the path of reducing that down to zero is that we haven’t been able to contact the clients yet.”
Source
To the right is a picture of my grandfather who fought for America during WWII.
There is no guarantee that I would have been able to refinance my mortgage with any other service as a US citizen and neither the US Veterans Administration nor the U.S. Department of Housing and Urban Development are willing or able to assist Americans living outside of US jurisdiction.
Unfortunately, the Office of Fair Housing and Equal Opportunity (FHEO) does not have jurisdiction to handle complaints outside of the United States.
STATUTE – It is the policy of the United States to provide, within constitutional limitations, for fair housing throughout the United States.
Sec. 802. [42 U.S.C. 3602] Definitions
(g) “State” means any of the several States, the District of Columbia, the Commonwealth of Puerto Rico, or any of the territories and possessions of the United States.
FHEO administratively enforces federal statutes, executive orders and regulations designed to afford all persons an equal opportunity to live in housing of their choice and to participate in HUD-assisted programs and activities without regard to race, color, national origin, sex, religion, familial status (families with children under 18), disability, or age.
Source
I volunteered to fight for America in the US Army, yet which American politician fought to save the home of an American veteran living abroad? I could care less about banking secrecy as long as the innocent are protected and I’m all for combatting money laundering. Yet, America needs to do much more to ensure that its policies do not cause harm to innocent Americans living overseas in violation of US federal laws prohibiting national origin discrimination.
Federal law prohibits housing discrimination based on your race, color, national origin, religion, sex, familial status, or disability.
Source
A residency-based tax system would prevent national origin discrimination against Americans for having a mortgage on their primary home or local checking account, and fighting for such would not violate US federal laws. Maybe it is time to fight for America and Americans like how my family and myself have done so.
Calagary 411 says: “No, Tortured, you CAN renounce if you choose to do so (another option is ‘doing nothing’ as KalC says, but you have to be risk adverse for that). You were born in Canada to US parent(s) so born a dual citizen.”
Ok, I have totally misunderstood. I thought Tortured was born in USA to Canadian parents. If tortured has no red/white/blue tatoo, then she (he? sorry tortured I am not sure of your gender) has no need to get a CLN because her birth certificate say born in Canada.
My understanding is you can renounce anytime you want. All the State department’s Ren/relinquish forms do is remind you that you may have tax obligations. Whether or not you do anything about it is up to you. I guess if you ignore it, there’s always the potential for it to come back and bite you when you are crossing the border (stay here, and there should be no issue).
But put this in perspective — if you renounce and decide to become tax compliant too, there is an end; a light at the end of the tunnel. If you don’t renounce, this expensive filing treadmill never stops and whatever more draconian rules they decide to impose on expats you’ll have to suck up.
To me, renunciation (even with tax compliance) would be short term pain for long term gain.
What I am saying is that in the renunciation process they do not ask for any form of promise for tax compliance. When I was at the renunciation meeting I was not asked or told anything relating to taxes, and I was certainly not asked to make any kind of promise about taxes. There is one form that I signed that does mention taxes DS-4081, have a look at line 10 of this form.
@ White Cat,
This is the reference to tax in the DS-4079, Statement of Understanding of Consequences.
(10)My renunciation/relinquishment may not exempt me from United States income taxation. With regard to United States taxation consequences, I understand that I must contact the United States Internal Revenue Service. Further, I understand that if my citizenship is determined by the United States Attorney General to be motivated by tax avoidance purposes, I will be found excludable from the United States under Immigration and Nationality Act, as amended.
http://www.state.gov/documents/organization/81607.pdf
@whitekat
I think she was born in the US; so birth certificate and Canadian passport will say that. It does make it harder to make the “full ostrich” work, unless you simply decide never to enter that country again. I think the real problem might eventually come from the banks, who will want to see a CLN to keep them from reporting accounts to the IRS (or CRA if there’s an IGA). Unfortunately, we still don’t really know how all that will play out with Cdn banks/credit unions.
@Arrow,
Yours is my interpretation of it, too – to find out what the tax consequences are, you must contact the IRS (because we here at DoS don’t advise on those matters). You’re not actually agreeing to contact the IRS. Nor is there a promise to file in the 4081. BTW, I’m not advocating filing or not filing, that’s an individual choice. But I think it’s sick that the US has gotten so fixated on tax that people, understandably, get the impression that the loss of citizenship is dependent on tax compliance.
I think one purpose of the 4081 besides the obvious one, that you understand the ramifications of what you’re doing, is that it also functions as a CYA document, sort of a checklist that the consulate gave you all the information they were supposed to. Just my 2c opinion.
Well, this is confusing. Here is what a respected immigration lawyer in Toronto told me via email:
Generally speaking, the exception should apply to you (we will have to discuss further); however, there is no exception from the requirement to be tax compliant (for anyone).
Likely you will want to get caught up on your filings and then renounce. Now is a good time to come forward.”
By exception, she is referring to the exit tax since I was born dual.
@Tortured,
You may want to contact a lawyer (or two) before deciding to renounce, particularly if you are thinking of renouncing without becoming tax compliant.
@ WhiteKat,
Confusion is the name of the game with this US mess, argh.
I would be curious about why the lawyer feels one should file first and then renounce, since DoS doesn’t care — and as long as you file before you certify on your 8854 that you are in compliance for those five years, you have obeyed the law regarding IRS obligations – and because it’s so common to renounce first, then file (as people just want to stop the clock on their US citizenship as soon as possible) and no problems arose.
Did she explain why she advocated filing before renouncing?
I’ve thought that maybe if someone found out about this mess in November, had an appointment to renounce in December, (only 6 months before the next June 15th) and had a complex financial life, maybe having only 6 months to get one’s taxes in order could be risky.
At any rate, given the statute of limitations, an IRS return isn’t dead until several years after filing (I think it’s 3). So once you file, you can’t know for sure for 3 years that you had paid IRS everything you owed.
From the archived RenunciationGuide.com
If you are born a dual citizen (US and some other country citizenship) you are not subject to the Exit Tax described above unless you do not sign out on time with Form 8854, as discussed previously. Everyone needs to thoroughly understand all of this and make the decisions best for themselves and their families to live with (or to hide from). The unknown of FATCA only muddies the waters.
@WhiteKat
Every lawyer is going to tell you to be compliant because to do otherwise could get them disbarred. But a lawyer’s advice is just that: advice. I think your advice about consulting a lawyer or two is good, given the stakes here, but it doesn’t necessarily mean you have to do as they suggest. An awful lot of people have spent much treasure following a lawyers advice, and many now wish they hadn’t.
Good information is the key; so you can make the decision that works best for you. Remember lawyers are in this to make money, and they don’t make money if you decide to hold back.
@Arrow,
Re:”To me, renunciation (even with tax compliance) would be short term pain for long term gain.”
Perhaps, particularly if you are already in the system. But for people like myself and tortured who don’t even have a SSN, I think there are risks waking the sleeping bear. Where is the urgency when there is NO IGA yet? Yes, for tortured, the cat is out of the bag as far her bank is concerned, but there are other banks and credit unions, and none of them are asking for proof of non-US citizenship YET.
Ask me a year from now, I may think differently. But for now, I think that people like Tortured (and myself) are wise to stay under the radar.
@Arrow,
Agreed, that is why I am NOT taking my lawyer’s advice and NOT renouncing and NOT becoming tax compliant.
@Pacifica777 “All the State department’s Ren/relinquish forms do is remind you that you may have tax obligations.”
This is also how I read it as well. The State Department does not want to be accused of not warning you. They just tell you to call the IRS. By the way when I did call the IRS, were they shocked that they had someone on the phone that had not filed taxes in over thirty years and demand to know who I was so the could come and get me, no they just directed me to a pdf file on the IRS website.
@WhiteKat,
An immigration lawyer is likely the best to advise on if one would have a successful claim to relinquishment. How I wish that had been my first step before getting advice from a cross-border tax firm and then entering back into the US tax system, when now I know that I would have had a successful claim to relinquishment from the time I became a Canadian citizen in 1975. If I’ve saved that fate from one person, my time here will have been worthwhile.
If we are to get advice regarding tax obligations, it is best to research the IRS site re international taxes and perhaps consult with a couple of respected US tax lawyers, preferably resident in Canada (or another country) as they, hopefully, will understand much better the law on both sides of the border and how that might affect you. And, of course, Isaac Brock has many excellent resource links. The Renunciation Guide ( http://web.archive.org/web/20120726052834/http:/www.renunciationguide.com/ ), which is now archived was the primer for many of us dealing with this issue for some time. It has valuable information and history of the issues we discuss. It is, however, no longer updated.
One of my favourite sites has wonderful information in layman terms. Even I readily understand what is presented there as I am of pretty much the same way of thinking as the author: http://renounceuscitizenship.wordpress.com/blog/. In fact the blog entry, http://renounceuscitizenship.wordpress.com/my-wound-is-geography/, is, save the way the author arrived in Canada, my exact take on US citizenship — and the ways to be exiled from the US. The best thing I ever did, my lucky break, was moving to Canada and raising my family here (the land where my dad was born — and moved to the US with his family when he was a young child).
@Pacificca777,
Argh is right. Getting out of dodge is as clear as mud, so why even try since the marauders are not even close to breaking down my door.
I suspect that the lawyer said file first, just because of the hassles, time and expense involved, so why not get that cleared up first. Otherwise, someone could end up procrastinating or have problems getting the forms completed and miss the deadline. Just my guess.
Form 8854 has both a yes and a no check box. No is an option 🙂
@Calgary411,
Hindsight is 20/20 isn’t it? Sigh.
@TrueNorth,
My middle finger is also an option. Also its free, and not taxable.
@ Calgary,
Re the document you posted, I find this line very interesting:
Since you fill out the 8854 based on your assets the day before renunciation, there’s no way you could complete an 8854 in time to bring it with you to the consulate.
Maybe there was a different cut-off date at one time — but if not (and I suspect the cut-off was always the day before renunciation), this was really bizarre (but being 2 years into the US mess, nothing about that country, especially when it comes to taxes, surprises me if it’s bizarre).
And @ all,
Consulates are not asking to see 8854s now. In fact, I think if you renounce in 2013, you have to wait til the end of the year (or January 2104) for the 2013 8854 to be available. I don’t think it’s out yet.
You’re correct, Pacifica. Those expatriating in 2013 will have to wait until the new and improved / updated 2013 form is available at the end of 2013. You will not be able to use the 2012 version of the IRS Form 8854. And, yes, bizzaro in these times to ask for a Form 8854 at the renunciation appointment. Some consulate officials, though, are experiencing their own steep learning curve about expatriation — as reported by BenPloni (Jerusalem).
I understand completely why a ‘US person’ abroad who has been in the system (i.e. has a SSN and has filed with IRS) would want desperately to renounce, and cut all ties to the IRS.
But why would someone like tortured who is Canadian with Canadian heritage, and lived all her life as a Canadian, bother to even acknowledge the outrageous demands of FATCA and the IRS, especially since she lives in Canada, where no IGA has yet to be signed, where we know there will be class action suits if one is signed or if banks start taking it upon themselves to discriminate against US persons (which may already be the case in Tortured’s situation)?
Tortured is SAFE for now. Things have yet to play out before we can assume that is no longer the case, at which time the situation may call for more drastic action on Tortured’s part. She should however, divorce her bank pronto!
Of course, this is just my opinon, and my strategy. I am an anxious person who likes to cross all t’s and dot all i’s, so deciding to say ‘screw off’ to the USA was not an easy one. But it feels like the right one, the moral one, and for now a relatively safe one. Time will tell.
… and read, read, read to understand the many in’s and out’s of this. Individual research is essential. And, I would suggest you stay tuned to this thread regarding a determination of a question I have a keen interest in: If a person was not registered as a Birth Abroad to US parent(s), does that unregistered person have automatic US citizenship at birth or is their’s a choice to claim US citizenship (as we have reports of US consulates saying)?
http://isaacbrocksociety.ca/2013/05/31/we-want-to-know-once-and-for-all-for-sure-is-it-true-legal-policy-a-choice-the-us-cannot-force-anyone-who-is-born-outside-of-the-us-to-acquire-us-citizenship/comment-page-3/#comment-374273
In fact, today, I have changed my game plan for my personal peace of mind and resolution for my family (perhaps if I were a younger person, my decision would be different.) I want peace of mind that my son will not be robbed by the IRS after I am gone.: http://isaacbrocksociety.ca/fatca/comment-page-24/#comment-378967
@WhiteKat,
I was born in the U.S to Canadian parents. Just noted your blog from yesterday.
My feelings on all of it at this time is I am damned if I do and damned if I don’t.
Looking to feel more optimistic as the day goes on!
Good for you, Tortured. The more educated you get about how to make your specific decisions, the more power you will have and the less bulldozed by all of this. Bravo!