When it comes to compliance there is a lot of confusion as to:
- what day does loss of citizenship occur and
- what roles do f8854 and a
- Certificate of Loss of Nationality play?
The filing requirements are explored in two posts by John Richardson.
Before June 3, 2004 (before the creation of the “Tax Citizen”)
The date of your “expatriation”was determined solely by the provisions of the Immigration and Nationality Act.
June 3, 2004 – June 16, 2008 (after the creation of the “Tax Citizen”)
You continued to be treated as a “U.S. person” for tax purposes UNDER THE INTERNAL REVENUE CODE until you gave “notice” of your “relinquishment” to a government agency. For this period part of the “notice” was filing Form 8854 with the Internal Revenue Service. In other words, there was no way to cease to be a “U.S. person” for tax purposes until you had notified the IRS.
After June 16, 2008 –
A.The issuance of a CLN is confirmation that the State Department has agreed that you have relinquished U.S. citizenship. A CLN is a confirmation that you have met the “notice requirement” under the Internal Revenue Code.
B. The CLN is one way (a self-certification is also possible) to satisfy “foreign banks” that you are NOT a U.S. person for tax purposes under the Internal Revenue Code. (In other words, a CLN is a “sufficient” but not a “necessary condition” to prove non-USness.
Read more HERE
1. Is the loss of U.S. citizenship for nationality purposes dependent on having a Certificate of Loss of Nationality (“CLN”)?
The answer is absolutely not.
349(a) of the Immigration and Nationality Act specifies conditions under which one relinquishes U.S citizenship.
2. Is the loss of U.S. citizenship for tax purposes dependent on having a Certificate of Loss of Nationality (“CLN”)?
Prior to June 3, 2004 – NO for either immigration or tax purposes
June 3, 2004 – June 16, 2008 – NO for either immigration or tax purposes.
After June 16, 2008 – No for immigration purposes – It is necessary as a confirmation of having met the “notice requirement” to end U.S. citizenship for tax purposes
3. What is the role of a Certificate of Loss of Nationality (“CLN”)?
For Immigration and Nationality Purposes – no relevance whatsoever
For Tax Purposes – The Internal Revenue Code
The accusation of U.S. citizenship is triggered by various indicia (U.S. place of birth, U.S. residence, U.S. phone number, etc.). The U.S. “place of birth” is the most dangerous indicia. Those with a U.S. place of birth can rebut the accusation of U.S. citizenship with either:
A. The CLN; or
B. A “Self Certification” (that must meet specific requirements) documenting why:
– the person has relinquished U.S. citizenship; and
– does NOT have a CLN.
A denial of U.S. citizenship will generally require proof.
In general, those who have relinquished U.S. citizenship under the Immigration laws of the United States prior to June 3, 2004 are more likely to be able to “self certify” that they are NOT U.S. citizens even though they do NOT have a CLN. This position is consistent with the August 2015
4. Why is the Certificate of Loss of Nationality (“CLN”) of value?
It’s simple. Unless you live in the United States, life as a U.S. citizen abroad, in a FATCA, FBAR and CBT world, will be an endless source of anxiety and difficulty. A Certificate of Loss of U.S. Nationality is becoming one of the most sought after documents in the world today.
5. What is the role of a Certificate of Loss of Nationality (“CLN”) in a FATCA inquisition?
June 16, 2008 – Present
IF (you relinquish U.S. citizenship under the Immigration and Nationality Act) THEN
You continue to be treated as a “U.S. person” for tax purposes UNDER THE INTERNAL REVENUE CODE until you give “notice” of your “relinquishment” to a government agency. The “notice” requirement is NOT to the IRS, but to the State Department. (See S. 877A(g)(3) and S. 877A(g)(4) of the Internal Revenue Code.) Once “appropriate” notice is given to the State Department you cease to be a U.S. taxpayer from the date the notice is given (on a prospective basis).
Read more HERE
Jagz – “Can the irs prosecute u for not filling fbar and form 8854 if u gave up your green card?”
No. Don’t worry. They haven’t got the staff or the resources to check these things, and they can’t enforce their insane laws on the citizens of other countries.
Thanks plaxy 🙂 I couldn’t sleep well since I found out about this things and compliance is something I feel I can’t do coz the penalties are insane it makes sense if u are a criminal.
They can’t prosecute you outside the US.
I would be cautious about entering in future as the gate agents may well have you listed as having an unsurrendered green card.
As far as banks etc are concerned, you have never heard of a green /blue/pink or any damn colour card. 🙂
Not sure how long you have held a green card or if you have officially surrendered it.
Here is a some info about the situation.
Jagz – “the penalties are insane it makes sense if u are a criminal.”
Yes that’s who it’s aimed at. It’s very scary, until you realize they can’t actually enforce all these threats, outside the US.
I am still a green card I am thinking should I renounce it or just forget I had one I had it for 10 years?
If it was me I’d stick it in a drawer and forget about it.
Do you intend entering the US again?
If not, burn it.
I believe it was EmBee who very aptly coined the term “kryptonite card”.
My view is that if you go to the trouble and expense of renouncing but were previously non-compliant, at least consider filing the paperwork to exit the tax system, but only if it won’t cost you any money in taxes owed. (File “simplified” returns if that helps.) It isn’t absolutely necessary but might be worth the effort if it helps you sleep nights or you have a kid threatening to move to the US.
For a green card holder who left the US, by definition born elsewhere, I would just burn the thing and forget about it, unless I planned on returning frequently, in which case I’d surrender it (I-407); if I had US assets or pension or expected social security then I might want to tread more carefully and explore the exit tax problem.
I agree with Plaxy, the problem comes only when you enter the US as they may have you on file as having a green card (as happened to a colleague of mine) who subsequently surrendered the card. I belive the green card question is asked on applying for a visa or ESTA.
If you decide that you need to enter the US again, then I might surrender the card officially with the I407 . As someone here said, if you file the 8854, tell them only what they already know, or could know.
Jagz. Can you imagine how much it costs to prosecute someone? Multiply that by 10 for someone ex the USA. ( which would not be possible in the first place). We don’t know where you live and what kind of visa you require to visit- that would be the only hang up. I just looked at I 407- a simple form with no mention of taxes. If I were to send it in I would not file anything else.
OVDP!!!! Wash your mouth out with soap!!!!!! It’s meant for criminals. Simplified!!!! Not much better- meant for those who wish to retain citizenship. The US. simply cannot imagine anyone giving up citizenship or lawful residence in the greatest country ever.
BB – “I believe it was EmBee who very aptly coined the term “kryptonite card”.
Thanks guyz for all your comments
I echo DoD,
OVDP is not any kind of solution for ordinary mortals. It is a trap for the ordinary unwary who are not actual US homelander mill/bill/ionaires deliberately hiding money ‘offshore’. It magnifies the problem exponentially for krill and minnows and small by-catch whose problem is really of the US extraterritorial CBT (or green card equivalent) harsh punishments and penalty regimes applied to our legal local or country of origin accounts, of inadvertent ‘form-crime’ or minimal US tax type.
Yes was me. Broke both wrists Fri. (skating). Type with 1 finger now but can move mouse around carefully. Will just be reading here for many weeks while focusing on bone healing.
Merry Christmas Everyone!
Oh no, EmBee! Sorry to hear about your accident and breaking BOTH wrists. Well, take the time to have others to cater for you for a change this Christmas.
I hope you have a speedy recovery.
It looks like Trump’s Christmas gift to the middle class is a lump of coal (something only valuable to him). Make America Grate Again!
Oh dear Embee, so sorry about your accident and injuries. Take care, and as @BB said, sending hope for a speedy recovery.
Thinking of you. And ever grateful for the wisdom and wit you have generously shared with us over all these many years here.
Have a speedy and good recovery, EmBee, enjoying from a safe place what looks to be a White Christmas coming your way. Take special care!
Noderators. Any chance you could put a link to this thread in the right hand column under ‘ ask your questions about’ ?
Thanks for pointing out that people should be aware of this post/thread on an ongoing basis. I added it to the list of posts at “How to Renounce/Relinquish,” under “Important Information” in the sidebar.
Sorry to hear of your skating accident. Get well soon!
“4. Why is the Certificate of Loss of Nationality (“CLN”) of value?
It’s simple. Unless you live in the United States, life as a U.S. citizen abroad, in a FATCA, FBAR and CBT world, will be an endless source of anxiety and difficulty. A Certificate of Loss of U.S. Nationality is becoming one of the most sought after documents in the world today.”
Yep. The CLN is your manumission document.
“Thanks guyz for all your comments”
And gals. The US government is an equal opportunity harrasser.
“For a green card holder who left the US, by definition born elsewhere”
Diplomats’ children disprove your definition.
“Can you imagine how much it costs to prosecute someone? Multiply that by 10 for someone ex the USA. ( which would not be possible in the first place).”
It would be possible. If the non-resident is a US citizen, courts in the District of Columbia have jurisdiction. If the non-resident is an alien[*], the government can use any district court.
You can be jailed 5 years for downloading Michael Jackson’s music. That’s 1 year longer than for murdering Michael Jackson. The expense doesn’t deter the US government any more than the Canadian government.
[* US nationality law and income tax law define alien differently. I think the nationality version applies here. So non-citizen nationals exist, but American Samoa doesn’t have a US district court, and I haven’t figured out how US district courts of Hawaii and the District of Columbia obtain jurisdiction over them.]