US expat tax and FBAR: Discussion thread (Ask your questions) Part Two
Please ask your questions here about US Expat tax and FBAR.
Participants will need to provide their e-mail address (real or fake) and an alias. The only written rule is that participants must use a same alias each time they post (and not “anonymous” or derivatives thereof).
Bear in mind that any responses that you get from participants is peer-to-peer help, and it is not intended as a replacement for professional advice. Also, the Isaac Brock Society provides this disclaimer: neither the Society nor any of its members are professionals. We offer our advice here only in friendship and we recommend that our readers seek professional advice if they need it.
If you wish to receive an e-mail notification of comments, check the box to that effect when making your first comment.
NB: This discussion is a continuation of an older discussion that became to large for our software to handle well. See US expat tax and FBAR: Discussion thread (Ask your questions) Part One.
@Agahard, are you a so called “dual?” Here are some rough steps…..
When did you last apply for a US Passport? From that date, did you do anything expatriating like ANY kind of government job?
Based on your age, you could have also expatriated having voted in a “foreign election” or collected benefits in the UK.
BUT all of this needs to be examined.
However,to renounce and get into compliance is going to set you back £5,000 plus. And thats assuming a lot of DIY.
IF you had funds in an ISA, you are screwed beyond belief…….
@George – ”
However,to renounce and get into compliance is going to set you back £5,000 plus. And thats assuming a lot of DIY.
IF you had funds in an ISA, you are screwed beyond belief…….”
It didn’t cost me anywhere near that much to renounce. The $2350 fee, plus travel to and from the Consulate.
The ISA situation depends what the investments are.
No need to panic.
@iota, “@George – keeping on good terms with one’s bank while researching the options and deciding what to do. If Angharad is below the threshold her accounts may not be reportable. If she finds that she is still a USC, and doesn’t sign the W-9, the accounts will be treated as refractory.”
With all due respect……
IF he signs a W-9 he is reported in the same manner if he does not sign he is reported. The end state is identical….
In regards to being on “good terms” with one bank, this bank is throwing this fellow British Citizen into the lions den! There is no legal authority to freeze or close the account.
Further, the minute the form is signed there is a permanent record of ADMITTING US Citizenship. I have learned a great deal from Ginny and Gwen on such a mater, they never admit being a US Citizen, what they do admit is that one or more foreign powers possibly claim them.
Once this British Citizen signs that form, he/she is admitting to be a US Citizen which they may not be or may not want to be admitting.
All that said he/she needs a new bank/credit union/building society.
AND ONLY THEN can figure how to move forward.
@Iota, the typical person can not do a DIY streamlined filing and even then may not want to do a DIY.
A simple streamlined and the US renounce fees will bring you up to around £5,000. I know as I have had this quoted east,west, north and south.
Many people spend much more……
If he/she had anything other than shares or cash in the ISA, then they are screwed under the pfic rules.
Regardless, the $2,350 you paid was EQUAL to being mugged in the Underground or in Hyde Park. That money was stolen from you…
@George – Yes, if Angharad turns out to have already relinquished the FATCA problems disappear. Her accounts won’t be reportable.
For a US citizen, if the accounts are under the thresholds, the accounts also won’t be reportable, if the w-9 is signed. But will be reportable if not. That’s the difference.
@George, it’s up to Angharad to decide whether she wants to pay an accountant or tax advisor, or do the filing herself.
Yes, the $2350 fee is outrageous. £5,000 plus would be much worse though.
The ISA situation depends on the investments.
Don’t the banks have to actually report account information? If there’s no account information to report because they are exempt or under the reporting threshold, what difference does it make whether someone signs a W-9 or not? Would banks just send W-9’s to their tax authority with no account info attached, to be forwarded to the IRS for further investigation?
Agahard, Your head must be spinning. You asked a simple question and get lots of conflicting answers. Some are good , others such as entering the streamlined programme-not so good.
Don’t ‘come forward’ in a hurry. Learn more about your status first.
Does your bank know you were born in the US or is this letter just a general mailing?
Streamlined is a trap. It was meant for those who wish to become compliant with US taxes and then either stay compliant or renounce. It would be horribly expensive for you. We assume you are not in Boris Johnson’s income strata. He could afford pricey accountants and lawyers.
The IRS cannot seize your assets and cannot collect any penalties for not having filed FBARS or tax returns. There are 10 million American ex-pats and only a few file taxes and of those only a handful are penalized.
My advice- certainly don’t enter the system. As long as you don’t, they won’t know you exist.
As far as the bank is concerned- don’t sign the W-9. instead ask for a W8-Ben. Self certify , by signing the W8-Ben, that you are not a US citizen. If they ask for a CLN, tell them you lost your US citizenship 50 years ago and at that time there was no requirement to inform the US authorities or to obtain a CLN. A ‘reasonable explanation as to why someone doesn’t have a CLN is part of the British agreement with the IRS (the IGA)
If that doesn’t work for you, I would renounce, get a CLN- note it will take a year or so and cost 1630 pounds- and then NOT file any taxes or other returns. There is nothing the US can or will do to harm you.
The W-9 doesn’t get sent to HMRC. It stays with the bank.
The difference it makes is that if the bank doesn’t get the W-9 within the time stated (90 days I think), the banks are supposed to treat the account as reportable.
@iota
Recalcitrant account holders will have their account info forwarded no matter what. Boy, the IRS is going to be flooded with a lot of non-USP account info. I can hardly wait for the sh!t to hit the fan on that one.
RBC Dominion in Canada told me that my accounts were reported for no other reason than I signed a W-9.
@angharad
First of all we have to establish if you may have already relinquished your US citizenship
There are relinquishing acts that you may have already performed.
1. When did you obtain your UK citizenship?
Was it from birth or later, if later, when?
2. If later, did you after becoming a UK citizen apply for or use your US passport, file US taxes, or vote in a US election
3. Have you ever had a UK gov job? If so,
when?
Don’t panic, let’s get the facts established first.
If you are in fact still an American, then you can renounce, and either back file 5 yrs of taxes and 6 of fbars with an explanation that you did not know you had to file, or you could do nothing and not travel there again. Renunciation is not contingent on tax filing.
@Bubblebustin – “Recalcitrant account holders will have their account info forwarded no matter what.”
Yes, that’s what I’m saying. If the W-9 is received, the account’s not treated as recalcitrant.
I don’t think myself that the IRS is ever even going to look at “low-risk” accounts (by which I assume they mean accounts belonging to people they know nothing about and haven’t a cat in hell’s chance of suing.) But I would think they,d be more likely to look at accounts reported as “recalcitrant”. And because the IGA makes it UK law to self-certify citizenship status, I personally would not refuse. And I definitely wouldn’t sign a W8-BEN swearing under penalty of perjury that I wasn’t a US citizen, unless I had checked out the INA relinquishment criteria and confirmed for myself that it was true. But it’s up to each person to make their own decision about these matters. None of us asked for this shite.
Angharad
If you are still a US citizen,
it will not necessarily take you a year to renounce. You can email various embassies in the EU and see who will give you the earliest appointment if necessary.
A CLN will keep the banks at bay.
and why do anything?
lots of folks on here say read the thread and then decide, what to do,but don’t rush your decision , which i dunno if that is a good idea .. everyone’s opinion seems switch from time to time .. and to seek professional so called advice good luck..cost you a small fortune to get the answer uggghhh well i dunno
but if you pay me a whole load of money i can file that for you and you should,,, why ? uggghhh cause
i dunno pay me more and i will figure that out somehow and give you a answer …
then on here it goes from tell them to shove it they cant touch you ,,,,,,,,,,,,,, then it a good idea to file … im completely mind fu#$ed to this whole thing im lost …
There appears to be some very well educated folks on here!!! There must be someone well educated Canadian law person on here that REALLY has an answer to whats what of what ?
@Bob
Because there is not one answer that fits all. It depends on your situation, where you live and the degree of risk you are willing to take.
Some people have decided to try to stay off the radar if they can, others want to get out cleanly with prof help, others self file if they are able. Some may have already relinquished their US citizenship and don’t realize it.
You have to read and then decided which is the best course of action for you.
well that doesn’t answer squat Heidi. and i don’t mean that in a rude way.. everyone’s in the same situation and has the same degree of risk in a round about way!!
so the question still stands who has a answer … has to be someone that reads this thing and has an awnser!!
@Bob,
The answer lies with each individual affected. Risk is not the same for everyone, many factors are considered by each individual.
Your frustration is understandable, and we have all gone through it. Many of us are still frustrated 5 or 6 years later. And still fighting.
The honest truth is that pretty much anyone involved that you would expect to help you solve the problem is either useless (ie. most tax advice, Cdn gov’t), incompetent (ie. most tax advice, Cdn gov’t, IRS), or corrupt (ie. most tax advice, IRS, US gov’t).
The answer to the question is there is no answer.
@Bob
I have to agree with Heidi here. Everyone is NOT in the same situation. And while some of the risks will be similar, each person will have their own level of tolerance for that risk. Plus, some situations have more risk in them than others.
Some of the factors to consider: were you born in the US? Do you have investments/retirement savings in the US? Do you have elderly parents in the US who might need extended care? Do you travel regularly to/through the US? Will you be a “covered expatriate” if you renounce? Have you already relinquished? What is the cost of coming into US tax compliance given your personal circumstances? … and many more.
Each permutation of these factors will potentially result in a different “answer”. In the end, it is a personal decision.
@Bob
Exactly what Heidi, The Mom, and Karen said.
Yes, it is terrible: you get hit with this crap out of the blue, and naturally you immediately want to find some way out of it FAST. You would THINK that there must be some easy answer, or at least a reasonable path forward, but unfortunately you’d be terribly wrong. The US didn’t invent this stuff to be “fair,” they invented it to steal money from us for the benefit of the homelanders (their votes count, y’know – ours don’t), control us, keep tabs on us, whatever.
I want to tell you this: you must first of all ACCEPT that there is no “easy way” out of this mess. Your final decision will surely be a “lesser of several evils”. Don’t despair; you may even have pretty good options (although there are many very bad options). It will take awhile to get your head around this mess and your multitude of options. For example, some people eventually decide they can live with doing nothing based on their specific circumstances. Others decide (because of who they are, their belief systems, and because they need to find a way to sleep at night and live with their decisions) to come into full compliance and remain US citizens (not my cup of tea, but to each his own). Others renounce without lifting a finger regarding compliance, while yet others renounce after coming into compliance or file taxes after renouncing. No one can make your decision for you or decide what is best for you. Only you can do that. Only you know what level of risk you are willing to accept. The process will take some time (steep learning curve, unfortunately – and, yes, conflicting advice and opinions from all of us, because we’re human too and because there are so many different ways to approach this), so take a deep breath and start reading. Ask questions (people here are very willing to share information). Learn. Don’t rush your decision (as you yourself wrote) is excellent advice. Let me repeat: don’t rush your decision!
When I got hit with this crap I finally found balance by taking up a new sport and practicing it several hours a day (and now I’m in pretty good shape, LOL). You need to do something to get to a calm state of mind (if that’s an issue for you), so that you’ll be able to rationally assess your options. People who don’t take the necessary time often later find that they have made decisions they did not really want to (marry in haste, repent at leisure). You simply can’t make an informed decision unless you know all of your options and the risks. Good luck.
Great advice, Hard Pressed.
Whatever decision you make has its price, whether it be money, mobility or sleep.
Blessed is the defiant ones who can sleep like babies in their decision. The situation has always been much too fluid for me to have done that.
Ok im Canadian citizen but born in us
have no US assets and ,,, well the only reason i go to the states is to buy gas,,, and thats about it dont have parents that i would have to worry about taking care of !!!
so whats the risk.. other then well YOUR BANK might report you if you open a new account,, then so what ?
Canada says it doesn’t assist in helping collect sooooooooo what if it comes down to that i buy my gas in canada and dont travel south ..and ignore what could possibly come from South of the border.. correct?
Oops, that’s blessed “are”…
@bob…. Canada says it doesn’t assist in helping collect sooooooooo what if it comes down to that i buy my gas in canada and dont travel south ..and ignore what could possibly come from South of the border.. correct?
you could use any such letter that were to possibly come from south of the border to line the bottom of your bird cage. that is what i plan to do with any such mail.
there are over 190 countries to visit in the world. so what if america is not one of the ones you ever go to again.
@Bob
I believe that in Canada there are credit unions who are not Fatca affected and will take US persons if you have problems with your bank.
In Switzerland there are no such things. There are only 3 banks who will take you and only for a simple ‘ checking’ account, no savings, investments or mortgages.Soon there will be no US persons left there except those on a tempory assignment. It is certainly a different case for each person affected.
Now with a little info, I think you may be closer to finding an answer that fits you.