US expat tax and FBAR: Discussion thread (Ask your questions) Part Two
Please ask your questions here about US Expat tax and FBAR.
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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.
@monalisa …….. yes my dear you are very,very cautious 🙂
Of course, nothing is cast in stone; a year ago, I never dreamed that I’d take the bold step of expatriating!! 🙂
Recent article in Arizona media about the problems of US extraterritorial taxation of persons in Canada:
http://www.thestarphoenix.com/business/Americans+Canada+face+complex+situation/8209390/story.html
I was happy to see the acknowledgement of the problem with account and asset reporting:
…………”The problem is not in-come tax. The problems are the punitive IRS penalties and criminal prosecution threats for failure to complete the many required annual information returns.”…….
That is the Saskatoon, SK Star Phoenix, badger. The author, Terry McBride (a member of Advocis, works with Raymond James Ltd.) said he has USP clients for whom he has learned about this and submitted articles to the Saskatoon paper. It would be a good idea for him to transmit his views to papers in Phoenix, Arizona. (I gave some feedback to this author, a commenter his first news article. He was limited to only 700 words to convey this story.) He’s to be commended for making the effort in helping his clients!
@badger @Calgary… That story from the Star Phoenix should probably have its own posting. 🙂
Good idea — thanks, Just Me.
@quincy – wow how efficient-I admire that. I will either have to use a US based professional or DIY and am a bit wary of the last. What I considered was entering the new (from sept. 12) streamlined program with 3 yrs back taxes and all 6 yrs Fbars included and then doing the 2 last years separately. I thought if I started with 2008 and then went to 2012 I would have the years required and could for example renounce after I had sent off the forms by June 15th or possibly extension to October.However the tax firm I spoke with in the US mentioned that hte “streamline” was for 3 years and they only did more than that if there was a problem. So what to do?
Did you just file all the back years and send them in – as a so-called “quiet disclosure”? I would appearently also have to write a letter explaining my incredible unawareness of these issues – not difficult as there has be zero information in the media where I live, I just found out by chance a week ago.
“If you renounce this year, you wouldn’t send in your 8854 til june 15 of 2014 and you can get an extension til October if you want. You would easily have your CLN by then if you renounce in the next few months.”
Luckily there doesn’t appear to be a rush to renounce here, probably because most US persons are as unaware as I was…
Thank you for your efforts to enlighten me, I am gradually getting there 🙂
What should dual citizens do about all this?
1. I was born in Canada, lived here always
2. I have a US passport (expired) from a U.S. parent
3. I do not nor ever have worked in the U.S.
4. Have never filed with IRS
Anyone?
@KalC reply to allcanadian
“was born in XXXX, never lived in the US, but have a US passport from one American parent. I’ve never filed with the IRS. If I never intend to travel to the US again should I just ignore all this?”
How can one be sure that they won’t get caught, especially if they travel on their passport from XXXX? If you have a passport, you also have a SS number, they are prerequisite to get a US passport. If it means never ever visiting the US again, that might be difficult if they are for example 25 years old – however food for thought.
@nonono (appropriate name)
Most here will tell you that you’re lucky you were born in Canada so won’t show a US place of birth on a Canadian passport. Don’t ever renew that US passport / too bad you have it. Were you registered with the US upon your birth? Do you have a US Social Security Number? We all must make our decisions based on our level of risk tolerance. Read, read, read — there are different decisions and reasoning. You might want to start at http://isaacbrocksociety.ca/renunciation/ and stay in touch for opinions of others.
Most comments here seem to be from expats but I was hoping someone here can weigh in on my dilemma.
I reside in the US but have a foreign gold holding account which is below $50,000 therefore form 8938 is not required but has been above the FBAR limit for the last eight years. There is no income earned on this account and I have properly reported all my taxable income. Except for the initial deposit there has not been any activity in the account excluding monthly charges.
As far as I can tell I have two options.
1. File going forward and eventually close out my account with the hope I don’t win the IRS lottery pool.
2. File 6 years of past FBAR’s with a reasonable cause letter.
Does anyone know of the IRS rejecting a reasonable cause letter even though there aren’t any taxes to pay? Any feed back is appreciated.
Allou This is what ALLCanadian said.
‘I have no intention of ever renewing my US passport or traveling internationally again. If I want to travel I will just get a new Canadian passport’
There is no problem.
@calgary411
No, I was not registered with the US upon birth but yes I have a SSN. I never lived in the US
Katherine, I’ve never before seen the concept of ‘operationalising ‘ a passport. Why would you have needed a passport to relinquish?
“In 1988, however, I applied for a US passport in order to use it to advise the US gvt that I had committed an expatriating act (the oath in 1979) and did get the passport …. but it was never signed by the US consulate official (as required to “operationalize the document).”
In any case the passport has expired. I wouldn’t do anything.
@nonono,
So essentially you are registered with the US. Your personal decision will have to be based on whether or not you wish to travel freely across the border to the US, among other things, including how extensive FATCA will affect our Canadian banking. It is all absurd. If only we could know what the future holds, what Canada will do to protect its USP citizens and residents. Stay tuned — you’ll likely get better advice than I can give.
@calgary411
Again, I have no desire to cross the border into the US again. How will Canadian banks be collecting this citizenship info anyway?
@Katherine. I missed your prior comment that KalC is commenting on. Getting a US passport (my having done so, a prime example) is the worse thing to have done to be able to claim relinquishment unless a damn good case can be made for having been forced to do so by a rogue border official to cross the border. In 1988, did you advise the US government (Department of State) that you had committed an expatriating act and, if so, what was the result? Or, did you not go through with advising the US government then and are, instead, now contemplating to advise them? I just can’t visualize what your relinquishment appointment would entail. I agree with KalC, likely better to do nothing.
@nonono,
As it is right now, with Canadian privacy law and what the bank can / will ask, if I were you I would just state when asked “I am a Canadian.” And be very proud that you can say that — it is where you were born. (That is what I will say for my son who is developmentally delayed.) Again, we really don’t know if the banks will overstep their bounds. Canada SHOULD step up to protect you and all others! Will they?
To everyone who has penned a comment to my e-mail, a big thank you. And to KalC and calgary 411, here are the particulars ….
The word “operationalized” is mine … I meant that on the inside cover of the passport, below the paragraph entitled “Notice”, there is a signature bloc. It reads “If issued outside the U.S. the following section must be completed by the issuing Authority” and while there is information stamped under “Passport Issued at”; “City and Country” and “Title”, the area for the “Signature” is left unsigned. Since the sentence above these spaces indicated “… must be completed…”, I understood that the passport was in limbo given the missing signature. Other views, please?
With regard to getting the passport … I have regretted it …. it was due to a former boyfriend and discussions with other policy people at work that I was persuaded to establish a presence of some type … hence I applied for a passport in order to alert the US gvt of my exp act of 1979 (note that it was never signed by the authorities, expired in 1998, I never travelled on it and that I don’t have an SSN). And no, I never followed-up re: alerting the gov. because I was working long hours and it fell down the list of priorities in my life. The year after I got the passport, I did take on the 1st of a number of policy positions in the Cnd federal government, all the while knowing that these positions would be expatriating as well.
This is what I was going to let the consulate know in notifying them of my past relinquishment (the swearing of the oath in 1972) and request for a back dated CLN. Does the existence of the passport completely nullify my expatriating act? Any idea of what I can expect to encounter as questioning, given my facts? If they refuse my facts re:the relinquishment, can I renounce at the same appointment?
I don’t think that doing nothing is an option now …. last summer an investment company (a long story …) identified me as an American to the IRS (who in the IRS, I have no idea). So they have my married name (expired US passport is under my maiden name).
Am anxious to hear any advice you may have to offer. Risk tolerance varies … mostly, just want out. Thank you in advance for any help you may have to offer.
@Katherine, not to be nosy, but it would be good information for all to have on “things possible” — was your identification as an American to the IRS an punitive or accidental action on the part of this investment company or part of something they had to comply with and provide to the IRS in regard to an investment you obtained? These things scare the bejesus out of some of us.
If you think action is now required for you, if the Consulate determines that a relinquishment will not be possible for you, hopefully you would be able to then change it to a renunciation instead. This has happened previously, but I am not sure the policy.
katherine. ‘An investment co. identified you as an American to the IRS’ Without a Social security no you hardly exist as far as the IRS are concerned. This is only 1 factor to be weighed. If you can afford to file 5 yrs of tax returns then renouncing is an option.
@allou I suppose what I did may be called a quiet disclosure. I did it all before the streamlined program was announced. Did the accountant say that if you send in more than 3 years with the streamlined program, will the IRS refuse to process it?
Just a caveat for those considering the “full ostrich” strategy. If you have children with US citizenship who wish to renounce it, the IRS may become aware of you during the process of your childrens’ renunciation.
Question for those who are already clear of Uncle Sam. I’ve heard that my CLN can be collected this week (hoorah), I’m sorting out the tax side of things, but what happens then? Once you’ve done all the filing you sit back and wait for what? Assuming you owe nothing do you get a letter from the IRS saying so? I understand they’ll send demands for payment of outstanding tax, but do you get notification so you know for certain all your tax obligations have been fulfilled?
@Medea,
Glory be if they would send you any kind of notification you are officially out and clear, but you can obtain proof of details of all of your tax returns:
http://isaacbrocksociety.ca/expat_tax/comment-page-4/#comment-201852