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.
@KalC, so I’ve been hearing! Well i suppose if they won’t give you a SSN after one relinquishes/renounces than only other way would be to get one of those tax identification numbers.
@CD888
I assumed for a long time that getting an ITIN was easier than getting a SSN, but I’m beginning to think that it may be just as hard. You can get them from outside the US; a friend of mine did it (but it was a right royal pain).
For starters (the SSN application says the same thing):
Form W-7, Application for IRS Individual Taxpayer Identification Number, must include original documentation such as passports and birth certificates, or certified copies of these documents by the issuing agency. Notarized or Apostilled copies of documentation will not be accepted.
I don’t know where it’s documented, but if you have lived outside the US for decades then you have to send a ton of other documents to prove god knows what (like property tax statements or similar to prove where you lived).
CD888. Strictly speaking you do not need to renew you US passport in order to get a SSN. As you have already been informed that applying for a passport or renewing a passport may limit your options in the future. There are other documents that can be used for identity purposes.
I was able to get a SSN without a valid passport. But please be aware there are some rather onerous requirements to obtain a SSN. You can start this process with the at the US consulate. There is no need to travel to the US.
You will require proof that have resided outside of the US for all years. I used school records ( I needed to harass the provincial education as the local school record were destroyed as required by law) and CPP contributions. You will need proof of the date you left the US. I used immigration papers (I was instructed to destroy these records when I became a Canadian Citizen). Here is link that explains what is required.
<a href="http://www.ssa.gov/ssnumber/ss5doc.htm"
When you apply for a SSN you are poking the bear. The clock may start ticking. I had already decided on a complete exit plan before I started. I researched at least 3 months before I applied for a SSN. Of course they is a fine if you file income tax without a SSN when you were a US citizen.
Good Luck
@CD888
Have you read the following? There is a paragraph about SSN/ITIN:
http://www.irs.gov/uac/Instructions-for-New-Streamlined-Filing-Compliance-Procedures-for-Non-Resident-Non-Filer-US-Taxpayers
Social Security
Please visit Social Security’s website to apply for benefits or a number if you live in Canada. You may apply for a Social Security number at the Consulate, but you should expect to wait 4 -5 months before receiving a response from the Social Security Administration.
http://toronto.usconsulate.gov/service/other-consular-services.html#SocialSecurity
As far as I know, you only run into potential problems (fines) if you apply for a US passport when you already have SSN and don’t put it on the application. Just put a series of zero’s in its place if you must apply or renew one. I did, and have been through the border several time since, with no repercussions.
Oh my goodness!!! Can this get anymore challenging?? Even when trying to be compliant by back filling or streamline, it seems like i keep hitting a brick wall.
I have a landed immigrant document showing i was sponsored since 1987. If there is such a record I’ve been working since i was 18. I’m now 44. School records will be hard to prove because my aunt registered me under a name that isn’t on my legal documents. How she ever did that I’m not sure.. Long story short, i suppose you could say i was and illegal alien since my father brought me here as a baby. I don’t know what legal documents my grandmother had for me but I’m guessing not much. They registered me under her last name not the one on my birth certificate and because the spelling of my first name is uniquely spelled my aunt used the common spelled way to register me. If i wasn’t trying to prove my residency here since infanthood just to obtain a SSN or tax identification number, these things have not been an issue for me residing here. I suppose the Canadian government was only concerned with when i was officially sponsored for landed immigrant status not who or where i lived up until then.
I’m beginning to wonder now, what’s the chances of me not being found by not having a bank account and going cash only. Maybe i can cash my paycheques at money mart or something like the that?
Is there any other way to do this? Relinquishing or renouncing means I’ll likely have back file which means I’ll need an SSN number or tax identification number. Streamlining means I’ll have to obtain a SSN number. So if it’s going to be too impossible to obtain one what other options would i have?
This is a real nightmare. I have all these complicated circumstances that were created beyond my knowledge and control since i was a child. And if you want to know, basically the story i was told by my mom is that my father took me and came to Canada without her consent and knowledge. I had no knowledge of my mother’s whereabouts until just recently even we reunited for the first time since i was a child. Sounds likea story from a book i know. I’ve been told…
@CD888
I would keep KalC’s suggestion of renouncing but not filing on the table. One thing he forgot to mention though: you can never set foot in the US again. It’s just a matter of time before your IRS record is available to the border officials.
I would consider doing nothing until we hear what the Canadian FATCA result is. I’ve been reading posts here for over 2 years, and my personal plan and my sister’s is different now than it was just 1 month ago.
@WhatAmI, i thought both procedures were sort of connected. That after you renounce, DOS sends a copy of your CLN to the IRS who in turn will come after you if you don’t file your form 8854. That’s where the question arises, and if i don’t what could happen? Canada seems to be leaning towards giving to the US request regarding FATCA so I’m not that confident they will try to protect the little fish in the sea. Ihave read that the US can’t make Canada collect fines or penalties from you while you’re in Canada and i think i read somewhere that they can’t garnish your wages either, but how will the Canadian laws change maybe over time with pressure and threats from the US if they are finding more and more people not filing after renouncing? It makes sense I’m being told that I’m not the fruit they’re after, but how far will they go to find out I’m not? I have no problems with not ever stepping foot in the US again if that’s the catch.
@ CD888
I would have to agree with WhatAmi. Your case is one that your own Canadian government should be championing and right now we do not know for certain what is being hatched in those secret IGA negotiation rooms. If an announcement is not what we want to hear then there will be court challenges to follow. If the Canadian government cannot offer you and others protection from the bullies to the south then what good is it?
@CD88,
I agree with Em and WhatAmi to hold off until we see what Canada will do. On Monday, or shortly thereafter the answers to Hsu’s and Brison’s questions to parliament are due to be answered which should give us a better indication of where our government is going with this. It’s hard to hold tight, I know, I’m there with you (no SSN, non-compliant, US birthplace), and have been waiting impatiently for over 1 year since the OMG moment – I guess that makes me a ‘willful’ violator now, subject to 27.5% of all my assets for being a bad girl. Sometimes a little anger is good, and keeps us from bending over too far. Imagine if ALL the non-compliant US persons of the world (most of us) gave US the finger and refused to comply, FATCA or no FATCA. Are they going to say we are ALL tax evaders and try to collect a portion of the assets of millions of US persons living outside USA?
@Em, you’re right. I would hope and think that our Canadian government would do more to protect those who legally and willingly became Canadian citizens of this wonderful country. I’m just not confident they have the ability to push them away. I’m sure many countries who are already on board don’t necessarily like this or want it but nonetheless they have accepted it in some other countries. I feel as though when faced with a threat of withholding 30% funds from the banks US holdings and investments they’ll gladly throw us under bus.
@WhiteKat have you already renounced or relinquished? I’m thinking if i renounce and apply for a tax identification number won’t they have to issue you one just so you can meet the requirements that THEY area asking for in order to comply? I was reading on the IRS site that one would apply for a tax identification number if you’re not eligible for a SSN. Technically i am because i was born the US, but having here all my life has complicated that eligibility. If I’m going to renounce and not live there then i would wonder why they wouldnt just issue you a tax identification number so i can just file those last required tax filings. But it seems nothing is standard or normal practice with the US laws and procedures.
@CD888,
Re: “I feel as though when faced with a threat of withholding 30% funds from the banks US holdings and investments they’ll gladly throw us under bus. “, IMHO that depends on how hard the ‘US persons’ kick and scream while attempts are being made to surreptitiously throw them under the bus. So far there has been a lot of kicking and screaming going on even while most ‘US persons’ were still blissfully unaware of FATCA and CBT. As more and more people wake up to the threat, the kicking and screaming will increase, IGA or no IGA. FATCA will fail eventually; hopefully its death knoll begins very soon with a big fat NO from our Canadian government (which is well aware of how loud the kickers and screamers have been to date).
CD888,
No, I have not renounced, nor relinquished. I’ve decided to go with the one-finger salute approach.
@CD888,
My understanding is that you need a SSN in your situation. When I first found out I was technically a US tax payer (after 50 years of thinking I was not), my reaction was similar to yours in that I was scared and felt I had no choice but to comply. Streamlined had just come out, so I figured that would be a good fit, and then I discovered I needed to get a SSN. Once I found out that I had to PROVE I had a life OUTSIDE USA in order to get a SSN, so that I could file tax returns and FBARS to a country I had nothing to do with in 1/2 a century, I decided ‘F that’.
@WhiteKat, well if they are going to make me prove I’ve lived here all life, i have witnesses who can take an oath and I’ve worked here since i was 18 which someone mentioned i can show them my CPP contributions. I can’t change the info on how i was registered in school all my life though. In some ways not that i viewed it looked this ever before, but my true identity started in my later teens when i was officially sponsored and became a landed immigrant. What would i tell happened to the rest of those 17 years before that? I have no clue! This wasn’t even a problem until now. Sheesh!!!
@WhiteKat plus when i think about this even more, who cares whether i lived my childhood in Canada or where? I wouldn’t be some rich offshore tax evader from the age of 1-17 anyways. I was till considered a minor.
@CD888
As you can see, there are people here who are doing nothing: neither relinquishing nor renouncing, not filing. That’s why the FATCA agreement is so important. If it weren’t for FATCA, it would seemingly be easy to give them the finger and not enter the US again. Without even a SSN, how would they even know you exist or where you are? Well, enter FATCA, and the banks giving the info to the CRA and the CRA giving it to the IRS, and now you can’t hide. Or, maybe your bank closes your accounts because you refuse to prove to them you’re not a US person.
There are minimum bank balances under which the banks don’t have to report accounts to FATCA, but lots of people think the banks will report everything regardless.
@WhatAmI. I think those people are right in what they think these banks will do. The banks only care about the millions and billions of dollars they can make and don’t want to lose. So throwing us to the sharks won’t mean anything to them. I want renounce no questions about it. I’ll comply with the back tax filing and FBARS, but now it’s more of a question of how many hoops will i have to jump through to geta SSN? I kept thinking to myself, if i renounced and got my CLN that would make me a non US citizen at that point. So if I’m no longer a US citizen then wouldn’t i have to apply for a tax identification number instead? They want to file my taxes don’t they? Just some random thoughts swirling around in my head again.
@CD888
I thought the same thing a while ago, but it seems the SSN is mandatory. There have been blogs and articles written by high-profile people and groups calling for all sorts of improvements in the IRS’s handling of people who have lived for decades or their whole life outside the US, a simple TIN application procedure, etc. Who knows if we’ll ever see such improvements. It seems things can be screwed up quickly but it takes forever to fix anything.
@CD888
I feel for you, you don’t seem to have had an easy life and this is not helping. Like everyone else says, try to take a deep breath, stand back and start educating yourself as best you can. There is nothing to be gained by rushing in any particular direction at this moment. Even if FATCA comes into force in July 2014 (which is looking rather doubtful) it will take them a very long time to get around to you, if it ever happens at all.
The system is so chaotic and so bogged down at this point that if I didn’t have a specific event to tie my decision to (taking an oath and becoming an Australian citizen) then I might still be watching and waiting.
Sometimes I wonder if the whole FATCA business will either collapse under its own weight or be repealed, and then the unaware majority will never know what they were saved from? And the people who have fitted us for tinfoil hats will say “I told you so” when nothing happens? (Which is far from the worst outcome here! I’d rather be thought stupid than have my family and friends and millions of other expats dragged into this nightmare.)
I relinquished in September, got my consulate appointment in October and am still waiting for my CLN. I emailed the consulate at the beginning of January and they could only tell me it is ‘in process’.
I consider myself non-American from my relinquishment date and plan to file my taxes accordingly. If the State Dept. takes two years to process my CLN I see it as their problem, not mine. I want the piece of paper mainly to show my bank, if we ever get that far.
I realise of course that I am one of the more ‘fortunate'(!) posters here, in that having grown up in the US I have a social security number, and I became aware of the filing obligations in 2000 so have over a decade of compliance behind me. I have no assets in the US and can comfortably contemplate not going there again. And this is one of those situations where my poverty is an advantage.
So happy Australia Day all, try not to let the big bully in the south take away your lives. Pity your neighbours across the border; they live in a country where the terrorists have won.
@WhatAmI, well I really screwed that tax assessment up didn’t I! Good thing I don’t need to file US tax forms.
@CN888, don’t apply for another US passport. You don’t need it to get an SSN and will only cause more trouble with relinquishing – which you can still do so I would take that route over renunciation and save yourself some money. Another reason I suggest relinquishment is that the relinquishment date will be important for your bank, should FATCA be implemented in Canada. The CLN says on it “That: said expatriating act was performed voluntarily with the intent to relinquish United States citizenship; That: he/she thereby expatriated his/her self on (date) under the provisions of …” This is the date banks will work with, not the date that the State Department approved your application.
It may be that you don’t even need to file FBAR’s. Unless the total in one or more accounts adds up to $10,000+ there’s no need to file them. It’s an aggregate figure so would depend on what totals you have in multiple accounts. There’s a link to more about them here:
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Report-of-Foreign-Bank-and-Financial-Accounts-FBAR
They are pretty easy to fill in yourself as basically it’s just a list of any account outside of the US that you hold.
http://www.irs.gov/pub/irs-prior/f90221–2012.pdf
and you use this link to find out the exchange rate:
http://www.fms.treas.gov/intn.html
I wouldn’t worry about those accounts you’ve closed. The IRS won’t know anything about them so only report those you have now and can show paperwork for if you do meet the +$10,000+ criteria.
So assess whether you need to file any FBAR’s so you know where you stand on those. If there’s no need for you to file them then you’ll have more time to consider how to tackle the rest of any filing you may decide to do. Don’t rush into anything. Take your time and weigh up all the options, including doing nothing, relinquishing and not filing, or relinquishing and becoming tax compliant. Keep up to date on what’s happening with the government’s FATCA plans and adjust your plans accordingly. As others have said it will probably take several months to get your head around this and sort out the best way forward for you personally. I know you want out of the nightmare that’s suddenly hit you, but in the long run it’ll be much better to take the time to assess and plan your exit, than rushing into spending money to file when you don’t necessarily need to. All the various forms and their instructions are online at http://www.irs.gov so you can look/study them to find out what you may need to do or not do.
A final suggestion: I would see if I could check with the citizenship office to find out why your certificate and citizenship card have different dates on them. It may not change anything, but it is curious that the card has a date in April given when the certificate says September. I’d check to make sure which one is correct just in case, for some strange reason, the certificate gives the wrong date on it. It shouldn’t, but it’s very strange that there’s a discrepancy between the two as I would have thought the card would have been checked against the certificate’s date before being issued.
@MedeaFleecestealer. Thank you for your opinion and suggestions. So if an account is closed you think they can find out i had it? I mean i am having a headache myself trying to think how i would obtain the information they ask for to be compliant. I do not to reapply for another passport, as my current one has expired and was issued prior to me receiving my Canadian citizenship 10 years ago. I only thought to do so in order to apply for the darn SSN. I want to relinquish instead of renounce too so i can be clear that i in fact intentionally swore allegiance to another country voluntarily. I know the IRS dept will see it from the date i go the consulate. I was also wondering if they would it less difficult to issue you a SSN if you wear trying streamline to be compliant as oppose to relinquishing and then trying be compliant.
The certificate date and the citizen card date discrepancy from what i was able to find out online is the date they approved your application and the certificate date is when you pledge your oath.
I am grateful for your support advice. Thank you.
@WhatAmI. I honestly think they are trying to make it as difficult for us as possible those who have lived abroad for a long time because it’s like pay back. They don’t even treat us like Americans yet they insist we still are one. We don’t seem to have the same rights and privileges as the ones who live there BUT we are still american according to their law. It’s all so absurd and just so dictator like. Honestly how can they criticize communist countries and their dictators when they themselves have adopted this CBT policy where even the communist countries don’t even hold against their people who have left. They suppose to be a modern country who fight for all freedom and democracy. Chaining people to their taxation system however they can is not freedom or democracy! It’s starting to feel like we’re dealing with a dictator ourselves.
And none of the other countries will stand up to the US and their rules except Russia.