Liberty and justice for all United States persons abroad

The Isaac Brock Society

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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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.

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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.

3,618 thoughts on “US expat tax and FBAR: Discussion thread (Ask your questions) Part Two”

  1. WhatAmI says:

    We here at IBS believe …

    The church of IBS presumes to propound with the pronoun prerogative of Queen Victoria?

    Yecch! Yuk!

  2. Re (@petros): “@woofy, If your date is 1976, why would you worry about the IRS? ”
    Re (@WhatAmI): “We here at IBS believe that the IRS can’t and won’t come after you if the date of expatriation (1976 in your case) is prior to 2004.”

    But you do recommend they have a CLN in hand, though, right? Is there a thread that one of you can point me to that expounds on this position?

    @MedeaFleecestealer:

    Re: “I dread to think how long it would take if I still had to use paper, pen, fingers and toes! Eek!”

    Ha! Me, too. Also not the greatest math brain, but somehow I manage to get the household and business finances done without too much hair-pulling.

    @monalisa1776:

    Re: “the scary thing is that I believe my last five years of tax returns could be red-flagged because I renounced, as though they might assume I was trying to run away from something.”

    Just a few comments earlier I expressed my own fears about this. Fortunately I don’t think anyone here has heard of this happening – yet.

    I think the hardest thing for me is going to be the first thing, whatever that is. To date the only thing I’ve done to acknowledge my U.S. citizenship is to apply for a passport (that was only 4 years ago, what feels like the age of innocence now!). No doubt it’ll feel like voluntarily jumping into a sea of sharks. That’s why I want to make sure I not only know how to swim like Mark Spitz, but that I’ve got a world-class shark cage and possibly some decoys set up in advance.

  4. @Wren, I agree that the hardest stage is actually just after the OMG moment as it all sinks in and don’t know what to do. There won’t be any solution that you’ll be completely happy with but with careful consideration you should be able to find something you can live with.

    As for my earlier paranoid dirges, I don’t actually think most of us posting here will be targeted by the IRS but one shouldn’t be complacent either. I’d feel safer doing everything pedantically correctly so I can make a clean break but realise others might prefer to lie low.

    Another reason I need to do everything by the book is because I could be looking at substantial US-sourced inheritances down the line so am doing all I can to prevent potential future problems. Mind you, I wouldn’t put it past the USA to eventually impose perhaps a 30% withholding tax on any transfers out of the US, even inheritances. I could definitely see capital controls being introduced to keep more assets in the country (and as lower hanging fruit).

  5. Question re: SSN application

    I have confirmed with both my parents that I do not have an SSN. It was mentioned here that acquiring a Social Security Number (SSN) could be problematic/challenging. I haven’t been able to locate any specific information apart from the standard how-to-apply stuff. I sense that I will need to brace myself, but for what?

    Thanks, as always.

  6. (I do plan on contacting the IRS directly about this issue but if there are complications that were discussed here I figured it would be good to be aware of them beforehand.)

  7. @monalisa1776:

    By the book is my preference, as well. Unfortunately they make it so complicated and scary that I understand the temptation to lay low and just hope for the best. That’s not for me, though. I couldn’t handle the stress!

  8. @Wren,

    Here is a story from a friend whose wife needed a SSN for the Streamlined Procedure. She was born in the US but has lived in Canada since the age of 6. ,

    She applied for it in early January, and we are still waiting. If she were just
    coming of age and applied in the states it would have taken a day to get a
    number. But as a Fifty something expat applying from Canada the Americans
    are very suspicious, and very careful. They made her supply very detailed
    proof she has indeed been residing outside of the US all these years.
    School records, Canadian Income taxes, property tax bills for every single
    year, marriage certificate etc. etc. etc. We were told it could take 3 or 4
    months for them to evaluate all this stuff and decide whether or not she
    even qualified to have an American SSN.

    Amazing! You hear all the horror stories of getting fined
    for not filing US income taxes, and it turns out they might not even let her
    have a SSN so she can file.

  10. @Wren,
    My son had to get a SSN in order to file US Tax Return and had to drive to Niagara Falls, NY to apply for it. He called them and got together all the info they needed. He received his SSN in about 3 weeks after his visit. It was a pain for him but that was the only way to get it, they told him if he mailed everything to them it would take 3 months or more, that is why he decided to drive there.

  11. http://toronto.usconsulate.gov/service/other-consular-services.html#SocialSecurity

    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://www.socialsecurity.gov/foreign/canada.htm

    Canadian Service Area Directory

    This directory provides the Social Security Administration’s Resident Office for those beneficiaries and claimants residing in Canada. The individual’s Canadian Province and/or Postal Code is needed to readily determine the Resident Office.

    Directory

    Alberta

    Great Falls, Montana (DOC 869)
    2008 23rd Street South
    Great Falls, MT 59405
    1-877-583-4114
    Fax: 1-406-761-6393

    British Columbia See separate listing for Social Security offices in British Columbia.

    Manitoba

    Grand Forks, North Dakota (DOC 707)
    Suite 300
    402 Demers Avenue
    Grand Forks, ND 58201
    1-888-617-0456
    Fax: 1-701-772-8622

    New Brunswick See separate listing for Social Security offices in New Brunswick.

    Newfoundland

    Bangor, Maine (DOC 002)
    Room 208
    202 Harlow Street
    Bangor, ME 04401
    1-877-405-1448
    Fax: 1-207-941-1945

    Northwest Territories Juneau, Alaska (DOC 996)
    Federal Building
    Room 231
    709 W. 9th Street
    P.O. Box 21327
    Juneau, AK 99801
    1-907-586-7070
    Fax: 1-907-586-7320

    Nova Scotia Bangor, Maine (DOC 002)
    Room 208
    202 Harlow Street
    Bangor, ME 04401
    1-877-405-1448
    Fax: 1-207-941-1945

    Ontario See separate listing for Social Security Offices in Ontario.

    Prince Edward Island Bangor, Maine (DOC 002)
    Room 208
    202 Harlow Street
    Bangor, ME 04401
    1-877-405-1448
    Fax: 1-207-941-1945

    Quebec See separate listing for Social Security Offices in Quebec.

    Saskatchewan Minot, North Dakota (DOC 706)
    Federal Building
    Room 104
    100 1st. Street, SW
    Minot, North Dakota 58701
    1-866-415-3193
    Fax: 1-701-839-4602

    Yukon Juneau, Alaska (DOC 996)
    Federal Building
    Room 231
    709 W. 9th Street
    P.O. Box 21327
    Juneau, AK 99801
    1-907-586-7070
    Fax: 1-907-586-7320

    All Other Provinces See separate listing for Social Security Offices in Other Provinces

  12. Would this work?
    – Renounce
    – Optional: inform IRS you have renounced and will be submitting returns once all info is available
    – Get ITIN (not SSN)
    – File 5 years of returns

    Saves the major hassle of getting a throw-away SSN.

  13. Thanks, all!

    @WhatAmI: I don’t even need to hear two stories like that. That one is enough to put me off the idea. Thanks a lot.

    @saddened123: There’s another example of how citizens abroad are being treated like second class citizens. I wouldn’t mind so much if they didn’t expect so much in return for this abhorrent treatment. Thanks for sharing your son’s story.

    @calgary411 – Whew! I do have all of that info, but thank you. It seems whenever I have a question you always chime in. I’m so grateful every single time.

    @tdott – I think that’s exactly what I’m going to do. I’ve essentially been examining two possible approaches, and one of those starts with renouncing.

    As I’ve mentioned before, I’m trying to come up with a plan of attack for myself as well as my mother and sister. That each of us have a unique situation makes it extra challenging, but it also means I’m learning a whole lot. Thanks in large part to Brockers! I look forward to getting my personal stuff dealt with (or at least initiated) so that I can focus more of my attention on kicking some FATCA butt alongside everyone else here.

  14. @Wren,

    I’m hoping the SSN story I posted will inspire others to post their _better_ experiences, if any better experiences exist. I can’t find the post now by the person who drove to the US to get a SSN. I wonder if they had to produce the same “proof”?

    When you say it’s put you off the idea, what will you do instead?

  15. @WhatAmI

    Here’s the story of the son driving to Niagara Falls: http://isaacbrocksociety.ca/expat_tax/comment-page-62/#comment-1155702 – @saddened123, can you share what his application process like?

    Re: “When you say it’s put you off the idea, what will you do instead?” – Renounce, just as @tdott suggested. I admit that there were other influential factors, but that would likely have been enough. I figure there’s risk in renouncing and apparently risk in applying for an SSN. What does an SSN get me, other than to the next step? I’ll have to renounce, regardless.

  16. What does everyone think about House Ways and Means Committee tax reform proposal? One thing I noticed is that the personal exemption is removed (which Canadians can claim for kids that are resident in Canada even if they aren’t US citizens) while the child tax credit is increased (the children have to be US citizens to claim this credit). Obviously bad if you have kids that aren’t US citizens. Second, the principal residence exemption is increased to 5 out of 8 years instead of 3 out of 5 (meaning fewer homeowners will qualify even if they qualify for the Canadian main home exemption). Does anyone see anything else that would adversely affect duals in Canada?

  19. Current FBAR Guidance from IRS: Report of Foreign Bank and Financial Accounts (FBAR)

    Offshore Voluntary Disclosure Program

    On Jan 9, 2012, the IRS reopened the Offshore Voluntary Disclosure Program following continued interest from taxpayers and tax practitioners after the closure of the 2011 and 2009 programs. This program offers people with unreported taxable income from offshore financial accounts or other foreign assets another opportunity to resolve their tax and information reporting obligations, including the FBAR. Although the program does not have a closing date, the IRS may end the program at a later time.

    For non-resident U.S. taxpayers presenting a low compliance risk, the IRS implemented new streamlined filing compliance procedures effective September 1, 2012. The procedures are designed for non-resident U.S. citizens, including but not limited to dual citizens, residing outside the U.S. since January 1, 2009, and who have not filed U.S. income tax and information returns. The procedures require the filing of delinquent income tax and information returns for the past three years and the filing of delinquent FBARs for the past six years. For qualifying filers, reviews of submissions are expedited and the IRS will not assert penalties or pursue follow-up actions. When filing delinquent FBARs on the BSA E-File System, participants can annotate that the filing is in relation to either the Streamlined Filing Compliance Procedures or the OVDP. For more information go to Instructions for New Streamlined Filing Compliance Procedures for Non-Resident, Non-Filer U.S. Taxpayers.

  21. I had an incredibly easy time with getting an SSN. I gathered all of my information together and in 2012 went on a summer vacation to South Dakota. With much fear and trepidation I went to a little office in Rapid City, South Dakota, toting all kinds of things to prove my US citizenship. I’m not sure they had ever dealt with anyone like me, but after fumbling around for awhile, they sent me on my way. As I recall, the only information they looked at was my US passport and my Canadian passport. When I arrived home from my holidays, my SSN was in my mailbox.

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