How to Renounce/Relinquish
Consulate Report Directory (Brockers Describe their Consulate Meetings) and CLN Delivery Time Chart
Department of State Forms, Procedure Manuals, and Contact Info
Expatriation Date, Form 8854 & Certificate of Loss of Nationality
Important if Relinquishing Act Prior to June 4, 2004
Very important for pre-2004 relinqishers to read, the posts/threads at this link also contain some useful information for those who relinquished after June 4, 2004, or are planning to do so.
Interactions between Department of State and IRS regarding Renunciation/Relinquishment
You can renounce (or apply for a relinquishment-based CLN) if you have not filed taxes. Here’s some general information, with source links, relating to that and the relation between DoS and IRS in the context of renunciation/relinquishment.
IRS Ruling on Relinquishment and Retroactivity, 92-109
Relinquishment and Renunciation Data
The actual “relinquishment and renunciation data” was integrated into the Appendix of the Consulate Report Directory in 2013 (tracking chart of people’s wait times from booking to consulate appointment to receipt of CLN) and is continually updated there. The thread itself , however, has remained open and popular.
Relinquishment by Persons-Born-Dual or Who Naturalised in a Foreign Country as a Minor
Although a person who is already a citizen obviously can’t relinquish by naturalisation, any adult can relinquish by taking employment with a foreign government (or its subdivisions) or by joining the military.
Relinquishment by Naturalisation (INA, s. 349(a)(1)) by Person Born in US to Canadian parents: Cheryl’s Story. Relinquishing act (naturalisation) was her registering her birth abroad with the Canadian government in 1977 when she was an adult.
Cheryl’s detailed story contains information of particular interest to Canadians and general information which may also be useful to those of other countries and those with slightly different fact sets as well.
Reports by Persons who Relinquished US Citizenship Upon Taking Government Employment, Immigration and Nationality Act, s. 349(a)(4)(A)
Self-Documented Relinquishment
The relinquishing act itself causes the citizenship loss. A CLN provides proof of it, but it’s not the only way to prove it.
Estate Matters for Former US Citizens
How the 877A Exit Tax May Apply to your Canadian Assets
This is a series of nine posts on different aspects of the exit tax. Much of it is relevant to persons in all countries.
Almost No US Citizenship Renunciation Appointments Left During 2016 in Dublin
The title highlights Dublin, but this post contains a chart of links to consulate websites’ and their info re renunciation appointments around the world, as well as ongoing discussion of the topic.
To clarify, in order to take advantage of the Foreign Earned Income Exclusion, you were supposed to have filed. Even if the FEIE brings your income to zilch, one is supposed to file.
I don’t mean to say that you should start filing either retroactively or going forward. Just clarifying the rules as they are intended.
@Cody
Renouncing allows travelling more freely or living in other countries. If you do not intend to travel to the US or live in another country outside Canada, you can renounce and not file. If you intend to stay in Canada it is OK for now to live under the radar but that could change.
I was born in the US and moved to Canada about 15 years ago, totally unaware of the tax situation. I renounced and filed 5 years back taxes in 2014 after hearing about FATCA. Owed nothing but filed. Never heard from the IRS. I travel to the US on occasion to visit elderly relatives who can no longer travel to see me.
So you can renounce and file or renounce and not file or live under the radar. It depends on your situation and risk tolerance. There is no easy answer. Just carefully evaluate your individual situation and do what seems best for you. Good Luck.
Renouncing and taxes are not directly liked. One doesn’t need to be tax compliant in order to renounce. One doesn’t need to file after renouncing unless you volunteer to do so.
When someone renounces her name is given to the IRS but it’s doubtful they know what to do with the names.
The goofy new amnesty programme excuses up to 25 K of tax owing over a 5 year period. It still requires filing 5 yrs. Details here.
https://www.irs.gov/individuals/international-taxpayers/relief-procedures-for-certain-former-citizens
Not worth the trouble in my opinion.
@Cody
Regarding your points on the previous page.
1. Money from the sale of a house is not income, certainly not earned income, so the FEIE is not relevant here. In Canada any gains from the sale of a primary residence are not taxed; in the US it is subject to capital gains tax after an exemption of $250k per person or $500k per couple. In any case, whether your employment income is or isn’t under the FEIE threshold does not change your purported obligation to file, which you’ve wisely ignored.
2. Not sure what you mean about information, muddied or otherwise. It’s quite simple actually.
Renunciation – giving up US citizenship – is between you and the State Department. Your tax compliance status is not checked; you are not required to be compliant in order to renounce; you will not be asked questions about taxes when you renounce. You make an appointment, pay US$2350, fill out the form and swear an oath, and some weeks or months later you receive your CLN.
After renouncing, the State Department sends your name and address (and nothing else because there’s nothing else to send) to the IRS. As far as we know the IRS does nothing with this information.
A separate but related process is the exit from the US tax system. For someone who had been filing prior to renunciation, they would do a special final-year return plus something called the 8854 form. If they were particularly unlucky or wealthy, they might actually owe an exit tax payment on their way out the door. For someone who had never filed but either wished to make a “clean exit” or was convinced by a lawyer or tax accountant that they had no choice in the matter, they might file 5 years worth of tax returns and FBARs, then the final-year return and the 8854. They might not owe a cent but they could spend a small fortune having “professionals” fill out all that paperwork for them.
Alternatively, a person who had not been filing prior to renunciation might just decide that the IRS is a toothless paper tiger and ignore all this nonsense, particularly if they were reasonably confident that they would have owed nothing anyway. Failure to properly exit the US tax system means that you would still technically be on the hook for any past debts – not an issue if you would owe zero, obviously – but there would be no future obligations after the loss of US citizenship.
As mentioned above, if you plan on moving to Europe, ditch the citizenship – it’s a no-brainer. (Incidentally, you could have done this in France when you first encountered banking problems.) Just make the appointment and do it, don’t worry about the tax nonsense. If you are staying in Canada, forget about this – nothing to worry about unless there are major changes in FATCA rules and/or the tax treaty.
“all my sympathies to those dealing with issues like this in Canada”
There are literally no issues to deal with unless one is filing US tax returns. Which, fortunately, very few dual citizens actually do, unless they have cross-border financial entanglements that make it necessary.
“I’m very glad to have found this community.”
That’s what we’re here for. Saving people from the clutches of lawyers and accountants.
@Portland
A key feature of the goofy new amnesty program is that it allows someone to file all their returns without obtaining a Social Security Number, which can be a big obstacle for non-residents.
Why anyone would bother doing that is still a mystery to me. I suspect that very few people will take the IRS up on their generous offer.
“Why anyone would bother doing that is still a mystery to me. I suspect that very few people will take the IRS up on their generous offer.”
Maybe if filing under the program would qualify you for a huge refund? Otherwise, there’s absolutely no point. My brief adventure with filing netted me a $300 cheque for a long defunct Bush tax credit. Regardless, it was still a mistake.
@Cody
I renounced in September 2018 in London. I’d never filed a US tax return in my life, and I shall not be doing any now. I have yet to hear anything from the IRS and, even if I did, I have no assets in the USA for them to touch. I’m also a financial minnow, certainly not worth their time.
I had no problems having a bank account in the UK, but I was prevented from opening any private pension plans or making investments. My CLN has set me free to plan for my retirement.
@BirdPerson
After hearing so many positive answers from this community I think I will renounce this year (at least make the appointment) for peace of mind and because my partner is French, and we will likely acquire some family assets over there at some point. I am glad to hear your CLN has liberated you from all of this.
On a side note: I was shocked at how quickly French banks turned me away once they saw that little line in my passport. In France, no bank means no health care refunds, no phone, no loans, no checks. I was lucky to have my Transferwise account just to receive my salary.
@Ron Henderson
Regarding: Not sure what you mean about information, muddied or otherwise. It’s quite simple actually.
If it were that straight forward, would there be any chatter on this message board? It’s always simple when you know the information. Anyone combing the internet for answers for their situation is faced with a lot of opinions, a lot of legalese, and many variables. You seem to be extremely knowledgeable but not everyone knows what you know. Thanks to your answers, it’s finally clear to me.
Just stay away from the lawyers and most accountants.
I said the same thing earlier today, but apparently said it a little too vigorously…
I echo what Portland said. There’s no need to consult with a lawyer to renounce, and accountants are only there if you do decide to file any US tax returns.
I found the people at the US Embassy in London to be friendly, even compassionate, in their approach when I renounced. They are not trying to catch you out or trip you up.
@Cody
There’s more chance of your being struck by lightning than this happening to you, but since you mentioned France, there is one tiny risk that you should be aware of.
France, like Canada, Denmark, Netherlands and Sweden, has a mutual-assistance in collection agreement in the tax treaty with the US. This means that the French authorities would be obliged to assist the IRS in collecting any US tax debts from someone who is a US citizen but not a French citizen (or who had incurred the debt prior to taking French citizenship). It’s the same in Canada, the IRS has no ability to extract money from dual citizens, but it can ask CRA to use its collection procedures against a US citizen who does not have Canadian citizenship. (This it has done precisely once – the Dewees case.) The point then is that if in some completely unfathomable circumstance the IRS discovered your existence and decided that you owed it money, you are perfectly safe in Canada but, hypothetically, not safe in France, Denmark, Netherlands or Sweden (and also Japan whenever that treaty change comes into effect).
Again, there isn’t a snowball’s chance in hell of this happening to you unless you do something very, very stupid, but you should at least be aware of the collection rule vis-a-vis France.
By “do something very, very stupid” I am referring to poor Mr. Dewees, a long-term permanent resident who after decades of non-compliance decided to begin filing US tax returns, and got stuck with a huge bill for not reporting his consulting business correctly or something like that, and ultimately CRA was obliged to collect money on behalf of the IRS. That’s the short version of the story. The moral of which is that he would have been absolutely fine if he had never filed a thing, or had obtained Canadian citizenship after moving north in the 1970s.