Just Saying No: Not Renouncing/Relinquishing Nor Complying
Some people cannot afford to renounce (or relinquish and get a CLN) and some people will not renounce or relinquish because they do not consider themselves to be US citizens.
This thread is a place for people in this situation to share information and experiences. Thanks for sharing — your stories will be very helpful to others!
@Robin Schell
Just be careful how long you stay in the US if you want to avoid being a tax citizen again after you renounce/relinquish. There is a substantial presence test based on a 3 year rolling average.
https://www.irs.gov/individuals/international-taxpayers/substantial-presence-test
I was a US resident for 15 years up until 2007. Since then I moved back home to Europe and NEVER renewed by green card in 2014. Haven’t been in the US since 2007. Sold my homes and everything else and fled back to Europe. I have nothing in the US since 2007. I have absolutely NO intentions of ever going to the US, not even as a transit stop or even visit a US embassy.
Nobody has contacted me and I have not mentioned anything to anyone.
Do I still have to file or pay US taxes?
Depends on who you ask. The US government would undoubtedly say yes. I (and obviously you) say no. You left over a decade ago and the IRS doesn’t have a clue. They can’t touch you. Let sleeping dogs lie. Live your life.
A rhetorical question?
A rhetorical question?
LOL. No, I really want to know, e.g. is there case law?
@ Jan
“Just say no.” I am.
You would be silly to file. There is nothing they can or would do.
Thank you ALL! I was just looking to see if there was a court decision like this already on the books, but as said to me by a man who did +30 years in prison for a crime he didn’t commit: There are no mutes in prison!
It’s a pretty obvious, resounding, and unanimous NO!!!
This is the route we have decided to go re: Nate’s citizenship!
[yes, I realize Jan will probably not read this as it’s a late post, nonetheless …]
@Jan
If you are *not* asking about what the US rules/regs/laws say, then stop reading now.
AFAICT, you were a long term resident of the US. That would mean that in addition to having to have to file Form I-407, you also have to file form 8854 (with the ramifications that go with that) in order to terminate your tax residency. And, of course, you are supposed to be filing tax returns until the above happens.
That is what you’re supposed to do (AFAICT). What you should choose to do is a different question. However, I suspect most folks in your position would choose blissful ignorance. The only reason I’m mentioning all of this is for the sake of completeness (or at least, less incompleteness).
Phil Hodgen has more details, for example see https://hodgen.com/chapter-1-a-quick-overview-of-the-exit-tax/
I am leaning towards cutting the knot – compliance then renunciation. For certainty, etc. My question – although I need accountants to help me with compliance, do I need legal management of my renunciation? Lawyers have suggested it, but the cost is high. I am not a CE. Any thoughts?
@Bob
I would say ‘no’. You do not need legal help with renouncing. FWIW, I had tax people help with getting compliant, but no legal help with renouncing. I did ask my tax guy a few questions re form 8854, but that’s it. And, realistically, you should be able to get most, if not all, questions you have re renouncing, form 8854, and even the final tax return answered at Brock. Lots of us have been thru this and most people are happy to help others if they can.
Perhaps you can ask these lawyers exactly why they think you’re incapable of doing on you own what so many others have done.
Re: lawyers for renouncing. The Consulates won’t even allow a lawyer to accompany you during your renunciation appointment so the answer is no, don’t bother.
By the way, have you thought about spending the money for some decent tax software? You might find you are able to handle the compliance part on your own as well. Even if you eventually give up and decide to go with the accountant you’d have a better idea of exactly what he/she was charging you for.
I renounce in 2017. Sent in my final tar return but discovered I forgot to send in 1040 Schedule C. My question is, should I bother to send the form and to submit FBAR for the time I was an American citizen?
If you made a mistake which the IRS didn’t catch yet, don’t use your real name when posting.
Since you live outside the US, your final tax return is due 2018-06-15. You can file Form 4868 for automatic extension to, I think 2018-10-15 but you need to read the instructions. You can send a new return before the deadline and it will supersede the mistaken return.
You’re supposed to file FBARs for the time you were a US citizen. If you wish to comply, you do so. If you haven’t been complying and don’t wish to start, as far as we know the US hasn’t tried to penalize a renunciant for missing FBARs.
@MT,
re ND’s advice above – ask admins to edit your post.
I don’t know anything about the 1040 Schedule C.
but re FBARs
See;
“…You are asked to certify that your tax filings under Title 26 are up to date. Since the FBAR is required under Title 31, you are not required to certify that your FBAR filings are up to date…….
…If your FBARs are not up to date, you can still certify that you complied with all your tax obligations on Form 8854, and answer the question on Line 6 with a “yes”. This prevents you from being a covered expatriate, even though you did not file FBARs…..”
https://hodgen.com/expatriating-without-filing-fbars/
Read the whole thing and make your own decision about what you think your risk actually is re backfiling FBARs – particularly if you are a small minnow with no US sited assets and no US heirs. Backfiling doesn’t remedy the failure to have filed FBARs so there is limited reason to do it.
I don’t know where you are located (don’t need to answer that), but in Canada, the CRA will not assist the US with collecting on the FBAR penalty since it is not a tax and not covered by the Canada/US tax treaty
https://isaacbrocksociety.files.wordpress.com/2012/03/ba481782.pdf
We have had people renounce/relinquish successfully without having filed FBARs.
@Bob, I echo tdott. If you’re asking only about the actual mechanism and act of relinquishing/renouncing at the embassy/consulate – having a US tax or any other kind of lawyer would not have been any help with my relinquishment, and was not and is not required.
I only consulted one (for the tax portion only) because I mistakenly chose a more complex and ‘noisy’ type of catchup compliance in panic and anxiety – at a time predating the range of options now available (ex. Streamlined). A type of compliance which I might add was a grevious error that caused me and my family bmuch needless psychological stress and pain and money lost to professional fees. In contrast, the actual relinquishment was quite quick and straightforward (except for some minor unwarranted ad hoc bs questions from the consular official which I was pre-prepared for from reading here at Brock and knew I didn’t have to answer).
There is nothing in the actual process of renouncing /relinquishing at the consulate /embassy that you need a lawyer for. Prepare ahead of time by looking at the forms they send you (and I pre-filled mine so I could edit and re-edit it on my own time), gather the required supplementary documents, read and ask questions here, think about limiting what you say to what is absolutely necessary, and that is all you need. The lawyer CANNOT go in with you, and cannot prepare the actual non-tax forms, and the tax forms and tax compliance are another question entirely separate from the actual act of renunciation/relinquishment.
US tax lawyers are trying to cash in on additional niche services by pretending that they are required for the actual relinquishment/renunciation. They have no training in US immigration/citizenship law anyway.
@ M (person who asked a tax question 4 comments above),
I’m an admin on the site and I just saw your post. I’ve changed your name to M on your comment above. If you’d like it changed back, no problem, just let us know.
Hey guys, I was wondering if those of you who have renounced have all filed taxes before renunciation? I was made a US citizen when I was 16, quite some time ago, as my mom is an American. I’ve never lived or worked in the US, only Canada.
I’ve been agonizing over whether to even bother with the renunciation process or just continue to fly under the radar. Filing taxes in the US is one thing I have never done.
Anyways, just wondering at everyone’s approach to renunciation and whether starting down that path would bring a lot of needless stress, likely yes?!
From a purely philosophical standpoint, if you never lived in the USA and you did not apply for citizenship yourself, it would appear illogical in every conceivable way to be considered the slightest bit obligated or to be bound by any US laws.
Having never lived there you won’t be on their proverbial radar.
Would they have anything that even shows you’re aware you have citizenship?
If it was me I would consider myself relinquished through non-use.
@P
Welcome.
There are many approaches depending on situation.
If you don’t have an American birthplace and have no problems with banking etc, then you could continue to stay under the radar, just don’t admit to being an American citizen.
If you have an American passport then don’t use or renew it. Ii is easier for Canadians to do this as they don’t have to fill in an ESTA or apply for a visa to visit the US where the state all citizenships past and present question is asked .
If you feel you want to be free of the US for peace of mind and can afford $2350 then go ahead and renounce , many have done this and not back tax filed. The US can do nothing if you are a citizen of Canada.
@P
If you were born in Canada, do nothing. Stay off the radar. The US knows nothing about you save for having your birth documented many years ago. No need to renounce or deal with taxes.
To answer your original question many of us renounced before filing taxes. A subset of that group never filed; others did for various reasons such as having heirs in the US
I left the USA as a young adult, never filed taxes. After much help from people on this site, I decided that I would never file.
I also decided, however, to renounce, as various investment products and private pension plans weren’t available to a US citizen in my country (UK). Now that I’ve renounced, I can once again plan for retirement.
I should point out that I have no assets or income in the USA, and I’m a financial plankton. I don’t expect to leave much (if anything) to my USA nieces and nephews when I die.