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!
Actually, upon re-reading, yes it says the employee has to be 18.
It will still cost $2350 to document relinquishment so I don’t really see any advantage to the subterfuge of mowing lawns for the local parks department then later attempting to convince the State Department that you did so with the intention to relinquish US citizenship. Once the fee came along the rationale for the relinquishment vs. renunciation strategy essentially disappeared, unless the act occurred before 2004.
In theory, a relinquishment could be interpreted as less of a rejection of the US than a renunciation but I have seen no evidence the US government really cares one way or the other.
@ maz57
I don’t think they can say my husband’s relinquishment is any less of a rejection than a renunciaton. He, at my suggestion, went to his Canadian citizenship ceremony with a letter stating his intent to relinquish which was co-signed by the citizenship officer who seemed very pleased to do it. The same day he e-mailed a copy of that letter to the US consulate and requested an appointment for relinquishment. Four months later came the appointment and four months after that the CLN arrived and it was done. The date of his relinquishment on the CLN is when he notified the US consulate of his expatriation act (i.e. citizenship day) which made that the year of his final tax filing, not the next year when he had his consulate appointment. Unfortunately for those who didn’t have the advantage of knowing about the hazards of being a USC when they became citizens in their resident country it isn’t as easy to prove intent as it was for my husband. We both have Brock to thank for guiding him successfully to that CLN.
@EmBee
I wish I’d thought of doing that. The afternoon I was sworn in as a new Canadian I emailed the US Consulate and informed them of my expatriating act and that it was my intent to lose US citizenship. In their reply they didn’t dispute that I was no longer a USC. I archived the email exchange and I still have it but it would be much nicer if I had an official paper record. I never bothered to apply for a CLN, however. I didn’t feel like sending the bastards my hard earned cash and so far it hasn’t been an issue.
(As an aside, my citizenship judge revealed during the ceremony that he was a transplanted American. He was about my age and seemed like a really decent guy. I always regretted that I didn’t have an opportunity to sit down with him over a beer. I’m sure it would have been quite an interesting conversation!)
If my 19 year old son who was born in the USA wants to give up his US citizenship, what is the best way to do so?
We applied for his Canadian citizenship when we returned to Canada. He was 1.5 years old at that time.
@EmBee what exactly is a CLN? Can he relinquish and have documentation without having to pay $2350?
‘If my 19 year old son who was born in the USA wants to give up his US citizenship, what is the best way to do so?’
Start by sending e-mail to a US consulate to ask for an appointment. Others will give more detailed instructions, which I don’t know because it was different when I renounced.
‘We applied for his Canadian citizenship when we returned to Canada. He was 1.5 years old at that time.’
I think you mean you applied for a Canadian citizenship CERTIFICATE for him? Surely he was born Canadian and the government didn’t have an option to grant or deny citizenship to him?
‘@EmBee what exactly is a CLN? Can he relinquish and have documentation without having to pay $2350?’
CLN is Certificate of Loss of Nationality.
There are ways to relinquish, such as by taking a job with a national or provincial government that requires a declaration of loyalty etc., with intention to relinquish US citizenship by doing the expatriating act. If he doesn’t need a CLN then he doesn’t have to pay US$2,350 but the relinquishment will still be valid. He had better not act at all like a US national after the expatriating act.
If he needs a CLN because of worry that the US will still treat him as a “tax citizen” until he gets a CLN, or because a bank wants to see one, etc., then it probably costs US$2,350 and a meeting at a consulate, the same as for renunciation.
I think there’s a cheaper way to obtain a CLN, but no one has tried it yet. Do an expatriating act with intention to relinquish. Afterwards, apply for a US passport, carefully cross out relevant parts of the preprinted declaraion and write an accurate declaration, which is allowed because this is a passport application not an IRS form. Declare that the applicant performed an expatriating act with intention to relinquish US citizenship. I think the consular official is required to deny the passport application and issue a CLN, for the price of the passport application. If he ends up with an unwanted passport then maybe he’ll have to go ahead and renounce.
@John
The short answer is, if your son needs to prove that he is no longer a US citizen, you or he is going to need to spend $2350 for a CLN. No way around it. The renounce vs. relinquish question isn’t really relevant, as it’s the same price to prove loss of citizenship.
To renounce, just google your nearest US consulate, there will be an e-mail address, you make an appointment and bring along the documents they request. That’s basically it. While the consular staff are generally quite friendly and helpful, it’s possible that with someone as young as your son, they would make more of an effort to ensure that he’s fully aware of the consequences, and might even try to talk him out of it (there will doubtless be references to future possibilities for studying and working in the US). Over on the Facebook group there was a report of someone’s 18-year-old daughter in London being persuaded to not renounce. That being said, they cannot deny renunciation if they believe him to be of sound mind and not under duress.
For what it’s worth I think that is quite a young age to make the decision. I’ve recommended that my daughter (who at least does not have a US birthplace) wait until she’s done university before pulling the plug; in the meantime she lies to banks just like her father, to avoid FATCA reporting.
If he does not need to prove that he’s lost US citizenship, then he can either do nothing, or perform (and document) an expatriating act so that later he can attempt to have the US recognize his relinquishment, if needed (it will still cost him $2350 to do so, at today’s prices). Frankly it’s probably simpler just to renounce.
Note that tax compliance is not necessary for renunciation. Though for a typical 19-year-old it’s probably quite simple and straightforward to do up the paperwork for a full exit of the tax system. Also it’s not terribly relevant when he acquired his Canadian citizenship, though advantageous to be dual from birth if one has been compliant and is worth enough money to face the exit tax, which likely isn’t the case for the late teenage years.
Finally, probably best to ignore Norman’s odd scheme for how to score a free proof of relinquishment. He’s dying for someone to try it though.
@ John
Unfortunately renunciation and relinquishment both cost the same (US$2350) now. Relinquishment was free when my husband did it (about 5 years ago). It goes to show how quickly things change and never for the better when the US government is locked into punitive mode. Hopefully, being as young as he is, your son has no requirement to file any US tax forms (below threshold income level, no savings exceeding $10K total). Then he can pay the renunciation fee to get his CLN, file an extremely simple 8854 and be free to engage in whatever financial life he desires, without any encumbrances of US citizenship-based taxation (CBT).
I have renounced Dec 4 2018 and have received my CLN on Feb 4th.
I am wondering how many CDN’s are unwilling or unable to pay the Transition Tax ?
I just received a note from my CDN accountant that the irs is not going to allow the Transition Tax to be paid over the 8 years if you have renounced.
They want it paid in full immediately.
I would love to hear if there is a movement of CDNs just going to so no and not comply with this stupid tax. ?
@Punky
Sounds like you’re about to start this movement. Chapeau!
I’m sure plenty are refusing to pay or come into compliance but finding each other may be a challenge.
My question is about simply not complying this year with my return.
I was born in the US and came to Canada in 2004 (citizen since 2016). For a long time I didn’t do returns, then I got into the system with FATCA. Every year this pains me to no end to pay so much money to get a return done – to prove I owe nothing! I found this site a few months ago, and was relieved to know I wasn’t alone in thinking how messed up this system is.
So this year I don’t want to fill out my return. I don’t have the money to renounce either. I still have one US bank account and I have a lot of family still in the States. Should I close my US account? I don’t travel that often to the States, but sometimes go for business. What are the risks? I honestly can’t stomach spending more time and money on another US return. Ugh.
I need some advice, thanks!
If you have a reason to keep your bank account open in the US, maybe you want to keep $50 in it and let that be the amount at risk.
You don’t have to be afraid to travel to the US unless the IRS sends you some particularly nasty kind of letter (not just an ordinarily nasty letter). It sounds like they haven’t done so.
@Norman Diamond they haven’t written any letter thus far because I’ve been complying and doing my returns. This is the first year I’d not fill one out (since FATCA). Would I be more on their radar because I had been complying?
“Would I be more on their radar because I had been complying?”
My intuitive feeling is yes but it might not matter. Some others stopped filing and haven’t heard a thing. Who knows if the reason is because the IRS doesn’t have radar or because the IRS sees but decides not to care about what they see on the radar.
@Margotte
Odds are if you don’t have enough money to pay for renunciation, you don’t have enough money to be of interest to the IRS.
No one can predict with any certainty what will happen when a person who has been filing returns suddenly stops filing, but since there are filing thresholds – income levels below which you are not required to file a US tax return – the lack of returns going forward does not necessarily mean tax evasion. It could also mean that someone just decided to stop working and be a pampered layabout spouse (or hardworking stay-at-home parent).
Do you know for certain that you are subject to FATCA reporting, and would the amounts be significant, such as interest income beyond the minimum filing thresholds (which range from $4k to $12k)? That would be a consideration.
As for radar, there are really only two ways the IRS learns about you and your money: first, whatever you tell them when you file returns (that part is voluntary); second, whatever they learn from FATCA reporting. If an account is reported, the IRS will get year-end balance and interest/dividend income. Reporting happens if you’ve identified yourself as a US person, the accounts are *not* excluded as RRSP/RESP/TFSA etc., and the account value exceed whichever threshold the bank applies (relatively little is known about this). It’s quite possible that you are not in fact subject to FATCA reporting, in which case the only radar your filing returns.
If you decide to continue filing but the cost of compliance is a problem, you can do it yourself. Apparently it’s not difficult, particularly if you follow the pattern of previous years.
The minimum filing threshold changed this year, didn’t it? Now ranges from $5 to $12k depending on marital status or something like that. Not clear on the details, but the basic point still stands: not filing a return is not in itself proof of tax evasion, if one has low enough income. Ergo, the IRS doesn’t automatically become suspicious of someone who stops filing.
Margotte:
“I don’t want to fill out my return. I don’t have the money to renounce either. I still have one US bank account and I have a lot of family still in the States. Should I close my US account? I don’t travel that often to the States, but sometimes go for business. What are the risks? I honestly can’t stomach spending more time and money on another US return. Ugh.
I need some advice, thanks!”
Three choices:
Option A:
1. Stop spending the money on filing US tax returns, and put it instead towards saving up for renunciation. If you can’t manage to save up enough, self-document your relinquishment of your US citizenship.
2. Close the US account.
3. After renouncing/relinquishing your US citizenship, you can travel to the US on your Canadian passport, same as other Canadians.
Option B: keep the US citizenship and keep filing.
Option C: keep the US citizenship but stop filing.
Since filing US tax returns is merely a citizenship obligation, which can’t be enforced outside the US, you can choose whichever option suits you best.
@Nononymous I didn’t know there was a minimum threshold! I started my own business and my income has been very low for the last 4 years – lower than the threshold. Things may change this year, but as far as the IRS is concerned, they’ve only seen very low income since the beginning.
@plaxy thank for that sum up.
I think I’ll move most of the money out of the US account, but keep it open for now, and just stop filing.
Is there a link to how to self-document relinquishment?
Margotte – Just not filing seems a good solution.
Self-documentation of loss of citizenship is just something you can do if you can’t afford to pay the renunciation fee – a way of putting on record the fact that as far as you’re concerned you’re Canadian only and don’t intend to “act like an American” (make use of your US citizenship).
Self-documentation doesn’t give you proof of loss of citizenship. That’s what the $2350 buys you – the proof. Fortunately, in Canada it appears proof, though desirable to avoid potential border hassles, is not necessary. However, it would be a bit pointless to self-document loss of citizenship while keeping a USC account with a US bank, as that’s very much “acting like an American.”
To self-document loss of citizenship you can close the US account and put your intention in an affidavit, stating what expatriating act you have committed (e.g. naturalisation, taking employment under a non-US government, renunciation), and send a copy to the DoS. Then never make use of your US citizenship again.
Ok. Goodbye US account, then. Thanks for all this info – I am SOOO grateful for this website and all of your helpful answers! I’m feeling much relieved.
Margotte – just to clarify: the DoS won’t take notice of your self-relinquishment. They only acknowledge the $2350 version.
Self-documenting gives you the satisfaction of knowing that you’ve asserted that you don’t want your US citizenship and don’t intend to use it, and have put that intention on record and notified the DoS of your intentions. It doesn’t have any effect beyond that.
If you’re going to opt just to stop filing, that’s really all you need to do – just stop.
Yes, I realize that this is in no way official. But in the off-chance that things change some day, I think it’s good to have things recorded. And making the price so high that it takes away our right to choose seems highly illegal.
Absolutely agree with both points.
@Margotte
Don’t get too hung up on the “self-relinquishment” thing. It’s personally satisfying but does nothing otherwise. For example, maintaining a US bank account doesn’t have any consequences for citizenship, so don’t feel like you need to close it to somehow demonstrate your commitment to not being American. If for some reason it’s convenient to have one, keep it. Similarly, if you cross the border on a US passport to avoid hassle (which can occasionally happen if you have a US birthplace on your Canadian passport) then don’t stop doing so because you’ve decided to privately self-relinquish. Frankly it’s a bit meaningless.
Regarding minimum filing threshold, I believe it’s $400 for self-employed, so unless you earning less than that, you have an obligation to file (an obligation which of course you should ignore). But check – as someone who refuses to file I’m not one to ask about the finer details. My point was rather that it’s not unusual for someone to stop filing all of a sudden, if their income drops. It is absolutely not the case that red lights will begin flashing at the IRS if they don’t see your next return. You will never hear from them.
What is your situation with respect to FATCA reporting? Have you identified yourself as a US citizen when asked by your banks? If you have not yet been asked, then you are not being reported, period; if you did identify yourself, you may or may not have been reported, depending on what sort of accounts you have an how much money they contain. If you are asked about US citizenship in the future, you know how to answer the question – a simple “no” will suffice.
Overall I’d say just continue as you were before you started filing. Attempting compliance was obviously not a great thing to do, and a waste of money, but at least you’ll have minimized the damage by stopping now.