Relinquishment and Renunciation Data (as reported on Isaac Brock), Part 2
US RELINQUISHMENT RENUNCIATION.m2
Above is a link to data we are compiling on Relinquishments and Renunciations — a work in progress.
(We are starting Part 2 as Part 1 has now over 1,000 comments.) Link to “Relinquishment and Renunciation Data (as reported on Isaac Brock), Part 1”
This Relinquishment and Renunciation database corresponds with the Consulate Report Directory, which tracks individual experiences for each Consulate, along with a timeline chart.
Note: We are using numbers instead of blog names for this public posting so there will be no compromise of private information. Your facts will help give a snapshot of relinquishment and renunciation activity and where that occurs.
Please submit information in the comments below (or someone can contact you privately if you leave a message).
This database and the Consulate Report Directory have proven valuable resources for those new to the subject of relinquishment and renunciation. They can see numbers for and read others’ experiences of relinquishment or renunciation at various US consulates throughout the world — as reported by participants of the Isaac Brock site.
Thanks for your addition to the Relinquishment and Renunciation database. Your input will definitely help others.
Welcome Jed,
I am sorry for all your stress! Your situation does indeed sound very complicated! I wish I had an easy answer. All I can suggest, is to read as much as you can here. Perhaps other brockers can direct you to specific posts that will be helpful to your particular situation. One thing I can say, is please take your time before you react, to avoid making decisions you might regret later.
To be honest, reading your story reminds me just how important it is for Canada to be a leader, and to take the first big step in derailing the FATCA train. I hope your comment encourages more Canadians to come out to the Ottawa anti-FATCA protest.
CANADA IS KEY TO STOPPING THE FATCA MADNESS, and to saving people like Jed in Australia from a living nightmare. Please join us Wednesday, if you can!
Sorry I should have said: renounce and get a good tax accountant ….. or …..
Additional
– my assets are under $2M
– will i be faced with the exit tax?
– I have read:
• If you decide to relinquish, schedule an appointment with a US consulate and obtain a Certificate of Loss of Citizenship. There is a wait list for an appointment (typically several months). If you have performed an expatriating act (typically by becoming a national of a different country with intent to relinquish USC) the loss may relate back to the earlier date but you must obtain the Certificate.
• If you decide to relinquish USC, you will remain tax resident until you file Form 8854 Initial and Annual Expatriation Statement (see “Exit Tax Regime” below).
@Jed,
There are many on this site with more knowledge than myself.
I believe that as you were born a dual citizen, your only choice is to renounce. The principal of relinquishment applies to those individuals who perform an expatriating act (such as naturalizing in a foreign country), with THE INTENT to relinquish their U.S. Citizenship.
Also, as far as tax compliance is concerned, you would need to comply. In fact, several lawyers who have posted on IBS, feel that even those who relinquished after 2004, need to be compliant.
As you are probably aware, your use of the U.S. Passport also would probably mean you will have to renounce.
There is also the option of doing nothing.
@Jed
The good news is if you are a dual at birth you may be exempt from the exit tax. The bad news is that you need to certify 5 years of tax compliance anyway.
http://hodgen.com/dual-citizen-exit-tax/
@Jed, and Media Fleecestealer,
A 3rd option is ‘wait and see’ for awhile. Has Australia signed an IGA yet?
Canada needs to say NO, NOW. The entire world is waiting for someone to be the first.
@Jed
Sorry, didn’t see your post about your assets being <$2M.
@Medea
Medea, thank you for your reply.
The nightmare never ends does it…
Some questions if i may
– i thought at the time of renouncement i need to fill in a Form 8854 which confirms my tax affairs are in order (with the IRD) – If i do not tick this box I cannot renounce
– Form 8854 http://www.irs.gov/pub/irs-pdf/f8854.pdf
– did you have to fill this in?
Regarding your warning to never visit the US again if i do not do the forms. Do you believe this is the case if i use my Australian passport as well? i suppose so 🙁 do you know of any cases where legalities have come to someone visiting for 2 weeks? What authority do they have to fine/arrest me if I am no longer a US citizen?
Thank you
Jed
Thank you everyone for your replies.
– Can anyone comment on the chances of getting “caught” by the IRS? I dont even have a Social Security Number.
– What would happen if i dont declare im a US citizen for FATCA?
– If i renounce do i have to fill in form 8854? for it to be accepted.
– Finally, it sounds like “taking an oath or making an affirmation or other formal declaration of allegiance to a foreign state or a political subdivision thereof, after having attained the age of eighteen years” I could perhaps make a public oath to Australia for the purposes of relinquishment (even though ive been both dual). It sounds (from legal wording) that this might even be valid?
I actually live in Europe and was planning to move to Switzerland (my wife is Swiss – nothing to do with tax avoidance) but i figure Switzerland would alert the authorities. Not sure where the EU stands. Australia has FATCA come into effect in 2014..
Many thanks
Jed
Jed. It may not be nearly as bad as people on this site make out.
1. You can renounce without being tax compliant (filling in 8854) . The state department is not supposed to ask about taxes. They are supposed to advise you to contact the IRS. Most people think that means filing 8854.
2. Once you renounce, you are no longer a US cit.
3. You don’t have a social security no. The chances of the IRS computers finding/bothering you are slim to none. They are busy with wealthy taxpayers living in the homeland.
4. The advice to never travel to the US is questionable at best. Let’s suppose the IRS finds out from the state department that you exist. So what? There is precious little they would do about it. You are an Australian living in Europe. As far as they know you don’t have any money owing. They have bigger things to occupy their meagre resources.
Jed. Were you born in the US? or Australia? It may make a difference in terms of what you decide to do. For example, if you hold an Aussie passport that shows a place of birth in Australia, that is much different than holding one that shows a place of birth in the US.
@Jed, no you don’t have to file the 8854 form straightaway. You have a year after renouncing to file it. I did my back filing up to 2012 and will file a partial year for 2013 plus the 8854 form in 2014. It has nothing to do with the renunciation process. To do that you simply go to the embassy/consulate and swear/affirm that you are giving up your US citizenship. You will sign the Oath and also the Statement of Understanding of the consequences of giving up your citizenship, but that’s it. The tax element doesn’t/shouldn’t come into it apart from a reminder that you need to do any necessary filing/paying and you may not even get that; I didn’t when I renounced in Bern this year. The documents are then sent to the State Department in Washington for final approval – again the tax situation has no bearing on their decision. In a few weeks/months you will get your CLN (Certificate of Loss of Nationality) and you can use this to prove to the banks, US border control, etc, that you are no longer a US citizen. These are the forms:
http://www.state.gov/documents/organization/81606.pdf
http://www.state.gov/documents/organization/81607.pdf
Forget about taking the Australian oath, it means nothing as you were born a dual citizen. It’s unlikely the Australian goverment would let you do it, but even if they did, the US would say it’s invalid because you’re already an Australian. Renunciation is your only option.
Even though you have no SSN number now, you will need either that or some other Tax Identifer Number to file your back taxes. All renunciations/relinquishment details are passed on to the IRS when the CLN is approved which will include your SSN/TIN. If you’ve filed and paid your tax then travelling on your Australian passport with a copy of your CLN shouldn’t cause any problems. But if you haven’t paid up there’s always a chance that, depending on how much you owe/fines imposed for not paying, you could be fined on the spot, refused entry to the US or even arrested. It hasn’t happened yet, but who knows what will happen in the future.
The question is does your Australian passport have a US place of birth on it? If not, then no filing and coming in as a visitor in the usual way shouldn’t be a problem because as KCal points out without an SSN you’re difficult to find. And don’t show your CLN to border control obviously! But if it lists a US birthplace then there could be questions.
It’s unlikely that moving to Switzerland would alert the authorities particularly, but Switzerland is at the forefront of the US’s assault on tax evasion. US citizens are finding it very hard to get/keep a simple bank account and if you wanted to have a joint account with your wife, she would likely be refused too even though she is Swiss. If you have enough money you might be allowed to have a mortgage or investment account, but we’re talking 100,000 Swiss Francs at least if not more. If you wanted to start a business here, again very difficult to get a business account for a US citizen unless you already have substantial funds.
FATCA comes in worldwide in 2014 – at least that’s the current plan. Whether it will be delayed yet again is anyone’s guess. But the timeline is the same no matter where you are in the world.
@ Jed, you might want to have a read here of people’s experiences with renouncing. There are only a couple of entries for Australia starting on page 12, but if you read some of the others too it’ll give you an idea of what to expect:
http://isaacbrocksociety.ca/wp-content/uploads/2013/10/Consulate-Report-Directory-2013.10.10b.pdf
Also the info at Renunciation Guide, although a little out of date, is still very useful for those researching the whole renunciation process:
http://web.archive.org/web/20120726052834/http:/www.renunciationguide.com/
It’s archived here at IBS and you can find the link down at the bottom of the page – RenunciationGuide.com.
@Ned…
Reading your first post and the comments / suggestions that I have followed, I thought I might just add one of my own.
As you can see from the comments that have followed your inquiry, “it all depends” is an apt description on what course is right for you.
The hard part, is deciding what information is good information and what best fits your needs. It really depends on your facts which are hard to adequately explore on a blog site. Beware of information you receive without adequate confirming it for yourself.
I would start with 2 key self evaluations on your part, and your answers should flow from that.
1. What is the value you place on that U.S Passport? What is it worth to you?
2. What is your risk tolerance?
Once you have this clarity, then you can pursue a solution that ranges from “do nothing” to “renounce and comply” with form 8854 filing which requires 5 years of tax filing compliance.
You are just starting the education process for yourself. There are a lot of participants here who have gone before you and taken different routes. There is something to glean from each. You have already been given some good advice. Take your time with your education drudgery, and NO NOT rush into the arms of a compliance Attorney who will want to make money off your unfortunate dilemma.
While you are self educating and formulating a decision, do everything you can do legally to remove any U.S indices that might prompt a financial institution to decide you are a U.S. Person. Once that happens, that is where your trouble will begin. In theory the FATCA compliance should not start until July, 2014, but as has been reported here, depending on the country and the state of FFI compliance efforts. Some banks have jumped the gun. So beware, and good luck.
Jed – My take on your case starts from the fact that you have long held a US passport. There is every reason to believe that the United States will be data mining that fact, later if not sooner, to cross-check with your tax filing status. The nooses are drawing tighter. Sauve qui peut. Read this:
http://usxcanada.wordpress.com/perspectives/#passport
Ned, ah… Jed!
..further to my comment…. And don’t take advice from anyone who can’t get your name right! Sorry about that, Jed… 🙂 Guess I was thinking about Ned Kelly
@Jed, in my opinion, I’d say that you should immediately schedule an appointment to renounce US citizenship. Pay the $450 fee and in 2 or so months you’ll have the CLN. Give a copy of your CLN to your banks and then you’ll be free!
For 8854, you have two choices. Do nothing or become compliant with US demands. If you want to become compliant, you’ll have to either attempt to figure out how to do it on your own by communicating directly with the IRS, or you’ll have to hire someone. With the later, you might get bad advice or it might cost too much. If you do nothing, then the US might attempt to cause you some trouble by applying FATCA pressure on your banks, possibly causing them to kick you out. Other than that, if you have no assets in the US, then there is not much that the US can do.
@Innocent
Unless the IRS can connect a CLN with a bank account they can’t do much, that is unless FATCA requires the bank to keep record for them of who who submits CLN’s exempting them from FATCA. Hardly seems legal since the bank is only required to report on US persons, not ex-US persons.
@bubblebustin, the situation of ex-persons is rather interesting. It is a gray-zone, or unknown waters. Nobody really knows what it means. I guess that IRS never thought about this. Just today I posted a comment about previous year FBARS and ex-US Person status here:
https://www.taxconnections.com/taxblog/options-available-for-us-taxpayers-with-offshore-accounts-andor-entities/#.Ulm0iRDU2So
It writes that US expats must file the past three years and delinquent FBARs for the past six years. Yet 8854 makes no mention of FBARs for non-citizens.
I think these attacks on ex-pats equate to a violation of human rights. Our free will has been stripped, no differently than being under the rule of a dictatorship style regime. I feel I have zero control over my own destiny and must bow to the will of a foreign government. I wonder how history will view these immoral actions by the current US government? I would like to think that one day in the future a new (and sane) US government will reach out to make reparations, apologize and invite all those who were forced to renounce to return.
@Jed, I feel your anxiety.. I have been in NZ for the last 14yrs. I’m hopefully getting a back dated cln for 2008 but my consulate meeting is not until Nov. I too am at a loss on how to back file 5yrs as because I can’t afford to hire an attorney and I too have misc. complexity. For example my wife and I own a home jointly and a NZ business. Have our accounts at anytime had more than 10k? Maybe but I’m not sure. We generally owe a lot on our mortgage and live check to check. I can barely afford to fly to Auckland to sort out the relinquishment and I am expected to properly file 5yrs of taxes? It’s hugely stressful.
I also had another question for you guys. Does my requirement to file the 5yrs begin from the time I submit my relinquishment forms to the DOS, or from the time I get my CLN? For example after I get my CLN I have x amount of months to sort out the back filings or does that happen before the CLN? I’m trying to gauge how much time I will have to get all this done.. (as if my life is not busy enough already sigh)
pukeknoz,
I believe the requirement is five years plus the partial 1040NR for the year of expatriation. If your renounce the CLN date will be the date of your appointment; if your relinquish the CLN date will be the date of the actual relinquishment you are now advising of. Many who are relinquishing (rather than renouncing) should have no requirement for filing depending on when that “relinquishment” occurred.
Unless Jed is about to have his bank accounts closed, IMO there is no rush to renounce. To do nothing, for now, means not to have to decide between renouncing and filing, versus renouncing without filing.
With any luck. and a lot of whining, and fighting, FATCA is going down first, soon to be followed by CBT!
And once that happens, all those ‘US persons’ who have not yet renounced, can do it just based on the principle, not out of fear.
@calgary Thanks but it’s still a bit confusing for me. My CLN should be back dated to 2008. If my CLN comes through successfully for 2008 would my back filing be for 2008 -5 years from that? I seem to be told It will be 2014 -5 years from that even if my CLN is for 2008. I was tax compliant through 2005 so was hoping I just do 2006-2008 plus my final year but I don’t think it works like that even with a back dated cln to 2008? You would think that would be the case, I mean if the CLN agrees that I lost citizenship in 2008 why should I have to have filings after that date.. So looking forward to getting all this over with..
@PukekoNZ,
If you sign your relinquishment forms in November (or any time in) 2013, you would have until June 15th, 2014, to complete your tax filings. The 8854 is due on June 15th of the year following the date the date of the consulate meeting, and on that you certify that you are in compliance for the five previous years. Your partial year 1040 for 2013 is also due June 15th, 2014. I think you can get a six month extension to October 15th for filing all this, but don’t know the details about that.