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.
@PukekoNZ,
Your relinquishment falls under 26 USC 877A(g)(4)(B), date you notify the US of your relinquishment, so unforutnately would be 2008-12 plus partial year 2013.
You can also access this in the instructions for the 8854, bottom of column 1, page 1.
I’m hazy on this as well, but I think this is because you can get an automatic tax filing extension to Oct 15, and the 8854 is due with the return. I’ve also read on Phil Hodgen’s site that you can possibly even get a further extension to Dec, but there were no details and that’s the only place I’ve ever seen a Dec extension mentioned. Would be nice to know for sure.
@SwissPinoy, you wrote “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.”
That’s what is maddening about so much of this mess. The IRS determines the regulations that implement US tax law, but both the law and the regulations change over time and many parts remain very unclear as they apply to US expatriates. Yet we just know that if we ask them for clarification, their answer will always be determined by how much information and money they think they can extract from us. So there’s no benefit in trying to clarify the situation by asking them.
The only way to achieve clarity and peace of mind remains to distance oneself as fast and as far from “US personhood” as one can.
and, from usxcanada comment some time ago, another thing to know about the filing of 8854:
I agree with you — it doesn’t make sense to me that one should have to file after the date that you lost citizenship, but I would listen to Pacifica’s good advice on how the law differs depending on the date. She’s mostly right on the money with her facts. We all hear you and echo “So looking forward to getting all this over with.” Hang in there. Ask your questions. Someone will give good answers for you to consider. We’re behind you and all others yet to go through this horror. My best!
(having trouble getting comment posted)
Thank you everyone for the VERY helpful feedback.
Dear bubblebustin
Yes because i was a dual at birth (and born outside the US) and with less than $2M in assets I don’t think I’m hit by the Exit tax.
Do you know/when it asks for 5 years of tax compliance and what they do to check/pursue?
@Only a Canadian, I was born in Australia
Dear @Medea
Your links were very helpful.
Due to the above do you think it would now be ok to travel to the US? (provided i stayed under 31 days) (using my non US passport) (even if i had not filled in all my IRD forms).
ALSO VERY IMPORTANTLY I have learned that. 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).
And to @just Me says
1. Value on US Passport, after this ordeal. Not much anymore.
2. Risk tolerance
Low. What will be the chances of being “caught” or worse by the IRD once I’m no longer a US citizen and without an SSN?
Everyone –
It seems nuts that i have to get a SSN in order to file my taxes just to exit the US system…
a) Any idea what happens if i just don’t fill in form 8854?
b) What will they do?
c) where/when does the IRD ask for 5 years of tax returns. I see a small not on 8854, is this the only place?
d)Or if i just put $0 on everything in 8854?
e) IMPORTANTLY If i don’t fill in form 8854, or more specifically if i don’t fill in the last 5 years of tax returns. What can the IRD do to me once I’m no longer a US cit, and without an IRD. Any ideas on what’s happened to others?
Thank you again,
Jed
Fundamentally this is the BIG problem for many of us – or me in particular. Since I was a Dual US/Aus citizen since birth but have used my US passport, I must renounce my US citizenship.
This basically means I must have US approval.
For the approval to be given i must fill in the 8854 form and thus do my last 5 years of US taxes…
**You will remain tax resident UNTIL you file Form 8854 Initial and Annual Expatriation Statement .***
If i was able to Relingish my citizenship by taking another oath and doing it for the purposes of refinishing my US citizenship I instantly become a non US citizen.
However in my situation i need their approval and need to file to forms to the IRS which is what i want to avoid 🙁
Any ideas or does anyone know anything different to the above?
Many thanks
Jed
@Jed: I have learned that. 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).
This is the old (pre-HEART, 2008) rule, and no longer the case. Folk renouncing between 2004 and 2008 had to file an initial 8854 as soon as they renounced and annually for ten years afterwards. HEART replaced this in 2008 by linking your tax expatriation date to citizenship loss, so you lose your US person status for tax on the day you renounce at the consulate. It is a good idea to quickly check the date on any document you read, because many old web pages still quote pre-HEART rules (and many just get it wrong even if written more recently).
You can see this on the instructions for form 8854. ‘Date of Tax Expatriation’ — and oh boy!, doesn’t that terminology tell you a lot about the way the US views citizens as chattel? — appears only in the section covering expatriation between June 3, 2004, and June 17, 2008.
@Jed, it really depends on whether your Australian passport shows a US birth place. If it doesn’t then it shouldn’t be a problem travelling to the US as they have no way of knowing that you’re a US citizen. It will mean you have to go through whatever visa/waiver procedures are required for non-US citizens when travelling to the US though. Also don’t admit that you’ve been to the States before, that may set them wondering how you got in as previous entries with your Australian passport won’t be showing up on their system. But how often do you travel to the States and do you enter/exit at the same place? Is your face likely to be familiar to border control because you pass through every few months? If it is, then travelling on your Australian passport could cause problems because they may remember that you came in a US passport before. US law requires that all US citizens enter and exit with a US passport, even if they hold other nationalities. At the least you’ll get told off, the worst case they’ll refuse you entry unless you can produce your US passport.
Are you sure you don’t have an SSN number? Often parents applied for their children when they were quite young as there is some US tax benefit if they did so I believe. Also have you never been asked for it when renewing your US passport? Can you ask your parents about this?
If you have no SSN number and your passport doesn’t show a US birthplace then there is another possibility, providing your bank/s don’t know you’re American either. Lie low, quietly drop the US passport (i.e. never ever use it again and don’t renew it) and be Australian only – don’t even bother to renounce. It would theoretically be extremely hard for the US to find you because you aren’t in their records apart from your US passport renewals. Border control can’t check on your US-ness with an Australian passport showing an Australian birthplace The IRS shouldn’t be able to find you either. Forget that you have any connection, however remote, to the US. If a bank asks, due to FATCA requirements, you’re only Australian. Cut visits to the US out if you can or keep them to the absolute minimum.
Don’t rush into any decisions, take your time and do your reseach to find out what is the best option for you. All of us here can offer advice and will do so, but ultimately how you deal with this is down to you as only you know your full circumstances.
@Jed, you don’t need to file the 8854 to have your renunciaton approved. It will be done with no checks on your current tax status. Once the CLN is approved you’re no longer a US citizen from the date you took the Oath of Renunciation whether you renounce or relinquish. The 8854 requirement is that you are able to say that you are tax compliant when you file a year after your renunciation date.
Whether you renounce or relinquish you are still required to file the necessary back tax forms. Relinquishing doesn’t mean your tax obligations have disappeared – that would be far too easy.
@ Jed,
Here are some links for some more background information on Medea Fleecestealer’s and Watcher’s comments. Very good info/advice from them. I think too that Medea’s advice about don’t rush into any decision is very important because generally we’re in sort of a state of shock (anxiety and sleep deprived, etc.) when we first discover this outrageous problem and there’s a lot of information to digest and details to think about.
So, famliarise yourself with the situation and the various options, as you’re doing, and then make the decision that feels best for you and that you’re most comfortable with.
Under the current law (2008), for IRS purposes the date of expatriation is the day the person signs the forms at the consulate: either to make the renunciation oath, which is a relinquishing act; or to notify the US govt they have already performed one of the other relinquishing acts listed in s. 349(a) of the Immigration and Nationalities Act. [ For Dept of State purposes, the date of expatriation is always the date of the relinquishing act, no matter how long ago it occurred.]
26 USC 877A(g)(4)(B),
This article by US tax lawyer Michael J. Miller explains the exit tax law now and how it’s changed from its prior forms pre-1996, 1996, 2004, and the current law which came into effect in 2008. There’a also a thread on the site here about that article.
You can also access information about this in the instructions for the 8854, bottom of column 1, page 1.
Jed. Everyone makes their own choices here, but if you carry an Aussi passport that has no hint of your ‘US-ness’, and you are sure there was no SSN for you, then Media Fleecestealer has a viable consideration for you. That being, just be Australian, travel as an Australian and let the US Passport gather dust until it expires and never renew. I am sure there are some already doing just that type of thing and not allowing the US to impose a citizenship on them that they don’t want or need.
Jed: If you wish to put more distance between yourself and the US, you could consider changing your name. Australian law, as you might know, allows a citizen to change his/her name once a year. As an example, the Australian-Israeli Mossad spy, Zygier, changed his name four times in about four years. Perhaps if your surname were anglicized by your ancestors, you could change it back to the original – a valid enough reason.
@ Innocente
Brilliant idea. One problem in using an Australian passport when entering the U.S. is that Jed’s name may
show up as having entered the U.S. before using an American passport. I have no idea what is in Homeland Security’s computers, but a name change, however slight, may be a solution.
Jed We’ve been down this road with many people on IBS. Most people here say ‘you HAVE to do this and you HAVE to do that” You don’t HAVE to do anything. US law does not apply in Australia.
You can safely do nothing or you can safely renounce and do nothing or you can renounce and fill in 8854 to the best of your ability. There will not be an exit tax; 5 yrs. worth of 1040s would be a large pain in the ass. The one considerable advantage to your filling in all of this bumpf is that it helps clog the system so they have fewer resources to bother the rest of us.
Re all the advice to Jed (Jed: that was a pretty good sketch of issues you posted) about how to hide out from what appears to be the system at the moment – name change, etc. Three simple points: (1) Data matching. US border entry officer puts name / date of birth / place of birth together and notices that there has been a US passport. (Data collocation grows ever more powerful. Access to change-of-name files is how accessible? One recognized purpose of change-of-name is secure abandonment of previous identity?) (2) Without any data at all, US border official asks a routine question, detects anxiety, starts to probe, then asks a question that if not lied to, will rip open the can. Deliberately lying to a US border official then leads to ??? (3) Two paths to certainty: (a) Avoid the foregoing by never ever doing anything that could bring you into a US border official situation, and keep hoping that rules and reach do not change over time. (b) Clean up the mess on their terms, not yours.
Anybody out there see a third way to certainty? True, some people enjoy the excitement of having an outlaw-on-the-run loose end hanging forevermore over everything they do.
Been there done that. Sauve qui peut.
@usxcanada
IMO, you succinctly lay out the 2 paths. My only quibble (and that’s all it really is) is that one could adopt a hybrid approach – path “a” until any unfortunate tax liabilities drop to virtually nothing, followed by path “b”. E.g., person sold a small business, in Canada there could be no tax on that, but there would be US tax. So wait for 3 years and do Streamlined, or wait 6 years and do QD; in this way the sale would not be part of your returns. Note that I am fully aware that this course of action is a gamble as there is no way of knowing if Streamlined and QD would exist in their current form in the future.
@tdott
Streamlined still requires 6 years worth of FBAR’s. Waiting 6 years to file and claiming reasonable cause unless you were in a coma would be dicey, don’t you think?
Warning: there’s no statute of limitations for filers who’ve never filed before.
Hi Guys,
I was also wondering if FATCA has some sort of powers to dig into your past? Let’s say my relinquishment goes through, also at this time I close all my foreign accounts, leaving any banking to my wife which is a non-US citizen. When FATCA rolls in looking for US account holders will the banks give them information about past account holders as well as current? Once I get my CLN I plan to notify in writing the banks where I did hold accounts, stating they are not to turn over my personal iformation to the US. But maybe FATCA can pull data from before this point at a time I was still considered a US citizen?
And the sun might not come up tomorrow
@bubblebustin
I guess if the sale of the hypothetical small business more than 3 and less then 6 years ago results in a big wad of cash suddenly appearing in an account, then this could result in the IRS finding a way to deny Streamlined and require more years of returns. And then you’re screwed as far as tax liability goes. 🙁
As far as reasonable cause (and wilfulness) goes, you have a point. I don’t know how far you’d get with a “I never received any professional advice on the requirement to file” argument. And if FATCA ever does land with full force in Canada, then it will become far more difficult to make a case for not knowing.
OK, fine, I concede. Scratch the hybrid approach unless you’re *really*, *really* into gambling.
Wow, you guys should read this.. http://dasmag.nl/why-i-will-never-return-to-the-usa/
@pukekonz
FATCA is about banks reporting current customers who are “US Persons”, not customers they had in the past. A bank where you are no longer a customer is not under any threat of getting a non-compliance fine levied on them by the US due to your past account. Thus they have no reason to report anything about you. Just reporting current customers is a massive headaches for the banks as it is; I developed computer software for more than a third of a century and have a grasp of the difficulties involved. Now if you write to your former banks, that brings you to their attention and raises a big red flag that maybe you’re hiding something or are nervous about things. I wonder if that’s a good idea. If the law said the banks had to report on former clients, the banks would surely obey that law regardless of anything that you write them. But if they didn’t have to do this, then they wouldn’t bother anyway, so why bring yourself to their attention or make yourself look suspicious.
Once you have your CLN, in order to harass you the US would have to initiate an international case in an NZ court. The cost of doing this may well exceed your entire net worth plus your wife’s. Which means they would lose money pursuing the whole thing. Once FATCA goes into full effect, they will be buried beneath an unbelievable avalanche of computer data. Your are one small person amongst millions of expats affected. Computers can only do so much. A human being is going to have to view each case and decide if it’s worth pursuing; this process cannot be totally automated. The IRS is short on staff and short on budget. The main focus will surely be people with current large accounts overseas who have not reported them. You might very well get lost in the background noise otherwise. Provided you don’t raise red flags everywhere and bring piles of attention to yourself.
@ozteddies, good points! Thanks
@pukekonz Interesting read, but why doesn’t that surprise me, sad as it is. Speaks well to some of the10 things Americans don’t know about America…. http://markmanson.net/america