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.
@Jed, there is a lot of misinformation out there. Just follow Medea Fleecestealer’s advice. Renouncing is simple. Get the required forms from the embassy, fill them out, email them back, go to the appointment, pay $450, get the receipt, make the oath and then it is done. You will then no longer be a US citizen. After about 2 months or so you’ll get the CLN.
Form 8854 doesn’t really have anything to do with renouncing. It is simply a US attempt to grab money from non-citizens.
@swiss pinoy: But you still have to fill it; answer questions on the first page which have nothing to do with taxes and hope it is filled properly!
@jgl51, one can fill 8854 out the next year after one renounced and is no longer a US citizen. Filling it out simply means one might become forgotten by the US. If one doesn’t fill it out, then the chance exists that the US might want to try to cause some trouble. I filled it out because I didn’t want to the US to invent some excuse to become fussy. But, who knows. The US might become fussy even if one fills it out. I’ve heard several individuals suggest that the US will attempt to give people who filled out the form a hard time. If so, then filling it out was a bad idea. Time will tell if filling out 8854 is a good idea or not.
It’s all a crap shoot.
@notamused: My understanding is that after renunciation withholding tax on an IRA would be 30% ?
@jgl51: Canadian and living in Canada? If so then the US/Canada tax treaty should apply with a W-8BEN. 15% US withholding/liability on IRA withdrawals, creditable against any Canadian tax liability. Additional 10% penalty if aged below 59.5.
https://www.sunnet.sunlife.com/files/advisor/english/PDF/IRA_401k_to_RRSP.pdf
Thanks. But not.Canadian. In addition my understanding is that by filing you agree that double taxation agreements do no longer apply for you… Or I misunderstood.
@jgl51, then what country do you live in, and does that country have a tax treaty with the US?
The basic rule is standard non-resident alien 30% US tax liability but this can be reduced by an applicable tax treaty, down to zero in some cases (UK, for example). The exception you note is for ‘covered expats’. If you fall into that (unfortunate) category then the rules for you are… special, because congress has decided that the ‘rich’, defined in a slippery, inconsistent and increasingly inclusive way, have fewer property rights than other folk. Covered expats cannot use treaties; more accurately, they are required to waive their treaty rights using W-8CE — IRS paperwork is the mechanism by which congress reneges on its agreements.
Rather appalling behaviour for the govt of a so-called civilized nation, isn’t it?
Thanks for the clarification. I do not think I’ll be a covered expat, so I’ll look into these treaties.
Re W-8CE: In the instructions it says that you are a covered expat if, among other possibilities,
So if you don’t submit evidence of compliance, then you will be a covered expat.
My questions are, where does the requirement for evidence come from, and what evidence are they expecting? Form 8854 makes no mention of the requirement for evidence that I’m aware of (although you do have to certify compliance); and that’s where I would have expected to find mention of it.
What am I missing?
What is the difference between renouncing and relinquishing?I have an appointment in 2 days at the Embassy/or Consulate in Tel Aviv.They sent me 2 documents to fill out: 1)Request for Determination of Possible Loss of United States Citizenship 2)Questionaire
I was born(1942) in the U.S,left with my parents when I was 10(1952).We returned between 1954-1957. I lived in Switzerland(with my parents and I emigrated to Israel in 1962 where I’ve lived since then.I was twice with my ex-husband during his Sabbatical work in the USA.Last time there was 22 years ago.No family,no social ties,nothing there for me to go there.The US gives me nothing:no social security(I didn’t work there.I have no assets there,no property,no bank account.NOTHING.
Citizenship:Israeli,German,USA.
I didn’t know of the citizen-based taxation so I never paid IRS taxes.However I am preparing them now.
What am I to expect from the Consulate?What can any of you Brockers recommend or prepare me for?
How do i get out of this with the least expenses?(Tax advisers have already been expensive)
J.N. It depends. If you obtained Israeli or German citizenship with the intention of giving up US citizenship, then you relinquished: you are no longer a US citizen, and you have no taxes to file. If however, you went back to the states as a US citizen, then they would argue that you did not intend to lose US citizenship. In that case, you would have to renounce. After that, you are supposed to file 5 yrs. of tax returns and a form 8854 but you are not forced to do so. An excellent resource is at the bottom of the Brock website.
http://web.archive.org/web/20120726052834/http:/www.renunciationguide.com/
An interesting comment on the difference between relinquishing and renuncing. Now I am myself unsure of the BEST way!
I acquired an other nationality after I was naturalized US citizen. I therefore could say I did to relinquish the US citizenship (did not think about that at the time…).
Where can I find the plus and minueses of both paths? One of which is re-entry in ther USA (as a tourist)? Other is whetehr or not it simplifes the tax exit (I did file the last 25 years and I should NOT be cnosidered a covered expatriate).
Thanks in advance for your thoughts.
Regarding a previous thread on liquidating an IRA before or after renunciation, I did some researcha nd asked afew so-called experts. Intrestingly enough each of them gave a dfifferent answer. I have not asked IRS ..yet!
If I liquidate before renunciation it is easy and taxed as income (just noticed tax rates went up this year…).
If I do after renuncaition as a NRA (non-resident alien) And in order to take advantage of a tax treaty and taxed in my country of residence I should filed form W8-BEN and asked that no tax be withheld. Some say to do so and others say IRA do not qualify as it is considered as income and 30% will be withheld. Most likely I will then still be taxed by my country of residence!
Any one on this forum has any real life experience on this topic?
@jgl51, there’s no difference for either of your queries. Whether you renounce or relinqush doesn’t affect your future tourist status and as you’re up to date on the tax issue that doesn’t either.
@Medea Fleecestealer
Thanks for the quick reply.
I thought though that if one relinquishes it is not necessary to file 8854? Wrong?
Yes, wrong. Whether you relinquish or renounce you must file the 8854. Here’s the IRS 8854 instructions link (page 1 under Expatriation point 2):
http://www.irs.gov/pub/irs-pdf/i8854.pdf
2. The date you furnished to the State Department a signed statement of your voluntary relinquishment of U.S. nationality confirming the performance of an expatriating act (provided that the voluntary relinquishment was later confirmed by the issuance of a certificate of loss of nationality).
@jg151
You said you have been filing US tax returns for the last 25 years. I would think it would be difficult to prove your INTENT was to relinquish US citizenship when you naturalized in another country, whe you have been filing tax returns through all these years. I believe your only choice is to renounce. The end result will be the same – you will just have to pay the $450.
For those inadvertant US citizens who have never lived in the US or been a resident there and who have never filed anything with the IRS.
When you renounced, what do you put in the Form 8854 for the following questions:
”
Enter your U.S. income tax liability (after foreign tax credits) for the 5 tax years ending before the date of expatriation.
1st Year
Before Expatriation
$
2nd Year
Before Expatriation
$
3rd Year
Before Expatriation
$
4th Year
Before Expatriation
$
5th Year
Before Expatriation
$
2 Enter your net worth on the date of your expatriation for tax purposes . ___
“
I am not one to usually promote attorneys, however, this one might be of value to some who are still trying to navigate the easiest and least expensive route to leaving the U.S. Tax Form and Penalty Club in your rear view mirro
Phil Hodgen’s just sent this email out. Yes, as he would say, it is shameless promotion, but at a price that I think some here can afford. $300 bucks. Here it is, and take it for what it is worth…
Phil writes…
I’m doing a webinar on November 12, 2013 for people who are considering expatriation before the end of the year. If you want to sign up, please do so quickly.
The webinar is limited to 10 people in order to get all of your (totally anonymous) questions answered. There are three open slots and I received inquiries from an interested person about 30 minutes ago; she hasn’t signed up yet.
Summary
I will be presenting a webinar for people who are thinking of renouncing their U.S. citizenship in 2013. Attendance is limited to 10 people–I want to leave plenty of time for each person to ask questions. The webinar will run for 90 minutes, and will be held on November 12, 2013. You can sign up here.
Objective
The objective of the webinar will be to give you the information you need to make a confident decision: expatriate in 2013 or not.
Professional Level Presentation
You will be getting the same information that I give to CPAs and lawyers when I talk about expatriation. If you are a professional, you are welcome to sign up for the webinar. But I expect that most of the participants will not be CPAs or lawyers.
Don’t worry. You will understand everything. Read any of my blog posts. That’s who I am and that is the level of explanation you will get.
Who Should Attend: Net Worth Under $2,000,000
This presentation will be useful for people who are confident that their total net worth is under $2,000,000. This means you are (probably) not going to be a covered expatriate. For you, the expatriation process is pretty much a highly complicated exercise in tax return preparation (with a few hidden “Gotcha!” landmines to watch out for).
Maybe you are highly confident that your net worth is below $2,000,000. If you are not sure, this is going to be an important thing to figure out. When you fill out the balance sheet on Form 8854 to report your net worth, you need to know how to do this, and how to figure out that your net worth is below $2,000,000. If you get this wrong, it will catapult you from “no tax” to “pay tax.” You become a covered expatriate. The stakes are high. If you can possibly push your net worth below the $2,000,000 threshold, you should.
Who Should Attend: Net Worth Under $7,000,000
If your net worth is above $2,000,000 but below $7,000,000, your objective is to renounce your citizenship without being a covered expatriate. As long as you can give things away, you can achieve this. We will talk about how.
Who Should Attend: Problems With Tax Compliance
When you sign Form 8854, you are certifying that the five years before expatriating have clean and shiny tax returns on file, and all of your taxes are paid. Some of you out there, I know, may not be all shiny and clean with your tax returns. We will talk about what to do. What are the strategies to consider in order to clean things up?
Paperwork: The Embassy Procedures
We will talk about what to expect when you go to the Embassy or Consulate for your exit interview. Frankly, this is not a big deal. Some of the Embassy staffers are a bit odd in their behavior (one Embassy official told a client of mine “Look at the flag! Look at the flag when you’re swearing the renunciation oath!”).
For the most part, however, the process is businesslike, professional, and quick. You really can’t go wrong with the paperwork. But we will talk about it anyway.
Paperwork: The Exit Year Tax Return
The exit year tax return is much more complicated than a regular tax return. We will talk about how this tax return is prepared, when it is filed, and special things to look out for.
Plenty of Time For Your Questions
There will be plenty of time for questions. You know, the kind that go like this: “I have this friend, and my friend’s brother read this article that said . . . .” 🙂 You will be able to ask questions anonymously. You can ask questions directly in real time by typing your questions on your computer so only I can see them. But trust me. No one online is going to know your name, even if you ask a specific question in front of the whole group. You can talk.
Three More People
I’m only taking on ten people in the webinar. Seven have already signed up. I hope that with ten people there will be enough time to cover all of the information you need to know, and answer all of the questions that you want to ask.
Handouts
You will get the PowerPoint slides that I use for the webinar, plus handouts I have written. There will be plenty of stuff for you to read. Everything will be delivered to you as a PDF.
Experiment
This is an experiment. Regular folks come to my professional speeches. (One of them, who heard me a few months ago at an accountants-only luncheon, just expatriated last month in London.) I have given presentations to accountants, lawyers, and bankers for years. Now I want to share with people who need this information for themselves. Either you will feel comfortable doing the paperwork yourself, or you will be an intelligent consumer–able to be smart in selecting the professional who will help you.
I also want to do this because the calls are starting to come daily from people around the world. We do not have enough time to help everyone. We are extremely busy. And frankly the other reason to make this accessible is price. We are highly specialized and expensive. I want this seminar to be at a price that is affordable for regular people facing a hard decision.
November 12, 2013 – Afternoon/Evening in Europe and the Middle East
The webinar will be done at 8:00 am Pacific Standard Time on November 12, 2013. That is 3:00 pm British Standard Time, 4:00 pm Central European Time, 6:00 pm in Beirut, Riyadh and the Arab Standard Time zone, and 7:00 pm in the Gulf.
Yes, I know. That’s a tough time slot for those of you in the Asia/Pacific region–it is 11:00 p.m. in Singapore. Sorry.
Price
The cost of the webinar is $300. This is less than 30 minutes of my time at my regular hourly rate. You get 90 minutes.
Sign Up
If you are interested, please go to the signup page to reserve your space.
http://www.eventbrite.com/event/9072850139
Questions About the Webinar?
If you have any questions about the webinar, please call the office at +1 626 689 0060, or email us by going to the Contact page on our website.
Obligatory Disclaimer
This is an educational seminar. You are not getting specific, directed legal or tax advice. Attending the seminar won’t make me your lawyer or tax advisor. But it will help you get smart!
sold-out!
By the way would be curious if any one on this forum attended the webinar whether it was the information was useful. I am not sure I like the “scare you” tactic with “gotcha”, “landmines”; etc..
Maybe standard from California lawyers??
Darn – sold out. Hope he does another – would love for someone to let us know their feedback and ask questions like – eg i’ve never done a US tax return, i was born overseas as a dual citizen, i’ve never been a resident in the States, and my worth is under $2M. What to do on the 8854 form with the question about the last 5 years!
MANY THANKS!
Jed
@jgl51
Phil is a colorful guy who makes dull stuff fun. If you read it carefully, he used those words to describe aspects that people are not prepared for that can lead to other problems or how we get into trouble because most of us don’t understand tax law. Hope that made sense.
I have a question. I just heard of somebody who gave up their US passport ( expatriated ) and have opted to do NOTHING after the fact. They are just – in their own minds- off the radar now. Will they be called upon to pay taxes? Because they havent heard anything and it has been 2 years now. I mean- what is likely to happen to this family? They live in Europe and have basically just blocked America out, as if it no longer concerned them.