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.
On the article on extradition for taxes offense. I do not think Canada has ever extradited any Canadian for USA personal tax filling. Is that correct?
@ Anyone who can answer what is probably a stupid question
Is my husband walking into a time trap? His relinquishing appointment is in February. We might not know until his CLN arrives which will be his actual exit date for tax purposes. Will it be his Canadian citizenship date in September (done with a witnessed intent to give up his American citizenship — copy already in the hands of the consulate) OR the date of his relinquishing appointment in February? If the CLN takes too many months to arrive (some are waiting over 5 months now) it will leave his final tax filing ambiguous and if he makes a mistake on the timing of the 8854 it could be costly. This is really confusing and after all I’ve read here in the past 2 years you’d think I’d know the answer to this.
Em. You are a minnow, your husband is a minnow. We are all minnows. They don’t have the resources to worry about your husband .
Put down the date that is best for you. (presumably Sept 2013). That’s it. You will probably never hear from them again. Sort of like they never acknowledged your I-407.
@Em, it’s the date of your relinquishment/renunciation at the embassy/consulate because that’s when you officially become a non-American. He may have gained Canadian citizenship in September, but he still remains American until he’s relinquishes in February. But don’t worry too much, you have up to a year after that date to file your 8854 form.
Thanks KalC and Medea
Looks like there won’t be an end to all this (for him) until 2015. Wish they could have given him an appointment before the end of 2013 but now the waiting times in Calgary are longer than they once were. I just hope we won’t be driving to his consulate appointment in a blizzard.
Hi Guys,
Since I turned in my relinquishment forms a week ago at the consulate I am assuming I should get moving on my back filing. I’m in New Zealand so on my own with this process. To say all this tax stuff is over my head is a major understatement! I am hoping to find CPA or what not online that can do each year for around $3-350 US. Can anyone here recommend someone they have used? I’ll need a lot of hand holding. I approached one of the online services but got nervous to use them. Basically their expert advertised how amazing they are with expat taxes, then after signing up they disappear and assign a gopher to you. The gopher is then somewhat vague and expect you to fill out a mass of electronic forms which all seemed over my head. My questions then take days to be answered etc. I’m looking for a more personal service and extreme guidance. I need to back file the 5yrs and then the 8854 (which is also way over my head). If someone can point in the right direction it would be a huge load off. Thanks!!
I have the following questions to the this expert group:
1) Did anyone who has already filed 1040, 1040NR and 8854 after renunciation (relinquishment) get questions from the IRS? Or did you get confirmation that all was OK and done?
2) Any one who renounced had any difficulties at the boarder when going back to the USA on a foreign passport? If yes, how did you manage the situation?
3) Any one who relinquished / renounced getting US Social security? Do you file 1040 NR or just get SSA to withold 30% and done with it?
@jgl51
1) I’ve filed my last return this year for 2012 and haven’t received any questions. No one will ever get confirmation that all is OK and done, however.
2) I’ve recently visited family in the USA with my non-US passport for the first time since renouncing and wasn’t treated any differently than other non-US citizens.
3) Not yet, but I will be getting it some day (if S.S. still exists at all by that time…). Many countries have treaties with the USA and have no withholding, so you need to look into that. I don’t believe there will be any requirement to file 1040NR either. (I certainly hope not!)
Good question @jgl51
I too would like to know this.
Especially for people who did NOT file the 8854 or last 5 years of returns.
Thank you.
Jed
@notamused: Thanks! I am almost ready to make the next step.. i.e the appointment at the Embassy!!
@jgl51. A bit early for me to be sure, but I renounced this year and will file in Jan. I haven’t had any response from IRS on a couple of iffy things in the past five years, other than to say that they ‘corrected’ my file as I requested. So far so good. I don’t expect even that much on the 2013 returns because there’s nothing unusual from their perspective.
I will now need a visa or a visa-free entry pass from the US to enter (on a UK passport) and I haven’t applied yet. If I get hassled, it will be in London when I do that.
I receive SS with no withholding and a Civil Service Retirement pension also with no withholding. The tax treaty covers both as taxable in the UK but not in the US, and I have tax credits as a backup if ever that changes, so neither is taxable on my 1040 or 1040NR. I plan to file regularly under the principle that telling them I owe $0 is better than disappearing, and the amount and source of income is clearly US and comes with the annual 1099s. It’s not a tricky return to do, so I can do it myself for free.
But I won’t have a final answer on these questions for another year or two. I can’t imagine I’m worth chasing for nothing. Hope this is reassuring, if not too helpful. I am also a non-covered expat, having made sure my returns were in and squeaky-clean before renouncing. I owed nothing, and my net worth on the 8854 is low because redoing the house plus the mortgage cost more than the present value.
@Susi: Thanks. Looks I’ll get you to file my 1040 NR -:)
according to my info, the dual tax treaty with my country of residence reduces the witholding from 30% to 15% but I think I do have to pay taxes here (on 80% of the amount) so probably a wash. Personally I would prefer to (legally) disappear and stop filing any thing. Last headache is my IRA (tax deferred retirement account) still in the USA.
@jgl51,
There’s two posts on border crossings after expatriation. Most have had no problem at all, but one person reported being hassled flying in from Europe on one of his trips.
Isaac Brock Society.
Has anyone had a bad experience when entering the US?
http://isaacbrocksociety.ca/2013/09/19/question/
Maple Sandbox.
Crossing the US Border on a Canadian Passport Showing a US Birthplace
http://maplesandbox.ca/2012/crossing-the-us-border-on-a-canadian-passport-showing-a-us-birthplace/
This is meant for informational purposes only. I’m not trying to tell anyone what they should do; everyone’s an adult here and can make their own decisions.
If you do not file 8854, you’re on the hook for a $10K penalty.
If you do not file the 5 years of returns, you’re on the hook for them (and any tax and/or penalties owed).
You *may* move into the category of wilfully non-compliant. (not sure the consequences of that, but it can’t be good)
These will hang over your head for the rest of your life (presumably with interest accumulating).
OTOH, you should be OK if
1) You never travel to the US again
2) You have no assets in the US
3) Your country does not have a tax treaty with the US that requires said country to collect IRS imposed taxes and penalties. E.g., Canada’s treaty does not require Canada to collect on behalf of the IRS if the person was a Canadian at the time the liability arose.
I realize I am not answering the actual question. I just hate seeing the “go out with a bang” approach mentioned without a mention of the possible consequences.
@pukekonz
You could try these people: http://www.nzustax.com. I have to be honest though, I suspect the price may be significantly higher than you are hoping for.
@pukekonz
I have used both a UK based “expert” and a US based one (for the most recent two years) that I found through the internet. I had a horrible experience with the UK based expert when they delegated everything to an incompetent junior who made tons of errors on my filings that took forever for me to fix for them. The senior people didn’t even check the returns before signing off on them. It took about 12 months in total. The fact that I could go to their office and swear at them in person was of no consolation to me nor did it provide motivation for them. I would hope my experience was extremely atypical.
My experience with the US based advisor has been good though it doesn’t fall in to the “hand holding” you think you may need. You may not like to hear it but the questionnaire/Excel spreadsheet is a useful tool for your advisor to try to keep costs down. It’s designed to ask you the relevant questions and for you to input the relevant data. I suspect the spreadsheet has macros that import the data you input into their return software so as to avoid duplication of data entry and to minimise errors. It may be a necessary evil if you want to keep costs down.
Speaking generally, I have found that many US advisors charge a la carte while many of the “local” providers here in the UK charge a flat amount on a per return basis. My total cost per return is radically lower using the US advisor despite the fact my returns approach 100 pages. That probably has more to do with the ridiculous starting point (£2,000 plus VAT) of some UK advisors than exceptional value. Also, the UK charges VAT at 20% which I don’t incur in using a US based advisor. Odd that VAT is charged on such a non-value added activity.
My US based advisor was responsive, accurate, and fast. Total turn around time was 5 business days for one return (albeit it was outside the peak season). I’ve exchanged many long and detailed emails with her and have received timely and considered replies. But I’ve not spoken to her on the phone (though I’m sure I could if I needed or wanted to). The price charged was the price quoted (based on detailed input from me of how many of which forms my return needed, how many line item entries on 8938 etc.). The fee was paid 50% in advance and the other 50% before receiving the draft return. For me (because I valued accuracy and speed over face to face or phone interaction), the service was light years better than what I received from the local firm (but, again, I hope my experience was atypical).
Don’t be shy about asking about a discount if you’re doing multiple years.
@osgood I think i tried them years ago when I lived in auckland and the pricing was insane.
@Edelweiss This lady you used sounds good, are you able to pass me any contact details? I just don’t want to go into this blind. If anyone can put me on to someone they used and were happy with that would be great.
The name of the firm is Artio Partners. I dealt with Z.M., who I believe is the owner of the firm. I think it’s a sole proprietorship but I’m not sure. I believe she has previous experience at a Big Four firm and an MBA from the University of Chicago.
@jgl51 In answer to your question 3) Yes, you can still receive US Soc Sec benefits and no longer be a citizen.
Last year I renounced and due to a social security treaty between the US and my current country, Australia, when I retired I was required to apply for social security from both countries at the same time. When I informed US Soc Sec that I was no longer a citizen their reply was that it doesn’t matter – if I qualify I am entitled to receive it.
I had been receiving annual Soc Sec statements from the US showing I didn’t qualify for any retirement benefits (I have been living and working in Australia for over 40 years). In spite of this, it turns out I was entitled to some benefits due to the treaty which gave me credits for my work in Australia.
I was up to date with all my IRS filing obligations when I renounced. I have read that Soc Sec does not maintain a separate mailing address database for their statements, etc, but rather gets the addresses from the IRS database. Or rather, they used to. They stopped providing annual statements a couple of years ago, due to budget cuts. However, I do not believe Soc Sec did any checking with the IRS regarding my tax status when I applied. I do not have to continue filing any tax returns with the IRS in order to receive the benefit, now that I am no longer a US citizen.
The information pack that I was initially provided with by Soc Sec stated I would receive US $xx each month and that tax would be withheld. There was no information given on how much tax was being withheld and whether the amount quoted was before or after tax. The amount I receive is not the same as the amount quoted, partly due to exchange rate fluctuations and bank fees. So, if you qualify, don’t assume you will be getting a specific amount until you see what actually shows up in your bank account.
@Rose. If you have US source income, don’t you have to file a 1040NR to show that income, whether any tax is due or not? My understanding is that I do, even if SS benefits are not taxed in the US by treaty.
@Rose
Social security statements are available online if you have a US mailing address (I realize that you don’t):
https://secure.ssa.gov/RIL
I believe the flow of information depends on whether one is self-employed or not. If one receives a W-2 (ie works for others and is not self employed), I believe the employer actually files the W-2 information with the SSA which in turn shares it with the IRS. So in that case it would be the IRS getting the info from the SSA, not vice versa.
If one is self employed, the earnings and self employment taxes are reported to and paid to the IRS which then passes the info on to the SSA.
I think somebody above complained they never hear back from the IRS after filing taxes (in Canada they do send you something after filing). I have called this place twice to verify that they got my 1040s. I need to be squeaky clean too as I renounced last Sept. It took maybe 10 minutes to get a-hold of them and they were nice and said they had my returns. You do have to pay for your call.
“Taxpayers with specific personal account questions should contact the Philadelphia International Taxpayer Service Call Center by phone or fax. The Philadelphia Call Center is operational Monday through Friday, from 6:00 a.m. to 11:00 p.m. (Eastern time): Tel: 267-941-1000 (not toll-free)”
@Rev Susi
My understanding is I don’t have to file a 1040NR to show my Soc Sec income. The benefit is not true income as such, but rather an entitlement I have paid for and earned over the years. Since I am not claiming any tax refund, and I’m no longer a citizen, I have no intention of continuing to file returns with the IRS. I have not been notified or given any information from Soc Sec or IRS indicating I need to continue filing (I made sure Soc Sec has it on record that I am no longer a citizen.) If my understanding of this is wrong or the rules change, I still doubt they would ever bother “coming after” me for this tiny amount of money.
@Dash1729
No, I haven’t had a US mailing address or any financial ties since I left over 40 years ago. I was not self-employed in my working career, so haven’t had experience of that situation. Re the flow of information, what you wrote could very well be the case. It’s just that I read that Soc Sci used the IRS-maintained address database for their regular mail-outs rather than keep a separate updated (and duplicated) database of their own. That may no longer be the case but in the current climate of budget cuts, it may still be. I mentioned the IRS address database for people who wanted to possibly claim Soc Sec but were not compliant with their filing. The two departments do share some information.
Rev Susi. I thought you renounced. After you file your 2013 return you are done and dusted. You do not need to file a 1040 NR unless you wish to.
For example, if you had us source income from stocks, there would be a withholding at source. You wouldn’t file a 1040NR unless you were trying to get the withheld tax refunded or reduced.
If I won the jackpot in Vegas, a portion would be withheld. This is an instance where it could possibly be advantageous to file in order to get some of it back.
From Form 1040NR, U.S. Nonresident Alien Income Tax Return
http://www.irs.gov/uac/Form-1040NR,-U.S.-Nonresident-Alien-Income-Tax-Return
Line 8—Social Security
Benefits (and Tier 1 Railroad
Retirement Benefits Treated as
Social Security)
85% of the U.S. social security and
equivalent railroad retirement benefits
you received are taxable. This amount
is treated as U.S. source income not
effectively connected with a U.S.
trade or business. It is subject to the
30% tax rate, unless exempt or taxed
at a reduced rate under a U.S. tax
treaty. Social security benefits include
any monthly benefit under title II of the
Social Security Act or the part of a tier
1 railroad retirement benefit treated as
a social security benefit. They do not
include any Supplemental Security
Income (SSI) payments.
You should receive a Form
SSA-1042S showing the total social
security benefits paid to you in 2012
and the amount of any benefits you
repaid in 2012. If you received railroad
retirement benefits treated as social
security, you should receive a Form
RRB-1042S.
Enter 85% of the total amount from
box 5 of all of your Forms SSA-1042S
and Forms RRB-1042S in the
appropriate column of line 8 of
Schedule NEC. Attach a copy of each
Form SSA-1042S and RRB-1042S to
the front of Form 1040NR.
From Taxation of Nonresident Aliens
http://www.irs.gov/Businesses/Taxation-of-Nonresident-Aliens-1
Filing Requirements for Nonresident Aliens
Nonresident aliens are generally subject to U.S. income tax only on their U.S. source income. They are subject to two different tax rates, one for effectively connected income, and one for fixed or determinable, annual, or periodic (FDAP) income. Effectively connected income (ECI) is earned in the U.S. from the operation of a business in the U.S. or is personal service income earned in the U.S. (such as wages or self-employment income). It is taxed for a nonresident at the same graduated rates as for a U.S. person. FDAP income is passive income such as interest, dividends, rents or royalties. This income is taxed at a flat 30% rate, unless a tax treaty specifies a lower rate.
Nonresident aliens must file and pay any tax due using Form 1040NR, U.S. Nonresident Alien Income Tax Return or Form 1040NR-EZ, U.S. Income Tax Return for Certain Nonresident Aliens with No Dependents.
Tax Treaties
The United States has income tax treaties with a number of foreign countries. For nonresident aliens, these treaties can often reduce or eliminate U.S. tax on various types of personal services and other income, such as pensions, interest, dividends, royalties, and capital gains. Each individual treaty must be reviewed to determine whether specific types of income are exempt from U.S. tax or taxed at a reduced rate. More details can be found in Publication 901, U.S. Tax Treaties.
My take on the above is that if you’re in a country which doesn’t have a tax treaty (totalization agreement) with the USA and receive SS benefits, those benefits are taxable in the USA and 1040NR would have to be filed. I assume that if you’re in a country which does have a treaty, you wouldn’t need to file 1040NR, although that isn’t stated explicitly anywhere. When the time comes, I do not plan to file 1040NR, since my country does have a treaty and I certainly don’t want to do anything to put myself back on the USA’s radar. Can anyone cite an official document explicitly stating that no 1040NR is required in such cases?