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.
@stressed
Yes, if the banks are going to be insisting on US tax compliance, they’re going to have to be less obstructive in allowing people to do so. My opinion is that OVD’s broken though, when people who entered even the 2009 OVDP still don’t have their cases closed. If anyone thinks that OVD or even Streamlined will resolve their tax problems quickly, think again!
Our situation is way too complex for us to do our own taxes, as husband has a Canadian corporation.
Does anyone know if you have to continue submitting taxes after you renounce?
@Canadian, it depends on what you mean. Are you already tax compliant and have the years necessary to stop filing? Or have you renounced and still have back taxes and the 8854 form to file?
@MedeaFleecestealer
I have not paid any taxes yet. I hope to relinquish with a back dated CLN and if denied I will renounce. So I plan to do taxes ASAP afterwards back to 5 years so I am not subject to the exit tax. And then file the 8854.
I read somewhere that you have to continue paying taxes for 10 years post-renouncement? I am hoping that this is not true.
No, it’s not true. It’s only if you are careless enough to be in the US for more than 30 days a year and only for that tax year. And it only applies to those who are covered expats. Here’s the exact wording:
Tax consequences of presence in the United States after expatriation.
If, for any tax year during the 10-year period in which you are otherwise subject to section 877, you are present in the United States for more than 30 days in a calendar year ending in such tax year, you will be treated as a U.S. citizen or resident for that tax year. You will be subject to U.S. tax on your
worldwide income unless the following exception applies.
Exception. You can be present in the United States for up to 60 days without being treated as a U.S. citizen or resident if you are performing personal services in the United States for an employer who is not related (within the meaning of sections 267 and 707) to you and you meet either of the following requirements.
You were a U.S. citizen and, within a reasonable period following your expatriation, you became a citizen or resident fully liable to tax in the country in which you, your spouse, or either of your parents was born; or
For each year in the 10-year period ending on the date of expatriation, you were physically present in the United States for 30 days or less.
See Pub. 519, U.S. Tax Guide for Aliens, for details about what constitutes
@Medea Fleecestealer
This means if you relinquish or renounce your US citizenship, you can not spend more than 30 days in the USA ? I became a Cdn Citizen in 1993…and spent more than 30 days each year for a couple winters. I am still waiting for my CLN.
Is covered expats for those with over a 2 million assests?
I don’t have that. Never had.
Yes, if you come under the covered expat criteria, i.e. income tax liability over a certain figure, have more than $2 million OR haven’t filed your 8854 form.
http://www.irs.gov/pub/irs-pdf/i8854.pdf
The person who did my taxes last year is a CPA, Brad Williams, of Williams and Parsons, in Sandpoint Idaho. He was very helpful, and will be helping with my final filing this year. I understand that I will need to file a 1040NR for the 2013 year, with a 1040 attached for the part of the year before the date of renouncing. I will also file 8854, using the last part to determine my net worth, but I am not worried about that because I am not a covered expat and am tax compliant. I will also file my FBAR for the year, using the figures I determined at the time of my renunciation as my highest balances. So although there’s no way to indicate that it is a part-year return, the amounts will be correct for the period. I have also to file copies of my CLN in two places, I think. But that’s it. I will not owe tax on my income because I have adequate tax credits, even if I don’t have the personal allowance and only 50 % (roughly) of the FEIE. By treaty, neither of my US sources of unearned income is taxable in the US. I don’t know if I have to continue filing 1040NR for the rest of my days because of that income (both federal pensions), but nothing else is reportable to them now. So my tax returns, if I do have to continue filing and claiming the treaty exemption or tax credits annually, are simple. That’s my situation, and Brad Williams was easily able to handle that, although he said he doesn’t have a lot of experience with people who renounce. That may be changing, of course, depending on FATCA. Check out their website at http://www.sandpointcpa.com if you want more information. He was a great help and support to me last year.
Medea exaggerates . For the vast majority of expatriates, the normal rules apply. You can spend 120 days a year averaged over3 yrs. if you file a closer connection form to form nation that period can be extended.
The rules may be different for covered expats. No one wants to be a covered expat.
At my prompting my husband confirmed by e-mail his upcoming relinquishment appointment at the Calgary US consulate and asked if they could provide him with some sort of proof of his appointment until his CLN arrives, in case he has to go across the border. The consulate replied promptly with this …
“We can come up with some interim notice for you to present at the border if necessary.”
Remember my husband will not be getting a receipt for a renunciation fee because he is relinquishing from the date of his Canadian citizenship ceremony. He was worried about the border because a dear family member in the USA is in failing health.
Em,
Smart move for Mr. Em.
Thanks for the more good news of the Calgary US Consulate experience.
@ calgary411
No, smart move for Mrs. Em. He never thinks of these things. 🙂
What is this, circa 1943??? Are your papers in order?
@Medea
No, it’s the same 120 days a year over a 3 year complex average period for a ‘covered’ or uncovered expatriate.
1..Count all the days in the first year
2. Count all the days in year 2 and divide by 3.
3. Count all the days in year 3 and divide by 6.
The sum should not exceed 120.
See Phil Hodgen’s blog.
The 30 day rule only applied pre 2008 when a 10 year post renunciation tax reporting was required.
So they dropped the 10 year rule in 2008? Well, that’s good news.
@Em just saw your post earlier in January 2014 re: form flogged pretzel….. thank you for the laugh and those words…… made my day!
@maz57 wrote on the ExpatForum:
“A person living in Canada can collect both SS and CPP, taxable only in Canada. Likewise, a person living in the US can collect SS and CPP, taxable only in the US. Citizenship doesn’t enter into the calculation. I find it curious that, at least with respect to Canada and government retirement benefits, the US practices RBT!”
I would just add that my husband’s mother (American, living in the USA, had a past “landed immigrant” life in Canada) always deducted her CPP payment and her SS payment, thereby paying no tax on either. I think it might have been because she was filing as a widow. Anyway she was told to deduct both. She has since passed away.
I need some guidance to help me avoid IRS penalties post-renouncement. I have never filed
taxes. I have no connections with US except my place of birth on my Canadian passport. Ideally I would like to relinquish. If they say “no”, I don’t know if I should renounce right on the spot because I’m worried that I have no taxes done. Or do I go home and figure taxes out first ?
I’m aware that I need to do 5 years and the form 8854. I also have fbars. Now I keep reading NOT to go through the voluntary disclosure program. I’m not sure what this means? Does it mean to try and fly under the radar? What about the streamlined procedure, has anyone had experiences with this? I’ve spoken to accountants and they both said that none of their clients had penalties. BUT the streamlined procedure includes only 3 years of back taxes, I have 2 extra years to do. So what, send 3 years through streamline and 2 separately hoping they fly under the radar?
Just looking for some direction or experiences because these questions haunt me at night. I’m worried they are going to take me for all I’m worth. I do not qualify for the “covered expat” unless I do not do my taxes.
And unfortunately I probably can’t make it to any info sessions as I live 3 hours away from them
@Canadian
Take comfort in the below comment at http://www.mnp.ca/en/media-centre/blog/2012/9/2/details-on-new-irs-streamlined-relief-for-americans-in-canada
In all likelihood the voluntary disclosure programs you have been warned against are the OVDP and OVDI. These are/were for actual tax evaders. You are not a tax evader, so stay away. The Streamlined procedure seems to be a decent way to get compliant. To date there seem to be no reports of anyone getting a bad result from it.
@Canadian, if you were born dual then renunciation is your only option unless you can prove you were in the Canadian military or worked for the Canadian government with the intention of giving up your US citizenship by doing so. You don’t have to do your taxes beforehand, you can renounce and do them after which is what I’m doing. You have until 15th June of the following year to get any back taxes filed, so if you renounced this year you have until 15th June 2015 to wrap everything up.
I have a query in with my tax advisor on the 3-5 year question as I entered the Streamlined program last year and hope that this year will see the end of my filing obligations. I only need to file FBAR’s, but Streamlined is designed for those considered low risk so I don’t think they’re going to be chasing you if you qualify for the scheme. But as it was only introduced in the last 18 months or so, it’s not possible to say categorically you won’t get penalised. We just don’t know enough about the scheme yet. But I haven’t heard of any reports of Streamlined clients receiving penalties.
@Canadian: As a Canadian citizen, remember you have protections from IRS. CRA does not and will not collect either taxes or penalties for IRS on any Canadian citizen. Plus, it’s very unlikely you would even owe IRS anything.
http://maplesandbox.ca/2014/canadian-protections-from-irs/
Try not to let this haunt you at night. Your best protection is the fact you are a Canadian citizen.
adding to Blaze the Revenue Rule Protect you with courts
http://uniset.ca/other/cs6/68OR2d379.html
But Fatca is a backhanded way to get around revenue rule.
That would be the Strongest Supreme Court challenge especially if it involves Canadian Dollar asset (Bond and Equities) in a trading account.
Sort of like Benedict Arnold Case
Canadian,
We would need more information about your situation. Were you born in the US the Canadian parents and never, or for only a short time, lived there? You need to start your real drudge work, reading lots here and then asking questions. Keep in mind that none of the information you will get here is legal advice. Everyone has to make their own decisions based on their own facts and their own level of risk tolerance.
Look over to the right on the home page of Isaac Brock into some of the links there to start your research. There will be lots of experiences in the posts and comments in the Archive at the top of the home page.
It is too bad you cannot attend an information session; the trip would be well worth your while in my opinion. Such a trip is not possible for everyone in the middle of winter, I know.
Well I just got my appointment to meet with the US consulate to renounce. I have to say that they are pretty quick at getting back to you. It took less than 24 hours both times to respond to my email.
My appointment is March 13. So just one major decision I need to make and that’s if I will renounce right on the spot if I can’t relinquish (and there’s a good chance I can’t). And what kind of tax implications this will have for me – 5 years of back taxes where I don’t likely owe anything but all kinds of FBARs (and possible penalties?!?!). It is also very difficult for me to get a lot of the financial info I need because I no longer bank with NBC and had thousands of dollars invested with them over this 5 year span.