Renunciation and Relinquishment Questions – Part 2 of 2
This is a continuation of Renunciation and Relinquishment Questions – Part 1 of 2
Ask your questions about Renunciation here.
This thread will be focused closely on renunciation questions and answers. If the conversation starts to ramble, those comments will be moved to another thread.
Sub-topics (more will be added as they occur):
Farrell v. Tillerson. Plaintiff is contesting Bern Embassy’s rejection of his CLN application due to his not having appeared in person at the embassy and his having been issued a passport after the relinquishing act.
Previous Renunciation Threads:
Renunciation and Relinquishment of United States Citizenship: Discussion thread (Ask your questions)
These above two lines are not showing as links on my screen, but they do work as links.
Has anyone heard of more renunciations happening in Canada of late? I’ve sent off my forms to do so ~2 months ago but have not seen any movement or heard back at all.
@Jake
Not sure what you mean by “more” but renunciations have been happening over the past year in Canada. The waiting lists are quite long and you won’t hear back until they’ve made an appointment for you, which can be well over a year from your application. If you’re concerned that the forms did not arrive safely, you can ask them to confirm receipt.
I’m trying to help a relative renounce US citizenship. The US embassy in Toronto has an email for the State Department to write for forms and information. We’ve emailed multiple times over the last few months and get no reply. Is there another way that anyone knows of? Thank you for any pointers.
@ Iamquincy,
If you were e-mailing this address, CanadaCLNInquiries@state.gov , you should have got a robo-reply right away with the required info.
I think I’d contact the main address for Toronto’s Citizens Services Dept at TorontoPassport@state.gov to tell them I’m not getting the reply from CLNInquiries.
If they don’t respond, I’d contact the Division Office for Citizens Services in Washington, Western Hemisphere Division. They’ve been helpful with consulate/embassy communication problems. We don’t have an e-mail address, but people use this phone number from the Dept of State directory (the mailing address is also there):
WHA [Western Hemisphere] Division Chief Brad Norton, 202-485-6110.
Citizens Services for all Divisions is currently on pages 20 of the directory . https://www.state.gov/wp-content/uploads/2019/10/Org-Directory.pdf
Thank you for your quick reply. Yes, that is the email we have tried several times and from different email addresses. I have also made sure to check my spam folder. Will try your suggestions.
Thanks again. Cheers
My wife and children believe that the measures I have taken to distance myself from US taxation are not effective. They listen to friends, lawyers, financial advisors and accountants who say that the only way to lose US citizenship and get out from tax problems is to go to a consulate, renounce and do tax filings. My family says that my refusal to do the required protocols will cause them huge problems when I die. And my wife is very angry with me for not doing what she thinks is needed.
This issue raised its head recently when my wife told me she had taken my name off a property we had owned jointly because she did not want to lose it or pay tax on it to the US when I die.
I was born in the US and have lived in Canada for 50 years. In 2000, I became a Canadian citizen with intent to relinquish US citizenship. Afterwards, I did not do anything, like vote in the US or file US taxes, that would indicate that I thought I was still a US citizen. I got a Canadian passport, voted in Federal elections and acted like the Canadian I was.
Awhile after I became a Canadian citizen, just to find out my situation if I filed, I had a tax firm that specializes in preparing income taxes for US persons living outside the US do a couple of trial years. They showed that if I were to file, I would owe no taxes. My situation has not changed.
My estate will not be large enough to attract US estate taxes.
I placed a notarized affidavit with my will stating how I had relinquished US citizenship, that no reporting of my death to the US is necessary and that no mechanism for reporting exists. I included a copy of the US law that states the ways US citizenship can be lost, which includes being naturalized in another country with intent to relinquish. I also included a copy of the State Department manual stating that “There is no obligation for an individual to obtain a CLN or otherwise notify the Department of State of relinquishing one’s citizenship.” These procedures were in force until 2004 or 2008 when the US law began requiring relinquishers to notify State and obtain a CLN to verify their loss.
Two of my children were dual citizens by way of their birth in Canada and me as their father. One lived in the States for a few years and then moved back to Canada. He was up to date on income tax filings for himself and his small business. The filing requirements and taxes became too onerous and he renounced. Since taxes were up to date, he was finished.
The other son operated a professional business in Canada and had never filed US taxes. When he learned about US demands from our other son, he approached a cross-border lawyer who helped him renounce and file several years of taxes. These sons believe that the only way to get rid of US citizenship is the way they did it. They have not tried to understand what I did, they just reject it because they think I am just being a stubborn old man. They refused to be executors of my will because of this. My Canadian wife does not want to be executor either, but is of necessity for now.
This has been causing real problems in my family and marriage for a long time. I don’t know who or what they would listen to that would at least let them look at my situation calmly. It is too emotional for them. I see little hope of resolving this. I do not want to go through the regimen that my family says I should, and think it is not only unnecessary for me, but would be unwise to do. I wonder if anyone else has similar problems and what has helped them. How can I get people who refuse to listen to at least consider other possibilities than what they think is the only way?
@wasus nowcan
On principle I agree with you entirely, but if you can afford it and to preserve your marriage and family harmony, perhaps you should officially document your relinquishment and get a backdated CLN?
@wasus
You are correct, of course. However, life is not fair sometimes and it seems like the sensible move in your situation would be to stop arguing and spend the $2,350 to make your family happy. You are buying peace.
I would double-check this, but I believe that if you can document your relinquishment as having occurred prior to 2004, there is no requirement for the whole exit tax procedure. You won’t need to file a thing with the IRS.
If you were to simply renounce but refuse to file tax returns and Form 8854 and all that, you’d probably continue to have a variation on the same argument with your wife and sons.
I myself renounced recently because my elderly parents were convinced that the IRS would devour their estate, and the lawyers and financial advisors who knew of my US citizenship were very reluctant that I serve as executor, trustee or power of attorney. Nobody has asked to see my CLN – they’ve taken my word for it – and I filed nothing, before and after.
@wasus
Ron is correct, if you became a Canadian citizen before 2004 and did nothing ‘American’ since then no need for any tax filings.
http://isaacbrocksociety.ca/2012/06/19/if-your-expatriation-date-is-before-2004-the-rules-are-different/
@wasus
So here’s what I’d do.
First, get yourself on the waiting list for an appointment to document past relinquishment (*not* to renounce).
Second, gather up all the information you’d find by following the link above, concerning both tax obligations and the need to contact the State Department. Package this information and give it to your sons and tell them to send it to the lawyer they used for expatriation (along with statements that you became Canadian in 2000 and did nothing “American” after that because you intended to lose US citizenship when you swore fealty to the monarch) and ask if they have a problem with your argument. You could even offer to pay half the cost of the legal opinion!
Given the waiting list for an appointment, you’ll have at least a year to either convince your family or save up US$2,350 to buy a CLN.
Thank you Heidi and Ron. Good advice. I think I’ll do it. Some paperwork, a trip to the embassy about 5 hours away by car, around $3k Cdn and maybe the family will be satisfied.
@wasus
Don’t let the family attempt to persuade you that tax filings are still necessary for a pre-2004 backdated relinquishment.
Overall, it might still cost a lot less than $3k to have their lawyer tell your sons that you are not wrong, so that could be worth trying that while you wait for the appointment.
Ron, I asked the lawyer who made up my wife’s and my wills and who did the affidavit about my relinquishing what reporting of my death is necessary. He said it would be to the province but there is no provision or requirement to report to the US. My wife says that she did not hear this answer, and anyway he is a local lawyer who might not know about it. All professionals (financial advisors, accountants and lawyers) i have spoken to here seem to be ignorant that there are ways to relinquish other than renouncing and to believe that because I was born in the US I am a US citizen forever. My wife knows I consulted with our JR and she does not believe him because he is from Ontario. So I don’t know where to go for an informed person who would be credible with my sons or wife. I’d really like to.
And thanks for the dialogue. It is wonderful to communicate with people who truly understand what we are up against and are empathetic. Wasy
It might be worth trying the lawyer your sons used – surely that’s a credible authority.
Otherwise it sounds like there’s a chance that even if you buy yourself a back-dated CLN, your family will still think it’s not enough and go on and on at you about the IRS until you draw your last breath (unless you snap and do away with them first).
I have found that there is nothing in life more difficult to change than a hardened mind.
I think I had better try discussing it with them all again, tell them what I am willing to do and see if that would satisfy. I have been thinking, perhaps a little nastily, that these are people who are looking a gift horse in the mouth, so to speak. They don’t have it now. They are making it rough for me because they don’t like the way they perceive I am giving it to them.
Maybe I should seek a professional executor, if such exists, and make that person the executor.
Frankly, I am getting to old to fight these kinds of battles.
@wasus
My sympathies. It sounds a bit like vaccination, doesn’t it? At a certain point, all the logic and evidence in the world won’t penetrate the mind of someone who’s firmly convinced of their position.
There are indeed professional trustees and executors. I’m sure they charge a good fee for their services. The executor of a US person’s will would have an obligation to bring the estate into US tax compliance, so a professional would not take this on without reviewing your background and deciding whether they would have that obligation. If they decide that no, you are no longer a US person and your estate would have no US tax obligations, then surely your family should be satisfied.
That being said, it’s possible that the fees for an executor would greatly exceed the cost of a CLN. Alternatively, have you considered setting up a trust so that there is no estate, no probate, nothing for the executor to do?
@Wasus nowcan
You could write to the State Dept, explain your situation, the fact that you have relinquished by the fact of becoming Canadian back in 2000, and have not acted as an American in any way, and ask them to confirm your understanding of this . You may get an answer , who knows?!
PS wasus
Ask them to please confirm your understanding from their published information that you don’t need a CLN to confirm that you have relinquished your US citizenship. You can then show your family the letter and file the acknowledgment for your estate. Its worth a try for the price of a stamp.
One of the cranky old regulars here a few years ago, the name escapes me, suggested applying for a US passport but in such as way as to guarantee rejection on the grounds of having lost citizenship in the past, then using the rejection notice as a sort of bargain-price CLN. Personally I’d be worried that some incompetent messes up and issues the passport anyway, which then wrecks your ability to claim retroactive relinquishment.
@Heidi – Asking the State Department for an opinion is essentially the same as asking for a free CLN. It’s certainly worth a try – won’t cost more than a postage stamp – but I wouldn’t hold my breath.
Great, and for me, novel ideas. Thank you for thinking of them. More possibilities and limitations to consider. It would probably be better to have a contact in the SD rather than a “to whom it may concern” type letter?
I’ll look into the trust idea. Never thought f a trust could be used that way.
And BTW, I have appreciated and benefited from your wise comments, Heidi and Ron, for a long time on this forum. Wasy
@wasus
Trusts aren’t necessarily cheap – definitely more expensive than a CLN – but they help your heirs avoid the whole probate process (and in BC at least it also saves the 1.45 percent probate fee). If a lawyer was satisfied that you were not a US person and agreed to set up the trust, your family really wouldn’t have anything to complain about.
@Wasus
A backdated CLN for a relinquishment in 2000 would be invaluable for any tax concerns your family or your estate may have. If you can afford it, I would bite the bullet and get it officially documented. Relinquishments used to be free, now they are same as a renunciation, who knows they could up the price again blaming the cost of living increases. That’s what I would do to avoid conflict and peace of mind.
@Wasus: Like the other members of the board stated, your interpretation of the law and the application based on the facts you describe are correct. No one in Canada or anyone else in the world will try to ascertain whether you are a US person when they execute your estate.
Nonetheless, the pragmatist in me says that you are better off renouncing or trying to obtain a CLN based on your past relinquishment rather than trying to persuade the unreasonable to reason. My renunciation will take place next month and I am doing it, in part, to assuage some fears that my wife has. Ultimately, one chooses to renounce for peace of mind. The US can always arbitrarily raise the renunciation fee or embark on some other programme to target US persons abroad, whether these US persons are real or imagined. I have potential complications such as the estate tax and wilful lack of US tax compliance in the past. Ultimately, if your family’s paranoia is causing conflict and anguish then just rid yourself of the US citizenship. I know renunciation is not a magic solution that rids one of any previous liability. However, I just feel happy and relieved no longer being a US person.
In case you are curious, the US embassy where I am going to renounce next month asks various questions relating to past relinquishing acts as part of the renunciation process. The embassy seems willing to grant the CLN based on past expatriating acts, although you still need to pay the US $2,350. I think there are some long wait times in Canada as there are in Switzerland where I live. I am going to another US embassy in Europe to do this. My first appointment will be on the phone and the renunciation will be one week later in person.
@RonHenderson How did your renunciation process work if you do not mind me asking?
@ByeByeUSA
Were I @wasus, I’d be concerned about simply renouncing, because the family might then demand the whole tax compliance process (which the sons put themselves through). Having a documented pre-2004 relinquishment may satisfy them. It’s of course completely silly and yes, the family is being paranoid, but the situation needs to be dealt with.
My renunciation went very smoothly. Requested an appointment by e-mail, got one 14 months later on about 2 months’ notice. All done in under an hour, relatively quick and not the only one on the day. No mention of taxes beyond the reminder that past debts won’t go away. I was asked for my SSN but I did not provide it, as it’s not required on the State Department paperwork (DS-4080 and DS-4081); this was not a problem. The CLN arrived a month later.
Had it only been me, I might not have bothered. My executor was aware of my citizenship and had no interest in reporting anything to the IRS (and had I predeceased my spouse it would not have been an issue at all). However, my elderly parents had irrational fears of the IRS devouring the estate, plus their lawyers and investment advisors were aware of my citizenship, including the person who will one day manage a substantial chunk of money in my name. This was going to cause problems down the road so I decided it was time to bite the bullet and renounce. No regrets at all.
@RonHenderson: I would also recommend @wasus just focus on the renunciation part. That is what I intend to do, as I do not wish to open a taxation can of worms.
Thanks for the explanation about the renunciation. It seems like a very straightforward process. The US embassy civil servant employees have usually been very professional when it came to quick passport renewals, obtaining Consular Reports of Birth Abroad, and even organising a travel letter for my non-US person wife to travel to the US in 2020 so my dying father could spend a bit of time with his grandkids. My only bad experience is with one overzealous employee who looks, sounds, and acts like John Bolton’s female fraternal twin, but she is the exception rather than the norm. The real problem is at the policy making echelons in the US Congress, the White House, and at the apex of the State Department. The insular nature of the ‘Homeland Americans’ also plays a part because many regard Americans abroad as traitors etc.
My three kids have their Consular Report of Birth Abroad. I e-mailed to a number of embassies in Europe and I found one within a day’s driving distance willing to do the renunciation that had no queues. The still unnamed embassy asked me to fill out some forms, including the DS-4079 dealing with potentially expatriating acts. They wrote back and gave me some appointment dates and accepted my proposal to do the initial appointment by phone followed by the actual renunciation in person one week later. Thus far, I am happy with the professional civil servants who are stuck implementing the horrible policies created by the US-policy making class and the yahoo Homeland Americans who could not care less.
As you say, there is no magical database connecting the State Department and IRS, although I expect future changes. My tax lawyer acquaintance says the Biden administration wants to tighten tax enforcement and increase IRS funding, but he says there should still be plenty of opportunities for chicanery involving tax avoidance schemes that politicians and the very rich use, which people like my tax lawyer will interpret and administer in exchange for high fees.
Did you feel anything weird about unbecoming a US citizen? I would prefer not to do it, but it makes sense after carefully weighing the pros and cons. I feel increasingly foreign when I am in the US, despite spending slightly over half my life there. I forget whether you are a US émigré or an Accidental because I arrived on Isaac Brock more recently.