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)
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This thread is now closed. Please comment on Renunciation and Relinquishment Questions – Part 2 of 2
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Phil Hodgen has a monthly blog which is often very useful. The latest entry is a brief summary of the final paperwork after you expatriate. A dual status return and form 8854. Provided of course that you choose to file.
The international robbery society naturally confuses the issue as much as possible. To understand their instructions, you have to substitute the word citizenship for the word residence. I. E. they talk about dual status as if it applies to residency whereas we mean it to apply to citizenship. This is because they conflate the two and call all US citizens US tax residents.
https://hodgen.com/paperwork-expatriates/
Hope this is the right section of this site to post it on. I am thinking of renouncing next year but would like to travel to the US to visit family later this year. Can I still visit the US this year and renounce next year? Or would me visting this year affect my renouncation?
@ Annoyedbookowl,
Visiting the US doesn’t affect being able to renounce. It’s pretty common for people to visit the US before (and also after) renunciation.
Before you renounce, you are free to travel. It won’t affect anything. After, you are treated in the same way as everyone one else with your particular citizenship.
Thanks for that reassurance. The other question I have is re, DS 4079 on tax compliance. I’ve been reading that tax compliance and renouncation are 2 separate things but then why is it asked at all on the form? I’ve read so many conflicting stories.
That one is straightforward. DS 4079 originally had another purpose. It was meant for those who had performed a potentially expatriating act. In that case, State would try to determine the person’s intent. So the questions relate to intent. Do you vote, do you pay taxes, do you have property, did you perform the potentially expatriating act voluntarily?
They could not possibly imagine that anyone would deliberately give up the most precious citizenship on earth. After all, tens or thousands are fighting to get in.
In our case, it is relatively meaningless. When you renounce, your intent is clear. The questions on DS 4079 will have no consequences. Tax compliance and renunciation are completely separate issues. No need to be compliant if you choose not to. Many compliance condors tell their victims differently.
The 4079 is pretty irrelevant for renunciation. Some consulates (probably most, especially amongst the high-volume locations) don’t use it for renunciation. When you first contact the location that you’ll be renouncing at, they e-mail back what forms they require.
The Foreign Affairs Manual, 7 FAM 1260, even states that “Form DS-4079, Request for Determination of Possible Loss of United States Citizenship, is not standard or typically necessary for renunciation cases,” but it doesn’t forbid it being used for renunciation, so at some places they do.
The 4079 is required at all consulates when someone is applying for a CLN based on a prior relinquishing act, such as by naturalisation or by taking government employment. If a person is claiming to have relinquished years ago but kept filing taxes (although they had no US income) and/or renewed their US passport, etc, it implies they must have thought they were still a US citizen, which brings their intent at the time of relinquishment into question.
thanks for this. If I was compliant via a streamlined process- as I’m currently going down that road and might be too far down the road to cancel the work that the accountant has done. Would I still be able to renounce?
Department of State basically doesn’t care about one’s tax status as the citizenship itself (and the issuance of the CLN) is not dependent on one being tax compliant.
There’s more information with source links at this page: Renunciation/Relinquishment: Interactions between Department of State and the Internal Revenue Service.
I replied to you thinking you were asking if a person doesn’t file taxes, can they still renounce? which is yes. Also the CLN remains valid even if they never file.
But also if a person has filed taxes, that would not prevent a renunciation either, because with renunciation the person is a US citizen up to the time of renunciation, whereas with a relinquishment there can be a time gap, even decades, between the relinquishing act and applying for a CLN.
They are not connected. You can renounce at any time. You could renounce before you file your streamlined forms if you chose to. P.s. Why not bail on the streamlined?
Thank you for that information. I wasn’t even aware that renunciation \ replenishment was possible before I started down the streamlined route. Would I still be able to renounce this year even though I’ve filed an extension to file 2018. Sorry for all the questions – this is all new to me.
You can renounce anytime. They are not connected.
If this assures you, we renounced in early 2017. Up til then we hadn’t filed taxes for years.
after renouncing, we approached a reputable tax accountant. She wanted us to go the streamlined route . We said ‘no’ and against her advice did a quiet disclosure of 5 years. ( The reasons are somewhat complex but boiled down to not wanting to lie on the streamlined form.
So quiet disclosure it was. Filed 5 years worth after renouncing. Haven’t heard a word from them. Not a single word. ( there were not any taxes owing)
If we didn’t have children in the states who stand to inherit, we might not have filed at all. The accountant cost about $2500 for 5 years worth.
@ Annoyedbookowl
“Replenishment” comes weeks to months after renunciation. It’s when your CLN arrives and your cup of freedom is refilled … to the brim. 😉 You should have seen the grin on my husband’s face when I brought his CLN home from the post office that day. Priceless! 🙂
As others have said, renunciation can be done whenever it works best for you. Afterwards there’s time to complete your tax filings and send in the 8854.
@Portland – thanks for sharing your experience. I might and it’s a very big might receive inheritance from my grandfather further down the road – Would I still have to file an inheritance tax form of i’m no longer a citizen and renounce?.
@EmBee *that was supposed to say relinquishmemt
@ Annoyedbookowl
I know but it could have been your mind skipping ahead to a time when renunciation is behind you. Keep your eye on the prize. It may seem confusing to get there but thousands of others have made it through the process. Some, like my husband, didn’t even do every little step perfectly. (So far, 5 years later, no repercussions … knock on wood.)
@Annoyedbookowl
I don’t post here often anymore, having renounced 5 years ago. But thought I’d let you know what my experience was.
As far as travel there has been no problem. I see relatives south of the border several times a year, both before and after renouncing. Bring a copy of your CLN after renouncing/relinquishing.
As far as filing, I renounced first, then filed the five years of returns and form 8854. I did the forms myself on paper and mailed them in. No accountant and no streamlined. I owed nothing and heard nothing from the IRS. One may need to use an accountant if the tax situation is complex.
Good luck. It’s a great relief when it’s over.
An inheritance down the road makes no difference. An estate pays the taxes not the heir. An American can leave money to anyone they wish. It matters not if you have renounced.
I’m one of those who renounced without filling in any tax paperwork, and I don’t plan to file anything now that I have my CLN. I have no assets or income in the USA, and I’m a financial minnow. I have travelled to the USA post renunciation, on my UK passport, and had no problems on entering. (I offered to show the official my CLN, and he wasn’t bothered).
When travelling to the US, I’ve never been asked for my CLN but bring the copy as a precaution. However, a border officer did question why I was travelling to the US on a Canadian passport with a US birthplace. I answered that I was a Canadian citizen now and no longer a US citizen. That seemed to be a satisfactory answer and I was told to have a good trip.
I am also a financial minnow which the IRS likely has no interest in. Needless to say, I travel south of the border as little as possible.
Hello, I’m new to this site. Please excuse me if I am posting in the wrong place, the site is a bit overwhelming!
I’m seriously considering renouncing. I live in France and have French and US citizenship.
My main concern is whether the IRS can claim taxes on the sale of my Paris apartment, where I currently live. It will be my main source of income when I retire which is within next 5 years. Plus, I will need to move to a cheaper area of France and purchase or rent out a new home.
If I don’t want to pay taxes on the sale of my primary residence or future estate taxes (we’re talking peanuts), is it worth it to renounce? Or just ignore the IRS coming after me, if they do?
Thanks very much in advance for your answers and advice!
Are you already filing US tax returns? If not, how would the IRS even know about your flat, unless you tell them?
@Anna
Re renunciation versus staying under the radar.
Have you already been filing and Fatca reporting?
Do you have a US birthplace on your French passport?
Have you been having problems with banking access?
Do you have any assets in the USA?
The US cannot collect from you if you are a citizen in the country in which you live but they may be able to collect from any US assets you may have.
These are all considerations when deciding the best way forward.
Anna Whether you renounce or not, there is nothing the IRS can do to harm you. However we need more information in order to give valid advice. In the meantime, don’t file anything with them until you have a clear understanding of your choices.
@Anna
http://isaacbrocksociety.ca/2016/11/01/dual-citizens-of-sweden-france-netherlands-denmark-canada-take-note-your-country-will-not-collect-for-the-u-s/