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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Unfortunately, being German, you may have felt “obliged” to answer truthfully when you opened a bank account. Big mistake. The good news is, you don’t have a US birthplace, so you don’t really have much to worry about. And you caught the problem early and found us.
What you need to do now, immediately, is close that account. Then open a new account at a different bank, using German ID with non-US birthplace, and never say anything about US citizenship. Yes, you are openly and knowingly giving false information. It’s not the end of the world, people do it all the time.
After that, you are fine. You are safe. Do not ever file any US tax forms, and you won’t even need to renounce. As long as your bank is not aware of your US citizenship, there will be no problems, no restrictions, no reporting. You are not in the US tax system yet. The IRS may or may not receive one tiny piece of information about you sometime next year. The IRS has bigger things to worry about – this is not a problem.
Don’t worry about the exit tax. It’s complicated and would never be an issue unless you had a lot of money and were foolish enough to enter the US tax system.
J, listen to Ron. He knows what he is talking about and gives excellent advice.
@JinGermany
If you have admitted US citizenship to a bank then the account will be reported to the US under the fatca agreement. As a US citizen you are also required to file a report of all ‘foreign ‘ ( non Americans accounts ) that are in total above $10,000 to FINCEN .
No one who has ignored this requirement has of yet reported hearing from the IRS. They know nothing about you, they have limited resources and only pursue resident Americans hiding money abroad when it is worth their while. The only time they collect from Americans living and working abroad is when you give them all the information for them to do so.
Many US citizens who have no US birthplace simply deny US citizenship to banks. The banks are protecting themselves against the threat of FATCA on their assets and you must protect yourself of the threat of the US IRS on yours. The US is the only country in the world to practice Citizenship taxation.
The 8854 is the form the IRS would like you to file to assess your net worth for an exit tax assessment.
If your net worth is over $2,000,000 or your average earnings are above a certain amount then you will be taxed 15% on any unrealized gains above approx $700,000. I am not sure of the current values but you can google it. There are complex rules with retirement funds and a transition tax on business. You really do NOT want to get involved. There is no tax collection treaty between Germany and the US.
Take time to read the information on the Brock sidebar , you have plenty of time to digest this and ask more questions before any appointment can be made.
@Jin Germany
I agree entirely with Ron.
I was just filling you in with the quagmire of US taxation rules.
Do not enter there!
@Ron the hijacker general…(sarcasm)
J asked questions about taxation after YOUR original thread mentioning it !
I tried to explain what it was all about.
“what do you mean by “dont send the US tax declaration?” to whom? i never lived ther or wroked there or had any income that would need to be declered there, so i dont quite get what you mean”
@J in Germany
1. You can do as many others have done and refuse to tell banks of your US citizenship.
2. Renounce and don’t file anything as many others have done.
As your are not already in their system, don’t enter it.
J in Germany. I have a slightly different approach. First I would try to open an account at a different bank without disclosing your apparent US citizenship. Don’t regard this as a crime or even misdemeanour. It is solely to protect yourself against an improper assault on your privacy. If you can do that, I would close the first one. You are not part of the US tax system on account of your opening this first account. You will only be part of the US tax system if you make the mistake of voluntarily entering into it. Don’t fret too much about FATCA. As far as we know, any information sent by a German bank to the US generates no action unless the account were to be huge or they find out about it by other means and wish to pile on. They are getting hundreds of thousands of reports and don’t know how to handle them. The IRS is a paper tiger when it comes to offshore minnows.
Remember, you are in the right here. You didn’t want to be a US person. They have no business trying to tax you or trying to make you fill in dozens of useless forms year after year.
Above all, don’t be persuaded to file any tax related forms. No 1040, no 8854, no FBAR. NOTHING.
And once the bank issue is fixed – by lying – there is no need to renounce. It is expensive and unnecessary. It also won’t be possible for a very long time, so there’s that.
Guys thank you very much. I will take the following action after just talking to my wizard of a banking advisor a few minutes ago: I will have my wife open an account with a new bank, which will handle all our transactions. I do not appear as a customer to that bank. No need to make a false statement. The other bank with the account that learned about my US citizenship a few weeks ago (which triggered all of this), has received my complete cancellation. This makes me truly invisible bank-wise (and a pet to my wife). My renunciation will now take as long as it needs and when all is done I will re-create a financial identity. This solution came to my advisor and me as a result of your input. I do thank you VERY much !!
“This makes me truly invisible bank-wise (and a pet to my wife)”.
Bonus!
@ J in Germany
Glad you have found a solution that you are happy with.
One question I would have is will your employment enable you to pay a salary into a bank account in your wife’s name?
Well done. We did something similar but more complex. Transfer of assets to one spouse, renounce, transfer back. It takes time and trust but it can work.
@J You are still early in the process. You will soon lose your fear of making false statements.
@RH, so true.
I remember my first time.
I thought every employee in the bank could see the US person flag on my back.
Was waiting pensively during every encounter, for the “ARE YOU A US PERSON” question.
Now is no biggie. Not a laughing matter though. Is stressful to go from total honesty to total liar.
Nah, not a liar. Just conserving the truth for situations where it actually matters. When I’ve been asked the question the bank people seemed genuinely relieved that I answered no. That saves work for them because they are then able to immediately move on to productive business. Similar to when your wife asks if you like her new dress; unless you are looking for trouble, there is only one safe answer.
I would not concern myself about lying to banks.
In Switzerland they closed US tainted peoples accounts and mortgages leaving them without their homes and any means to pay their bills. In the UK they forced illegal PPIP ((payment protect insurance) on their customers.
They are not in business to serve their customer, they are there to make a profit at any cost. They are unscrupulous.
They are not a court of law. They are doing another governments business for them and you owe them nothing more than they give you. You must protect yourself and your family from this unethical practice in any way possible.
My son who has dual US/UK nationality used his British passport to open an account when he studied and worked in the UK. He has an American birthplace but it matches a city name in the UK, so he told them he was born in the British town equivalent. UK passports have city birthplace names not country.
There are many in Switzerland who deny US birthplace as the Swiss passport has place of origin, which is the area from which your family comes from or the Canton where you Naturalized as Swiss.
That is interesting about the Swiss passport. So any American who naturalized could walk into a Swiss bank and solve problems caused by their name and accent by claiming to be Canadian.
@RonH
Thats what many do here in Switzerland.
Even my son in the UK was asked by a bank why he had a slight American accent, he said he had been at school in Canada! Not sure many can tell the difference , I can only pick it up if I hear the word ‘about’, but then I was raised and educated in the UK.
Swiss trying to pass as regular German would be infinitely more difficult.
In general, what are the odds IRS comes after you after renouncing & not filing any tax return plus 8854?
Well, I renounced in September 2018, never submitted anything, haven’t heard a thing.
All the IRS know about me is the CLN. No social security number is quoted anywhere. They have no idea of my net wealth (low!) or income (also low!).
I have no financial life in the USA, so there’s nothing they could do to me anyway.
I don’t lose any sleep over this at all.
@minilibrarian
There have been no reports here on Isaac Brock from any non filer hearing from the IRS.
They are understaffed and underfunded and quite honestly it isn’t worth there while pursuing anyone they know nothing about and who they could not collect from anyway.
Odds are zero if you were not already in their system
If you were never in the US tax system and have no US assets (either now or after inheritance) then I would say the IRS coming after you is very extra extremely unlikely. I’d like to say that the odds are zero but of course we can’t know that. Certainly near-zero however.
Also bear in mind that it might be quite some time before you can get a renunciation appointment, as the consulates are closed for the duration.
Thanks everyone.
So no filing history = not in the system?
How about one never filed before but included someone’s tax return as dependent?
Is he or she in the system in that case?