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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Following my comments over a year ago, my son has today experienced his OMG moment when the dreaded FATCA letter was sent to him. He is currently working in Australia, on a 2 year work visa, and his UK post is forwarded to us. His bank have sent the letter asking him to confirm his tax residency. We had hoped his bank did not know he had dual UK/US citizenship as he was born in the UK and only took out US citizenship when he was 17 after I suggested it might come in useful one day! Biggest mistake of my life – and his! I have renounced and he is now going to try and get an appointment in Australia to renounce as well. He is going to ask his bank who sent the letter, to close his accounts, but my question is, will they freeze his accounts if he does this? I fully expect he will still have to provide the information they are asking for, although he has no SS number, just a US passport, as he has never lived there and has no assets there at all. I thought I had seen the back of this nightmare, which literally gave me a nervous breakdown before. Without the help of many people here I don’t know what I would have done! If anyone has experienced something similar to this and can suggest what he can do to keep the bank at bay until renouncing, I would be eternally grateful! Many thanks.
@Rose
Take a deep breath and relax. My guess is, the bank has no idea that he’s a dual citizen, and that’s why it’s asking. He’s received the bog-standard FATCA letter that is likely being sent to all current customers. You and he are getting way, way too overwrought here.
The worst thing you or he can do is have some giant freakout and call up the bank demanding to know why the letter has been sent. Just answer “no” on the form and be done with it. If he’s really uncomfortable, close the account a few weeks later on grounds of having “moved to Australia”. Then when he returns he opens up a new account somewhere else, using UK identification with UK birthplace, and saying nothing about US citizenship.
To be blunt, why is this an OMG moment? Surely both of you were fully aware that his UK bank would send out such a letter one day. They ask these questions of all customers. How the customers answer is entirely another matter.
Furthermore, lest you feel guilty, be aware that your son was a US citizen from the moment of birth. All you did when he was 17 was document this fact so that he could obtain a passport (but no SSN, which is good). That is literally his only point of contact with the US government – the IRS does not know that he exists.
Your son is a dual citizen born outside the US. This is a non-problem. He does not need to renounce. He does not need to close bank accounts or worry about FATCA. Don’t even consider filing US tax returns, unless he’s keen desperately keen to receive the stimulus benefit this year – $3200 in free money. All he needs to do, for the rest of his life, is not mention the fact that he’s a US citizen. If he keeps his mouth shut, this problem solves itself. You are both getting needlessly worked up about nothing.
@Rose
Why do they suspect he is a US citizen if he was born in the UK? Is this a general letter that is sent to many people whom work abroad for short periods of time?
If he has given them no US indicia I would not mention US tax citizenship to them, as many others have done. The banks are just saving their own skins and he must protect his. He is not beholden to them.
He can then renounce at his leisure if it gives him peace of mind.
@Rose
See also this reply:
http://isaacbrocksociety.ca/fatca-and-australia-part-2-of-2/comment-page-1/#comment-9031472
Your son is in the same situation as my child (dual citizen born outside the US). My child simply says “no” when asked about US citizenship. End of story. They are extremely not concerned about this.
He couldn’t remember if he told them about the dual citizenship, and just kept quiet hoping he hadn’t – but from this correspondence it’s clear he did and they are aware of it, it isn’t the ‘normal’ letter asking you about your citizenship. It even says “if you are no longer a US citizen and have renounced your US citizenship please provide a copy of your CLN.” He has had his dual citizenship for almost 18 years and opened an account after getting it. Had we known about any of this, I would never have encouraged him to take apply for it, and definitely not to mention it to his bank. Hindsight is a wonderful thing. I just hope he can close his accounts with them knowing he is a dual citizen, and they don’t freeze them before he can transfer the balance. He certainly won’t be contacting anyone about tax compliance – he would have none to pay, but would have a big fee for the tax expert which he can’t afford. No he didn’t claim any stimulus cheques, and is happy to have nothing to do with the whole system!
What does the letter actually say? The CLN comment may also be standard boilerplate text, so don’t get too worked up. Is this a form on which he can simply check “no” to US citizenship, and be done with it? He likely would not have been asked about dual citizenship 18 years ago, so it’s probably not on record. Also he most definitely does not want to declare his US citizenship, because the bank will then be required to ask for an SSN, which he doesn’t have and which may not be easy to obtain at this point in time.
I can’t say with completely certainty what banks in other countries will or will not do, but I think the risk of having accounts frozen is very close to zero. If he’s concerned, close the accounts (without making a big fuss about it) and park the money somewhere else, then open new accounts with no mention of US citizenship.
In the absolute worst case, the bank will deem him a “recalcitrant” US citizen and report his accounts under FATCA. If that happens… so what? The IRS gets a small amount of data with no SSN attached. Big deal. Presumably he’s not worth tens of millions – they won’t care.
You are much too worried about this.
Thank you Ron, I think you may be right. It might just want to confirm he is living in Australia, as the letter is headed “Please confirm where you are resident for tax purposes”. It says “FATCA requires us to collect information from customers whose tax residency or US citizenship we can’t currently confirm” The way the letter is written makes you think they are aware of his dual citizenship, but you are probably right, and I’m just a neurotic! There is a section asking you to confirm if you are a US citizen or not. I would have thought they would have contacted him before now if they were aware which is why it came as a bit of a shock. Thank you again for making me take that deep breath!
PS If the bank isn’t demanding an SSN at this point, then it very likely doesn’t know or believe your son to be a US citizen. Depending on how things are set up he may be able to use online banking to confirm any foreign tax residency for CRS purposes (Australia potentially) and also officially check “no” to US person status for FATCA purposes. (That’s what I did a few years ago for my Euro account.) But really we need to know more about the text of the letter to further advise.
@Rose
There are many of these types of letters going out,, especially if your son has has a change of address or workplace, or even opens a new account in the same bank, any change gives them a chance to send out a US fishing letter.
There is only one country I know that tried to freeze accounts and that was Switzerland after they ran foul of the US gov and the freezing was successfully challenged in a Swiss court.
He needs to answer No, or open a new account with his UK passport and transfer his money, but he will need proof a a UK address.
That’s very useful to know, thank you. Section 2a of the Tax Residency Self-Certification Form asks if you are a US person Yes or No, and if yes to provide US TIN. I think he’s best to say No and hope for the best. He’s starting the renouncing process anyway. Thanks again Ron, you always help!
Thank you very much Heidi, I appreciate your time.
Just say “no” and this is all over. There is no need to “hope for the best” because that is literally the end of it. Also no reason to close the bank account. Y’all get way too nervous about this stuff!
Renunciation in his situation is a waste of time and money and, frankly, why engage with any arm of the US government if you don’t need to? Quite apart from the expense, it’s arguably “safer” to stay off the radar completely than to hand over your one’s name and other information to the State Department, who then pass it on to the IRS (who do nothing further so really this argument is mostly hypothetical). There’s a case to be made for renunciation if someone was born in the US, but with your son it’s pointless at best, counterproductive at worst. His US citizenship is completely undetectable as far as financial institutions are concerned, no reason to be concerned about FATCA or do anything further, unless he’s congenitally incapable of lying – a very rare human trait, thankfully.
@ Rose, Sorry your 11.49 am comment didn’t go directly on-line. Some glitch in the software, but should be okay now. BTW, my husband, a Canadian who’s never had any US indicia, got a FATCA letter too. From chatting with friends, we got the impression his bank was sending them to all their business account clients.
Thank you Pacifica, I’m hopeful it’s just a letter triggered by his being in Australia. I just had a flashback panic! I’m just so happy I renounced, and will be even happier when he does!
Your son really should not be thinking about renouncing, but I expect I won’t be able to convince you otherwise!
The only worry is that he has to (rarely) travel to the US for a Conference, and his passport expires in 2023. He won’t apply for a new one, partly because of the seemingly new requirement for a SS number, which he isn’t going to apply for. He would have to use his UK passport with an ESTA and I’m pretty sure they would flag him as a US citizen as he’s used his US passport before to enter for Conferences. It would be nice to think it might get easier/cheaper to renounce, but that seems unlikely!
He can renew his US passport without an SSN. That’s what I’d do.
https://travel.state.gov/content/travel/en/passports/have-passport/renew.html
Thank you Ron, will pass on all this very helpful info!
Finally, what I wrote on the comment on another thread just recently:
I’d caveat that by saying that Canadians just show up at the border or airport, they don’t need an ESTA waiver, so it’s easier for us.
My last US passport expired October 2018, at the same time as I renounced. When I travelled to the USA a month later, on British passport and ESTA, it was my place of birth which made the border official ask if I’d ever been a US citizen. It appeared to me that he had no record of a US passport for me.
That’s good to know BirdPerson. Thank you so much.
Can anyone personally confirm they have successfully renewed their US passport without a SSN? Mine expired over 5 years ago so I would need to go to the embassy (in London) to renew in person. I never received a SSN as I left the US for the UK when I was 4. I don’t really want to get onto the radar of IRS but I will need to travel to the US in the next year or two (if possible). I am contemplating renouncing my US citizenship but that opens up a whole new can of worms….
better to travel on your UK passport
@Portland
“ better to travel on UK passport “
Not sure if that is possible from the UK as she would have to apply for an ESTA and the application asks for other nationalities and passports held. A US birthplace would alert them.
@Susan
From the State dept website
https://travel.state.gov/content/travel/en/passports/passport-help/faqs.html
“If you would like to apply for a U.S. passport, and you don’t have a Social Security number, you will need to submit a statement, signed and dated, which includes the phrase, “I declare under penalty of perjury under the laws of the United States of America that the following is true and correct: I have never been issued a Social Security number by the Social Security Administration.”