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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Thank you Heidi. I had noticed this possibility, but wondered if anyone can confirm they have successfully done this? In person…?
@Susan
You might want to ask the mods to remove your last name from that most recent post.
If attending to the passport renewal in person, I would have the statement prepared ahead of time. Those instructions for making a statement are included on the instructions for the passport application form, so it should not be at all contentious or unknown, but maybe have it printed off as well.
By stating that you don’t have an SSN you are also stating that you’ve never filed a US tax return, but that is not something the consulate will care about. It’s not necessarily the case that you did anything wrong by not filing – had you never earned enough to meet the reporting threshold, you would never have been required to file.
Renunciation is often necessary for those whose US birthplace causes them to face restricted services from financial institutions thanks to FATCA. (On this note, the UK passport does not show country of birth, so if you were born in a part of the US that sounds vaguely British – i.e. Worcester, MA rather than Las Vegas, NV – then you can easily pass as not American when opening a bank account.) Renunciation is generally not needed to avoid US tax obligations, since those can easily be ignored by Accidental Americans such as your self.
Thanks Ron. It’s not my real name 🙂 Unfortunately my US birthplace is quite recognisably American, and my UK passport does show it. It has only become known to me very recently that I should have been filing tax returns and although I don’t think I will owe any tax, I earn enough be required to file. And I don’t want the ongoing hassle and worry for the rest of my life as I’ll never live in the US. There does’t seem to be any way to renounce at the moment due to the UK embassy not allowing appointments, so unless this changes soon I may have to prepare the statement as you suggest, renew the passport without an SSN, then get an SSN and get my tax returns in order whilst waiting for renunciation appointments to become available again. And as I live several hundred miles from London it’s a major PITA as a total of 3 trips to the embassy will be needed!
You do not need to be in tax compliance in order to renounce. You simply renounce and at some point shortly after the State Department sends you a piece of paper that you can use to show to your banks to end any FATCA reporting or limits on services. (Are your banks currently aware of your US citizenship?)
If after renouncing you wished to formally exit the US tax system, you can do that by filing Form 8854 and attesting to being in compliance for the past 5 years. If you were never in the US tax system and never had an SSN, there’s really not much sense bothering. According to the IRS itself, it looks like 40 percent of those who renounce never file the tax paperwork. (There is a special procedure now for anyone who renounced and who does not have an SSN – they can do the exit procedure without an SSN. Why anyone would bother with such a paperwork exercise is a mystery to me.)
My advice:
1. Get your US passport without an SSN, if you need it for travel to the US.
2. If you are having banking problems due to a US birthplace, get in the queue to renounce US citizenship. If your banks remain unaware of your US citizenship, ignore this.
3. Under no circumstances consider entering the US tax system. (If you had an SSN I’d say consider filing for 2020 to procure the $3200 stimulus benefit and use that money to cover the $2350 renunciation fee, but you might have trouble getting an SSN quickly enough to make that happen.)
You should also check to see if there’s a US consulate closer than London, as they should offer both passport and renunciation services.
Susan, I’m in the UK, born in the USA, became a British citizen in 1993, renounced US citizenship in October 2018. I’d never been in the US tax system, I have no financial life in the USA, so I decided not to complete any US tax paperwork. I haven’t heard from the IRS, nor do I expect to.
Hi Ron, no my banks are not aware, so far I have avoided filling in the box asking if I have any other nationalities, though they do ask online from time to time. So none of the forms you have to complete when you renounce ask you if you are compliant with the 5 years of tax returns? Is that separate?
Unfortunately Belfast and Edinburgh are even further than London for me, though if an appointment came up I would go to either.
Thank you BirdPerson, that is good to know! I would rather stay out of the system, and I wouldn’t owe any tax anyway, so it would just be a big pain and expense.
And in answer to your question, the Embassy doesn’t ask about tax compliance. There is a form which asks if you’ve completed US tax returns (4079) but that’s only to see whether you’ve acted like a US citizen (you’re also asked whether you’ve voted in US elections) if you’re applying for relinquishment.
Stay of the system!
To repeat, there will be no questions about tax during a renunciation appointment. Volunteer no information either. If you are merely renouncing (as opposed to documenting a past relinquishment) then there is no need to complete form 4079.
My earlier advice stands: renew your passport without an SSN, don’t worry about renouncing unless you have a banking problem (which you don’t currently) and under no circumstances should you consider entering the US tax system.
@ Susan,
They’re not supposed to bring up tax at renunciation and London has a good reputation for being very efficient and professional with renunciations. Reports from there have always been good. So, I don’t foresee any hassles, or even unpleasantness, there. (Occasionally, it has been mentioned at some locations, but, in any event, it does not impact a renunciation, nor have I heard of IRS getting involved when it did come up — except for required paperwork, the departments basically stick to themselves.)
I made an info sheet showing the interaction between Dept of State and IRS in renunciation. Basically it comes down to DoS automatically sends IRS a copy of each Certificate of Loss of Nationality they issue, but IRS hasn’t been contacting people. They seem to have enough on their hands with people who are actually in the system. (Note: In the info sheet, I refer to Form DS-4079, which some locations require renunciants to fill out, but London does not use it for renunciations.)
I agree with the others. You’re so removed from the US tax system, I wouldn’t get involved with it. The US really doesn’t seem interested in people who left as kids (and retained no financial ties). It’s been quite common for such people, if they renounce, to just renounce but not enter the tax system, especially people who don’t have a SSN in the first place.
Thank you so much pacifica777, Ron and BirdPerson for your comments and advice – it’s really helpful in knowing exactly where I stand, clarifying what the best course of action is and what is likely to happen. pacifica777, your info sheet is very useful and the reports of what happens at the UK embassy seems straightforward especially when compared with some other locations!
I’m going to keep an eye on the embassy’s page to see if renunciations start again in the near future, but if not, passport renewal without SSN followed by renunciation when possible, is the way to go I think.
Thanks so much again, I’m really grateful for your replies!
Not sure how it’s working in the UK, but in Canada you can apply for an appointment and get put into the queue for whenever things reopen, so do it sooner rather than later if you don’t want to wait forever.
I checked the website, but it says they aren’t even accepting applications for appointments at the moment and can’t provide a timeframe for when this will recommence :-/ I’ll keep checking!
@Susan
In pre Covid times many people travelled to other Consulates to get a faster renunciation appointment and combined it with a brief vacation, I remember they went to Iceland, Mexico, Amsterdam, Luxembourg to name a few.
It looks like the Lisbon consulate is open and Portugal has a green light for travel from the UK. To speed the process you might want to send them an email and see what they can offer?
Thanks Heidi for finding out this information. I’m not in an urgent rush to get this done, but it’s certainly worth bearing in mind if the UK option remains closed for a long time to come.
Lee, who got a notice from IRS in March got another one this week, apparently triggered by the 60 days having elapsed, and is really concerned about it. Thanks for your replies to the question I posted about the March notice. Can anyone shed some light on this new notice? Lee doesn’t own a business or have complicated investments, just an everyday person. So, it seems strange to me it would take so long for IRS to close the file.
Background
2019: Lee renounced.
Spring 2020:Lee filed 8854, 1040, 1040NR and related forms with IRS-Charlotte Processing Office sent copies to Philadelphia IRS.
Summer 2020 then Early Autumn 2020: Lee received letters first from IRS-Charlotte then Austin Processing Office, asking Lee to send Austin copies of some documents Lee had sent to Charlotte and from Austin how some figures were calculated on the 1040 and 1040NR. Lee replied and did as requested at that time.
March 2021: Lee receives letter from Austin, saying, “We are working on your account. However we need an additional 60 days to send you complete response on what action we are taking on your account. We don’t need any further information from you right now.”
Text of Notice Received This Week
“Re: Tax period ending December 31, 2019. 1040.
“We previously sent you a letter about your enquiry received Sept xx, 2020” [Note: They are referring to the letter they sent Lee in Early Spring. However, Lee did not make an enquiry in Sept 2020. Lee’s letter of Sep 2020 was a reply to info they requested.
“Although we try to respond quickly, we often need additional time for research. We can’t provide you with a complete response at this time because: “We need more time to provide you with a complete response to your inquiry.
[. . . Boiler plate sentences about what to do if you have a balance owing – not relevant here. . .]
“Please allow an additional 60 days for us to obtain the information we need to obtain the information we need to let you know what action we’re taking. You don’t need to anything else right now.”
@Pacifica777 and Lee
I can only reiterate that it took well over a year and a telephone call from me to an agent before multiple computer generated letters stopped. They believed I owed them tax from the previous year, but I had already paid in a combined return with spouse . After renouncing separate returns are required and my payment was filed with spouse’s return and SS number. The agent admitted that no one had looked at my letters ( all 4 of them) with an explanation that they were really busy.
If Lee wants to clear this up , I suggest he calls the IRS hotline the moment they open to have a chance of speaking to someone, otherwise just forget it and don’t worry about it. I suspect no one has reviewed his case. He is not their top priority.
PS Lee and Pacifica
The agent I called admitted they had received my letters of explanation, they had been logged in the computer but that no one had reviewed the issue, hence the computer generated letters to me (with penalties for non payment!) after each time lapse.
I would suggest Lee should just wait and try not to worry about it.
Asking for an friend. Anybody have any idea of waiting lists to renounce in Canada(or elsewhere for that matter) as they seem to believe they can walk in and get an appointment anytime they like.
Chatter on Facebook page ‘Renounce US Citizenship – Why and How’ is that most embassies are still closed for renunciations. Those which are open will only take appointments from people living in that country, and there is a long waiting list.
Due to covid, a family member has waited over a year
@ Mike,
Sorry I have no current information. Since they started doing renunciations again in late 2020, I know of three people, who had had their appts cancelled last Spring, who renounced between December 2020 and February 2021. The most recent renunciation I know of is from April 2021, which had been originally scheduled for April 2020.
I haven’t heard much at all about renunciations since the pandemic started. I know a few people who have sent in their applications in recent months, but no one’s mentioned (to me, anyway) that they’ve heard back.
In the year prior to the pandemic, wait times for an appointment in Canada ranged from 3-4 months to 11-12 months, depending on which consulate was used. I’d definitely get myself in the queue as soon as possible.
To get the info package and booking information for Canada, your friend should e-mail canadaclninquiries@state.gov (regardless of where in Canada your friend plans to renounce, it all goes through a central booking system) and your friend will receive the renunciation package by automatic reply.
I put myself on the list in November last year. I’ve heard nothing since then, apart from a confirmation that I’m in the queue when I checked in several months ago.