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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Last I heard, Ottawa has been doing one (1) renunciation per week since about February. How long the lineup is at this point, I have no idea.
Hello everyone,
I have quite an unusual question regarding renunciation. I left the US as an infant and have been living abroad ever since. The problem is, in my country all ID documents show my place of birth so I cannot conceal it from the banks etc. I decided I need to renounce since I cannot even open another bank account, since in my country, if I lie while signing the FATCA agreement, I can be treated as a criminal and go to jail if anyone finds out…
I don’t plan to file anything to the IRS after renouncing as I have no ties to the US whatsoever, but there is a thing that bothers me in this whole process.
My parents made sure I get a SSN number when they left US so I have it. The problem is with my second name on the SSN as it is different from my second name on all my other ID’s. On SSN it’s “Marcus”, while everywhere else it’s “Markus” (there was probably some incompetent person translating my birth certificate in my home country). Now the question is, can I get the CLN with the visible second name “Markus” or should I go some complicated route to change it to the one on my SSN? I don’t know how much the US knows about me and if they have me in any of their records, but if they have (given I have SSN number) is there a possibility they will refuse to issue CLN if the names are different?
I would really appreciate some advice.
At the moment, the renunciation paperwork does NOT ask for your SSN.
My SSN is in a different last name than the one I have now, but I renounced without having changed it.
I wouldn’t worry about this in the slightest! Particularly if (like me) you won’t be filing any US tax returns.
@Adam
With an SSN you have the option of filing a US tax return this year to (eventually) scoop up your $3200 stimulus benefit, which nicely funds the renunciation fee. That may or may not be worth the trouble for you.
Otherwise, as mentioned, there’s no potentially issue with the middle name spelling because you are not required to provide your SSN during the renunciation appointment.
I’m guessing you’re in a country where one look at your ID means that you are identified as a US citizen, so you don’t really have the option of lying about it. I expect that being caught lying will not result in anyone going to jail – in Canada, many of us have been doing it for years with no fear of consequences – but it sounds like you’ll need to renounce anyway.
So, now that things are finally opening up in Canada – all provincial restrictions in Alberta end on 1 July – are there any bets as to when consulates will resume normal service? I’m not expecting to renounce before 2022.
Adam. When you renounce, you will be asked for a copy of your birth certificate and passport.
Thank you very much for advice. I will apply for a CLN with my main “Markus” middle name then, without worries;)
As for the stimulus benefit, that’s something new, I did not previously know about. Does every person applying get it? What if I do not have US passport? (I never bothered getting it). I guess there is also a thing with my home country taxating the money when it arrives, even if in US it’s tax free..
Well, it sounds really interesting, but I don’t know if it may cause some additional trouble.. Is there maybe a special thread about it?
To Portland: I need to check then which middle name is on my home country birth certificate, is that right? What about the passport if I don’t have it?
@Adam
You don’t need a US passport to file a US tax return, only an SSN.
There’s tons of info out there about the stimulus benefit. Not sure what the deadlines are now but in theory if you filed a 2020 return soon you’d be eligible for up to $3200, depending on your level of income. That payment would not be taxable in your home country, since it’s not income but a tax credit (think of it as an advance on a future US tax refund).
If you don’t desperately need the money, ignore and stay out of the US tax system. If you would struggle to afford the $2350 renunciation fee, it’s a unique opportunity to have that cost covered.
I would use your home country birth certificate name if possible. If you don’t have a passport, no problem. They will want some proof of your citizenship other than American. They don’t want you to be stateless
P S Don’t think about the stimulus cheque. It doesn’t apply
@ Adam,
I never had a US passport either. If/when asked the number of your US passport, just say you never had one. That’s what I did and no problem at all. Likewise if they ask you to send in a scan of it in advance of your meeting, just let them know you never had one.
@Portland
The stimulus cheque most definitely applies. It’s a godsend for anyone who can’t afford the renunciation fee. It’s not worth entering the US tax system to file one return to claim it if a person doesn’t need the money.
I wanted to enquire about which US embassies in Europe provide renunciation appointments without interminable delays or bureaucratic impediments, as is the case in Switzerland. I have read the embassy reports on the website, but the COVID situation has hindered the process.
My wife and I will welcome our final child next year, which we will register as a US citizen. Our children can decide whether they want to live in the US someday, although I sincerely hope they do not. Having the US passport during these crazy COVID times has been helpful, as I have been visiting my terminally ill father in the US every three months.
I have flown under the radar since I left the United States and my Swiss documents do not indicate any US ties. I simply sign the forms with the banks stating that I am not a US person and I have no problems. We do hold some US stocks solely under my non-US wife’s name using a local Swiss broker as custodian. I do not like lying, but I am not interested in forwarding information to the US.
When I lived in the US, I was also not tax compliant. I comply with the rules in Switzerland where the effective tax rates are much lower than they are in the US with good planning and where the government largely reflects my values. Seeing what the US has done to John McAfee https://www.zerohedge.com/political/john-mcafee-may-die-prison-after-spain-approves-us-extradition-tax-charges over unpaid/unfiled taxes is rather disconcerting, albeit unsurprising, as I would like to be more politically active in the future.
My plan is just to get the CLN as a form of protection. I know renunciation does not free one of previously incurred tax debts or liability on the US side, but the Swiss would never extradite one of its own citizens over US tax matters based on local law. I will not file any returns or go through the entire Exit Tax paperwork. Strictly speaking, I just want the CLN.
My concern is that the US government will continue to become more punitive and increase the hurdles required to renounce. I will exceed the Exit Tax threshold of $2 million, although I keep much of it solely in my wife’s name for protection. Perhaps in the future, the US government will require evidence of tax compliance to renounce or really target people like me who have reasonably high amounts of money with increased fees or even more onerous exit taxes. The proposals emanating from the Biden Administration/Elizabeth Warren etc. are alarming. Lest someone accuse me of being partisan, it was Trump and the 2017 tax code changes that made life a nightmare for US people abroad who owned foreign companies.
I am happy to hear what anyone has to say. I did speak informally to a tax lawyer who formerly worked for the IRS. He told me not to worry about any of the past taxes and just to renounce and not keep anything in the US. He said the odds of having problems are very low unless one has a disgruntled spouse or irate busines partner who rats one out to the IRS. I am just keen to hear thoughts from people on which embassies in Europe do not have huge backlogs and whether renouncing makes sense. I do not want to live in the US and spending $2,350 is annoying, but not a financial impediment as it is for many other people. I really feel estranged from the US and I want to have as much peace of mind as possible.
From a Facebook page of which I’m a member (Renounce US Citizenship – Why and How) even those embassies which are taking appointments are limiting these to residents of their own countries and to very few appointments a week.
I renounced in 2018 because I couldn’t open up investment accounts or private pensions here in the UK. I never filed any US tax returns and won’t be doing so.
Why register your children? My understanding is that they could always apply for citizenship in the future, should they wish to do so?
@BirdPerson Thanks for the input. I can probably find a way to claim residence in an EU country for the sake of going through the renunciation process.
We registered our children and obtained US passports for them because it facilitated our ability to travel to the US to see my father, who has cancer. It was a somewhat convoluted bureaucratic ordeal to obtain permission for my non-US wife, although this was more on the airline/Homeland Security side. The embassy was fine. On the day we flew, the Homeland Security IT systems were down, which meant the airline could not verify my wife’s ability to enter the US causing us to wait a few hours at the airport with small children. When we arrived in the US, we had to wait some time in the special room whilst the border guards decided it was ok for my wife to enter.
If I were to renounce today, the last child cannot become a US citizen because I would not have been a US citizen at the time of the child’s birth. US citizenship is a dubious benefit in my view, but I do not want to decide this for them. I want to try to treat all of theme equally. However, I am keen to renounce and just say goodbye to the US government and US passport for good.
@ByeByeUSA
Without being aware of the tax issues I registered my child’s birth in Europe some 20 years ago. One US passport – never used – but no SSN. I’ve come to the view that this is absolutely not going to be a problem. They have entered the US many times using a Canadian passport, there’s obviously no system to match up biographical details (name, date and place of birth) on entry.
For a while I regretted doing it, but now I see it as a good outcome. They are fully and completely off the US radar and need never worry about FATCA or the IRS. Travel as a tourist is unimpeded, but if they wanted to study or work in the US, it would be a relatively simple matter to dust off the baby passport, update the paperwork, and ensure that affairs were in order on the tax front.
Keep us posted on the renunciation progress. It’s going to be a long wait. I signed up for the queue back in November (in Canada) and I’m not expecting to hear anything before 2022.
@RonHenderson Thanks for responding. My tax problem when I lived in the US is simply not reporting income. I have never had any audits or tax debts. However, I worry that the future renunciation process will involve demonstrating tax compliance or even having to report information on wealth, which appears on Swiss tax returns because Switzerland has a wealth tax. I just want the peace of mind of severing myself from the US and protecting myself against rule changes. What stops the US from increasing the renunciation fee to $10,000 or basing the renunciation fee off wealth?
I am curious @RonHenderson what prompted you to renounce. I have seen your comments on here and on various articles about US citizenship renunciation and I thought you always advocated the position of ignoring the crazy rules.
@ByeByeUSA
I would have been content to ignore this forever, but a few things changed over the past year.
First, we were considering a possible semi-permanent move to a European country where my US birthplace would not go unnoticed by financial institutions. Ultimately this did not come to pass, but I still hope we can do something similar in the future.
Second, and more importantly, I stand to inherit a not insignificant amount of money from parents who are convinced that the IRS will somehow seize much of their estate. I cannot convince them otherwise. I’ve accepted that it’s much easier to renounce than to argue with them. The fact that they have foolishly told various lawyers and investment advisors about my US citizenship is also a factor in this calculation.
Third, while it would not have been a hardship to pay the renunciation fee, the fact that one could force the US government to cover its own costs due to the pandemic was a delicious irony, and not an opportunity to be missed.
I still plan to renounce without filing an 8854 or attempting any form of tax compliance. Since I’ve never disclosed my US citizenship to any financial institutions (including the German online bank where we’ve long had a euro account) there will be no need to do any FATCA cleanup.
In terms of my own estate, the executor of my will agreed to never mention US citizenship, but getting rid of it will prevent any future change of heart.
@byebyeUSA
The Consulate in Luxembourg offered fast, no hassle renunciation appointments to non Luxembourg residents before Covid. It’s less than a day’s drive from Switzerland and I was told has free parking close by!
I am not sure of the situation at the moment but it’s worth an email enquiry.
@RonHenderson Thanks for sharing this. As I understand it, if your parents’ estate is below the estate tax threshold of approximately US $11 million ($22 million if married), then they owe no estate tax. I used to prepare tax returns in the US, but I am quite a few years removed from practising, so I am somewhat rusty.
As far as I know, Canada does not impose a tax when one receives inheritances. In our case in Switzerland, we have to declare an inheritance received to the tax authorities, but direct heirs like children and grandchildren will not owe tax locally. This website might be of interest in your situation https://thunfinancial.com/home/american-expat-financial-advice-research-articles/inheriting-from-the-us-while-living-abroad-gift-or-gotcha/.
I have also applied for the various stimulus payments and I am using them towards the renunciation fee. My Swiss wife is especially paranoid about the IRS. I told her the US government operates with the same corruption and incompetence of Italy, except the Italian government parasites are thin and smartly dressed! Both countries have confiscatory taxation and rent seeking interests that take from the people and provide very little in return.
I know about dealing with complicated parents who come up with crazy ideas. US $2,350 to avoid fights and have some peace of mind is the price worth paying. Thanks for all your help and good luck.
@Heidi Thank you so much! The website has a much more straightforward process than in Switzerland. I will write to them and see what is doable. It is definitely worth the drive to Luxembourg to avoid the hassle. I will report how it goes.
@ByeBye
It’s little know there is even a Consulate there but a few Swiss I have known have renounced there with little hassle and without the need for the confusing 4079 form (which is really only needed to document past relinquishments.)You can park on the street outside .
Trust me, I tried explaining to my parents that there was no need to worry about an estate tax, or any US tax later if I was never going to file, but at a certain point I realized I wasn’t going to make much progress with them. Easier to give up the citizenship. I was also concerned about their having revealed my secret to various bankers and lawyers.
If all goes well we should be in Europe for the autumn. I might see if it’s possible to renounce there, although we’ll be tourists not residents.
@Heidi: If I do renounce via Luxembourg and you live in the area, I am more than happy to extend an invitation for a lunch or something like that to say thank you and to celebrate. I still need to wait until the child arrives, but I will begin the process now.
@RonHenderson If you are in Switzerland in autumn, please let me know how I can reach you privately. I am happy to extend an invitation as well to thank you for the contribution you make to this topic here and elsewhere. I would also be annoyed at someone providing your citizenship status to the bankers and lawyers. Contrary to what many believe, these professionals are looking after their own interests CYA, rather than their clients.