Renunciation and Relinquishment of United States Citizenship: Discussion thread (Ask your questions) Part Two
Ask your questions about Renunciation and Relinquishment of United States Citizenship and Certificates of Loss of Nationality.
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NB: This discussion is a continuation of an older discussion that became too large for our software to handle well. See Renunciation and Relinquishment of United States Citizenship: Discussion thread (Ask your questions) Part One
I am a Canadian citizen, non resident of Canada, tax resident in Europe. So I live and file in Europe. I have avoided FATCA so far but I think it will catch up with everyone soon. The penalties associated with being contacted as non-compliant are a big shadow to live under. To the point where I have to convince myself daily that “potential financial ruin is not the end of the world.”
@Norman et al
Here are some US / UK matched cities for those with Briitish passports looking to deny a US birthplace.
My son made use of his US/UK city match on his British passport while working in Europe.
I think that renouncing, many times, has less to do with compliance than with the never-sure, “waiting for the other shoe to drop” + hoping you/your tax people can keep up with the sticks in the spokes.
No one in charge, no real person to appeal to (is there even a REAL appeal?), no concrete answers, no one in IRS can corroborate, insane penalties, no way to plan retirement properly, assumed-criminal-as-against-principle (innocent until) etc, etc, etc….
= the expat on a limb. If you’re happy with these terms, go right ahead and retain that taint.
I assume you do *not* have citizenship in your country of residence, then? Is that country one of France, Netherlands, Denmark or Sweden?
Outside those four countries, the US has no means of collection, period. In those five countries, if you are not a citizen, the US can in theory ask domestic authorities to help collect tax (but not FBAR) fines and penalties. (See Dewees in Canada.) No evidence as yet that the IRS is capable of or willing to attempt using FATCA data to track down and punish non-compliant US persons abroad.
But since you are dealing with European banks who may wish to see ID that includes birthplace, you face greater risk of detection than if you lived in Canada. At some point you may be well advised to renounce. No need to go through the full tax compliance and exit procedure if you’d rather not bother.
Slight confusion about this from your original post:
“C1 Are you required to file a tax return in any country other than the U.S. or Canada?”
Was the letter from a Canadian bank, or a bank in your country of residence?
“In those five countries, if you are not a citizen, the US can in theory ask domestic authorities to help collect tax (but not FBAR) fines and penalties. (See Dewees in Canada.)”
Dewees volunteered, though, by entering the OVD* programme. Before he did that he had apparently been doing just fine with his Canadian corporation – not filing US tax returns.
Once he entered the program and started filing, it was inevitable that he would become vulnerable to assessment; and that Canada would be bound by the terms of the treaty to assist with collection.
@plaxy Yes we know. The details of Dewees aren’t super relevant here. Still trying to figure out what advice to give since it’s not clear where Fillinchen’s bank is located.
Given the confusion, this is an object lesson in the importance of stating the following when asking a question: where one physically lives, where one files tax returns, where one has citizenship, where one is born, and in which country is the offending financial institution located. Otherwise very hard to give sensible answers.
“The details of Dewees aren’t super relevant here.”
The irrelevance of the Dewees case is (IMO) what needs to be explained, once Dewees has been mentioned.
Avoid getting involved with the US tax system and you (generic expat you) won’t get assessed by the IRS.
If you do file, and do get assessed, the IRS can’t collect; but the residence country might, if you live in one of the five countries mentioned and don’t have citizenship of the country.