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
@MediaFleeceStar, how did you do streamlined when you were below the Form 1040 income tax filing limit? But still had outstanding FBARs.
@George, because I’d never filed any sort of US tax form as I didn’t know I needed to. Streamlined requires 3 years of tax returns and 6 years of FBARs. As I had no income (stated by my US tax preparer in a note attached to the Questionnaire) I only needed to back file the 6 years’ of FBAR’s. Sent off the Questionnaire and the FBARs last year and so far haven’t heard anything further.
Hi Guys,
Thanks for all your comments. Even though I know most of you are in the same boat, it somehow helps hearing it. As for the suggestions, if this helps: my passport was seized right before I resigned, and I was told that, while I may still be American for this time period, I have no rights of an American. I gave it up because I thought that would make the process go faster, but I cannot get it back. My case worker at the Embassy knows that I work freelance and how detrimental it is that I have this CLN as soon as possible, but she simply responded with “I’m sorry for any inconvenience this has caused”. Basically, the US knows that I’m in a very precarious situation, and they do not care. They did give me some stupid letter saying that I had renounced and they had seized my US passport and would not issue a replacement. I have informed my case worker in my country of residence that I have renounced, but she says there’s absolutely nothing she can do until I have the actual CLN in my hand. That effectively means that my life has come to a standstill until I have this.
I am just at my wit’s end with this situation because I do know a lot of foreigners here from various nationalities, some of which I do tandem courses with to learn new languages. All of them have renounced after me and have passports of this country in their hand now because the only thing they had to do at the embassy was renounce, and that was it. They weren’t a citizen anymore, and they received their ‘other’ citizenship the same day. I’m trying to stay positive, but it’s hard.
@Utterlyfrustrated
So are you saying that you renounced without an alternative passport to use?
Bewildered. Yours is relatively straightforward. When you become Canadian later this year, you will have done so with the intent to relinquish US citizenship.
Then,if you wish, make an appointment at the consulate to inform them that you have relinquished and ask them for a CLN which will take a while to arrive. (No charge)
Then Do Nothing More. People will tell you you need to file 5 yrs of tax returns and a 8854. Check it out but really -what are they going to do? As far as the TFSA is concerned, don’t mention it. As a very smart guy said years ago on this site- “don’t tell them anything they don’t already know”
Bewildered But Determined,
Just checking — no income ever from Canada or just no income ever from the US? Is the TFSA the only investment that you have? It is over $10,000 so you will as well need to submit FBARs (FINCEN 114) to include that and any other banking or investment account you hold or have joint account status in. Your TFSA is considered a “foreign trust” and requires Forms 3520 and 3520A as well. Medea has given you good advice on either claiming your new Canadian citizenship as your act of relinquishment — or renunciation. I, myself, would go with the relinquishment. You will still have to do all of the other compliance and final 8854 to certify that or would be deemed a “Covered Expatriate”.
One step at a time will get you out of the clutches.
Bewildered. Calgary411 is a very brave lady but she and I often disagree. in my opinion you don’t HAVE to to anything with respect to FBARs. They will have tens of millions of these things coming in with no idea what to do with them. They were meant for drug dealers and money launderers. I assume you are neither. You are what is referred to as a minnow. They will have no interest in you whatsoever.
Thank you for the advice.
@Calgary411: no income ever from either country after immigrating to Canada.
Please would you help with some follow-up questions?
1. presuming the required IRS forms are submitted, do they have to be submitted BEFORE informing the consulate of relinquishment and asking for a CLN or can this be done afterwards? That is, does submitting IRS tax returns after relinquishing someone “invalidate” the relinquishment?
2. if the IRS forms are NOT submitted, are you asked to make a statement about your tax status with the IRS during the course of relinquishment and if so then what is the advised statement to make?
@Media Fleece Star. I assume you live in the EU/EEA.
OK, so you filled out the streamlined questionaire. Local accountant types up a short letter that you did not need to file a Form 1040 for years 1,2 and 3.
You sent in copies of six years of FBARS with the streamlined application.
You filed six years streamlined by email PDF. Assume you put in the note box that “Did not know needed to file. Filing under streamlined.”
Is that basically it?
By chance did you have 25 or more FBAR accounts so you provided no detail? I ask because by a wide definition of financial accounts including gift and sim cards you can hit 25 plus.
I know of some people that could benefit from your experience.
@ Bewildered but Determined
In reply to specifically your questions at 10:40 a.m.
A person can go ahead with a consulate appointment although they are not up to date with taxes or have never filed taxes. Dept of State deals only with the citizenship itself; and citizenship, or loss of it, is not dependent on one’s tax status. Basically, they don’t care if a person has been filing taxes or not, not part of their mandate.
No, submitting IRS forms after a relinquishment/renunciation does not invalidate it, as these would be forms regarding the period during which the person was a US citizen.
Here’s some general info and links:
Dept of State:
Dept of States’s only involvement/connection with tax is the following:
(1) At the consulate the person signs DS-4081, Statement of Understanding of Consequences, One of the 12 items is Item 10, that renouncing “… may not exempt me from US tax income taxation [etc] …”
(2) Dept of State is to provide IRS with a copy of each CLN they issue as per DoS Interagency Coordination and Reporting Requirements.
(3) The questionnaire. DS-4079, at q. 13 (e) asks “Do you file US income or other tax returns?” DS-4079 is used to determine if a relinquishment actually occurred when the person claims it did. [DoS does not require the 4079 for renunciation, but allows consulates to use it for renunciation files as well, if they wish. So, some consulates use the 4079 for renunciations and some don’t.] The tax question on the DS-4079 is there as an indicator of your ties and connections to the US, which is important if you’re claiming to have relinquished some time ago. But it has no relevance either way to a renunciation.
IRS:
For IRS purposes, one has until June 15th of the year following the expatriation to certify that they have been tax compliant for the five years previous to renunciation (unless they get an extension). This certification is a yes/no question on the exit tax form (8854), which reads: “ Do you certify under penalties of perjury that you have complied with all of your tax obligations for the 5 preceding tax years?”
If a person does not do this, it does not affect their citizenship status. It can result in IRS problems, such as being considered a “covered expatriate,” that is subject to exit tax, and possible other IRS problems. However the citizenship remains terminated and the CLN remains valid.
@ Bewildered But Determined, it doesn’t matter. You can do it either way. I renounced first and then did the tax side, but you could do taxes first and then relinquish/renounce. You should NOT be asked anything about your US tax status at the consulate because it’s none of their business. They may remind you that you might have US tax obligations, but that’s all.
@George I posted the 6 years of FBAR’s as the electronic system hadn’t come into operation last year. The partial year filed for 2013 was done by my tax preparer as was the Streamlined Questionnaire. What he put on the note was “Although a Streamlined Questionnaire is being submitted, the taxpayer is not filing tax returns because she has no income to report.”
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Bewildered But Determined,
1. In thinking about this, I don’t know how to answer. You are not required to file US income tax returns by virtue of your income. TFSAs are considered “foreign trusts” and require filing of 3520 and 3520A forms. Can they be filed or do they need to be filed without the filing of a 1040? Someone else might be able to answer that.
2. Expatriation (renunciation or claim of relinquishment) is separate from IRS tax compliance. The US Consulate or Embassy may inform you that you are required to file these, but they will not (or should not) ask you anything about having done so. You have until the due dates of the year following your expatriation (and extensions for same) for IRS tax returns and FBARs (FINCEN 114) and the Form 8854.
KalC might have given you the information you wish to follow. Every person has to make his or her own decision on what to do based on much research and their own facts, including “Do I ever want or need to again cross the US border?” Personally, I feel that all *US Persons* in Canada no matter how they may be defined need protection against US extra-territorial tax law coming into their country. Indeed, some can pass under the radar more easily than others and avoid detection — and I think they should if they can. However, I also believe that it is not a work-around or escape from detection that should have to be the norm. We should ALL, every Canadian, be protected by proper and just law. Canada needs to provide protection to ALL of its people. NONE of us should be hit by the draconian U.S. penalties for not filing and the exorbitant cost in having to do so each year (separate from taxes actually owed). I realize many don’t agree and who am I to say? Make your decisions based on the best information and risk tolerance for you and those you love.
It is the litigation that persons in Canada have commenced and are raising money to complete that is for the protection of persons such as you and all other US Person individuals and families in Canada and other countries. If we all support this with our donations as often as possible, it will be a reality. You can join us in that fight if you think your rights and the rights of others and, indeed, ALL Canadians and the sovereignty of Canada are important, join us and support: http://www.adcs-adsc.ca/.
@Polly yes, I had no other choice. First I renounce, then I get approved, and only then can I get a passport of my nationalized country. Both my parents are American, and there was no other way to get a secondary passport first, unfortunately. I’m stateless, yet not stateless at the same time somehow.
People- how about starting a part 3 to this thread. it takes forever to wade through older comments to get to the new ones.
?
@Polly,
This link, found on the right sidebar, always takes you to the last page:
http://isaacbrocksociety.ca/renunciation/
@ Polly
A new thread is not necessary. Navigate by deleting everything after “renunciation” in the http line, reload (or refresh) the page and you will find yourself at the last page of comments. Other threads are even easier because there is the blue “number of comments” link to take you straight to the newest comments.
@notamused/ UtterlyFrustrated (if you’re in Germany):
Possibly of interest. There’s a Spiegel TV documentary called “Deutsch werden” that shows various foreigners naturalizing in Germany. A Turkish teacher is shown at a Hamburg immigration office completing paperwork to obtain her naturalization certificate. She also signs a document requiring her to renounce her Turkish citizenship and then is handed her German citizenship Urkunde (certificate).
For details, see the program called “Deutsch werden: Der lange Weg zur Einbürgerung” starting at 13:30 for the Turkish teacher’s visit to the naturalization office. At 15:00 she signs the document obliging her to follow through with renouncing her Turkish citizenship.
Question: Why is she allowed to sign that she will give up Turkish citizenship to obtain the German citizenship document while the process for USCs appears to require them to present the CLN before they can obtain the naturalization certificate?
EmBee, I felt such a warmth when I read your post noting that when Canadian Brockers woke up they would reply. And @George, I echo the sentiment; “I love the new term “Euro Brockers” “.
And you know…..The sun never sets on the Isaac Brock Society.”
That is what saved my sanity many a long night – the knowledge that a least one other person out there would be awake soon who understood the nightmare. IBS was a lifeline to the other side of this.
@Utterly Frustrated, there are others more capable – particularly those outside Canada (who know the situation re naturalizing somewhere that doesn’t accept dual status) to weigh in on your situation as per the unique factors that stand in your way, but wanted you to know that we empathize and wish you the best. Hang in there.
Finally an article has been published today in the Calgary Herald about this mess,
http://www.calgaryherald.com/news/persons+living+Canada+fear+FATCA/10120360/story.html
@Innocente thanks for the tip. I assume – from what I’ve seen in my country with regards to what I actually needed for a work permit – that every naturalized citizen is processed different based on his or her country of origin. It’s awful to watch people passing me in droves with nothing standing in their way of getting their citizenship while I sit here and wait, rocking back and forth in the corner. The best way I can put it is that it feels like being wrongfully imprisoned for years chained to a wall, and one day, the guard comes by and opens the prison door, saying, “If you can figure out a way to get through this door, you’re free”. But you’re still chained to the wall, and all you can do is keep pulling against it hoping that it gives way.
@heartsick Thanks for posting the article. It was both heartbreaking and scary, especially the end bit where people were just given their citizenships back without warning. That’s one of the things I actually looked forward to when I renounced. Have any renouncers been having any difficulty getting back in the US with their new passport showing a US birthplace? I wanted to get a passport without it, but apparently, the US won’t recognize those. I wish I was rich enough that I could pay whatever government official I needed to to change my birthplace lol.
UtterlyFrustrated, your input in this thread would be appreciated: http://isaacbrocksociety.ca/2014/08/14/why-dont-you-just-renounce/comment-page-3/#comment-2606734
@ UtterlyFrustrated I myself and two siblings are caught up in this mess. We were born in the US to two Canadian parents and at the time we left, as young children, we were told that we could “reclaim” the citizenship after the age of 22. We never claimed it and have lived our whole lives thinking we were only citizens of Canada. The US changed the law in 1978 but did not bother to use any means to inform its so called citizens abroad. It has done the same with tax reporting. This is why there is so much anger, the US expects us to just know when they change things. When we were born, the US gladly took citizenship away from those leaving the country. Lawsuits changed that, and laws changed but without considering that some might want to rid themselves of the citizenship. Canada did not allow dual citizenship at the time our births were registered or for many years later, that also changed. The US tolerated “duals” but discouraged it, they have never had a law against it. Having this citizenship thrust on us with the taxes to be paid (don’t invest your country’s mutual funds, highly punished by the US) to renounce has been emotionally devastating for our whole family. I am so sick of the people commenting in these articles about us enjoying “benefits” from the US. What benefits? I made my choice years ago, I am Canadian. This article appeared yesterday in the Vancouver Sun and is much longer in that paper.
You will need to travel with a copy of the CNL and your passport to enter the US, according to most it is hit or miss on being questioned but that will probably get worse over time if you cannot prove you lost the US citizenship.
My deepest sympathies @heartsick. That is an awful situation, and I hope it gets resolved for you in a positive way very soon.
@Petros thanks for drawing my attention to it. It seems there’s been a misunderstanding about what’s actually going on on my side, and in my attempt to be vague enough so as not to get the law hounds barking, it has confused people. I apologize for this and have commented on the issue in the other thread you posted.
Yippeeee! Today In the mail I received my “Canadian Forces Certificate of Service” from the Library and Archives that I submitted a request for four weeks ago, certifying that I served from June 1985 to 1991 with the “Canadian Forces Cadet Instructors List” as a Lieutenant (meaning, a commissioned officer). The package even included my Canadian Forces enrolment form that I completed back in ’85. As far as I am concerned, thats my proof that I “relinquished” citizenship in 1985…voluntarily. (and with intent, I might add)
Quick summary: born in US to two Canadian parents. Returned to Canada at 3 months old, my birth was registered in Canada. No ties to the US ever, not even a single relative lives there.
Now I am thinking…..should I pursue a CLN, or just remain in silent stealth mode until someone somewhere demands “proof” of my loss of citizenship? What if I try to relinquish and some bonehead decides for some reason it doesn’t qualify and I’m refused? if I don’t pursue a CLN, I would continue travelling on a Canadian passport (as I have my whole life) that says place of birth, USA, potentially presenting problems at border crossings in future? Decisions, Decisions.