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
For Western Hemisphere, it’s Division Chief Clay Adler 202-485-6289.
Also in the Sidebar at Dept of State Forms, Procedure Manuals and Contact Info, you can scroll down to the Dept of State Telephone Directory link. The offices that do the CLNs are currently on page 17.
I often wonder why so many have reported aloof or impersonal or even hostile service at US consulates or embassies, since virtually all of the interaction that relinquishers/renunciants have at the US embassy or consulate are not with US citizens, but rather citizens of the country in which the embassy or consulate is located; i.e., in Canada it is Canadians sending out those terse emails. Is it something about working at the US embassy or consulate that infects the local staff with a disdain for the local population, and even for the US citizens seeking legitimate assistance? Why this lack of civility? Why the absence of any names, even first names, on most emails? It certainly rivals the worst to be seen in the corporate world, airlines in particular come to mind, and possibly telephone companies; maybe it is from such that the some of the US embassies and consulates recruit their staff…
I did send an email to the Obama about this issue and the injustice being done to US Expats. The response I got was a form letter which did not discuss one of the issues that I had raised. See below:
Thank you for writing. I know taxes are an issue that hits home for almost every American family, and that means they draw out strong opinions. I want you to know I value your perspective.
While different parties offer different solutions, almost everyone can agree that our tax code is badly in need of reform. Under today’s tax laws, those who can afford expert advice can avoid paying their fair share. Interests with the most connected lobbyists can get exemptions and special treatment written into the tax code. And wasteful, complicated loopholes punish businesses that invest here and reward companies that keep profits abroad.
American taxpayers deserve better. We should be making changes that strengthen the prospects of hardworking families, not those who can game the system. So in the months ahead, I will keep pushing Congress to close wasteful loopholes, end incentives to ship jobs overseas, and lower tax rates for businesses that create jobs here at home. And I will keep working with them to fix an upside-down tax code that gives big tax breaks to help the wealthy save, but does little to nothing for middle-class Americans.
Of course, any tax reform has to come from Congress, which means progress will be difficult. But I am committed to seeing it through. I was proud to sign into law tax cuts for small businesses 18 times, and to lock in a tax cut for 98 percent of Americans during my first term. If we can come together and let common sense guide us, I am confident we can achieve even more in the years to come.
Thank you, again, for sharing your thoughts with me. To learn more about my ideas for revamping our tax code, visit http://www.WhiteHouse.gov/issues/taxes. To get help sorting out a tax problem, visit http://www.IRS.gov/Advocate. You may also be eligible to receive free, in-person help filing your taxes each year. To learn more, visit IRS.Treasury.gov/freetaxprep.
Sincerely,
Barack Obama
@ TokyoRose
My husband was very fortunate to encounter polite staff at the Calgary consulate and one of them eventually signed her full name to e-mails … although the first exchanges did come back with a “signature” of simply ACS (American Citizen Services) prompting my husband’s reply e-mails to begin “Dear ACS”. We kept copies of all e-mails to and from. However, you bring up a good point about the consulate staff being Canadians. There must be some who are American though and I wonder if any of them had an OMG moment at some point or would they have been completely forewarned about their IRS obligations. I have to say that waiting for my husband to emerge from his appointment was nerve-wracking for me and I’m sure the security tape of me pacing the corridor was carefully reviewed.
Good morning all,
I think I made a potentially big mistake in my rennucation appointment and interviews. I had an interview on Monday and then had an interview in person on Thursday. I was doing my interview and they asked a couple of times why I was renouncing and I told them I was doing it because I was Canadian and don’t consider myself to be American. And they asked again same thing. We went through all of the interview questions and then she asked again and I a moment of honesty I said it was compliance issues. I told them it was complicated to do all of taxes. I told them that I was compliant and owed nothing in taxes. So when I had my in person interview on Thursday I made sure that I told them that I was not doing this for tax avoidance purposes and they said that what’s they were putting in the file was that I was not doing this to avoid taxes and that I have been compliant for the last few years. But since I cannot see what they actually typed into the form I am scared that they may have put some thing in there saying that I was doing for taxation issues. I just want to get my CLN now. I am fearful that they may construe this as an attempt to avoid paying taxes to them. In which case I could be barred from entering the USA again. Which for me is not an option. I need the ability to be able to come down. Anyways. I was hoping for some thoughts from the forum here.
Cheers.
@Joe
Wow Joe. Are you kidding? From Obama himself and he wants tax reform? I think that is actually great. If he can get the ball rolling towards tax reform, then maybe our issues WOULD be addressed along with all the rest. Maybe the collateral damage of FATCA would be a part of it? Maybe then it could be revised without losing face? As things are now, I fear nothing in the way of tax reform will be done and only more walls will be erected. In the meantime, valuable time is being lost, names are being handed over to the CRA or the IRS, and things are progressing in a dire direction. I would wish for tax reform sooner than later. We might be a part of it. Oh how I wish for RBT- if only America could see how it is harming itself with CBT and not just robbing all of us who dont even live there.
@Krackerjack –
– There’s a distinction that’s clear to me, though apparently not to many people on online comment boards, between the administrative burden of taxation and taxation as such.
– The Reed Amendment has never been implemented, and never may be. The IRS apparently sees it as impossible to administer, as passed.
– If you want to set your mind at ease, you can always file a Privacy Act request for your file, which will include the ‘consular officer’s opinion’ that went to Washington. (http://foia.state.gov/Request/PersonalRecords.aspx)
Krackerjack121,
Your answer that you were not doing this for tax avoidance purposes – that you have been compliant and owed nothing in taxes / it is the complexity — sounds like a perfectly good answer to me. Chances are slim to none that they would make an example out of you when they have not done so for any other. Sleep well.
Form 8854 says that you must add a statement explaining any significant changes to your assets and liabilities from 5 years before upto the date you file the first form. The five years leading upto your departure date – is under their jurisdiction, but any change after your date of expatriation is not their concern. Thoughts?
@Krackerjack121
I don’t think you are going to have a huge problem. It isn’t as if the consulates don’t know what is going on. You are compliant, you don’t owe. And believe it or not, it isn’t the consulate’s job to determine WHY you are renouncing, only to make sure you understand what you are doing and that it is voluntary.
I also see this somewhat differently than others. The whole point of the expatriation tax and being covered and so on, is that when those conditions are met, it is presumed one is renouncing for tax purposes. If you meet the income test, the asset test or cannot certify you have complied 5 years prior to renouncing. If you are not covered and are compliant, there’s nothing to suggest renouncing for tax purposes.
FWIW, I discussed this openly with the vice consul when I renounced. He did not have a problem with it. And as far as the Reed Amendment is concerned, pls read this explanation as to how impossible it was/is to enforce it. It is actually quite funny in a sick sort of way.
http://blogs.angloinfo.com/us-tax/2013/12/30/expatriation-if-you-go-interview-with-bill-yates-former-attorney-with-the-office-of-associate-chief-counsel-international-irs/
Please try to relax and forget about this.
I wonder what or who we can contact re the Vancouver Consulate’s lack of response to our requests for an apt to renounce or relinquish. any thoughts? I contacted them on Sep. 3 with my filled out form and have not heard anything.
lioness, I too am waiting. I sent my forms in by email two weeks ago and there has been no reply. Does anyone know what the waiting time is for:
1) an email response from Vancouver
2) an appointment date from Vancouver
If Vancouver doesn’t answer, I guess I’ll be applying to Calgary.
@lioness @Joe
Please let the US government know how you feel about the fee increase decrease in service here:
http://www.regulations.gov/#!documentDetail;D=DOS_FRDOC_0001-2956
@Bubble
Is there any way to check if your comment has actually been registered with them? I posted a few days ago when the total was 13. It is only up to 20 now. Yes, maybe many have not gotten over there yet but I worry about their statement: “Agencies review all submissions, however some agencies may choose to redact, or withhold, certain submissions……duplicate/near duplicate examples….” I would imagine we are all saying pretty much the same thing and who knows what they are doing about that. I would like to see if they actually HAVE our comments.
@charl
Regulations.gov privacy notice states the following:
“Regulations.gov is a web-based application supporting the United States Government in the federal regulatory process. Regulations.gov is provided as a public service to access and participate in the federal regulatory process. On this site you can:
Search for a regulation such as a proposed rule, final rule, or Federal Register (FR) notice;
Submit a comment on a regulation or on another comment;
Submit an application, petition, or adjudication document;
View docket contents, including public comments and submissions;
Sign up for e-mail alerts about a specific regulation.”
Maybe someone more tech-savvy than I am can find where to access the comments!
“is provided as a public service to access and participate”
What a mangling of the English language! Don’t they speak English in Washington any more?
Let the US government know how you feel about their recent 422% renunciation fee hike! Only 19 so far! http://www.regulations.gov/#!documentDetail;D=DOS_FRDOC_0001-2956
There might be some interesting tax consequences for the period between relinquishment of one’s citizenship and the date of one’s expatriation as per 877A. The latter is likely to be the date on which you advise a US consulate of your relinquishment.
After the 2004 expatriation provisions were enacted (S877), Michael Kirsch wrote a paper. S877 created a new concept in tax law: a citizen only for the purposes of taxation. Once you have relinquished, you are no longer a US citizen, whether you have advised the State Department or not. The IRS created the tax citizen in order to assert taxing jurisdiction under the ’10 year rule’ of S877, but the concept would appear to exist under the present S877A for the period between relinquishment and the date of expatriation as recognised under The Tax Code.
What Kirsch claimed in his paper, which preceded S877A, was that the existence of a tax citizen creates all sorts of legal interpretation issues where the word ‘citizen’ is used in US legislation: does it’s meaning extend to a tax citizen? Many actions taken by a tax citizen (e.g. using a US passport) would invalidate a claim of relinquishment. Others don’t (e.g. payment of the exit tax).
An interesting issue discussed in Kirsch’s paper relates to tax treaties and, in particular, the savings clause. He suggests, with considerable legal justification, that the use of the word ‘citizen’ in US tax treaties can only mean citizen in the nationality sense, and cannot be extended to a tax citizen. This has interesting consequences, most notably that the savings clause no longer applies to tax citizens who have relinquished. Without the savings clause a foreign American, if she qualified as a resident of the other country under the tie breaker clause, would only be subject to US tax as a non-resident alien (RBT anyone?). Notably, the US would also have waived its rights to CGT in favour of the country of residence. The exit tax is a CGT, and the deemed US sale wouldn’t constitute a taxable event under foreign tax law; i.e. no exit tax.
There are two problems here: Kirsch is an establishment character, so those issues would most likely have been addressed before S877A was enacted. Secondly, my application of Kirsch’s opinion on the ’10 year rule’ to other provisions of the tax code probably lack legal integrity.
Has this issue been covered anywhere on IBS? Is it possible that this glaring loophole actually exists, but no ‘covered expatriate’ had the knowledge or courage to exploit it?
@Domino– Michael Miller did a review of Pre-June 4,2004 — http://www.robertsandholland.com/siteFiles/News/03-05-13_Expats%20Live%20in%20Fear_MJM.pdf
For those after that date, regarding vis-a-vis a tax treaty, there was a discussion here..http://taxblog.com/ainfanti/domestic-law-and-tax-treaties-the-united-states/
The author concluded that most likely 877A overrides treaties since courts generally give the more weight to legislation passed subsequent to a tax treaty signed, but concluded that no one can be certain until it’s tested in court.
If you relinquish can you still get into the streamlined process in FATCA? And if you preformed your expatriating act in Dec. 1995 would, or can, the Consulate backdate your CLN to that date? So if it was backdated to 1995 would your tax burden be applied for the previous 5 years pre 1995?
@EC…in 1995, there was no 5 year certification requirement. According to Miller’s interpretation, if you get a backdated CLN, your date of tax expatriation was the date of your relinquishing act.
See http://isaacbrocksociety.ca/2012/06/19/if-your-expatriation-date-is-before-2004-the-rules-are-different/
My date should read Dec. 1994 not 1995.
EC if you relinquished in Dec 1994, you have no need for streamlined or anything else. You owe them nada- bugger all. That’s the subject of the important post ” Did you relinquish before Feb 6 1995 ?” The link is under ‘our resources’ to the right .
@ Duke of Devon
Even if I did not formally relinquish in Dec. 1994? That’s the problem I am having understanding. When I got married I assumed I automatically relinquished, but did not formally do so. In Dec. 1994 I didn’t think you had to formally relinquish. I thought it was a given. So if I go in now and relinquish would it be backdated to Dec. 1994 to formalize the relinquishment even though you did not have to at the time. Nothing like making something easy.
@EC…you still don’t have to formally relinquish, but you might have a hard time dealing with banks without a CLN in hand. By applying for a CLN, you are basically getting a confirmation from the USG stating “yes, we agree you lost your citizenship in 1994.”