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 born dual citizen planning to renounce and file my five years to become tax compliant – Could any one advise me regarding a lawyer and accountant for this in the Calgary area? Thanks in advance.
I am have dual nationality NZ and USA.. and like so many had no idea I had to pay taxes to a country I left when I was 9 years old. Its like someone told me my cat had to pay taxes. So I am paying ridiculous money to get my first ( and I hope last) US tax return – the impossible to manage 6 years.
My question is -: Should I go for renunciation at the same time as filing my return? I am worried that if I do the IRS will be especially hard on me. So then what? Do I file then wait for the response, which could be months, then renounce and then have to file again!
Kiwi. Slow down. Are you certain you need to file a tax return? When did you become a KIwi and at what age? Have you worked for the NZ government or a State gov.?
Be assured the IRS do not know you exist. They won’t know until such time as you volunteer to jump into the net. If you insist on filing, you can do so after you renounce. If you file first, you won’t even get a response. If you don’t actually owe taxes, then there are no penalties. Slow down- find out more about your options.
@kiwi, as Duke of Devon says, don’t rush into anything. Look at all your options. Have you worked for the NZ or a state government or been in the military? If so, you have a good chance of relinquishing and if this happened some years ago you may not even need to look at the tax side of things.
Start your research here:
http://maplesandbox.ca/wp-content/uploads/2014/03/Synopisis-Ricardson-London-Ontario.pdf
http://isaacbrocksociety.ca/relinquishing-acts-performed-prior-to-2004/
If you can’t relinquish, then yes you can renounce without having dealt with the tax side first. This is what I did. You have until June 15th of the year following your renunciation to wrap up the tax side so if you renounce in 2015 you have until 15th June 2016 to file the 8854 form.
As Duke of Devon said, you will not hear anything from the IRS unless you owe them money so if you decide to file go ahead and do so with the view to file the 8854 form in 2016 to wrap everything up.
@Phoenix22, you have no need for a lawyer, though you may need an accountant for the tax side. To renounce you simply make an appointment at the embassy/consulate, fill in form DS-4079 and then go on the appointment date and swear the oath of renunciation and sign it, along with the statement of understanding. The forms are here:
http://www.state.gov/documents/organization/97025.pdf
http://www.state.gov/documents/organization/81606.pdf
http://www.state.gov/documents/organization/81607.pdf
Have you served in the Canadian military or worked for the Canadian government in any capacity? If so, you may be able to relinquish instead and save yourself the $2,350 fee and possibly doing the tax too if it was sometime ago that you did this. See my links above for kiwi.
Detailed discussion of tax issues raised by US exit taxes, CBT, etc.
http://www.caplindrysdale.com/the-current-state-of-expatriation-4
The Current State of Expatriation
December 1, 2014,
I was born in the US in 1951 and my parents,both American, moved to Alberta,Canada in 1953. I have ever worked in, lived in the US since leaving at age and own no property in the US. I gained my Canadian citizenship in January 1974 and fully believed I relinquished my American citizenship. There was no mention of dual citizenship etc. until the past few years when this taxation law came into effect. I have not filed any forms, have not applied for a SSN or a passport. I am going to argue I believe I relinquished my American citizenship and so therefore am not subject to the Tax Laws. Does anyone know if this argument has been made and if so if it is effective?
@ Rebecca You relinquished in 1974, believing that when you took Canadian citizenship, as an adult, you lost the US citizenship. Many people have been sucessful and have had the same situation as you. In 1974 there was no requirement to let the US know you had relinquished. As long as you have never done anything “US” such as obtaining a SSN or maintaining a passport, which you said you have not, all should be good. You are one of the lucky ones. Technically you do not even need a CLN but it would be useful if you were to travel to the US and to show to the financial institutions (some will let you self certify if they know of your US birthplace). Currently there is no fee to officially relinquish but there are long waits at the US Consulates.
The argument is bulletproof. You are no longer American. It will take about 3 months to get an appointment and another 6 months to receive your CLN.
Don’t let anyone try to tell you that you are still American.
You don’t have now or in the future any obligation to file any US tax forms.
Rebecca in the eyes of the State Dep’t., intent is everything.
It wasn’t the law then but it is now. When you relinquished, it was automatic but be sure to tell anyone that it was your intention to relinquish American citizenship.
Bonus: Documentation of relinquishment is free saving you $2350. Consider a donation no matter how small to ADCS. Good luck.
@ Rebecca
Exactly as Duke as said, be sure to state that it was your intention to lose your US citizenship at the time of your naturalization. On Form 4079 use language like “I had full intent to relinquish”. That is much better than statements such as “I believed that I would lose US citizenship” or even worse, “I though I had lost US citizenship”. They love the word “intent”. Another key phrase is “at the time of my naturalization”. It is important that you had intent THEN. Intent NOW does not count.
@ Rebecca – Welcome to IBS – the finest collection of insights and commentary on these complex issues.
You say you are going to argue that you relinquished your US citizenship & so are not subject to the tax laws. Where do you plan to argue this? At your local financial institution? I doubt this say-so will hold any weight without documentation. These FFIs do not fully know the US citizenship rules, and are not expected to be experts on this topic; their job is to find and report and, if they are unsure, send it to the IRS anyway. Sorry to be so blunt.
Now, it is possible to argue this at a consulate or Embassy but you may have to wait until next summer or later (in Canada) or you could become a renunciation tourist to another country with a consulate. But even then you may not be able to relinquish free of charge – – again, you are going to have to pull all your papers together and document all the dates and actions and have at your side these documented details on the laws at the time. Armed and ready, you MAY succeed. We will all be cheering for you and will want to hear how things went. Best of luck and know that you are not alone. In the meantime, consider donating to the Charter Challenge to rid Canada of FATCA and the IGA for all concerned. 🙂
LM. Not may succeed. Rebecca will succeed
@Rebecca, yes, it’s perfectly arguable and you will get a CLN to prove it. Many people here on the forum have obtained a CLN with similar arguments. As LM says you’ll need to gather the paperwork to support your claim: Canadian citizenship certificate if you have it – apply for a copy if you don’t, Canadian passport, etc. What work do you do? Have you worked for the Canadian government in any way or served in the Canadian military? Again details of these will help prove that you are Canadian only. Make an appointment at the embassy/consulate of your choice and meanwhile study form DS-4079 which will need to be filled in by you and sent to the embassy/consulate beforehand.
http://www.state.gov/documents/organization/97025.pdf
Make clear in the questions that you did know and intend to lose your American citizenship when you applied for the Canadian one.
Nor will you need to do anything on the tax side. See the following link:
http://isaacbrocksociety.ca/2011/12/16/did-you-relinquish-before-february-6-1995-then-you-did-not-have-to-inform-the-state-department/
As heartsick says, the only downside is the length of time to get an appointment for the relinquishment and then the further delay in the CLN arriving. Check here other people’s experiences at the embassy/consulate you choose to use.
http://isaacbrocksociety.ca/consulate2/
Good luck.
What an apt day for us today!! Our CLNs arrived today!! It was a 6.5 month wait since our back-dated relinquishment was approved. Now I can tell our story in full. Had it not been for the IBS and John Richardson (our hero) this would not have worked out this well. Thank you, thank you all!! I have much to report and advise but that can wait a bit while I dry my tears of joy and drink some celebratory wine. Soon.
@Garm, congratulations! What a nice early Christmas present for you and your family. Definitely time for a celebration.
Hi,
me and my brother were born in the US from Canadian parents working in the US. We were born in 1970 and 1972 respectively. My parents moved back to Canada in 1975. I started school in 1976 at 5 years old (almost 6).
We have never worked in the US, never asked for a US passport, never owned any US property, never had a bank account in the US, and we never went back to live in the US.
I have worked as a research scientist for the Canadian government for 15 years. I have represented the country at several international meetings. I traveled (still am) quite a lot to the US for work (conferences and such). My younger brother is a mechanic and just like me, never owned anything in the US.
Because of the which hunting that’s going on, I’m thinking of renunciation (or relinquishing). Should I bother? I mean what can happen if I don’t do anything? If I do something, should I renounce? Can I relinquish?
What do you think is best for us?
Thanks,
Steve.
Adam.
I forgot to mention, for the last 2 years, I get in trouble every time a cross the border from Canada to the US. And I do so several times a year. I was good for 15 years of traveling to the US. But lately, I’m always told I should cross the border using a US passport (I don’t own one; never did). And they always make me wait a little before they say “OK for this time”
So I play dumb and tell them I was convinced it was illegal to have two passports. They use to give me a passport application which I would take but never use. Two months ago, for the first time, the agent said he could see in my file that I had been crossing the border w/o US passport and that it was going to be my last time. He said “I’m putting a note in your file, next time you won’t be allowed”.
Well, that next time is this Sunday 🙁
I guess I’ll find out if he really wrote a note in my file…
Steve.
@Steve, hi and welcome to IBS. You’re going to need to do a lot of research before you make up your minds, but I’ll try and get you started.
Firstly there is a difference between renunciation and relinquishing (apart from the cost). The two terms tend to get interchanged, especially in US documentation. To renounce your citizenship is a conscious decision on your part that this is something you want to do and so you make an appointment and go to the embassy/consulate to take the Oath of Renunciation in front of the consul. It currently costs $2,350 to do this so bear that in mind. You don’t need to give a reason for your decision, it’s your right under the US constitution to renounce if you want to.
Relinquishing is where you’ve performed a certain action or actions in the full knowledge that doing so will cause you to lose your US citizenship. In your case this would be working for the Canadian government, knowing that by doing so your US citizenship would be lost. With a relinquishment you make an appointment to go to the embassy/consulate to tell them that you’ve relinquished by doing such and such on such and such date with the intent to lose your citizenship. This costs nothing in the way of fees, unlike renunciation.
These links will help you get started with your research:
http://maplesandbox.ca/wp-content/uploads/2014/03/Synopisis-Ricardson-London-Ontario.pdf
http://isaacbrocksociety.ca/department-of-state-forms-and-procedure-manuals-for-renouncingrelinquishing/
http://isaacbrocksociety.ca/2011/12/12/relinquish-dont-renounce-if-you-can/
So in a nut shell, you have the possibility to relinquish by working for the Canadian government while your brother would have to renounce.
Why should you do it? Sooner or later your bank/financial institution is likely to ask you about your American birthplace if they have any inkling at all that you hold US citizenship. In which case they will want you to sign a W-9 form so they can pass your account info on to the IRS. If the IRS makes further enquiries about you the bank may want proof that you’re US tax compliant – not to mention the IRS! There are two paths you can take: go through the hassle of getting a Social Security Number (SSN) and do the necessary back filing of returns or do nothing about the tax side at all and simply relinquish/renounce so that if your bank queries your American status you can present them with a Certificate of Loss of Nationality (CLN) to show you’re no longer American.
If your birthplace appears on your passport you also run the risk of increasing hassle by US border guards about why you’re not travelling on an American passport as you’re supposed to. Having a CLN will prove that you are no longer an American.
You might like to research other peoples’ experiences at the various embassies/consulates if you have a choice of which to use and you’ll find them here:
http://isaacbrocksociety.ca/consulate2/
Don’t rush into any decisions until you’ve both researched thoroughly what it will mean for you. Bear in mind that to book an appointment at an embassy/consulate is running well into next year with the wait for the CLN to actually arrive in your hands being as long or longer, sometimes over a year.
I’m sure you’ll have more questions so come back and ask them and we’ll do what we can to guide you through the American citizenship maze.
@Steve, if you want to keep the option to relinquish then DON’T apply for a US passport. The embassy/consulate will see that as proof that you didn’t mean to give up your citizenship when you started working for the Canadian government.
Steve: Normally I suggest doing as little as possible. In your case, you are only 44 and presumably want to travel south for many years.
You are theoretically entitled to say you relinquished. You could say so to a border guy who might not accept that. There are links to the 7 ways to have relinquished here and at Maple Sandbox.
N.B. An oath is not required.
Intent to relinquish is all important.
Some people have been refused relinquishment even tho they were entitled. In that case you could decide to renounce.
If you renounce, you are supposed to contact the IRS. This means filing form 8854 and possibly filing 5 yrs. of tax returns. ( a world of pain)
Some Brockers haven’t bothered ‘contacting’ the IRS on the grounds that a) they were wrongfully denied relinquishment and/or b) what are they gonna do?”
@ Steve You are getting good advice here. You can look into a relinquishment if you qualify, INTENT is extremely important, but your brother may have to make a different decision. Also check out the citizenshipsolutions.ca website in addition to all the information here. It is unfortunate that you need to travel to the US for work, this situation will make that difficult. With FATCA and your work, you will feel a lot of pressure to move quickly, but be careful, you need to make an informed decision. You are not alone, you will find many knowledgeable people here.
Do not go running to lawyers or accountants yet. You don’t say where you live but lawyer, John Richardson (citizenshipsolutions, he is on our side and is an exception) does information sessions on this most frequently in the Toronto area for a nominal fee. He has travelled all over Canada to provide these sessions.
Many of us are in a similar situation and struggling with this. I too was born in the US and so were my siblings and moved with my Canadian parents in the 1960s to Canada as young children. We have never thought of ourselves as US citizens. We also have no connection to the US, no passport, no work history, no property, no SSN, nothing. I have not encountered problems at the border but have travelled infrequently. I think the border crossing will become more difficult with a US birthplace on your passport. The FATCA witch hunt is another worry.
I’ll put on my devil’s advocate hat now. Could the fact that Steve not only did not tell the US border guards that he had relinquished and was thus not a USC, but also accepted a passport application from them, be used as proof that there had been no previous intention to relinquish? This would assume the State Department would have access to this information.
@Steve. If they give you more hassle at the border this coming Sunday, tell them that because of their previous admonitions you have looked into it and have determined you can’t get a US passport for the simple reason you are not a US citizen anymore. Obviously they think you are a US citizen; it’s up to you to tell them you are not. They are border guards, not experts on US citizenship law.
Working for a foreign government is one of the 7 expatriating acts according to US code. It all depends entirely on your intent at the time you accepted such employment and, of course, your actions since that time. If you intended to lose US citizenship you lost it. This is for you and you alone to determine. The US government has nothing to say about it. A nice bonus is that you can sidestep that $2350 fee if you should decide to apply for a CLN.
Applying for a US passport would be totally inconsistent with claiming that you lost US citizenship so do not let them force you to do it. Be prepared to be turned back but do not let them intimidate you. If it really comes down to that I’d register a complaint with the Canadian government and see if I could turn it into an “international incident” just to stir up a little s–t.
Your troubles are very strange because I have been entering the US for several years now with a Canadian passport with US birthplace and have received no hassle at all. Maybe you need to try a different border crossing. Could be the goons at your particular crossing haven’t yet got the memo.
Wow! Thanks to all of you. I’m still going through all the posts.
Some additional information.
When I joined the government, I had to pledge allegiance to “The Queen in Right of Canada”. I had a secret security clearance. And I had a green passport to be used for all work traveling. Could that not help me establish I new I was giving up my US citizenship?
Once, I did try to explain to a border agent that I had been instructed to not travel with a personal passport while on official duty. But that got me into a long argument with the agent. At one point he got mad and told me “as far as my country is concerned, there is only one passport that exist, the US passport. You must travel with your US passport. We don’t care about your green passport.” He also asked me “Are you not proud to be a US citizen?”. So I learned not try to explain this again. I just played dumb and took their form instead. And I have a witness to this event. That was about 4-5 years ago.
The “goons” are at the Ottawa airport. I also run into issues a few times in Toronto. Never had an issue in Montreal, Calgary, or Vancouver.