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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

 

10,433 thoughts on “Renunciation and Relinquishment of United States Citizenship: Discussion thread (Ask your questions) Part Two”

  2. Another woolly article on the subject. It gives the impression that people are jumping ship without already having lived in another country for some time, which I doubt applies to very few renunciants. Most have been living abroad for many years and know what benefits/penalties they’ll have to deal with when they switch.

    There is no “first rule” that you must have a new home nation. Yes, it’s certainly recommended in these days of global travel, but it’s not necessary for renunciation purposes. If you want to risk living as a stateless person then you can renounce without having another citizenship to fall back on. It’s difficult, but not impossible.

    Where has he plucked the less than a thousand renunciations last year figure from? Official figure is 1,781 with FBI mentioning around 3,000. Does he know of some secret statistics that everyone else has missed?

  3. This is just a very grateful shout-out to swisspinoy, notamused, and especially pacifica777 for your earlier help regarding my overdue (15 months!) CLN.

    I e-mailed and then called Brett Pomainville in Washington two weeks ago. He was extremely helpful, even apologetic. It appears that there were certain “system problems” at the Jakarta consulate that affected quite a few applications. In any case, I received an e-mail from DoS this morning indicating that the CLN is on its way to Jakarta. You don’t what a relief that is. Wait a minute — yes you do 🙂

    Thanks again, everyone.

  4. @ Asian Expat,

    Congratulations! What a long wait. But so happy to hear they handled it so quickly once you got in touch with Mr. Pomainville!

  9. @AsianExpact

    Congratulations on your liberation. You can now take a deep breath and take it all in.

  10. Has anyone else who renounced or relinquished through the Toronto consulate in November 2012 not yet received your CLN? I am starting to wonder what’s going on, The consular officer said 3 to 6 months. Maybe it’s a sign that a lot more people are renouncing and relinquishing through Toronto and there’s a log jam? And congratulations Asian Expat What a long wait you had!

  11. Banany, my CLN obtained through Toronto took about 8 months to arrive. The bottleneck is more likely in Washington than in Toronto. Just be patient, the Bureau of Consular Services in Washington probably is swamped, and with the “sequester” going on, who knows how many staff they have lost. 🙂

    .

  12. Returns do seem to vary wildly. I know Switzerland’s nowhere near as big as Canada, but I got my CLN in six weeks with an estimated return time of 2-3 months, so Washington is not necessarily where the holdup is. Banany, I’d check with Toronto/Washington and see if they have any news. Sometimes things fall through the cracks as Asian Expat’s experience has shown.

  13. When you go to the Toronto Consulate to renounce and turn in your passport (if you have one), do they give you anything that proves that you renounced. Does it mean you stay put in Canada and can’t travel with your Cnd passport until the CLN arrives?

  14. @ Small

    Travelling in the interim is not a problem.

    You get a receipt when you pay the $450. In reporting on his renunciation at Toronto, Extex mentioned:

    “She explained that it would take about four months for the State Department to return the CLN, and that I would be contacted about whether I would like to pick it up or have it mailed. (A brief aside: I live about 3 ½ hours away so it will be the latter). She returned the receipt for my payment and said that I might want to make copies, since it is heat-transferred and can quickly fade into unread-ability, and to keep a copy with my Canadian passport as proof of the transaction as well as why I am travelling on a Canadian passport and have a US birthplace”

    People have also been told at their meetings that once your CLN application goes into processing, that fact is made available on the database that DHS can and/or does access when you’re at the border or airport.

  15. Before Murdoch/ News Corp. purchased the WSJ, it was known for quality, objective writing (and its opinions mostly stayed on the editorial page). In 1998 an article “Taxing Issue: How Do You Quit Being An American? With Great Difficulty” appeared in the WSJ, which I was able to locate on the internet today. It gives some history to the Federal Register’s “Name and Shame” list and exit tax:

    http://www.debito.org/naturalization2.html

  16. I understand one has to file US taxes for 3-5 yrs. to renounce, but what does one do if one was a student and didn’t make enough to file?

  17. Have a read here:

    http://www.irs.gov/Individuals/Students and see what advice the IRS has.

    If you have any foreign bank accounts they’ll need to be listed on a FBAR form if the total of any/all accounts exceeds the equivalent of $10,000 at any time of the year. So whether you have one account that has, say the equivalent of $11,000 or 3 that have $2,000, $5,000 and $4,000 you would have to file a FBAR for that year.

  18. @Small.

    There is NOT a requirement to have filed US tax returns for 3 to 5 years BEFORE being able to renounce. The renunication is with the Department of State and they do not ask if you are compliant with US taxes.

    There IS a requirement to state on Form 8854 that a person is compliant with all US income tax requirements by June 15th of the year after their renunciation date (which will amount to five years of compliance, plus the partial year return for the year of renunciation).

    This essentially requires that the person intending to expatriate certifies under penalty of perjury that he or she has fully complied with income tax and information disclosure filing requirements. If in fact no returns had been filed, such expatriate would be required to do so covering the preceding 5 year period and in the course of doing so provide full disclosure of their worldwide assets. Additionally, they would be required to certify that they have complied with all federal tax obligations and paid all taxes due over the course of the preceding FIVE years. Any taxpayer who fails to submit this certificate of five year tax compliance would be subject to the mark-to-market effective exit tax described above irrespective of whether they met the income tax liability or net worth conditions normally required to trigger such tax.

    Here is the first link to come up on a search for the minimum income to be under to not be required to file a US income tax return. http://www.equisi.ca/faq/faq001/, which looks like an accurate piece, although I haven’t yet read the whole thing.

    Many Canadians who are U.S. citizens have in past years failed to file U.S. tax returns because they were entirely unaware of their requirement to do so. In some cases, however, such individuals deliberately chose to ignore such filing for a variety of reasons described further below. It has been estimated that there are approximately 900,000 U.S. citizens or qualified U.S. residents presently living in Canada. At the same time, statistics suggest that for the 2009 year less than 100,000 of these dual Canadian – U.S. taxpayers would have filed a U.S. tax return.

    The fact is that all U.S. citizens as well as individuals deemed by the Internal Revenue Service (the “IRS”) to be U.S. residents for income tax purposes are required to file annual U.S. income tax returns. Unlike Canada, the United States taxes its citizens on their worldwide income, regardless of the source of such income. Accordingly all income, including Canadian and other foreign source income, is required to be disclosed on U.S. tax returns to be filed annually by all “U.S. persons” living in Canada with a gross annual income from global sources for the 2012 year of at least $ 9,500 ($19,000 if married and filing jointly.)

    …

    In addition to, and independent of, U.S. annual income tax returns filing requirements, Canadians who by virtue of their U.S. citizenship or otherwise are deemed “U.S. persons” for tax purposes, are required to separately file a Foreign Bank and Financial Account Report (“FBAR”) disclosure return. (See Tag #4) Such return must be submitted annually where the U.S. taxpayer (i) has financial interests in, (ii) or designated forms of signing authority or control over, Canadian or other foreign bank or financial accounts to the extent that at any point in time during any year the aggregate amount of all such accounts exceeds $10,000. The term financial accounts for these purposes would include savings, checking, mortgage and even retirement savings accounts. Clearly, this is a very low minimum threshold level, and would probably apply to the vast majority of U.S. persons living in Canada.

    If your daughter’s income is/was under $9,500 in any year, she will not have a requirement to file a US tax return. Additionally, if she holds less than a total of $10,000 in all bank / financial accounts (not one account but a total of all accounts), then she will not be required to have completed and filed a US FBAR (Foreign Bank Account Report, Form TD F 90-22.1 (http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Report-of-Foreign-Bank-and-Financial-Accounts-%28FBAR%29). These requirements, according to US citizenship-based law, also apply to Green Card (Permanent Resident) holders if they have not cancelled their Green Card with the proper form, I-407.

    All US Persons in Canada should absolutely keep this in mind:

    The “promise” from Canada’s Finance Minister James Flaherty:


    I should also note that penalties imposed by the IRS under FBAR will not be collected by the Canada Revenue Agency (CRA) on the IRS’ behalf. While the Canada-United States Income Tax Convention contains a provision that allows for the collection by a country of taxes imposed by another country, this does not apply to penalties imposed under laws that impose only a reporting requirement. Furthermore, the CRA does not and will not collect the US liabilities of a Canadian taxpayer IF THE INDIVIDUAL WAS A CANADIAN CITIZEN AT THE TIME THE LIABILITY AROSE (whether or not the individual was also a US citizen at that time).

    More than ever and sooner rather than later, it is beneficial for any permanent resident of Canada to obtain Canadian citizenship — if that is their wish. Anyone living in Canada (or any other country) who retains their US only citizenship should absolutely be aware of the responsibilities, consequences (as well as benefits if that is what they see). Even if US citizens reside in Canada temporarily, fully intending to return to the US to live at some later time, they must be aware of the requirements of US citizenship-based taxation law. No way any longer someone should be a foolish ostrich in denial — or at least that’s the way I see it. For ourselves and for our families, we must all be as aware as possible and make our decisions accordingly.

  20. Since I was not able to speak with a human at the Toronto Consulate, need to verify if the fee is STILL $450.

  21. @Small — if you renounce under section 5, it is $450. If you relinquish under section 1-4, it’s free.

  22. @Small,

    Yes, $450 USD is the fee for renunciation. And, the receipt is important to hold onto until the CLN is received.

  23. @ Small,

    Re contacting Toronto. Bloody frustrating not being able to make phone contact. You could earlier in last year, no problem. But when I phoned again in October 2012, it was no longer possible to get a human (at least I couldn’t figure out how to).

    However, if you need info from them, they seem to be pretty good with e-mail, in my experience as they replied in about an hour — actually two people did, as each handled one aspect of my question.

    So, I give them high marks on handling e-mail. But, still there’s times you really want to speak with a person …..

  24. @Small,

    Note that your daughter will have to renounce as, I think, she would have been born a dual citizen of both Canada and the US versus having naturalized?

  25. As of today at http://canada.usembassy.gov/consular_services/fees/questions-and-answers.html

    Overseas Citizen Services Fees

    Q: Why does it cost so much money for me to renounce my U.S. citizenship?

    A: Renouncing one’s U.S. citizenship is a significant step that requires thorough and careful attention. We take seriously our responsibilities for ensuring that people know the consequences of their decision and that each case is properly handled. As a result, the adjudication of renunciation cases is very costly per case. The new fee of $450 helps cover those costs. For more information on renouncing U.S. citizenship, please consult this guide from the Bureau of Consular Affairs and consult your nearest Embassy or Consulate.

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