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
@ CaptainCanuck
“… its too hard to verbally attack and explain in the media how wrong it all is.”
So true. We all try but It seems these days if you don’t create your image in a thumbnail or compress your words into a sound bite you cannot get through to a majority of people. We’ve all arrived at our untenable situations via a complex route and I know that when I try to explain exactly what has happened and might happen to me, eyes will glaze over long before I finish. If I try the Cole’s Notes version I will likely be hastily judged guilty by both Canadians in Canada and Americans in America. The only ones likely to understand are Americans in Canada … and only those who are aware of what is happening. Many still do not know. It’s all extremely frustrating but I look forward to Joseph Arvay’s day(s) in court when he will put the proper words to the injustice which was initiated by the U.S. gov’t and then egregiously endorsed by the Canadian gov’t.
Our two adult children are Canadians but, sadly, we also claimed U.S. citizenship for them at birth because one of us is U.S.-born. They’ve never lived in U.S and have seldom visited. They need to file U.S. tax returns before then can renounce, but to file tax returns they need Social Security numbers. U.S. Social Security says they must go to the U.S., possibly staying for several days, to get the numbers. Our kids won’t set foot in the U.S. So, the question: how do they get Social Security numbers without going to the U.S? All advice gratefully received.
@Vancouverite, no they don’t. They could renounce without doing anything on the tax side first. That’s the way I did it, renounced first and then dealt with the tax.
But frankly, if they’re not in the US tax system I wouldn’t bother to start now. Renounce, get their CLN’s and then forget about the rest. The US has no way to track them tax-wise so don’t give them the opportunity to do so. The CLN is important for their banks, in case they need to prove they’re no longer American – that’s assuming their banks even know. They have Canadian birthplaces so will not be hassled when crossing the US/Canadian border.
Or they could even not bother to do anything. The only record is their registration by you of their births abroad. They have Canadian birthplaces and I assume never had a US passport so banks aren’t even likely to query their status and border control won’t either. Just quietly forget any American connection – they’re Canadians pure and simple.
To add on to what Medea Fleecestealer said: If they renounced first, they would then need to get an ITIN to file taxes. And the IRS gives out ITINs like candy – i.e. obtaining one is no problem. I *think* you may even be able to send the ITIN application in with the tax returns.
Note that the IRS is supposed to get a copy of all CLNs. So, in theory, the IRS would be aware if they renounced. And, the IRS would, in theory, have at least the name, birth place, and birth date of your adult children. Keep that in mind w.r.t. going the renounce and do nothing else route.
Also note that if they never obtained a US passport they *may* possibly have an out in the future. There is a very small chance of a change in regulations that could exempt certain duals-at-birth from having to have to file in order to log out of the US tax system. So it would be useful to determine if your children fall into that category, and if so, a wait-and-see approach may be best.
@ Vancouverite
I like the sound of the advice in Medea’s last paragraph. RE: getting an SS number. There’s nothing Social nor Secure about it. It might well be called the Surveillance State number now. However, as always, choosing a route through this quagmire is up to the individual. I hope everything works out well for family. It will be the US-born one among you who will have the hardest row to hoe. Good luck!
@Medea Fleecstealer @tdott
2. What are IRS’ procedures for obtaining information on expatriates?
• Certificates of Loss of Nationality and expatriate tax information statements for former U.S. citizens are collected by the State Department from its Foreign Service posts and are to be forwarded to IRS monthly.
• INS provides annually to IRS a computer disc identifying individuals who gave up their residency permits (green cards). However, IRS does not use the data to track expatriates because the data do not distinguish former long-term residents from other former green card holders and generally do not include tax identification numbers.
http://www.gao.gov/assets/100/90271.pdf
@ Bubblebustin,
An update to the GAO document dated 1 May 2000 — Dept of State no longer obtains tax information referred to therein. They do still forward copy of Certificate of Loss of Nationality to IRS, though.
Department of State Foreign Affairs Manual, 7 FAM 1243(c):
Inter-Agency Coordination and Reporting Requirements [regarding expatriation] are in 7 FAM 1240. Section 1243 deals with IRS reporting.
Vancouverite. Listen VERY carefully to Medea and others. Take the time to fully understand every thing you propose to do. Do not rush to get social security numbers and above all don’t get them passports.
Because they were born in Canada, they aren’t in the system and don’t ever need to be.
If, at some time in the future, and after much more study, they decide they need to renounce, they would fit into a category called dual at birth. They would be told by the consulate to file 5 yrs. of tax returns. This can be done after renunciation or even not at all. The best time to renounce according to Phil Hodgen is between the ages of 18 and 181/2
Ther is much discussion on another IBS thread about a proposed regulation which would obviate the need to file any tax returns.
Again, think again. They might not need to do anything. There is no rush. If they wish , they can renounce first and then consider whether or not to file tax returns later.
Vancouverite. You said your adult children won’t set foot in the U.S. There certainly appears to be no need for them to do anything at all .
Even if you have a U.S birthplace you could just NOT go there too and not file or renounce (I think).
@Vancouverite, there really is nothing they need to do. Just forget the American connection. They’re Canadian born, have Canadian passports and no indication of any other nationality, apart from a piece of paper in your possession. Why get into the American hassle when there’s no need to; it will only bring heartache, tears and frustration.
You say one of you is US born. Has that person renounced/relinquished or is planning to? The only possible reason to think about getting a CLN would be if your bank knows of the American connection via the US born parent and queries whether the kids have American citizenship too. But even then it would be much easier to simply lie and say “no”. The bank will be satisfied and you’ve saved yourselves a lot of hassle and pain.
@All
Am not taking issue with nor suggesting any particular action for Vancouverite to take. However you may notice one of the children was born in the US; they are not both CDN born.
@Tricia Moon, no both kids are Canadian born. It’s one of the parents who is US born.
“Our two adult children are Canadians but, sadly, we also claimed U.S. citizenship for them at birth because one of us is U.S.-born.”
One of us – parents – is US born, otherwise there would be no need to claim US citizenship for the kids.
@Tricia
Vancouverite said “one of us was born in the US” I understood that to be one of the parents?
Thanks for your helpful comments. To clarify, we got the adult children U.S. passports when they were infants. They’ve never used or renewed them and they travel on their Canadian passports. How does this change things?
Vancouverite. It changes things ever so slightly. They still have the option to do nothing ; especially if they ‘won’t set foot in the U.S.’
Option 2 is to renounce and forget the rest. This is perfectly reasonable if they ‘won’t set foot in the U.S.’
Option 3 is to renounce, file 5 yrs. of tax returns (probably owing nothing). Estimated cost to have it done professionally is 5-10 k . It is possible to DIY but takes a lot of effort. Good luck to them.
P.S. Option 4 is to wait and see if the proposed Regulations in the 2016 budget paper go through. (unlikely but possible). In that case , they would have no U.S. requirement to file. See the thread on the U.S. proposal to provide relief started on Feb 11.
How do I limit italics?
@Vancouverite, as Duke of Devons says, very little. Something that was done once decades ago isn’t really going to change anything as far as what you do now. If they’d been using and renewing them all their lives then that’s a different story as it proves to the US that they do consider themselves to be American as well. But that’s not the case. They still have the option to just ignore the whole American thing as they have Canadian passports and no betraying US birthplace for the US border control to query them on. If they don’t plan to ever visit the States again then that doesn’t even come up.
Option 5: the Republicans actually will stand by their promise to repeal FATCA if they get elected next year. How quickly they may do it? Anybody’s guess. Mine is that, as they’ve already stated they see it as mainly a contribution/vote catching promise, once they’re in, it’ll go on the back, back burner while they get on with more “important” legislation changes.
@Vancouverite
One thing they have to consider is that banks now ask if you are a US person when opening any new account. They are too afraid of the 30% withhold to risk not reporting anyone with US indicia.
If your kids decide to stay under the radar, how comfortable will your kids be answering “no”
Duke, You had your code just once, at the beginning, but not where you wanted to end (with a “/” preceding the same for end ending). That might be the reason. I see that putting the code in here again put the italics in this comment but I was able to end it. Hope that makes sense.
Vancouverites and Heidi. Nancy Reagan said it best; “Just say ‘No.'”
@Duke
Agreed, but some banks are asking ‘under the pain of perjury’
@Heidi, and how will the banks find out otherwise? If you say you’re not American, what can they do to prove you are? Nothing. It’s a scare tactic. IF they had a copy of someone’s American passport on their files then yes they could make a case for perjury, but hopefully the person involved wouldn’t be stupid enough to say they aren’t without being able to produce a CLN to back it up. But without any proof they have to take your word for it because there’s nothing else they can do.
The U.S. bureaucrats love that phrase. It’s sort of like the old warnings on DVDs threatening you with huge fines and jail time if you were a bad boy or girl.