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
@Emty
When you request an appointment, they’ll send you a form(s) to complete and a list of documents and information to provide (proof of Cdn citizenship, etc).
@George, thanks I should be able to do that fairly easily so I will add it to the list.
I knew it would be a relinquishing act because we were planning for a family at the time and I had been doing some research after being questioned by a border guard as to why I did not have a US passport. During my research online into what the implications of me being a US citizen would be on my children I came across the The U.S. Immigration and Nationality Act. I was soon to graduate from nursing school and was considering my employment options at that time and saw that taking a position with a foreign government could potentially be an expatriating act. After careful consideration through the summer I decided that it was in the best interests of my soon expanding family and primarily because I felt that I had always been only a Canadian citizen that I would consider my upcoming employment with AHS to be an expatriating act on my behalf.
Yes, I got the email with the other list of documents that they required. I just wasn’t entirely sure what “Original evidence of your prior expatriating act if you are documenting a prior relinquishment of U.S. citizenship” meant exactly for me and if I should be providing anything other than my letter of employment.
@Emty
It doesn’t hurt to take everything you can think of. Employment certification letter, ROE, T4 slips, union statements, pension plan statements, etc. Likely only the letter will be used, but you could mention everything you brought during the interview.
…and the employment letter(s) from the 2nd and other positions that you had later at AHS.
@WhatAmI Thanks, I’ll start compiling my file of stuff. I appreciate your input, thanks again.
Hi all,
I think I have a potentially time-sensitive situation (I may have a window of opportunity to relinquish rather than renounce), and I would definitely appreciate some input because I’m not sure I’ve considered everything. I’m fairly new to this site so I haven’t had a chance to read everything – so if some posts already cover the questions I ask below, please let me know and I will have a look!
I am a born-dual of the US and *European country* (born in *European country*, US father). I lived in the US as a child for about six years, then returned to *European country*, where I have remained. Other than some extended family members to whom I send Christmas cards, I don’t maintain any ties to the US. I have never voted in US elections and in the course of eleven years after leaving I only visited one time, for less than two weeks. I entered the US that time on a US passport, which I had renewed while in college (I was aware that to visit the US I would need a US passport, even if I didn’t know about any of the tax reporting requirements). Otherwise I travel exclusively with my European passport.
I discovered the CBT/FATCA/FBAR nightmare about a year ago. After a lot of stress, paranoia and anxiety, I decided to file under the streamlined program and have since filed for the 2014 tax year. I haven’t heard anything back from either filing so I assume they are ok, and that I can now say I have four years of compliance.
This is where my situation becomes quite particular, and I would appreciate some ‘peer-to-peer’ thoughts on whether I have correctly assessed my options.
In about one month I will start employment with the government of the European country of which I’m a citizen, in a non-political position (but one which is likely to support federal policy-making). I understand that this is an expatriating act if that is what I ‘intend’, and could make me eligible for relinquishment. I would prefer to wait another few years to see if the situation improves for expats post-elections, before taking such a dramatic step as ridding myself of US citizenship. However, waiting would entail filing tax returns after my potentially expatriating act and this might preclude my using my new job as grounds for relinquishment. Is this correct?
Would I even be able to relinquish in the near future, with only four rather than five years of 1040s behind me, or should I try to back-file a 2010 return this month before I start my new job to be on the safe side (and is this even a ‘safe’ thing to do?)? I have read that my embassy requests the tax form asking whether you have been compliant for the last 5 years for relinquishment; this is why I am wondering.
I realize that renouncing is more straightforward but I can’t afford the fee after already forking out so much to an accountant to get into the system. Appreciate any thoughts, thanks in advance.
DoS doesn’t ask for proof of tax compliance. So if you apply for your CLN this year (2015), you have up til 15 June 2016 to back file 2010 so you can certify on your 8854 that you’re compliant for the 5 years preceding expatriation.
The connections between the two are:
(1) Dept of State
Dept of State basically doesn’t care about one’s tax status as the citizenship itself (and the issuance of the CLN) is not dependent on one being tax compliant.
DOS’s involvement/connection with tax is the following:
(a) At the consulate the person signs DS-4081, Statement of Understanding of Consequences; one of the 12 items on it is Item 10, that renouncing “… may not exempt me from US tax income taxation [etc] …”
(b) The questionnaire, DS-4079, at q. 13 (e) asks “Do you file US income or other tax returns?” 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.
(c) Dept of State is to provide IRS with a copy of each CLN they issue as per DoS Interagency Coordination and Reporting Requirements, 7 FAM 1243(a).
(2) IRS
To log out of IRS and avoid covered expatriate status, IRS requires that the person file their exit tax form (8854), their final year form, and the five-years-previous-to-final-year forms, by June 15th of the year following the renunciation (or the year following signing of the 4079, in case of relinquishments).
FWIW, if a person chooses not to file, the citizenship itself remains terminated and the CLN remains valid.
Thank you, pacifica777!
@ rebadelev,
You’re welcome!
I’ve been thinking about another thing you mentioned
A potential problem I can envision with delay in claiming in this situation is:
If you continue filing after performing your relinquishing act and in a few years apply for the CLN – and answer “yes” on DS-4079, q. 13 (“Do you file taxes?”) – that can raise the question, “If you believed you’d terminated your US citizenship, why did you continue to file taxes?”
In fact, since 2004 the law states that one remains a US person for IRS purposes until the date they notify DoS of their relinquishment (26 USC 877A(g)(4))
But if you tell them that that’s why you kept filing, that would show that you knew at least something about expatriating and notification, which pretty much rules out being able to say “Until recently, I thought my citizenship loss was considered automatic by the US govt and/or I didn’t know I had to notify you to make it official with the US govt.”
And as there’s no fee for relinquishment-based CLNs, you can’t say you delayed in claiming because you had to save up the money required (and that’s why you kept filing in the interim years).
Delay in claiming, itself, is not a big deal. Usually it’s because people just never heard about CLNs at the time they performed their relinquishing act. But it’s very important it comes across that your mind was unequivocable about relinquishing when you performed the potentially relinquishing act. So, if you have any indicators of post-relinquishment US citizen type behaviour on your DS-4079, you have to be ready with a good explanation. I can’t think of one in this scenario – perhaps you or someone else might, though.
@pacifica777, again thanks.
Likewise, I can’t currently think of any good way to justify it so that I can keep the relinquishment option open past this tax year without exposing myself to risk if I don’t file. It looks like I’ll either have to take the opportunity this year to relinquish or accept that I may have to renounce in the next few years instead. A lot of food for thought!
@rebadelev, just to clarify, if you get an appointment this year (2015) you have until June 15th 2016 to file your 8854 (slipping finger there Pacifica777). The 8854 form requires 5 years of tax filings so, assuming you’ve already filed 2011 to 2014 inclusive you should file 2010. However, you do not have to complete 5 years of filing before relinquishing. I renounced first and then did the tax stuff afterwards. Having only 4 years at the moment will have no bearing on your relinquishment, providing you don’t file any returns after you start your new job. That is key to your claim that your new position was taken up with the intent to lose your US citizenship. Filing the 2015 is okay as that’s your winding up return, but your suggestion of waiting a few years before acting will make future relinquishment impossible.
The embassy/consulate staff are not allowed to ask you about your tax status when you renounce/relinquish as it’s none of their business. They should point out that you may still have US tax obligations, but that’s all they should do. Yes, there is a question on the 4079 form about whether you have filed US taxes or not, but it’s simply one of many indicators on the form they use to decide whether or not you really meant to lose your citizenship. Remember it’s designed for people who inadvertently lost their US citizenship, not for people who intend to lose it. One yes amongst a load of no’s isn’t going to make them reject the application because many others are doing the same as you, becoming compliant before losing citizenship. You can put something like that on the form if you wish. You started filing to bring yourself into compliance as you knew you intended to give up your citizenship.
I would do some real soul searching about your willingness to relinquish when you hold out hope things will change. Maybe you should weigh that against the convenience and cost savings of being able to relinquish right now.
Relinquishments are predicated on having made a pledge of loyalty to your country resulting in the abandonment of US citizenship. Contrast that with those who are renouncing in clear rejection of US citizenship due to FATCA and CBT. A subtle difference, but a difference all the same, one which could have a different outcome one day.
That last comment was for rebadelev, in case there was any doubt.
@MediaFleece…”Filing the 2015 is okay as that’s your winding up return, but your suggestion of waiting a few years before acting will make future relinquishment impossible.”
That is incorrect, the tax filing obligation is seperate from the loss of USC relinquishment.
The US IRS still considers the person a taxable US Person and needs to keep filing until they get a CLN.
Its a perfect vald explanation as to why @reb kept filing…..
Why did you keep filing? It was a pain in the ___ but I learned I had to keep filing even though I was no longer a USC until I got this stupid piece of paper CLN.
Thanks for the clarification, @Medea. It is a small relief that I can spend the coming months considering what to do without needing to scramble around to file the old return immediately.
@Bubblebustin, that is an interesting angle that I hadn’t considered. While I may have a glimmer of hope for things improving for expats who haven’t renounced/relinquished, I’m not sure I like the odds of the US gov’t inviting ex-Americans back into the fold. But it is true that I should consider the options philosophically, as well as economically.
@ George,
I agree with Medea that filing taxes for a few years after the relinquishing act would present a problem. As I see it:
Relinquishers have been asked, “Why did you wait until now to apply for a CLN?”
Usually it’s because ”I knew and believed that I was terminating my US citizenship by taking that government job, but I never heard of a CLN until recently”. It’s really common that people hadn’t heard of CLNs, and it’s no big deal.
But if they ask, “If you believed you were not a US citizen these past few years, why did you keep filing taxes?”
And you reply, “Because I read/heard that until the day you apply for a CLN (“notify Department of State”), IRS considers you to be a US citizen for tax purposes,” that shows you knew at least something about CLNs and notifying DoS. So, you can’t say you never heard of this until recently.
So, then they start thinking, “Was this guy hedging his bets for a couple of years, not really sure yet that he wanted to relinquish at the time he performed the potentially relinquishing act?”
If there were a fee for relinquishing, it could make sense that a person knew about CLNs and IRS, but it took him 3 years to save the money for the fee. But there’s no fee (TG!), so scratch that. The only other reason that’s come to my mind is the person wanted some more time to think it over before they made it irrevocable – and that, of course, will not fly with DoS.
So, I think the combination of — (1) delay in claiming; and (2) continuing to file taxes for years after the potentially relinquishing act because you knew the rules of expatriation; but (3) can’t explain, to their satisfaction, why, although knowing this, you chose to wait these years before claiming — could very well (even most likely) be fatal, because it brings one’s intent at the time of the act into question.
@ George I was replying to this question from rebadelev
“I would prefer to wait another few years to see if the situation improves for expats post-elections, before taking such a dramatic step as ridding myself of US citizenship. However, waiting would entail filing tax returns after my potentially expatriating act and this might preclude my using my new job as grounds for relinquishment. Is this correct?”
If she starts her new job soon, but doesn’t relinquish for a few more years then using said employment as her reason for relinquishing will not stand up to scrutiny. If she can manage to get an appointment to relinquish this year/early next then using her new governmental position will be a valid reason for granting a relinquishment.
As for continuing to file until you receive your CLN the instructions themselves are confusing. Early on it says this:
“Date of relinquishment of U.S. citizenship.
You are considered to have relinquished your U.S. citizenship on the earliest of the following dates.
2. The date you furnished to the State Department a signed statement of your voluntary relinquishment of U.S. nationality confirming the performance of an expatriating act (provided that the voluntary relinquishment was later confirmed by the issuance of a certificate of loss of nationality).”
Then further down this:
“When To File
If you expatriated after June 16, 2008, attach Form 8854 to your income tax return (Form 1040 or Form 1040NR) for the year that includes your expatriation date, and file your return by the due date of your tax return (including extensions).”
Given that you’re supposed to wind things up by filing the 8854 in the year following your relinquishment/renunciation year waiting past that time for a CLN to arrive before doing the final filing is crazy. The only reason, possibly, to continue filing is if there is a real doubt about whether or not a CLN for a relinquishment will be granted. I believe the question has come up before here and iirc the concensus was to behave as if you already had your CLN and file accordingly.
Hi everyone, new to this thread and am overwhelmed by the amount of information and help provided. I want some advice on what my options are in terms of renouncing/relinquishing, and what my tax obligations would be.
I was born in the US, but never resided. Parents are both *Asian country* citizens, which led to me being a citizen also. Moved to Canada in 2003, and became a Canadian citizen in 2008.
I have no family, residence, or ties in the US, except the possession of a US passport which will expire in 3 years. Hoping someone could shed some light on my situation. Thank you!
Hi JFUD. Welcome, you will get lots of advice here. Not all of it will be consistent. Choice no 1. Bank: hello Mr. Fud. We are happy to open an account for you. JFUD thank you. Bank Are you or have you ever been a U.S. Person? JFUD. No. Bank where were you born ? JFUD. Asian country. (Or alternatively NYOB.) In other words carry on as if nothing has changed
Choice 2. Make an appointment with a U.S. Consulate and tell them you relinquished your US citizenship when you became Canadian. There is no fee . It was your intent to give up your US citizenship. Intent is important. Do nothing to suggest otherwise .
You do not need to be tax compliant first. This is a common misconception. In fact there is no need to be tax compliant at all as long as you have no US ties.
Choice 3. If you choose to become tax compliant, you must either already have a social security number or a TIN ( taxpayer ID no.) ( you can’t get a ss number now because remember you relinquished in 2008).
Phil Hodgen at Hodgen law.com has just started a series about an Irish/ English/American girl who wants to relinquish and become tax compliant. Hodgen is a very bright accountant who would never advise you not to go by the book. The series will chronicle her real life adventures.
If you do decide to file you need 5 yrs. of back taxes and form 8854 for the yr. you document relinquishment. ( presumably 2016 due by mid 2017 along with your partial year tax return. ) it’s possible but not easy to file yourself. Figure 5-10,000 for an accountant.
Whether or not to file 5 yrs. of FBARs is optional. They are easy to file. It’s online and there is a drop down menu or reasons for late filing. There is a school of thought That retroactive FBARS are unnecessary because they come under a different statute. Good luck.
@ JFUD,
Regarding relinquishment, you mentioned you have “possession of a US passport.” Have you used (or renewed) it since becoming a Canadian citizen?
If a US passport was used or renewed after performing the potentially relinquishing act, it has not always been fatal to a relinquishment claim, but the odds for success are not good, particularly from reports we’ve received here in the past year. I wouldn’t say it’s a definite no, but it is definitely problematic.
I have my appointment for the formal notification of my relinquishment and application for my CLN coming up before the end of September. I am American having lived in Canada since 1959 (born in 1952), have a SSN (had a part-time 3 week job while at university in California in 1980), and have lived in Canada as a Landed Immigrant until April of 2015 when I became a Canadian citizen. Since becoming Canadian, I applied for my Canadian passport, travelled with it to the States this past July, voted in Canada for the first time in the provincial election in May and intend to vote in the Federal Election in October. The only ties I have to the States are family and friends. As I wanted to travel to the States, the fear of being fined at the border for having never filed my taxes, or worse being detained, I became compliant going the accountant route to make sure it was done properly in the spring of 2014 (5 years back and FBARS), and filed again this spring, 2015. From what I’ve read on this site and I’ve been all over it, my understanding is that because my intention was to relinquish my American citizenship by acquiring my Canadian citizenship, I do not have to pay a fee. I have seen nothing about this on the U.S. government site, only on the Isaac Brock site. I want to be prepared for my appointment and would like some documented ammo to refer to if I am told I need to pay the $2000+ fee. Could you please advise?
Here’s the official document.
https://www.federalregister.gov/articles/2015/09/08/2015-22054/schedule-of-fees-for-consular-services-department-of-state-and-overseas-embassies-and#h-15
The new fee comes into effect on 9th November 2015 (see near bottom of the document – Revising Item 8 in Part 22 Schedule of Fee for Consular Services.)
@Nofeedocumentation, “As I wanted to travel to the States, the fear of being fined at the border for having never filed my taxes, or worse being detained, I became compliant going the accountant route to make sure it was done properly in the spring of 2014 (5 years back and FBARS), and filed again this spring, 2015”
Words are important……………..
The form you fill out is asking the questions from your date of relinquishment.
Let me put it another way.
From the date you became a Canadian Citizen did you…..
a. travel on a US Passport? NO
b, travel on a foreign passport? YES (bonus points for going to the USA on a foreign passport, bravo)
c. filed US taxes? NO
——–
For about twenty dollars, to make yourself stronger, you may want to go to a Canadian notary or lawyer and swear an affadavit that you naturalised as a Canadian Citizen voluntarily and with the intention of relinquishing your US Citizenship.
George. You recommend swearing an affidavit at every turn. Have you actually found this to be necessary or useful?
@ Duke,
That interests me too, as in general, I don’t see a sworn statement as adding much, if any, weight to a relinquishment case. A sworn statement is presumed to be true, unless other facts contradict it. Then the presumption falls. So, you’re back to actions speak louder than words.
Before performing the relinquishing act
I think an affidavit might be useful if sworn shortly before naturalisation — not because it having a statement notarised makes it more true, but because it locks in the date the person had the intention. As well as swearing about your intention on your DS-4079, after performing the act, you’ve also sworn to it before performing the act.
A sworn statement prior to the relinquishing act can’t hurt, but I’m not aware of anyone being denied a CLN because they didn’t have one. The consulates generally don’t seem to have been making an issue about contemporaneous proof. I do know two people were asked if they told anyone, specifically it was asked if they’d e-mailed a family member or friend, about their intention prior to their relinquishing act. They hadn’t and they got their relinquishment-based CLNs.
Unless I had some specific circumstance that made me feel I should be very very clear prior to my relinquishing act, I’d save my money.
After performing the relinquishing act
If an affidavit is sworn say 10 years after naturalisation, it shows that in 2015 you’re saying you had the intention to relinquish 10 years ago. It doesn’t carry the weight of a contemporaneous statement, and you’re already swearing to this on your DS-4079 anyway. So, I see an affidvait as redundant.
If there’s a delay between your relinquishing act and your applying for a CLN, the best proof is not what you say, but what you did (and didn’t do – eg didn’t act like a USC) after your relinquishing act.
So, I’ve never been able to think of any purpose a sworn statement of intent – in addition to swearing to it on the 4079 – might serve after the relinquishing act.
For a self-documenter, a sworn statement of intent wouldn’t be redundant as there’s no 4079 involved. It can’t hurt and it might well be useful. But I don’t know how it’ll play out in this context, because although I know quite a few people who are self-documenting, I don’t know many who have had to prove their non-US status yet. Because I don’t know, I’d definitely consider swearing one if I were self-documenting, but also consider that it’s not required by the IGA and that swearing to something doesn’t make it more true, just creates a presumption it’s true, and in many situations a well-drafted unsworn statement does the job well.