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
Do I have this right?
1) a dual-citizen from birth who has never worked in the US or filed anything to the IRS and wants nothing to do with the US may be forced by FATCA and the banks to renounce in order to have a CLN to show the banks
2) this same person could then ignore ithe IRS and not file any taxes, FBARs or 8854, and never travel to the US again
3) if this same person wants to travel to the US, they have to file 5 years of taxes in order to complete the 8854 certification of tax compliance
The Streamlined Filing Procedure only requires 3 years of taxes, so in the case of #3 above, I’m not sure how to file all the taxes and FBARs required.
@WhatAmI,
It appears that Streamlined Filing is for those who wish to remain US citizens and fully comply from that point forward like good US citizens.
To all of you who have commented on my status & offered advice & information I thank you.
I have fewer days & nights that I feel the terror of all of this because of all of you & I am grateful.
WhiteKat is there a way we can get in touch?
WhatAmI Not quite right.
You do not need to renounce if you don’t wish to. You do not need to tell your bank where you were born.
If you did choose to renounce but don’t file anything, there is nothing at this time to stop you from travelling south.
@KalC –
I’m going to try to get a back-dated CLN but if that fails, I will renounce. I was born in the US to Canadian parents and moved back to Canada when I was a child. When I was 18 I went to the US consulate to “get rid of” my dual citizenship but was told dual-citizenship didn’t exist, that I was Canadian, and shown the door. Of course, I have no proof of that, and it’s going to cost thousands to get it if I can’t get a CLN directly.
So, I might have to prove to the banks that I’m not a USP. But, maybe not, since I don’t have over $1,000,000 in any (or total of all) non-RRSP account.
My Canadian passport shows a US birthplace and this is or will be problematic if trying to visit the US if I don’t renounce. If the IRS and border people tie their systems together, they could potentially see our tax status when we enter the US. Maybe that’s being paranoid, but several other people have mentioned this too. I won’t risk an expensive vacation that for example has to make a connecting flight in the US if there is some risk of being detained.
I have done nothing ever since moving to Canada to show that I thought I was a USP. Never had a passport, voted, worked or lived in the US, etc.
Two bits of news. (1) Chance conversation with woman ca 25-30 this morning. Her grandmother recently died. Born US, came to Canada at age 2. Estate now nastily entangled with US requirements. (2) Small refund cheque, as calculated, received from IRS for 2012 final return. Here’s hoping for last contact ever with that outfit. Sauve qui peut.
@Tortured,
I believe we could arrange for one of the admins to help us get in touch.
I think you’re both already in touch with pacifica. I’m sure she would be happy to help without your giving your info to another person.
@usxCanada,
Did you mean the granddaughter came to Canada at age 2, not the grandmother?
Is the grandmother’s estate in the US? Is this where she died?
I
@WhatAmI
I agree with KalC.
Re: your first point, do you live in Canada? If so, take heart. Canada has not signed an IGA yet. If it does, we’ll need to see what is actually in it before we know what situations (if any) require a CLN at the banks.
Also, we have 100’s of thousands of angry (or soon to be angry when they find out what we know) so-called ‘US persons’ living in Canada who won’t be voting Conservative ever again if Canada does not tell USA what to do with its FATCA. If the CG is stupid enough to sign, there will be plenty of us waiting in line to take part in several class action law suits .
In my opinion, chances are that you and I will never NEED a CLN at the bank.
WhiteKat –
Grandmother came at age 2. Granddaughter is only Canadian as far as I know, we didn’t go there. It’s the grandmother’s estate, situated in Canada.
@Calgary411, not necessarily so. My tax preparer is doing a streamlined questionnaire for me and I’ve already renounced. For those who renounce it’s more a question of do you go into an OVDI program and know you will be penalised or go streamlined and hope you won’t be because you’ve made a case for not knowing you should have been filing in the first place and weren’t wilfully being non-compliant. At least that was my understanding.
Hopefully the papers will arrive today so I can get them off in the post. I want this done with so I only have the final bit next year to deal with and then just sit and wait to see if I owe anything.
Thanks, Medea, for helping me understand your process. Will that, then, be the end for you? … Will you be filing the 8854 and, if so, the other two returns of five so you can sign-off through that process and not be deemed a “covered expatriate”? Or, will you still file the 8854 and answer no to the question of five years of compliance; ignore the US from that point and never need to travel there, having your CLN for banking purposes? (Perhaps you’ve explained what you will do or not do regarding the 8854 and I’ve just missed that.) As Petros and others have explained, it should be OK to knowingly do things that way.
I’m filing from 2006 to 2012 and then will do the 2013 filing and 8854 form later. It breaks down like this:
Form TDF90-22.1 FBAR for years 2007-2012.
Streamlined questionnaire and letter for years 2006-2011 (late filings)
IRS form 8854 for year 2013
Damn docs didn’t arrive today so am going to have to chase them up. Has anyone ever filed their FBAR’s online and then sent in the streamlined questionnaire and disclosure letter snail mail?
To be clear on the streamlined versus OVDI this is from the letter I got from US Tax Services:
“Please note that you qualify for the new IRS streamline filing procedure, the advantage of the streamline procedure is that it allows faster processing of your tax returns and foreign bank accounts reporting and this reduces the cost of compliance.
The downside of the streamlined procedure is that it does not provide protection from possible criminal prosecution should the IRS and Department of Justice determine that a taxpayer’s particular circumstances warrant such prosection. These determinations are based on facts and circumstances of each case. Otherwise, taxpayers with undisclosed foreign accounts and assets may want to participate with the Offshore Voluntary Disclosure Program (OVDP) to obtain clearance from the IRS Criminal Investigation Division. Be aware that OVDP participants are required to pay a mandatory penalty while those using the streamline procedure may avoid the penalty when no taxes are owed.
Please note that currently the IRS position is that a submission under the streamlined procedure shall disqualify a taxpayer from later using the OVDP.”
Thanks, Medea. I “get” how you are proceeding now. Yours is not for only three years of tax filings but the number the US requires signing out with IRS Form 8854). You will, though, use the ‘streamlined’ vehicle which people can file for only three years (but not limited to only three years) and then continue being a US citizen and in tax compliance from that point on. Thanks for your patience with me.
@Media & calgary411
I’ve talked informally to 2 different tax people now, and the strong impression I got was that only 3 years of returns could be filed with Streamlined. Now it sounds like you’re saying that is not the case. Can someone possibly definitively clarify this: is it possible to file more that 3 years of returns under Streamlined?
TIA
@tdott, this is from the IRS website:
“Taxpayers utilizing this procedure will be required to file delinquent tax returns, with appropriate related information returns (e.g. Form 3520 or 5471), for the past three years and to file delinquent FBARs (Form TD F 90-22.1) for the past six years. Payment for the tax and interest, if applicable, must be remitted along with delinquent tax returns. For a summary of information about federal income tax return and FBAR filing requirements and potential penalties, see IRS Fact Sheet FS-2011-13. (December 2011).”
Here’s the link:
http://www.irs.gov/uac/Instructions-for-New-Streamlined-Filing-Compliance-Procedures-for-Non-Resident-Non-Filer-US-Taxpayers
The only way I can see that you’d get away with only having to file 3 years is if you don’t need to file any FBAR’s.
@Medea
The IRS web page specifies 3 years of returns (and 6 years of FBARs) for Streamlined. But it sounds like you will be filing *more* than 3 years of returns under Streamlined. Is that the case? I ask because I want to file at least 5 years of returns in order to be in a position to renounce. Filing under Streamlined would be preferable if possible, but if 3 (no more, no less) years of returns *must* be filed under Streamlined, then it is not really an option for me. The IRS web page does not seem to allow for more than 3 years or returns under Streamlined according to my interpretation of it.
Do any others have an opinion or, better yet, experience with this?
@tdott
I went with the info I received from the IRS telephone helpline for filing from abroad. I spoke with about 3 different IRS advisors in april/maj and they all said to file 6 years of back tax returns plus 6 years of back Fbars in addition to filing for 2013 on time. And including a letter of explaination for each year for both the tax forms and Fbars. So that is what I have done – 2006-2011 filed back=6 yrs and 2013 on time. Sent by registered post and with a receipt showing delivered (obtained by track and trace).I did massive amounts of research and am very thankful for the help I have received via IBS persons and Phil Hodgens blog. In a moment of panic halfway through the process I contacted a tax advisor I found online and paid about 700 US dollars for advice, which turned out to be nothing more than what I had already learned here at IBS and via the IRS website and telephone advisors and the blog. I now regard this expenditure as a form of pyschological first-aid in a very stressful time.
I ended up doing the filing myself. I would been willing to pay a competent tax person to do it for me, but when I realized that I would have to gather and translate all information, plus there were no US tax experts available “in person” where I lived, there was no tax software I could use etc., I realized “it was was it was” and would have to be a DIY. For me the most stressing part has been the initial realization of the possible consequences and then the confusion as to how to tackle the situation until I buckled down to it. I was no fun to be around for about 2 months. I hope I never hear anything, and have made my appointment to said bye-bye.
@allou – did you send all the back filings to the address for the Streamlined Procedure, or to the “regular” address that you likely used for your “on time” 2013 filing?
@WhatAmI, I sent my back filings to the regular address. The IRS had requested that I back file two years that I had skipped, but they didn’t specify which address to mail it to. Haven’t heard anything since (one year).
@WhatAmI
I did the same as SwissPinoy – I sent them to the address in the 2013 instruction booklet for the 1040 – I did not enter the streamlined programme, though I can see that I would be eligible for it. None of the IRS telephone advisors mentioned streamlined, and I decided to use the “traditional” way to backfile. I was simply unaware that I was required to file, and my income is under the limit for the FEIE. The Fbars have to be sent to a different address. The postage was quite considerable – there was no way to file online from abroad.
I just got home from work at 6:30pm. today. I opened the mailbox AND THERE WAS MY CLN! It took a lot longer than expected but it finally came.
Banany, Banany — Success has arrived at your mailbox. My congratulations!!
@ WhatAmI
This is my first post as I am awaiting the results of my CLN…so I do not want to say much before giving definitive results of my TEST CASE…
Hold off on any decicions at this time and do not file any taxes…
My situation is similar in that I was Born in the US to a canadian mother – US Father…
But immigrated back to Canada in 1963 after my mother divorced and I was given Canadian Citizenship at the age of 10 in 1967…and canadian passport in 1968 at the age of 10…
The short of my argument to the US consulate in Calgary was: ” I AM CANADIAN”…dual citizenship did not exist and in 1979 when I was turned down by STANFORD University as they said I was not a US Citizen – since I didn’t apply for my US Citizenship before age 21 (ergo 1978) and would have to apply as a Foreign student thereby competing for limited acceptances …this was later confirmed verbally by the US consulate in Vancouver when I called them shortly afterwards in 1979 to verify the status of my citizenship…
Calgary initially rejected my status saying I became a citizen as a minor, therefore the 6 reasons for loss do not apply…However when I presented them with this argument…they recanted and filed for a CLN based on my turning 21 and never returning to the US…
I will go into full detail once I receive the CLN as I do not want to mislead anyone…
Please be patient as my Calgary appointment was May 10th, so I expect results any day…
If my case is accepted, then it will prove clear that:
“children who failed to move back to the US as adults after their parents had lost or given up US citizenship (a weaker version of the rule previously struck down in Perkins v. Elg); and dual nationals who lived abroad and had voluntarily claimed benefits of a foreign citizenship as adults. It should be noted that the abolition of these provisions was not made retroactive; people who had lost US citizenship under these provisions did not automatically get it back.”