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’m piggybacking on Joe’s situation b/c it’s similar to my son’s. Do you need to file FBARS for the 6 years even if at no time, any account exceeded the 10K limit? (He has been a student and has no significant assets and very low income. 2014 taxes were first he filed with IRS.)
@Duchesse
FBARS need to be filed if the total in all ‘foreign’ accounts come to more than $10,000.
Note. The banks have to report any US account over 10,000 but have the freedom to report any US account on their books. It is much easier for them to do this than trawl through them all.
Than you for all your comments. I plan to renounce first and catch up on the taxes afterwards with the ITIN. Good to find out that you need to calculate the net worth before the renunciation.
@Duchesse, as heidi says it’s an aggregate figure of any and all foreign accounts. So if for example he had $3,000 in one, $5,000 in another and $4,000 in another they would all have to be reported because their combined total is over $10,000.
@Joe
Just a quick question about when you received you other citizenship.
If you received it before a certain date and have done nothing American, like apply for a US passport, vote in a US election or file US taxes since getting your new citizenship then you may have already relinquished your US citizenship IF it was your INTENTION to do so. You will not then have to file US back taxes.You just need to document the relinquishment at a US embassy by filing 4079 to get your CLN, and pay $2350.
Read the relinquishment section on this site first.
You should
@heidi Well, I was born in Sweden and I have never lived in America. I had US passports before adulthood to visit my grandmother in America. After the age of nineteen I never renewed my passport again. I did the military service in Sweden. I chose to do it even if it could imply losing my US citizenship. From that period and onward I have felt I was no longer an American citizen.
@Duchesse – FBARs are a requirement of streamlined (though I suspect that if aggregate balances are less than $10k, a statement to that effect would be sufficient). If he had no filing obligation before 2014 and 2014 has already been filed, then he is in compliance and streamlined is unnecessary. Outside of streamlined, if aggregate balances are greater than $10k, then FinCEN wants the FBARs (and IRS can potentially assess penalty if not filed), but FBARs are not required to certify compliance on form 8854.
@Joe
I believe that would classify you as a dual citizen from birth, so you did not take another citizenship as a relinquishing act
But serving in the Swedish Military would classify as an expatriating act, in which case you could have already relinquished your US citizenship. You would have to fill in the 4079 and have a backdated relinquishment approved at the embassy. Email them and make an appointment for a relinquishment.
But why are you bothering to renounce if you have a Swedish birthplace? Do the banks think you are an American? Do you have SSN.?
@ Joe,
If you knew and believed that that act would cause loss of US citizenship, as you mentioned from that moment “onward I have felt I was no longer an American citizen” and didn’t act as a US citizen, you could apply for a CLN based on that relinquishing act, in which case the CLN would state that you expatriated yourself on the date your performed that relinquishing act.
Immigration and Nationality Act, s. 349(a)(3)(B):
“A person who is a national of the United States whether by birth or naturalization, shall lose his nationality by voluntarily performing any of the following acts with the intention of relinquishing United States nationality
…
(3) entering, or serving in, the armed forces of a foreign state if … (B) such persons serve as a commissioned or non-commissioned officer; …”
Also, Department of State, Foreign Affairs Manual 1270 Military Service and Loss of Nationality
In general the consulates are pretty familiar with renunciation (s. 349(a)(5)), but some consulates have little to no experience with the other relinquishing acts (they’re all listed in s. 349(a)). So if you choose to go this route, be sure to read up as you may have to point the sub-article out to them. Of course, it’s always important to read up and be prepared regarding expatriation — but with the lesser used sub-articles, sometimes it has to pointed out to the consulate officer.
Heidi mentioned you may have the option of staying under the radar. I recall you mentioned the other day that your bank raised the US citizenship matter with you. With a Swedish place of birth, starting with a new bank (and not doing anything about the US citizenship) might be a good solution for you. One possible drawback comes to my mind, which is if the original bank believes you to be a US citizen, would the original bank report your info because of FATCA? I think annual FATCA reporting applies to accounts that are closed in the current year as well as those which remain open. I’m not 100% sure, though. Others here are knowledgeable about that and I expect someone will post a comment about that.
@Pacifica
When would an expatriating act have had to occur to excuse someone from filing backdated taxes? …before June 2004?
@Joe
As Pacifica notes you would have to have served as a commissioned or non commissioned officer.
Other expatriating acts are working in any foreign government position.
@ Heidi,
I believe so, but when it comes to tax matters, I definitely suggest people read the articles at this link, so they’re clear and knowledgeable about what they choose to do or not do.
http://isaacbrocksociety.ca/relinquishing-acts-performed-prior-to-2004/
Adding my thanks to Joe’s. Wish there was an easier process for persons like my son, who never lived in US and got citizenship (thanks to me) when he was 15, when neither of us were aware of the implications.
Duchesse and Joe,
Be sure to read Allison Christians latest draft article. None of us deserves to take the blame for what we did not know regarding our children’s best interests and how we find ourselves, our families where we’re at today.
http://isaacbrocksociety.ca/2016/01/19/uncle-sam-wants-who-at-ubc-law-this-week-allison-christians-mcgill-university-faculty-of-law/
Joe, So many different opinions- hard to sort them out. Hold off on doing your taxes a little longer until you clarify your position. Firstly, as a dual from birth, you are never going to be liable for the exit tax.
Secondly, you may have relinquished when you served in the military if you were at any time an officer or NCO. This is relinquishing if it was your intent Intent is easily demonstrated in your case because you did nothing afterwards to maintain US ties.
Also, taking a government position in Sweden is a relinquishing act. Same idea about intent applies. If either of these occurred before June 2004 , you have no need to file.
Thirdly, Heidi is right- why bother? What exactly can happen? You might want to change banks and tell the new one nothing. Or you might want to renounce and do nothing. What will happen? Maybe a letter a few years from now? Big deal.
We have people here who were denied the opportunity to relinquish. Some have said ” I hereby self-relinquish-do what you want- I’ll have nothing more to do with you”
As I said, if you decide to do all the filing, you cannot be liable for the exit tax. You most likely aren’t liable for any tax in which case no penalties are applicable. Good luck
PortlandPLC sez to Joe:
Firstly, as a dual from birth, you are never going to be liable for the exit tax.
Never, huh? Try being dual from birth, ditching the citizenship, and then FAILING to timely certify the necessary prior years of tax compliance on an 8854. Firstly is worstly?
Joe – I get a kick out of watching your advisers swarm in to convince you that you had good clear intentions way back when, before you really ever thought much about any of this. That “advice” is worth every cent you do not pay.
Just memorize their scripts.That was an accidental passport you used to have, right?
Always add up what is par for the course before you tee off with Broccultists.
@Joe
Just remember that Canada protects its duals, Sweden does not.
@Joe
Yes, USX Canada is right in his statement that to be excused the exit tax assessment as a dual one has to certify 5 previous years of tax compliance and also live the prerequisite number of years out of the US prior to renouncing. BUT if Joe qualifies for a back dated relinquishment then this does not apply to him. His relinquishment happened prior to when the exit tax rules.
@usxcanada. I am surprised for someone who seems to criticise any of us who try to help that you even deign to say something useful for once.
Do you read a lot of Oscar Wilde?
My plan was to do the 5 years of tax compliance after the renunciation as I don’t have a SSN, could this be problematic?
@joe
If you don’t think that you can qualify for a backdated relinquishment and (escape back tax filing) and you want to go the compliant tax route then you can do as Medea says and apply for a ITIN to accompany your taxes. (Tax identification number).You accountant should tell you the proceedure.Obtaining a SSN is a long, complex proceedure and only really necessary if you want to stay an American and file for the rest of your life.
It may be difficult to prove that it was an act of relinquishment. My rank was the lowest, only private. But in my mind I crossed a line at that time. I will certainly try this option. Maybe if am lucky it will work. It would be nice if I didn’t have to work out the taxes.
I finally got a date for an appointment at the embassy.
When it comes to accountants. Are online preparation services like H&R Block and Taxesforexpats viable options? These kind of firms usually have flat fees but can they do the job properly?
@Joe, if you don’t qualify for the relinquishment because of your military service (though I’d seriously look at that possibility if you can) then renouncing and doing the tax filing afterwards is no problem. The only thing you have to remember is that you must file the 8854 form to exit the system by the 15th June of the year following your renunciation. So if you renounce this year you have until June 15th 2017 to get everything filed. But if your military service happened before June 2004 then I’d try for a relinquishment if you meet the officer status requirement.
Also remember that, before November last year if the consular staff didn’t think you met the relinquishment criteria you could simply switch to a renuncation and pay the $2,350 fee, it may be that because relinquishments also incur the fee now, that you might be asked to pay the $2,350 again to renounce – making a $4,700 hit. Not heard of it happening and frankly it’s a bit hard for them to justify as the paperwork for both is almost the same, but you never know. And if, for some reason, they say they won’t recommend a relinquishment for you, you can always insist that they send the application on to Washington for a final decision. One or two others here have done that and been successful in getting their relinquishment approved by the State Department, despite the embassy’s/consulate’s initial refusal.
@Joe, private will not cut it for relinquishment – you have to have been either a commissioned or non-commissioned officer. Have you worked in the Swedish government system at all – either federal or local? That’s another relinquishment option if you did.
No, so perhaps I should just go for the renunciation.
OK Joe,
If you want to do it all officially, then good luck .
Renunciation is quite a simple process and they can’t refuse you unless they think that you have been coerced. Remember if you think you may be close to the 2,O00,000 Mark, then you should consider re arranging your assets to bring them below this by the day before your renunciation. Phil Hodgen has a blog on this site that discusses this.(bottom of page)
Good luck to you.