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
@Chris – the 8854 instructions tell you to file “as soon as possible ” after renouncing. Since you have to send it with your dual-status-year forms, I think that in practice, for a 2016 renunciation, “as soon as possible” amounts to “as soon as possible after the 2017 forms become available. That’s what I did, at any rate. (Renounced 2016, sent 8854 last week.)
Hi iota. The 8854 instructions do say that, but they also say to file it with your 1040 tax returns which you do in the year following the tax year in question. So if you renounce in 2016, wouldn’t that mean filing the 8854 in 2017?
My situation is complicated by poor advice given to me by the IRS and the fact that currently I have no tax record, including a TIN or five years of tax compliance. I am hoping entry to the streamlined process will resolve those issues.
Chris – yes, that’s what I said. If you renounced in 2016, you file the 8854 in 2017. If you renounced in 2015 (as I did), you file the 8854 in 2016.
I have a SSN and a tax record with 50 missing years which is possibly worse than having no record at all. I didn’t bother with streamlined, since as far as I can see I owed the IRS no money even by their arcane calculations, so no requirement to file a return in Renunciation Year or any of the five years prior. I filed six FBARs (counting 2016) and sent them my 8854. Which is now on a tour of PA, courtesy of the USPS. Landed in Philadelphia, so I thought, Great, nearly there. The next day it visited Mechanicsburg and stayed a couple of days, then took off for Harrisburg, where it’s still languishing. I just hope it doesn’t go to Chicago. 🙂
Ah, I see my typo in my post above.
I said “Renounced 2016, sent 8854 last week.”
Should have said “Renounced 2015, sent 8854 last week.”
Apologies.
I see by Calgary’s quoting of the Van consulate email that they are still requiring the last address in the US. I had that question asked of me repeatedly in the Toronto consulate by an employee with a heavy American accent. Several times. For some reason he couldn’t understand that infants don’t know their addresses. It was infuriating.
May I ask why you advise to file 1040 along with 8854 for a partial period (for ex. 1 month) after you renounce? I personally do not intend to file anything besides 8854. I am compliant with everything since I did not get above the threshold of 10500 (or so) dollars earned per year. To be honest I’ve taken up my first job 8 months ago only to save the 2350 needed for renounciation. I have nearly 0 personal savings and I am now waiting only for the exchange rate for the dollar to drop in my country since it is outstandingly high these days. Then i plan to book an appointment in my embassy, file 8854 and be done. No additional 1040.
Jacek. If you are below the earnings threshold there is no need to file a 1040.
…and, The Mom, and Duke of Devon,
I have NOT heard back from the Vancouver US Consulate in answer to my query about their wait time for appointments (they indicated I would hear back within 48 hours). When I made the same query to the Calgary US Consulate, I heard back the same day.
@iota
So, I relinquished last May, do I use the 8854 titled “2015” (yr relinquished), or do I wait for them to release one with “2016” at the top (year of final filing?)?? If the latter, when does it become available?
I swear, EVERYTHING about USA tax is confusing. For all of their “directions & directives”, you’re left even more befuddled than before!
Also, I may be under the income limit to file, should I include a 1040 at all?
Thank you
Thanks Calgary. Was your query to Calgary consulate recent? If so, how long is the wait there?
Jane: Use the 2015 one. See Part I : 4 Check Jan1 2015-Dec 31 2015
Even the title of this document is confusing. They are incapable of making it clear.
Initial and Annual Expatriation Statement
It isn’t the ‘initial or annual’ for the vast majority. Almost everyone only fills it in once.
@Jacek, my experience was not advice, I am certainly not qualified to give it. I am just trying to muddle through, same as everyone else :). Though I think Duke of Devon is correct in your case.
I did what I did based on the Hodgen Law blog, which is one of the few semi-useful sources of info available to people in our position. Ignore the slightly misleading title, it isn’t for covered expats.
http://hodgen.com/step-by-step-tax-filings-for-a-noncovered-expatriate/
@iota, thought it may be a typo, but wanted to be certain 🙂
@Jane – Congratulations – I renounced in Oct 2015. 🙂
I agree, it’s incredibly confusing, and unfortunately I accidentally confused things further with a typo in my post above.
I figured that since I renounced in 2015, I needed to file a 2015 Form 8854, as Duke of Devon says. Which I did last week.
Like you, I’m below the threshold, so I didn’t file a 1040. I just sent the 8854.
@iota
I’m self-employed so I really am bamboozled. Would you think that the threshold would be in US dollars?
I’m so over it all now…even if I hadn’t intended to relinquish, I’d renounce just to not have to do taxes ALL year (I have to file every six months due to our own tax year being 1 July- 30 June.). I’ve spent so much money for nothing in return but more grief, it’s sickening…Just trying to read through any of these forms makes my head ache. I can’t imagine how bad it is for those who actually have something of value to declare.
@Jane – Yes I am sure the calculation to determine whether one has to file must be done in USD. I’m afraid I don’t know anything about how the IRS treats self-employment income. Maybe you could ask in one of the forums? I received some excellent advice and help from one or two of the tax forums. (And some that was not so helpful, but in my opinion that’s always the case with advice – free or paid for – it pays to listen, and then do the research to see if it seems well-founded).
@iota
“it pays to listen, and then do the research to see if it seems well-founded”
Best two out of three? Or four out of five?? That’s how ALL of this feels…Can you point me to whichever forum you feel had the most knowledgeable folks? I’ll research & then decide if it’s just something to pay an accountant for– one final time!
Thanks
@Jane – I found some (not all) of the posters in the http://www.expatforum.com/expats/expat-tax/ forum very knowledgeable (hope I’m not breaking any rules by posting the link!)
In seeking advice in the forums, I found that some posters – often those more “US-oriented” – tended always to interpret IRS documentation with an emphasis on caution: so if it was just impossible to be sure what one should do (which as we know is often the case with IRS instructions), these posters would always advise treating the item as US-taxable “to be on the safe side”.
I however take the view that while it may be wise always to “err on the side of caution” for US-resident Americans with American incomes and assets which the IRS can wallop with penalties unmercifully if the taxpayer puts a foot wrong, the situation is rather different for an expat. If the IRS thinks my interpretation of the rules is wrong, they can’t just help themselves to a chunk of my money and add on a tasty penalty or two for good measure. They simply don’t have that power.
Therefore, I’ve tended to listen more to the forum posters who take the view that you should fill in the forms on a good faith basis, in the expectation that if the IRS has any questions they can write to you, asking for clarification. And thus there will be an opportunity to correct any “non-wilful” errors or misunderstandings without penalty, just as one would expect with any other tax authority.
In reality, I’m not expecting the IRS to do anything with my FBARs and 8854 except file them under “N” for “Not worth bothering with” 🙂
That’s been my approach – not offering it as advice for anyone else, as I could be wrong. Good luck!
Duke,
The advice from the Calgary US Consulate was from mid-January (on behalf of someone who was told by her bank that, among other things, she would have to get a CLN, that Calgary was no longer doing renunciations and relinquishments and she would have to go to Vancouver). They were wrong!
The wait time for an appointment now may be even longer. Perhaps someone else could make another query.
Stephen commented about this and I agree — we should have this information easily accessible:
From: “Calgary_ACS”
To: “Carol Tapanila”
Sent: Thursday, January 14, 2016 8:45:22 AM
Subject: RE: Does the US Consulate in Calgary take appointments for renunciations and relinquishments?
At present, Calgary’s still booking appointments their own appointments. We’re booked into November already. I cannot answer for any other post’s workload.
Hope this helps.
Susan
Susan M. Smith
American Citizen Services LES Supervisor
Calgary, Alberta, Canada
This email is UNCLASSIFIED.
From: Carol Tapanila
Sent: Thursday, January 14, 2016 6:25 AM
To: Calgary_ACS
Subject: Does the US Consulate in Calgary take appointments for renunciations and relinquishments?
Or, do those appointments now have to be made for the US Consulate in Vancouver? If that is so, do you know the waiting period for an appointment there?
Thank you.
Carol Tapanila
Calgary, AB
Chris, thank you for the link. I read what Phil Hodgen wrote and did not find any reasonable explanation for why somebody that is well below filing threshold should file anything more than 8854. As far as I remember from reading his other articles, he advises to do many unnecessary things ” just in case”. I think I’ll pass on this one…
One of Phil Hodgen’s blog entries I found most useful in decision-making was the one about whether you decide to be a goat or a sheep.
http://hodgen.com/deliberately-choosing-covered-expatriate-status/
Jacek – I think Phil Hodgen’s clients may tend to be at risk of covered expatriate status, quite often. So the question of not filing 1040s simply doesn’t usually arise.
I believe the “Chronicles of Expatriation” of the Accidental American teenager (who had no income at all but still had to pony up the $2350 renunciation fee) did indeed finish with her filing only the 8854.
Calgary 411 Thank you.
@Jacek, Chris – a suggestion. When my tax preparer did my FBAR’s for Streamlined he put a note to the effect that I wasn’t filing returns as I had no income to report. Maybe do something similar with the 8854 form. Add a note attached to it to say you aren’t/haven’t filed returns because you’re below the reporting threshold.
I have received citizenship in a foreign country two years ago and am ready to relinquish my US citizenship. I have many good reasons why it should be approved,. I recently voted in a local election and I thought I had read somewhere that voting in a foreign election was one of the things that would lose your US citizenship. Has any one heard of this and if so, send me info.
Thanks
Hodgen does indeed advise filing returns even when below the threshold (in order to have some kind of paper trail). But if you’re not going to that, then I would second Medea Fleecestealer’s suggestion of adding a note as to why no returns are on file.