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
@Duke Next step will be to file 4 years of returns and 6 FBARS this year and then the rest next year with the 8854.
@The_Animal Yes, the fee is really outrageous + all the extra work/fees with the tax returns. Money shouldn’t be an issue if you want to renounce. Ironically the first statement the consul read to me was that “You have the right to renounce your citizenship.” I was tempted to reply “That is if you have the resources to do so.”
@SGS
When did you apply for the US passport? If it was after receiving Canadian citizenship it might be harder to relinquish as you did something “American” afterwards, leaving you with renunciation as your option. If however the passport was pre-Canadian citizenship, then I don’t see how that alone would be an issue.
@SBS
Even though the standard is supposed to be a preponderance of evidence about your intent at the time of your relinquishing act, the Department of State will most likely conclude that a passport renewal years later is the only fact that matters, even if you only renewed because of a mis-informed customs agent.
So, if you renewed that passport, it will probably be easier, quicker, and possibly cheaper to renounce currently rather than apply for a back-dated relinquishment.
@ Joe
I believe you need to file the FIVE years before the year in which you terminate your U.S. citizenship , then a partial year and the 8854 for the year in which you renounced. That’s 2011, 2012, 2013, 2014, 2015. Partial 2016.
If you have earned below a certain amount then you can file a 2555 the foreign earned income exclusion. For 2015 the maximum exclusion is $100,800 per taxpayer, and $101,300 for 2016 .
@ Karen and SBS
The advantage of trying to claim a backdated relinquishment to 1973 would be that SBS would not have to file backdated tax returns. If he did not renew his passport and has done nothing American ‘on file’ since then he should try for a relinquishment based on swearing an oath to the Queen and Canada in 1973..
SGS. Has something changed? There is always the option to do nothing.
@SGS and Heidi
Yes, the back-dated CLN is definitely advantageous. If SGS didn’t renew the US passport after becoming a Canadian citizen, then it’s worth a go.
My point is that DoS is likely to take the position that the single act of renewing a US passport overrides decades of evidence regarding prior intent. If the likelihood of having the back-dated CLN denied is high, then it saves time and possibly money to renounce currently. Not to mention the psychological “savings” of being able to put it all behind you sooner.
Of course it depends on the specific set of facts. If the relinquishment case is not straight forward, it pays to get legal advice.
(Sorry SGS, my auto correct changed SGS to SBS in my earlier comment)
@SGS
Sounds like you signed some official paperwork years after becoming a naturalized Canadian, attesting to the fact that you still considered yourself American. Since this happened after 9/11, my guess is that they scanned that piece of paper and added it to your file.
That said, you could try your luck and apply to relinquish. However, be aware that you risk losing the $2350 application fee, because the US does not issue refunds when an application for relinquishment is denied. Insult to injury, you’d have to book another Loss of Nationality appointment and shell out another $2350 in order to renounce.
@ Joe
I believe Heidi is correct. The year of renunciation does not count for making the magic 5 years of returns (for 8854 certification). So you need to file 5 years of returns; 2011-2015. And 2016 is a partial year. The apparent correct way to do the partial year is to file a 1040NR using a 1040 attachment (unsigned, I believe) to account for all income up until you renounce. Having said that, lots of people have just done a 1040 (signed) up until the point of renunciation; and to me it’s not obvious that there would be any major negative ramification for doing that, if you’re called on it.
Ok, then I’ll add 2011.
@ SGS and WestCoast
Westcoast has said: “That said, you could try your luck and apply to relinquish. However, be aware that you risk losing the $2350 application fee, because the US does not issue refunds when an application for relinquishment is denied. Insult to injury, you’d have to book another Loss of Nationality appointment and shell out another $2350 in order to renounce.”
Just incredible! Is that how it works now? One gets a double the fee if a relinquishment is not approved and then renounces? When I went through the process, there was no fee for relinquishment but in the meantime the renunciation fee went up to $2350. The process of getting rid of US citizenship seems to keep getting more difficult and more expensive over time.
@PatCanadian
I had my Loss of Nationality appointment earlier this year and was warned at the time that the $2350 was nonrefundable and did not guarantee my application would be approved. Relinquishments are sometimes denied, so I opted to play it safe and renounce.
If a CLN was denied for a relinquishment, will one be apprehended if crossing the border by land? Has anyone attempted to cross? Sad state if not even serious family illness will allow freedom to visit perhaps one last time.
My CLN was denied by the Toronto Consulate because I used a pre-existing US passport to cross the border after obtaining Canadian citizenship. There were NO other indicators of intent to retain US citizenship: no US residency, no financial holdings, no voting, no ANYTHING for the previous 45 years. So much for the “preponderance of evidence” that they are supposed to pay attention to when determining intent. And the use of this US passport was at a time when I didn’t even need a passport to cross the border. A drivers licence would have done just as well. In any event, despite being denied a CLN I have never had any difficulty crossing into the US on a Canadian passport, whether it be by land or air.
@always something says, you’re not likely to be apprehended. Probably a good telling off for not having a US passport, worse case they turn you back at the border. But it would be a very nasty b**tard of a guard who’d do that, especially if you explain the circumstances (ie family member on the verge of dying).
We have a US passport which was obtained because of badgering and threats by border guard, but unfortunately was also the reason CLN denied. Have left the USC issue stay dormant and wondered if DHS connected to data on IRS compliance by expats.
@ No name says:
My identical experience, except “In any event, despite being denied a CLN I have never had any difficulty crossing into the US on a Canadian passport, whether it be by land or air.” I was threatened that I would be denied entry if did not use US passport.
Joe,
When I look at the finances. $12-15K per annum (combined income); no savings (with that income there is no savings) and saying “F-it. I’m not doing anything” and putting the money towards food on the table, clothes on our family’s backs and a roof over our heads.
versus:
$2000/yr accounting costs to file taxes for the five years that it takes to file to get clear and lord help you if you can’t get clear on the first try, keep adding $2000/yr for each year that you are waiting for the CLN to go through
$2350 to get a renunciation.
Blood, sweat, tears and stress to know that there are people looking for you, because you just popped your head out of the hole that you were hiding in.
F-NO. We’ll just stay in hiding.
They say money doesn’t buy you happiness… Bullshit. In this case, it sure would. Sure wishing for a Lotto Max win right now. Then I can take the money (I’m the full Canadian born citizen in my family, my wife and kids are the ones that have the problem. My wife USA tainted. My kids: born in Canada but US tainted even though they aren’t registered), pay their renunciation fees and tell the US that they can f-off!
I’ve never hated the United States like I have since 2010. And I pray every night that the United States goes down the toilet bowl with one satisfying flush.
@The_Animal1970
Your income is low enough that you actually don’t have to file with IRS.
https://www.irs.gov/publications/p554/ch01.html
You only have to file FBARs if the aggregate total of all your bank accounts adds up to $10,000 or more. FBARs are done online and are actually quite simple to do, but you don’t even need to do those since you don’t have any savings.
In other words, your low income and net worth means there would be minimal paperwork for you to expatriate — all you have to do is fill the forms required for expatriation, so no need to hire an accountant. However, you do have to cough up the $2350 and it’s best to have another citizenship (you could technically renounce and become stateless, but that seems like it’d create more problems than it would solve).
The_Animal1970 says: Exactly my feelings as well. I am resentful that I would have to spend time, and precious $ we don’t have to exercise a privilege to travel to see close family. I try not to think of this horror coming to bear on my grown children when I’m gone. Who would have thought that you were not giving your children an opportunity by your connection, but rather a noose with a boulder attached. It may sound dramatic, but not in light of the dysfunctional beast into which the USA has grown.
When it comes to renunciation and relinquishment, another important issue to keep in mind is where you keep your money. Certain credit unions are exempt from FATCA reporting. If one does their banking at one of these credit unions, your information will not go to CRA and then to IRS. In my case, prior to July 1, 2014, I closed accounts at TD and RBC. Then proceeded to open accounts at two credit unions. One was exempt because it’s total assets were small. The other credit union was exempt due to Local Client base. Anyway, I didn’t file any FBARs, only 1040’s and 8854, after renouncing.
Keep in mind this only applies to bank accounts, not to investments. Investment companies affiliated with these credit unions will report any suspect US person as far as I know. A CLN is needed for investing and not getting reported.
@ WestCoaster
The_Animal is Canadian only and it’s his wife who is American. She hasn’t got Canadian citizenship yet. It’s hard to attribute any degree of “easyness” to anyone’s filings without knowing their complete situation (e.g. mutual funds or some other thing that requires odious, expensive forms) and neither should we know anyone’s complete situation because there are other readers here who are not benign.
@EmBee
True enough, but my reply was directed specifically to The_Animal1970 and was based on what he told us about his household income (12k to 15k) and the fact he told us he didn’t have savings (hence no FBARs, and I assumed no TFSAs, mutual funds or stocks since he told us money was so tight). I was trying to put his mind at ease, because if that’s the sum total of his income and assets, he wouldn’t need to hire an accountant, which seemed to be a concern for him.
The bottom line is that anyone broke (income below the threshold for filing with the IRS, aggregate bank balance less than 10K, no other assets) is in the best possible position — other than the having to shell out $2350, of course — to unload US citizenship easily, as long as they’re already citizens of another country. Hopefully, his wife will be able to become Canadian soon and get the ball rolling.
Animal: It sounds like both you and I have at least one problem in common. We’re both married to “Illegal Emigrants.” ; )
I am a Canadian citizen who was born in the U.S. and moved to Canada in 1980 at the age of 10 years old. I am considering an attempt to relinquish my US citizenship and apply for a back dated CLN which would be back dated to about 1998. I would be applying under Sec. 349 (a) (4) INA which states:
4. accepting employment with a foreign government after the age of 18 if (a) one has the nationality of that foreign state or (b) an oath or declaration of allegiance is required in accepting the position (Sec. 349 (a) (4) INA);
I had already been a Canadian citizen for nearly 15 years when accepting a job at a crown corporation of a provincial government though I did not have to take an oath when I was hired.
I have gone through the streamlined process having filed only 3 years of back taxes. I was caught off guard, not knowing about any expectations to file or pay taxes to the U.S. and probably given some bad advice my a tax company that I consulted once finding out about all this. I want to get out of the awful situation of being subjected to American tax laws as soon as possible which is why I am considering going through the relinquishment process. I have never worked in the U.S. nor do I have a U.S. passport but I have traveled to the U.S. for vacations. The last time I visited they forced me to say what citizenship I was using to enter and I said U.S. citizenship to avoid any possibility of refusal.
I believe that I meet the requirements of 4.a. under section 349 INA. It would be greatly appreciated if anyone could shed some light on the following questions:
1) Is it too late for me to relinquish due to having already paid taxes to the U.S. under the stream lined process or having traveled to the U.S. while claiming to be a U.S. citizen?
2) The crown corporation I am referring to is owned by the provincial government but is only a utility company. Will they deny my request due to the type of company or work?
3) I’ve read that I must now pay same fee to relinquish as to renounce. Is the fee applied regardless of whether they grant me a CLN?