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
Bad advice from a tax company is standard operating procedure.
A renunciation based on working at a federal crown corp (CBC) has been denied. At least one has been accepted (AEC). A provincial utility would be very iffy.
Having filed taxes will not be in your favour. Claiming to be a US citizen at the border would almost surely disqualify you. Relinquishing and renunciation are the same price. If you were to renounce, you would need only 2 more years of taxes to be compliant.
@anonForSafety,
I’m sorry I don’t really have any straight answers, but I’ll throw in my thoughts.
I’m aware of five people (the “Kingstons” are a married couple with similar fact sets, so more like four separate cases) who filed taxes when news of this first came out, years after they believed they’d relinquished their citizenship, because they were confused or panicked or believed they were required to. They all received their CLNs based on the date of the relinquishing act in spite of having filed taxes. I’m not aware of anyone who filed taxes and was rejected, but it may have happened — I’m only aware of these five people.
Three of the people who filed taxes commented on Brock. Here are links to their comments. I’ll include date and time, so if the links go to the wrong place on the thread (they sometimes do), you can scroll to them.
(1) The Kingstons
Consulate meeting:
Submitted on 2013/09/04 at 4:48 pm
Submitted on 2013/09/04 at 5:20 pm
CLN received:
Submitted on 2013/11/15 at 9:29 am
(2) Cornwall
Consulate meeting:
Submitted on 2012/03/21 at 10:16 am
CLN received:
Submitted on 2012/09/26 at 4:39 pm
Well, the question on the DS-4079 is “(14). What passport do you use to travel to and from the United States?” You never used a US passport to travel to the US (don’t have one), so it would be accurate to put “Canadian.” But I don’t know if there would be a notation in a database that you entered verbally as a USC and, if so, would they look for that.
They seem to understand that a crown corporation is a subdivision of the government, as one of the two people I can think of who relinquished due to crown corporation work was successful. But Molly posted in December that her application was refused because Dept of State considered CBC to be a “hybrid.” “Our office has determined that Crown corporations, such as the CBC, are hybrid entities which combine elements of both the public and private sectors, and as such would not place those in their employ within the purview of INA 349(a) (4).” Their explanation seemed pretty vague to me, but I’ll put a link to Molly’s comment (Dec 22, 2015 at 8:39 pm) and that comment should lead you to further discussion about it.
An oath isn’t required if you were a citizen at the time you took the employment.
INA s. 349(a)(4) is the sub-article for relinquishment by government employment, indicating that an oath is not required if one is a citizen of the country of employment, and 7 FAM 1252(h) explains why they consider an oath irrelevant if one is a citizen of the country.
As a citizen of Canada, you fall under INA s. 349(a)(4)(A) for which no oath is required. If you are not and do not acquire Canadian citizenship, then you’d fall under s. 349(a)(4)(B), which does require an oath.
Immigration and Nationality Act, s. 349(a)(4)(A) and 7 FAM 1252 (h)(Foreign Affairs Manual).
@pacifica777 and @Duke of Devon
Thanks for your replies and thanks so much for the links. They were very helpful.
I do realize that I would only have two more full years plus the year that I renounce to pay taxes but there are several very subtle differences between U.S. and Canadian tax law that can have serious consequences. I do not want to be restricted by laws of a foreign country even for one more day than I must. The way I see it if I can escape sooner I should at least try unless, I must pay the $2350 USD even if they reject my request? So far, I have not been able to find a clear answer on that.
As far as I know it’s not refundable.
@anonForSafety
Duke of Devon is correct — the $2350 is nonrefundable. If they deny your application for relinquishment, you’ll have to apply to renounce; that means you’ll have to book another Loss of Nationality appointment and pay another $2350.
@ AD203
The CLN and the tax filing are two different things. Your CLN will not be denied for lack of filing. Lack of filing, however, can make you a “covered expatriate”, which is probably not a good idea. Sounds like your income is above the filing minimum (around USD10600, I think, but look it up as it may vary by year). To avoid being a covered expatriate you’ll need to file 5 complete years of tax plus a part year (including form 8854) for the year you renounce. The 5 years need to be filed before you file the 8854 (but not necessarily before you renounce). If you haven’t filed, then you can submit all 5 years under the streamlined program (which requires 6 years of FBARs, if you have >US10k in foreign bank accounts), or you can decide to just file them quietly and take your chances on an IRS audit/penalties. If all you have is earned income (at the levels indicated in your post), you won’t owe any US tax.
@anonForSafety, the fee is non-refundable so that is a risk unless you can be pretty sure you’ll meet the relinquishment requirements. No name had his request for a relinquishment denied because he used a pre-existing US passport to cross the border. Having filed US returns when you were supposed to be only a Canadian citizen, especially after so long (1998), and working for a provincial utility company may be enough to deny your relinquishment application. They do seem to be getting more picky on what they will accept for relinquishment applications. You may want to take the risk, but if it’s denied you will have to renounce and pay the $2,350 fee again.
There’s nothing to stop you filing an extra earlier year to go with the three you’ve already filed under Streamlined, i.e. if you filed 2012 to 2014 years file 2011 and you’ll need to file 2015 obviously, but that means you’d have the five years needed for the 8854 form. You would then file the 8854 and a partial 2016 next year.
@Medea
I was under the impression that it’s too late for me to file for 2011 under the streamlined process since I already sent them in last June. Although, I still haven’t heard anything back from the IRS and really don’t know whether I’m compliant yet. Would there not be any late filing penalties levied at this point?
@anonForSafety, you won’t hear anything from the IRS unless you owe them money.
Um, possibly. Maybe you could send the 2011 along with another copy of the Steamlined form?
@anonForSafety: No one has mentioned that you also have the option to simply do nothing and continue to live your life as a 100% Canadian from this point on. (Which is apparently exactly what you did until you consulted that idiot tax outfit.) Its unfortunate that you got bad advice and filed some US taxes via Streamlined, but its not the end of the world. If your entire life (and assets) are in Canada the IRS can’t touch you.
If you truly believe that you relinquished, either when you became a Canadian or by accepting employment with a Crown Corp, then you aren’t a US citizen. You don’t have to ask the US government for permission to not be their chattel. Unless there is some pressing need to get a CLN don’t bother. And why in God’s name would you file Form 8854 and give the IRS a shopping list of your assets? Who cares what the US government might or might not think about your unique set of facts? Its a foreign country and you don’t live there.
anonFor Safety. maz57 makes a good point. Why continue the charade? BCDoc was refused renunciation. She then said to herself – the hell with it -I’ve tried and done my best and I’m not going to play the game anymore. Or another option – don’t file for 2011- simply state you have complied if or when you file 8854. You could well have been under the threshold. There are no late filing penalties if no tax was owed.
Seems like it could be a bit risky to file only four years and then certify five years compliance on the 8854, because it might well be flagged by the system as an unexpected event, and that could lead to extra scrutiny.
Just filing the 2011 return would be less likely to look odd to them, I should think.. It probably happens a lot, when people go through Streamlined and then decide to renounce and need to file two more years.
@Duke of Devon
“BCDoc was refused renunciation.”
I’ve never heard of anyone being refused, except under extenuating circumstances (such as mental illness) — do you mean she unsuccessfully applied for relinquishment? There’s a world of difference between the two (though both now cost $2350) because the latter doesn’t involve past actions being assessed regarding possible intent, whereas renunciations are themselves official statements of intent.
@anonForSafety
Since you’ve already filed with the IRS, just ignoring them from here on in isn’t going to work since you’re on their radar. Given what you’ve told us, I’d recommend you file the additional two years with the IRS (to bring your total up to five) and apply to renounce (because there’s a good chance you don’t meet the criteria for relinquishment).
Oops, replace the word ‘whereas’ with ‘because.’
Sorry I meant to say relinquishment.
@Duke of Devon
“Sorry I meant to say relinquishment.”
Whew, that’s a relief! I opted to renounce instead of relinquish earlier this year, based on the understanding that renunciations are generally rubber-stamped. Until I get my CLN, those kind of typos make me nervous, ha ha.
@ Duke
BCDoc is male, btw.
@ Anon for Safety
I am sorry you are caught up in this nightmare too. Thanks for sharing your story. In your favour is the fact that you have never had a US passport.
@ anonForSafety
I like maz57 has stated am a “self renouncer”. I came to Canada in 1966 and obtained Canadian citizenship in 1980. I have zero ties to amerika and have zero need or reason to ever into that country.
I have choosen to live my life according to the country where I live and of which I posess that citizenship… CANADA…..
if the IRS or any other foreign gov’t happens to figure out where I live and happens to mail me anything it will be added to the news paper that is lining my bird cage.
my bank down and credit union down the street from where I live and work is not foreign to me. a gov’t outside of Canada reqiring me to do some paperwork is foreign to me and I am not going to be governed by a foreign power.
after all according to the current liberal gov’t “a Canadian is a Canadian is a Canadian” and until the day I am marched off south of the border in hand cuffs I will live life according to Canadian law only.
@WestCoaster said,
“Since you’ve already filed with the IRS, just ignoring them from here on in isn’t going to work since you’re on their radar. Given what you’ve told us, I’d recommend you file the additional two years with the IRS (to bring your total up to five) and apply to renounce (because there’s a good chance you don’t meet the criteria for relinquishment).”
That is precisely what I did as soon as I became a Canadian in December 2012. I, too, had panicked and filed for a few years after my OMG moment, but I stopped filing anything as soon as I was granted Canadian citizenship (and simultaneously relinquished US citizenship). No CLN, no 8854, no FBAR, no more Mr. Nice Guy. So I guess you could say I was on their radar for a while and then my blip just suddenly vanished, LOL. I haven’t heard diddly from the IRS since that time and I don’t expect to.
I’m not necessarily recommending this (or any other) course of action. I’m just pointing out what so far has worked for me. This is all such a mess that we each have to find our own way and do what we feel most comfortable with. Fortunately there are a great bunch of people on this forum who make sure each option is fully explored.
I do agree that anonForSafety’s claim for a past relinquishment would most likely be denied based on what we know of the facts. So pay the money, swear the oath, and renounce or forget about it.
@maz57
This is all such a mess that we each have to find our own way and do what we feel most comfortable with.
so true maz57 so true
what works for one may not work for others. we each have to get over the panic associated with our OMG moment and then decide which course of action is right for us.
i have no reason to ever have anything to do with amerika ever again so i am comfortable in my self renuciation.
i do not envy those of you who have reason either business or family to have to cross into amerika. those reasons have certainly complicated your decision and thought process.
@maz57
“I’m not necessarily recommending this (or any other) course of action. I’m just pointing out what so far has worked for me. This is all such a mess that we each have to find our own way and do what we feel most comfortable with. Fortunately there are a great bunch of people on this forum who make sure each option is fully explored.”
So true! My own approach is to tick all the boxes and submit all the required paperwork, so I don’t ever have to stress about this ever again. I want to be completely done with the matter and know that I would continue to fret if I didn’t tie up the loose ends. That said, it’s a very personal decision and what works for me might not for someone else.
In any case, I’m very grateful for all the support and information from fellow Brockers — it’s made dealing with all this so much less overwhelming.
@WestCoaster
I’ve lived in Canada since 1993. I arrived fairly broke and studied medicine in Montreal. The last US tax return I filed was for 1993. I finished my residency in late 2000 and didn’t start earning any income until 2001, the same year I became a Canadian citizen. I kept the blue book with the eagle on the cover in a lock box and only took it out for the odd trip back to the US to visit relatives. I understood this to be a requirement as I was born there. In 2010 I foolishly renewed the blue book. I was at the Vancouver Consulate with my wife registering the birth of our youngest child. The consular officer “helpfully” offered to help me renew my then expired US passport. When I pointed out that I had become Canadian in 2001 and may have lost my USC (as per the back of the US passport renewal form), he instructed me to include a brief non-notarized, unwitnessed letter stating to the effect that I hadn’t intended to lose my USC when I became Canadian. My passport was renewed and I completely forgot about the letter that damn letter…
In April 2014 with the wrath of FATCA in full swing, I attended the consulate claiming relinquishment back to 2001 when I became a Canadian citizen. 2001 was a key date– backdating my relinquishment to 2001 would allow me to exit the US without all the IRS filing requirements. My net worth with student loans was negative then too. Others at Brock had been able to backdate relinquishments despite passport renewals claiming they had been given misinformation by border guards. I attended hoping to do the same. At my visit, the consular officer presented the letter I had forgotten about and said I wouldn’t be allowed to relinquish. He offered to process my renunciation that day but I declined for two reasons:
1) I was unwilling to pay $450USD to exercise a basic human right (expatriation).
2) Renunciation brought me back to the present with five years of filing, FBARs, form 8800-somethings, etc. I refuse to participate in the American Diaspora Tax.
So, that’s the long and complicated version of my story. Could I claim my passport was renewed in error and petition further for a 2001 CLN? Sure. But, I’m done going down that road. I live five to six hours from Vancouver, the consulate is a fortress, and the right of expatriation belongs to me, not Them. I will continue to live my life in Canada as a Canadian only. And if Justin won’t give the US the proverbial FATCA Middle Finger, I will give it myself on behalf of all my fellow Brockers. I miss nothing about the US system– the US is largely a failed democracy. Correct me if I’m wrong , but I can’t think of anything good it’s done for the world in the last 50 years or so. As I said on Petros’ post, I am pissed that I was forced to torch my “right of return” due to FATCA and CBT.
@BC_Doc
I can see why you’re pissed you off! Me, too. In fact, maybe even more so because I’m an accidental American. I’ve never lived in the US, I don’t have any American relatives or any other ties for that matter. I was born in the US while my non-US-citizen, non-US-resident parents were on vacation there.
Five years ago, I found out that I needed to file with the IRS. An accountant talked me into back-filing seven years at considerable expense, and I’ve paid accounting fees every year since to prove to the IRS that I don’t owe them money. In the meantime, I haven’t been able to get a TFSA or mutual funds because of the IRS tax implications and/or paperwork. The investment bank I deal with no longer accepts new American clients, and I’ve been warned that it’s just a matter of time before they close the accounts of existing American clients (i.e., as soon as they figure out how to identify them). Moreover, the paperwork gets more and more complicated every year. It all made me want to scream. (Still does.)
Why have I been so compliant? A) Everything about everyone is stored on a computer somewhere, and the US has been busily connecting all the dots, so the likelihood of being able to live under the radar for much longer is next to nil. B) I love to travel, and most of the flights leaving Canada go through US air space. C) The US is a juggernaut that steamrolls over other countries’ sovereignty without any real resistance. Maybe one day the US empire won’t be as powerful, but who knows when that will be. D) The consequences of not complying freaked me out, such as the insane penalties for not filing FBARs. I can’t tell you how many sleepless nights this business has caused me. (Well, I’m sure you and other Brockers know.)
Don’t get me wrong. Despite filing taxes and FBARs, I was firmly in denial except when paying my accountant. I didn’t want to have to officially do anything about my US citizenship, because I didn’t want to wind up on the name and shame list, in an FBI database, etc. Plus I was resentful about having to do anything at all. However, the expense of expatriating kept getting worse, what with application fees and the exchange rate skyrocketing ever upwards. Plus every year I procrastinated meant another year of paying accounting fees. I finally realized I was cutting my nose to spite my face.
(Note that this is how I felt about MY situation. I’m certainly not judging anyone for handling this differently. We all have different coping strategies and personal circumstances vary greatly. This is my perception of the situation, the impact it had on me personally, and I how I chose to address the problem.)
I finally renounced earlier this year, and am waiting for my CLN. I just have to file this year and next year, plus the 8854, then I’m done. I’m not wealthy, so I won’t have to deal with the exit tax.
To me, getting that CLN and tying up the loose ends with the IRS means freedom. Total and absolute freedom from worrying that there’s going to be new hoops to jump through, that the cost of expatriation will continue to go up, and, and, and.
Sometimes I wish that I could just ignore the whole business, but I just can’t. In terms of my peace of mind, officially applying to renounce was the best thing I could’ve done. Do I think it was unfair to have to pay so much money and go through so much — I ended up having to travel across the country to expatriate, because my local consulate is too backlogged to even book appointments — simply because my mother made the bad judgment call to travel in her last trimester? Yes, of course! But here’s the thing: Life is unfair. Sometimes that works in my favour, and sometimes it doesn’t.
In the grand scheme of things, I try to focus on the positive instead of letting myself being mired in the negative. For starters, I am extremely grateful that I am Canadian and thus not left stateless as a result of renouncing my US citizenship. A year or two from now, this will all be just a bad memory. One that I will refuse to let myself dwell on, because I’ve already wasted far too much time and energy being upset about all this.
Made a typo. The line after “Do I think it was unfair … simply because my mother made the bad judgment call to travel in her last trimester?” should’ve been “Yes, of course!”
(I think I originally had a line about not blaming my mother, as in of course not. But then I did some editing, because my reply was already turning into an essay. It’s going to be another year or three before I can truly be calm and objective about all this. In the meantime, I keep reminding myself of all the things I have to be grateful for, because I personally find being angry incredibly draining.)
Fixed, WestCoaster.
Your mom’s bad judgement call no different than mine — giving birth to children in Canada (1972 and 1974) just shy of becoming a Canadian citizen (in 1975). We were young and we did not have any idea what we would cause for our children.
Thank you both, WestCoaster and BC_Doc, for showing us that everyone has to make their own informed decisions and those individual decisions must be based on what we can handle going forward and how they further may affect our families. Heart-wrenching, both.