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
@WestCoaster, that could be possible in future. But for Gloria Corbett’s friend it simply isn’t going to happen that way. He is no longer a US citizen – and again how would the IRS/border control/anyone else know this particular John Smith from all the other John Smiths entering the US. Even fingerprints can’t tie a person to a CLN at the moment.
But the real question is what Gloria Corbett’s friend can live with in future. If he’s not going to worry about the possibility of the IRS doing anything then not bothering to file is an option. If he is going to worry about it, then filing with an ITIN application is probably the quickest and easiest way to clear the system.
And just to show how stupid the American bio-metric system is currently, yes it checks everyone coming in, but checks no one going out. So how can they know someone’s left the country when they were supposed to?
@Westcoaster.
Agree.
I know Canadians are entitled to travel to the US with their Nexus card. But take a look at the questions asked in the latest ESTA visa waiver program required to be filed by the rest of us . They have become even more intrusive and information gathering. They will know exactly which John Smith they are dealing with.
https://www.esta-registration.co.uk/esta-application.html
@heidi
“They will know exactly which John Smith they are dealing with.”
Yes, indeed. Across the board, things are tightening. More questions are being asked, more demands are being made — bio-metric data, CLN, etc.
Just Me just posted elsewhere on this site about how NZ banks are calling on their customers to reveal US connections:
http://www.stuff.co.nz/business/79049481/thousands-of-bank-customers-called-on-to-reveal-us-connections
I hate to sound like a Negative Nellie but — with the exception of members of the 1% club, who make their own rules — I simply do not think it’s going to be possible for anyone to hide anything unless prepared to deal entirely in cash (which several nations are seriously discussing banning), move constantly, only work under the table, not use the Internet for anything of a personal nature, not use a cell phone, not have a driver’s licence, not own a car, not own real estate, and avoid real social ties. The rest of us are out of luck, as we can be identified and tracked six ways from Sunday.
@WestCoaster
Negative Nellie here too. I agree with you. Those who renounced will be the first who get checked out to see if they also filed their taxes. Canada has promised not to collect if you were Canadian, but travel could become difficult because many countries might work hand in hand with America to catch “tax cheats” one day in the future, also. If they can take a passport away for tax debt, then they will be on the lookout for those who owe as well.
It really all depends on the results of the suit filed against the Canadian government. But otherwise, the way I see it- the fight against tax evasion is the new trend and here to stay. Except of course, for the money being hidden IN America- which makes such a farce of it all.
@Polly
A lot of people believe they’re safe because they’re minnows and it wouldn’t make financial sense for the USG to go after them. However, I believe it’s more about power and control; if the USG can also collect some money, that’s just a bonus.
This is the calm before the storm. Right now the USG is absolutely deluged with data coming in from the 100+ nations that are FATCA-compliant. No doubt they are completely overwhelmed at this point. However, once the USG ramps up and gets the people, processes and computer systems in place to deal with all the data, they’ll be able to cast a very wide net with little effort.
“Except of course, for the money being hidden IN America- which makes such a farce of it all.”
A classic case of ‘do as I say, not as I do.’ I just can’t believe the headlines these days. The world has gone crazy.
So pleased to see a passel of Brockultists start to go wobbly-kneed about the bulwark fantasized out of dead man Flaherty’s proclamation. Reality nibbles holes through warm fuzzy blankouts.
Sorry about any confusion on my last question. That tracking number was simply the tracking number for the XPresspost envelope. However, if anyone knows and can provide information on how to receive updates about whether they are going to impose their citizenship on me it would be greatly appreciated.
Also, I forgot to ask and they certainly didn’t provide any helpful information so I’m curious if the U.S. State Department refuses to acknowledge my relinquishment and decides to impose their citizenship on me in order to tax me for two more years, can I appeal that decision? If I do have to renounce, then on one of the forms I must certify that I am a U.S. citizen. Not only would I have to lie to free myself because I relinquished many years ago, but would seem to free them of any guilt in imposing their citizenship on me.
@ usxcanada
So pleased to see a passel of Brockultists start to go wobbly-kneed about the bulwark fantasized out of dead man Flaherty’s proclamation. Reality nibbles holes through warm fuzzy blankouts.
One who suggests that governments violating the sovereignty of others and/or breaking the laws of their own lands is nothing to be concerned about is not one who should be trusted.
Finally! I was starting to think I was the only one thinking how bad this is getting! Imagine a “cash-less” society where every penny is tracked? Bank accounts are “pretend wealth” to be controlled by ????
Do you like “cash sales”? Do you like 2nd-hand shops & garage sales?? NO MORE!
That, is a really creepy future. The 1% sending us “back-to-the-future” of “bartering”? And at that, how to barter veg when it all comes from the devil-incarnate, Monsanto? Good thing that the SCOTUS has on it’s staff a former Monsanto lawyer to vote in their favor?
I’m thinking it’s pitchforks & torches time…
@JaneI am constantly surprised at how meek , complacement and submissive people have become.
“If you have nothing to hide, you have nothing to worry about” Don’t they know what happened under the Stasi?
A pitchfork rebellion sounds good but look what happened to them in England.
And Lenin once remarked that the Swiss would never have a rebellion as at the first “keep off the grass” sign they encountered, they would all disperse.
Perhaps we need the French to rouse us.!
Or maybe just do it ourselves. The liberal convention is in Winnipeg in June!!!
The attitude that the IRS will only be going after the whales and leave us minnows alone is a very dangerous one to have, I think.
The expected revenue from FATCA has always been far below the projected costs which
should rule out revenue as the prime motive.
In negotiations with the CRS, the IRS has even said that FATCA isn’t about the money. They want the information.
The IRS has stated that the goal behind FATCA is “compliance”. In other words, their goal is control of the entire US diaspora via compliance to laws of the homeland.
Those three facts alone, in my opinion, should cause everyone to rethink what is going on
here.
For those who look at only how things stand today, you are forgetting what has transpired to get us here. It is much like looking at a photo of a long range missile in flight and telling the residents of the targeted city that they have nothing to worry about while ignoring the facts
of its trajectory and that they are the intended target.
How things stand today is not what we should be considering. We need to do our best to
plot the future based upon the path thus far taken and the intentions of those driving this.
Arguments that the IRS doesn’t have the money are off target. It’s not their money their are using, for one, and the work of tracking us down has been forcibly delegated to the FIs of
our resident nations who are footing the lion’s share of the cost. The IRS is not hunting us, they need only to look into those whom have been “caught” and turned over to them by FFIs, or forced to turn themselves in order to maintain bank accounts in their countries of residence.
If it is knowable that you were born in the US or of a US parent outside the US and you do not have a CLN you are at risk. If you do have a CLN you are at risk for whatever new document they decide you must have, a RCLN (ReCertified Loss of Nationality) or some such thing.
It is more likely that something that has happened will happen again than it is that it will not happen again.
People being so unwilling to do the only thing that might end this, pitchforks, perhaps the only possible deliverance is stealing an nonUSC’s identity. Until the biometrics kick in anyway.
Regina. Your posts are somewhat confusing. You informed them that you had relinquished. You are concerned they may turn you down and you would have to file two more years. Why two? Were you compliant until two yrs. ago? What was the relinquishing act?
If you obtained Canadian citizenship two yrs. ago with intent to drop US Ness they can hardly turn you down. There is an appeal process but I lost the thread.
Or you can do a BCDOC and self relinquish. i.e. have nothing more to do with them. P.S. Can you share with us how long it took to get an appointment in Regina? Thanks.
There’s some info on appeals in 7 FAM 1230 Administrative Review and Appeal of Loss-of-Nationality Findings.
@ brockers @Heidi just seen the new question on the ESTA about former nationalities held. pretty sure this wasn’t there ;last year. has anyone heard of anyone filling in “YES” and “USA” to this and then either getting ESTA denied or getting tossed at the border by CBP?
@Medea Fleecestealer
In addition to the hypothetical John Smith renunciant’s name, the USG has his middle name and date of birth. DoB narrows things down sufficiently that flagging and dealing with all John Smiths born on, say, Jan 1 1980 becomes a doable task. A middle name match narrows it down even further.
Below is my obligatory, nervous nellie, repost of my take on this. Written from a Canadian perspective, but lots of it applicable to non-Canadians as well.
Since my last post, I’ve added a blurb on estate settlement.
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If you are considering renouncing without filing those 5 previous years of returns, note that there is no statute of limitations on those unfiled returns, because they’re unfiled. So that will theoretically hang over your head for the rest of your life. It’s difficult to say what that means in practical terms (e.g., is there a real likelihood of the IRS catching up with you 20 or 30 years from now?), but it is worth keeping in mind.
By not filing returns, you have probably moved into the wilfully non-compliant category. I don’t know what the ramifications of that are, but I don’t see how it could be a good thing. FWIW, if you don’t file 8854, then you’re subject to a $10K penalty, and 8854 specifically asks about those 5 years of returns. Note that the IRS is supposed to get a copy of your CLN from the State Department.
By not filing returns (or not submitting 8854), you have definitely become a covered expat. That means, among other things, that you are subject to the exit tax. You will be taxed on mark to market capital gains subject to a $663K (2013) exclusion. As well, you will be taxed on the total (not gain, total) amounts in any pensions and RRSPs you may have, and there is no exclusion. RRSPs/pensions are, I believe, taxed at the highest marginal rate. The RRSP/pension tax is a major issue for covered expats IMO. [Note: because a RRSP is neither a real pension, nor a traditional investment vehicle, it is not entirely clear to me if it’s taxed on gain or total]
There have been no known reports of people who have renounced without filing being hassled about their non-compliance when attempting to enter the US. However, given increasing inter-agency and inter-country data sharing, it does seem possible that at some point in the future US border people will be aware of all former USC’s tax status. Should that come to pass, unless you like to live dangerously, travel to the US is out – that would include plane connections through any of the major hubs. For some people, not a big deal; for others, a very big deal. And, you’d always be concerned when flying over the US to, say, Mexico if you’re a risk averse type of person, due to the (admittedly unlikely) possibility of the plane making an unscheduled landing in the US.
The US-Canada tax treaty will protect you (at least in Canada) from the IRS if you were Canadian at the time the liabilities were incurred. I don’t see how there is any guarantee that the treaty could not be changed for the worse in the future. And although it would clearly be unfair if the changes were retroactive, nobody has ever accused the IRS of being overly fair (and the FATCA fiasco has indicated how much we can expect the Canadian government to stand up for fairness).
Another area of concern is estate settlement. If the executor of your estate is a professional of some sort and determines you did not cleanly exist the US tax system, he/she will almost certainly want to get your deceased self caught up on your US taxes. Depending on your situation this could result in massive taxes, interest, and possibly penalties being applied to your estate.
So, IMO, you would have to have a good reason to not file those returns and 8854. One concern people often have about filing those returns is the cost of getting someone to do it for them. A possible route is to DIY and just do the best you can. I’ll leave it to you to determine what “best you can” involves given that you’re almost certainly not a cross-border tax professional. At any rate, at worst you could be audited later and assessed some $$. If it’s a large amount of $$ that you are unable or unwilling to pay, you could then invoke your treaty right and not pay up; leaving you in more or less the same situation as having not filed. OTOH, at best you did a bang-up job on the returns that can withstand any amount of scrutiny, or, more likely, you can expect the IRS to not have the resources or inclination to worry about your piddly returns, leaving you home free (at least after the SOL runs out).
Phil Hodgen has a blurb on this subject: http://hodgen.com/will-your-future-self-hate-you/
@crystalondon
No, it was not there last year, and not there last month when I was thinking of renewing my ESTA. Last month did have the “do you have any other citizenships other than the one you hold” question. I believe this was to identify EU & commonwealth citizens who had also Iranian, Syrian etc passports, which they deemed to be suspect. The ” have you EVER been a citizen of another country” is brand new, and can have multiple connotations.
@tdott
One also has to think of the other countries in the world one might not be able to visit again. Some have treaties with America to deliver criminals, and some don`t. So it might be a reality that freedom to travel could be severely limited.
@Polly
Yep, based solely upon the fact that one was once a USC.
Question to @tdott concerning your last post:
Do your warnings apply to renunciation only or also to relinquishing, retroactively to the 1990’s?
According to this article, FATCA’s real purpose is not to collect money. It’s to pave the way for a global FATCA, informally known as GATCA.
http://www.zerohedge.com/news/2016-04-20/shocking-reason-fatca-and-what-comes-next
To quote, “…this means a permanent record of every penny you have ever earned, saved, borrowed, or spent anywhere in the world will be instantly available for analysis and scrutiny by countless government agencies, regardless of any actual or suspected wrongdoing.”
@WestCoaster
The IRS has even said as much. Why others refuse to thinks this a possibility is beyond me.
“Why others refuse to thinks this a possibility is beyond me.”
It seems to me that it’s a bit like the five stages of grief: Denial, anger, bargaining, depression, acceptance. Not all of us are at the same stage. I’ve had several years to work my way to acceptance. That doesn’t mean I no longer get upset about all this, but I try not to get too riled up. Taking concrete action has helped enormously in restoring my peace of mind. I felt trapped, anxious, and helpless before I got my CLN. I still have to do the final paperwork next year, but the end is in sight.
(My accountant made a HUGE mistake on my 2015 papers; I reviewed the papers when I got home tonight and phoned him immediately about it, but all I can do is cross my fingers that he fixes it before submitting everything. He’s totally tired and overworked, so I understand how it happened but at the same time I have a limited amount of understanding because this kind of mistake could lead to horrible consequences for me. Now I’m fretting that there are other mistakes I didn’t catch, because looking the papers makes my brain freeze. The only reason I caught that mistake was because it was so big. Ugh. Must turn my brain off.)
@WestCoaster
The very fact that we face such circumstances at all should be more than enough for all USPs, homelanders and all, to just say “no more”. How did we go from our beginning to this?