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
@Polly
“Honestly- you are starting to sound kinda crazy. Just get on with it. The rest will fall into place. You cannot honestly believe that the future of your child will depend on if you pay your american taxes or not? Then leave everything as it is and PAY THEM. Get into streamlined. Do it. Another possibility would be to talk to a lawyer. Not hire one but TALK to one. So you finally have some information to work with. Because all else- just sitting there and complaining- will only get you into worse trouble- it seems to me. This is not going to blow over. So for God`s sake- DO something.
But being obstinate just because this is an injustice is not the answer to this problem. You don`t live in Canada and cannot hide there. This is not the time to let your rebellious adolescent side get the better of you. As an adult you have to take responsibility.”
No, not crazy, my child’s future rests upon him being enrolled in a good education program from very early on until graduation from college. Anything that gets in the way of that destroys his potential for success. Anything, be it an unemployed or underemployed parent, not enough income in the family to pay the tuition, sickness, injury, anything that keeps him out of school. Satisfying the US’s lust for paper work is just a load of bricks dropped upon an already overburdened camel.
I am however, crazy busy. I owe, I owe so off to work I go.
I am not crazy. I live in a crazy place where a college degree is a requirement to be a garbage man and in a crazy world which allows FATCA and CBT to exist.
“Get on with it”? Which job do I quit? How do I provide for my child’s education once they are kicked out of school?
“Pay them” with what?
Not following advice that can not be applied to my situation is not being obstinate. How long can you live if you quit work and dedicate your life to pursuits that do not pay the bills?
My first responsibility is to my child and wife, before even to myself. Following your advice would destroy my child’s future and my wife’s assets, impoverishing them both. It would be very irresponsible of me to do so, for any reason.
Many people survive and do well for themselves despite losing a parent through any means. Few are able in this day and age to succeed without proper education. Very, very few escape poverty anywhere in the world, especially in Japan.
Your advice ignores these realities of my life.
Yes, I know this will not blow over. I know that I WILL lose my family regardless. While I still look for a way out, my main goal is to spend as much time as possible with my young child and my wife before I am forcefully pulled from them.
Chasing shadows of hopes that I can not hope to afford the time and money that might turn them into reality, hoping things just “fall in to place”, would be irresponsible and insane.
@foo and all
That’s what I tell my business students. A few minutes everyday of using English is better than a class once a week. But I do not have five minutes a day. I carry a ton of stuff with me to do just in case a student is late or cancels. If a few free moments appear, I have work with me to get caught up on. Copying my class notes in to the official class log, grading papers, proof reading tech or medical papers, learning the scenario for the next simulated patient workshop, lesson plans, job hunting, to name just a few. If at home there is the cat’s litter box to clean, furniture to be dusted (hasn’t been yet this year and I’m allergic to dust), the pile of washed laundry in the corner that has been there since that start of the year to be folded and put away, vines growing into the window sill to cut, stray bamboo to be dug out, tooth pain for the dentist to take care of, shave… Many of the basic every day “must do” tasks and chores are going undone and I would be doing these if I could carve out 5 minutes a day.
I do not have as long as the remainder of my passport validity. The passport renewal application I filled out three years ago had the following statements.
“The Department of State must provide your SSN and foreign residence information to the Department of Treasury. If you fail to provide the information, you are subject to a $500 penalty enforced by the IRS. “.
“Your Social Security Number will be provided to Treasury , used in connection with debt collection and checked against lists of persons ineligible or potentially ineligible to receive a U.S. Passport, among other authorized uses.”.
Emphasis in bold below mine.
“Your social security numbers will be provided to the U.S. Department of Treasury and failure to provide it may subject you to a penalty, as described in the Federal Tax Law provision. It also may be used for identification verification for passport adjudication and in connection with debt collection, among other purposes as authorized and generally described in this section. PROVIDING YOUR SOCIAL SECURITY NUMBER AND OTHER INFORMATION REQUESTED ON THIS FORM OTHERWISE IS VOLUNTARY, BUT FAILURE TO PROVIDE THE INFORMATION REQUESTED ON THIS FORM MAY RESULT IN PROCESSING DELAYS OR THE DENIAL OF YOUR U.S. PASSPORT APPLICATION”.
The following bold is from the application, not mine.
“CONSEQUENCES OF FAILURE TO PROVIDE INFORMATION: Failure to provide the information requested on this form may result in Passport Services’ refusal to accept your application or result in the denial of a U.S. Passport.”
That as three years ago. They already have me, I am in the net waiting to be hauled aboard. My file is on a desk somewhere waiting for them to work down the stack to it and they have a head start as it took along while of researching this to learn that the best hope is to renounce, then I learned of relinquishing which was free, now it isn’t. Each solution that has looked like the least bad option has had the rules changed or I learned of rules as I was working towards it that morphed it into a much worse option.
First, “F it!, I’ll renounce.” I thought and searched for and printed out all I could find on it to learn what needs to be done. Then the fee shot up and I learned of relinquishing. “Oh, this is much better, wish I knew of it earlier.” and down that path I start. Then wham, it now costs the same a renouncing. Oh, and I’m a “covered expat” and now subject to 10 years of filing taxes after renouncing or relinquishing. But wait, that changed and now I have “only” the exit tax. ONLY the exit tax, ha!
I have been on the field for three years. Every time I look at the goal post they have moved it. After every play they change the rules.
Then I learn of the Japanese requirement to relinquish US citizenship within two years of gaining Japanese nationality. Having already dealt with that maze called the US Embassy Tokyo homepage to get the application and then appointment, I have very strong doubts that most can renounce within the time limit. I started my passport application at least 7 months before my old one expired. It took 5months of a few minutes each night then hours and hours trying to find the application. Every link on the Embassy website was either dead or misdirected me.
As I worked on this, I found a four part report on the difficulties of renouncing through the Tokyo Embassy. The author called the phone number to schedule an appointment to renounce, as he was required, and got voice mail asking for the usual info and saying they would return his call. No return call came. He calls again and again with no return call. A lot more transpired but in the end, he had to schedule his renunciation appointment at the Embassy by another name in Taiwan! After doing so, he finally got a call from the Tokyo Embassy and an appointment to renounce in Tokyo. In his four part series on renouncing, he wrote that the Embassy had very cleverly hidden their phone number on their webpage. Well, it wasn’t just the the phone number they hid.
Took five months to for me to track down the passport renewal application. After completing it, I had only two months left on my passport. Going on line as required to schedule my appointment I found all of the very few, a dozen or so, available time slots already full. The schedule for the next month, the month my passport expired, was not up yet. Now I started to get really worried. I kept checking back hoping to see the following month’s schedule as soon as it was posted so that I could schedule my passport renewal appointment before they were all filled. When the schedule was finally posted, ALL appointments were already booked. Now I’m looking at having to depart Japan one week before classes start back up, leaving my pregnant wife alone and await a new passport in the States and hope I do not lose all of my jobs.
Not having found the Embassy phone number myself, and learning that it would be of little good anyway, the only recourse I could come up with was to go the Embassy with passport in hand and hope I could get in. Luckily, someone cancelled their appointment and I was able to schedule an appointment TWO DAYS before my passport expired. Despite more than 7 months of working on my passport application and the experience of going through the same procedure twice in the past through the same Embassy, it is by luck and luck alone I was able to renew my passport before it expired.
Reports of all relinquishing appointments for 2016 already being booked at several Embassies, the experience of the fellow have to schedule his renunciation appointment in a distant country and my own experience with my most recent passport renewal through my local embassy, the report of Japan annulling Japanese Citizenship to an American who did not renounce within the time limit tell me that careful planning is essential lest I lose my recently acquired JN while awaiting my appointment to renounce.
@japanT
These mammoth posts are taking you longer than 5 mins a day!
Take a break from it all, go look at the cherry blossoms, otherwise Polly may end up being right.
@heidi
The amount of time I have spent posting here is not even close to the amount of time it took for me to fill out my last tax return with the requirements they sent me. Besides, I usually type these out while standing on the subway with no signal to connect online and unable to do anything else. If I can sit down, I quickly fall asleep.
My comments are close those I have made in the past because my “schedule” has changed little.
@Japan T,
Consider it another job, and MAKE time for it. 5 minutes a day.
If you don’t do something, then you are just sitting back and waiting for the rogue wave to hit.
But it’s your life.
@ Japan T
I was under the impression that you were going to get in touch with Norman and (hopefully) work out a plan with his help.
In any case, it seems that the fundamental problem is that you do not have (and/or are not willing to make) time to deal with your situation. No one here is going to find a magic way for you to have more time, so either you find the time or you don’t. It’s that simple.
I really don’t understand why you are so worried about the small nit-picky detail of what the IRS told you in a letter ten years ago. Especially since it seems to no longer be applicable. Seriously, any weird rule that they wanted to impose on you ten years ago (and that no one has ever heard about) has likely gone into the dustbin by now. My advice to you: don’t get hung up on this little detail (or other little details, which basically includes everything that is not getting you a CLN in your hands). IT IS NOT IMPORTANT. I feel that it is just another way for you to justify not doing what you really need to do.
I think we can both agree that your number one priority is to shed your US citizenship. All the rest is details – yes, even your taxes. So, you should think of what you need to do to achieve that. Make a plan. Follow it. Get your CLN and THEN fill out your taxes and the final forms to the best of your ability. I believe you mentioned that you would be OK with never going back to the US, so what are they going to do to you if you follow this path? Extradite you because you didn’t fill out your tax returns properly (remember, at that point you will no longer be a US citizen)?
And there you have it: a “simple” plan that does not even require any layout of money (except for whatever you need to spend to get your second citizenship). It does not require you to spend any time on taxes at the moment. And, when the time comes, if you prefer not to do your taxes, you could take that path too and become a covered expat (again, what are they going to do to you if you never set foot in the US again?).
Or do nothing. That’s an option too (although not one I would recommend and not one that I would follow myself. However, I believe that that is what many people are currently doing).
So you can either get on with what you need to do – or not. It’s up to you.
As Foo said “it’s your life.”
Best of luck to you.
@tdott, with all due respect to your general advice.
There is a flip side to your general advice.
If someone is satisfied with paying the USG $2,350 to purchase a piece of paper and who knows how much to some cross border professional, more power to them.
My thinking has grown and expanded based on the example of Ginny and Gwen. In regards to the USG they have literally taken on the position of saying “bring it on.” They could care less of Ireland, Belarus, North Korea or the USA considers them as citizens!!
I admire them and respect them for their position.
To be blunt, what is the USG going to do to them or any similar situated?
They deny and refuse to allow a foreign poer to control their lives.
Their IS a consequence to their actions and that MAY mean no more cross border shopping which I am sure has crossed their respective minds.
Therefor, I have no qualms for those that have other citizenships to the some who covet that piece of paper and to the others who deny the ability of a foreign government to define who they are.
We likely agree that those who have solely USC really really need to come into compliance with their masters very quickly.
We likely agree that those who desire to be “dual” should come into compliance sooner rather than later.
But to those that have been “other than USA forever” and those that relinquished along the way, what is the USG going to do? And yes, I fully agree that if you do not play be their rules its wise to stay out of their arena.
I relinquished a decade ago, I do not have a CLN as I did not know that was part of the package and my lawyer did not know either but I do have an official letter from the USG confirming I relinquished.
I used to fret and worry about all this and lost considerable life credit units. No more to that!
I regained control of my life when I went to the USA on my EU Passport.
@Japan T, I basically think hard pressed is spot on……but let me embellsih.
Get three years of tax software and just fill out a return for each year the best you can and do not spend more than one hour doing each year, yes I am dead serious on one hour.
If you are afraid to file streamlined now, fine. BUT do the returns!!!!
Do 2017 with software, same for 2018……
You MUST know where you stand.
Keep working on alternative citizenship which IS your solution.
IF you become Japaneese, we know then you must get a CLN and to be honest I think its wise in general terms for most that get a CLN to enter streamlined.
After that…….who cares what any foreign government says.
@ George
I agree. Personally, I would do the taxes, but I would absolutely do them AFTER I had my CLN (the IRS would not have time to have any “problems” with my returns – and I could truthfully sign all the final paperwork regarding compliance). I only mentioned NOT doing them so that Japan T can keep that in mind as an option (remember, he has stated that he literally does not have the time to sneeze and doesn’t want to spend any money). I likely have a higher threshold for risk than many, and I can certainly see how others might like to dot their i’s and cross their t’s to a greater extent (i.e., entering streamlined).
People at IBS understand the horror of this situation but none of us can truly understand what others have on heir plate. The only thing I know is that the limbo and uncertainty are for me the worst part of this whole mess. Deciding what you can do as others have suggested and then proceeding gives some relief although not complete. It is time consuming and very stressful but less so then just doing nothing. Fairness or justice no longer have anything to do with this. I hope you can sort out your plan soon and proceed little by little. George’s comment makes good sense to me. My heart goes out to you and your family.
Yes, I am hung up on the letter I received from IRS. It was quite an undertaking and the threat of a fine of $10,000 per inaccuracy when I could not myself receive all the required information was traumatic.
But, let me get this straight. After gaining Japanese citizenship, I can renounce and get a CLN without back filing FBARs and tax returns?
@Japan T,
Yes.
@Japan T, that is one option among the several mentioned. There are risks. If you don’t file your returns, FBARs and the 8854 form to exit the US tax system cleanly you will become an covered expatriate and could be penalised by the IRS. What that means personally to you depends on how you see your future. If your bank is unlikely to demand proof that you’re US tax compliant you should have no problems there. If you plan never to travel to the US again for any reason (including transiting through to another destination) then not filing may be an option for you. But the question is whether or not you could live with that decision and not worry about it for the rest of your life. Some people can, others can’t and so decide to file.
http://hodgen.com/chapter-4-are-you-a-covered-expatriate/
https://www.irs.gov/Individuals/International-Taxpayers/Expatriation-Tax
As George said, you don’t need to do the filing before you get your CLN, it can be done after you’ve renounced. However, given the long waiting times for an appointment if you do decide to file I would start getting that done while you wait for an appointment. Or even if you decide to get an appointment in Taiwan or elsewhere to renounce more quickly. You have until 15th June of the year following your renunciation to file the final 8854 form so if you have a lot of paperwork to do getting started on it will make the latter stages go more quickly and smoothly for you.
@Hard Pressed…..some more clarification.
I think every ex-pat/former pat would consider it wise to “do their US taxes” on paper but not necessarily file. Why? Using @JapanT as an example, he may or may not owe anything when its all done. Doing it quickly and easily with cheap software means you will either simply confirm your anxiety and dread OR gain a sense of relief that its not so bad.
Why am I on the fence on applying for a CLN? Without divulging too much of my background which the moderators do know, the USG has lied to me and I have seen the lies very very close.
I could easily get a backdated CLN and maybe should I have got one for economic reasons when it was free BUT…..I have a personal fear that getting a CLN might be invoking future problems. This could include reinstatement of USC by some future Supreme Court.
Speaking solely for me and my unique situation; I committed a relinquishing act, the USG knows what I did and acknowledges it to both me and my lawyer who made a lot of money off me, I cut my ties to the USA then and there, I have traveled to the USA on my non-US passport. IF I were to apply for a US Passport “because I do not have a CLN” I think I would be in bigger trouble because of a long document trail already in government files. I am now at peace…largely…..so why should I get a CLN?
Yes, there are some based on circumstances who might benefit from a CLN but it is not clear cut for everyone.
Why should Ginny and Gwen renounce to get a CLN?
@JapanT, “But, let me get this straight. After gaining Japanese citizenship, I can renounce and get a CLN without back filing FBARs and tax returns?”
Words are very important and in our battle we must be careful.
Once you become Japaneese, or Irish or _______, you are NO LONGER a US Citizen because you RELINQUISHED with intent under 8 US Code.
You are then applying for a CLN to document same with the other government!!
It appeasr that with Japan you MUST get a CLN. Anything else by descent and you can call it a day if you desire.
But again, get the software and do not dwell on the tax issues. Spend one hour and just do it. Just because you bought the software, prepared a return, does NOT mean you have to file it.
@Cheryl, “The only thing I know is that the limbo and uncertainty are for me the worst part of this whole mess.”
With whatever decision is made, the decision that must be taken is THE decision that allows you to take control of your life back.
I will no longer live my life according the whims of a foreign government.
Well, that does change things. It gives me another year to do all the paperwork to get a clean break, if needed.
Are banks asking for prof of IRS compliance then? I thought they were using the CLN as proof of compliance.
Indeed, I was under the impression that you could not get a CLN until you became compliant and that one was a covered expat for not filing the previous X number of years regardless of filing them upon renouncing.
@Japan T,
Banks in Japan have not been asking for proof of IRS compliance, as far as I know.
Thanks all for the help and you patients. Still have a HUGE issue with time but the task seems to be much smaller, if I can ignore “the letter”.
The filing is an issue of control for me. If I must somehow pull off what I have endevoured to do for over two decades, free up some time from my schedule, why must I then use that time to satisfy the USG? I surely wouldn’t be in control of my life using all what little time I could carve out filling in tax forms.
@foo
Thanks for your earlier comments.
I have read and heard accounts of new accounts being denied to USC in Japan. I could not track the one I mentioned to you earlier but have since found others.
Of note, a student of mine was intrigued by my account of FATCA and asked a friend of his who works in a bank in Yokohama if USCs can open an account at their bank. The answer, yes they can but their is a load of extra paper work which includes certification of compliance with the IRS. I do not know which bank nor have I seen the paper work myself.
@ Japan T,
One can get a CLN without being tax compliant. It seems that people do that a lot – basically want to stop the clock on their US citizenship as soon as possible. To avoid covered expatriate status, one would have to file 8854 and the previous 5 years, but these are not required until the year after the renunciation (or, in the case of relinquishment, the year after you sign the 4079 at the consulate).
Here’s some info on that.
(1) Dept of State
Dept of State basically doesn’t care about one’s tax status as the citizenship itself (and the issuance of the CLN) is not dependent on one being tax compliant.
DoS’s involvement/connection with tax is the following:
(a) At the consulate the person signs DS-4081, Statement of Understanding of Consequences; one of the 12 items on it is Item 10, that renouncing “… may not exempt me from US tax income taxation [etc] …”
(b) The questionnaire, DS-4079, at q. 13 (e) asks “Do you file US income or other tax returns?” The tax question on the DS-4079 is there as an indicator of your ties and connections to the US, which is important if you’re claiming to have relinquished some years ago (in which case you’re trying to illustrate your lack of ties/connections/citizenship behaviour). For renunciations, it’s irrelevant if you have ties/connections/citizenship behaviour or not, so not all consulates require the DS-4079 for renunciations.
(c) Dept of State is to provide IRS with a copy of each CLN they issue as per DoS Interagency Coordination and Reporting Requirements, 7 FAM 1243(a).
(2) IRS
To log out of IRS and avoid covered expatriate status, IRS requires that the person file their exit tax form (8854), their final year form, and the five-years-previous-to-final-year forms, by June 15th of the year following the renunciation (or, for relinquishment, the year following the signing of the 4079 at the consulate).
FWIW, if a person chooses not to file, the citizenship itself remains terminated and the CLN remains valid.
@Japan T,
I know of brokerages that refuse to deal with US citizens, but that has nothing to do with compliance. The ones that I know of that allow US citizens will demand a W-9, but do not demand proof of IRS compliance. (It is not their problem if their customers get in trouble with the IRS, as long as they themselves do the needed reporting.) The ones that do not allow US citizens just have a blanket prohibition, regardless of compliance.
I hadn’t heard of banks demanding compliance certification, but am prepared to believe some might. Especially if they are US-owned, like Shinsei Bank. Though again, I suspect it more likely that the bank is more concerned with their own compliance than that of their customers. But if you find more details, they would be of interest.
@foo
This student is a very rare breed, he is one of the very few criminal pathologists in the country. He just left his position in the crime lab and take a position with the MHLW, so is scheduled is a bit hectic and we have not met since the beginning of this month. But I will ask him if he can provide more details when I get in touch with him again.
@Japan T, it’ll depend on the bank and how scared of the US they are. Here in Switzerland I made the mistake of not sending a copy of CLN to one of my banks when I got it. A few months later I got the paperwork for signing a W-9 and a letter with it suggesting that I should become compliant by entering an OVDP program if I wasn’t already tax compliant. I was able to provide the CLN so it was no problem, but I don’t know what the bank would have done if I hadn’t had it as I wasn’t compliant at the time – still doing the filing. It’s more something to be aware of if it’s going to take you some time to renounce. If your bank already knows you’re a US citizen then I doubt they’ll be asking for anything else. But you never know these days.
Now that pretty much fits with what I felt the situation would be. The law is not as important as how FFIs respond to it.
It has been so long since I opened my accounts that I do not remember if any of my banks even asked which nationality I was. They probably did ask for my passport and or gaijin card and photocopied it like every where else here does.