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
@George I will no longer live my life according the whims of a foreign government.
Hi George, you’re talking my language. Welcome to the Club of the Few. Each person has to do what is best for herself or himself and family which is exactly what Gwen and I are doing, and we live without fear and sleep well. I assume you do as well.
I do note it can well be much more difficult depending where one resides etc.
@japanT
Agree with Hard pressed and George
Do not get hung up on letters from the IRS sent years ago. Paper return records are not kept longer than 7 yrs, and that’s IF they can locate them. I was told by my lawyer that they have boxcars full of paper fbars sitting in parking lots with no filing systems. Electronic filing is another case.
File those back 5 yrs, and 6 yrs fbars with the (I didn’t know I had to reason), and get your new citizenship .Keep it all as simple as poss, they
are overworked and should not be interested in minnows. Or just relinquish and don’t look back.
Re: Proof of IRS compliance.
To the best of my knowledge there is no such thing, certainly not an official statement from the IRS. It is possible to have proof of NOT being in compliance; i.e. a letter which details an unresolved problem the IRS has with a person’s tax situation. But a statement from the IRS that all is in order? That simply doesn’t exist. The best one can hope for is to receive no communication from the IRS. That doesn’t mean one can’t get a dreaded letter the next day, next month, or next year.
Not even the expiration of the statute of limitations guarantees one is compliant. The IRS always reserves the right to reopen any past return where they determine there is undeclared income, fraud, or failure to include certain reporting forms. Keeping taxpayers continually on their back foot is one of the time-tested strategies the IRS uses to intimidate people.
So if your financial institution requires proof of compliance, I’m not exactly sure what you would show them. I guess it depends on the whim of the individual bank.
I have a request that those here who are most knowledgeable- make their way to edit the Wikipedia site re: FATCA.
It is absolutely not clear.
Regarding a CLN without being tax compliant- it depends on the country when people give that kind of advice. Canada said it would not collect from or expedite duals. I dont think Switzerland will either because tax evasion isn’t a crime which merits a jail sentence in Switzerland. One would have to clarify how Japan intends to handle such a person who is considered a criminal in America but perhaps not so in Japan? It would also depend on how old one is. I know a few elderly people who got a CLN and did not file and will most probably be dead before their case reaches an IRS desk.
But the alternative is to remain a US citizen and do your diligence. Pay the taxes ( with wife`s help) in Streamlined and fill out those forms every year. This is just me- but I don`t know how much I would feel at home in such a foreign society. I dont know if they or i could ever consider myself japanese- but Shogun did it.
In that case…. I would want an “out” with the ability to return to a western society. Just my 2 cents. I would not recommend anybody to get a CLN and not file taxes mainly because there is no expiration date for what is owed, and late interest rates are 20%. In addition, one does not know how technology will develop in the future, nor how laws might change.
@polly
“I don’t know how much I would feel at home in such a foreign society”
I agree, maybe that is part of JT’s reluctance.
Maybe he should become compliant, then decide how to proceed when he sees how the cards fall.
@Ginny, you already know enough about me to have sensed that attribute was already within my core being. But I have to say it was you and Gwen who pulled that ethos out of my core being so I could see it.
Whilst I firmly gave up USC, the two of you are simply rejecting the “gift” of USC.
I am now 99% confident that I am also Canadian because of recent law changes in your country but having said that since I have not made the jump to get the passport being over age 18, I reject the gift of being a Canadian. I am no more Canadian than you are a US Citizen. It is in the dreams of the United States that you are a US Citizen. I do not care if Canada passes CBT as I will firmly reject that.
If Russia passed a law declaring that all persons born on former Russian Territory are Russian Nationals would said citizenship be “accepted” by all those born in Alaska?
In Canada, the only thing you can be is Canadian.
Part of the problem is that Americans often consider themselves half French and half Irish or some other fractional identity. I always rejected such identity even in my youth, I was an American and could be nothing else within the USA. But that illogical comment on fractional identity I believe has crept into political decision making.
As a lawyer, I am sure that your only life change has been from traveling across the river with a drivers license to now traveling with your Canadian Passport as you will SOLELY enter the USA under the protection of your Canadian Passport.
@heidi
Yeah to the reluctance idea – and maybe also because he feels this is all such an abomination- so unfair and grotesque, which it is. But that doesn’t mean one does not have to deal with it. I have found that life is full of injustices. They are all over the place. You too?
@ Japan T
The IRS just wants numbers to keep their files looking all compliance pretty (makes them feel smug and satisfied, big and tough). Give ’em the best numbers you can and if they question you later (they probably will not) then you will honestly tell them you thought you were doing it right. This is a rephrasing of something another Brocker wrote a few years back (unfortunately I don’t remember who it was).
The current advice you are getting is to use the simplest method of applying an exchange rate to your salary payments (i.e. the annual average exchange rate for a given year — easy to find on the internet). Makes sense to me and I hope it does to you too. (You can’t find that 10 year old letter anyway and people honestly do forget things like that.)
So will it be …
First Step — get your new citizenship.
Second Step — get your relinquishment done so you have a CLN for the banks (go to Taiwan if need be).
Third step — give the IRS and FinCEN the best numbers you can (numbers you can be working on while doing the First and Second steps).
Or will you start with Step Three as some suggest (i.e. attempt to do Streamlined and hope they deem you eligible — the long filing gap might create a problem there.) As always, the choices are yours to make and your circumstances are probably even more tangled than you have been able to relate here (best not to relate too much). GOOD LUCK!
@Polly and Heidi
While it is true that I am not at all thrilled with the notion of becoming Japanese and far less at the idea of being forced to renounce US citizenship, any perceived lack of action by you is not due to any reluctance to do so. I have no reluctance to do so.
But I simply will not be enslaved to paperwork required by an absent government, no way no how.
“Necessity is the plea for every infringement of human freedom. It is the argument of tyrants; it is the creed of slaves.” William Pitt
Can not anyway, regardless of will or reluctance. If I could be compliant, I would not be in this mess in the first place.
The notion that one who lives in Japan has not learned to deal with injustice is laughable in the extreme. Japan is, to borrow a phrase, the land where one size WILL fit all. When those who can not fit themselves into the social straight jacket commit suicide, they are called weak and society thought to be better off with out them. I could provide a list of injustices personal Japanese acquaintances have been dealt that would shock you to learn that they still exist in any modern society. When is the last time you were forced to submit to a police search of your person and affects while walking about minding your own business. Though not recently, I have seen numerous Japanese men stopped by the police for a street search, in violation of Japanese law. Foreigners and those who look nonJapanese are often stopped by police and forced to show their papers. I have personal experience with this. Do you? And these are the more mild injustices that I am all too personally aware of.
I come to this site to learn, to gather information, so please do not lecture me on topics you know nothing about. What you have surmised about my situation thus far could not be further off the mark.
While I do not know if you are of the same opinion towards the NSA as many I have tried to tell about FATCA, I am amazed how those who ‘refuse to allow’ the NSA access to their personal data are so willing to allow the IRS access to their personal financial data. Now THAT is crazy. Members of my own Stateside family refuse to sign up for Obamacare because of all the personal information that they must provide to a government they do not trust yet advise, as you do, that I turn over my wife’s financial information to this same untrustworthy government. That is crazy.
The advice provided on obtaining a CLN without back filing may fit your situation. Did you have to report another person’s assets to do so? If not, that may be an easy decision to make. Do not suppose it is as easy for others who have third parties to protect.
I do agree with your statement about tech. and laws changing. What I do not understand is why anyone would want to voluntarily rejoin that system, especially as a step to free themselves from it.
@heidi
“Paper return records are not kept longer than 7 yrs, and that’s IF they can locate them. I was told by my lawyer that they have boxcars full of paper fbars sitting in parking lots with no filing systems. ”
Now that is encouraging in the extreme.
The only reason I need to file FBARs in the first place is that we shared an account. I have never been anywhere near the reporting threshold on my own. It is not my money and assets I would be reporting.
@iota
There was another thread either by or commented upon by Jim Jatras (I believe) where he said that FFIs closing USC held accounts was irrational for the reasons you give. I have not been able to read all of the thread nor even his point, but it sounds to me like some are closing these accounts rational or not.
I wonder though, if it is truly irrational to close these accounts as it may offer some protection from exposure from future attacks by the USG.
Are the costs the same for reporting accounts held by USCs and reporting that they have no accounts held by such persons? If the latter is in anyway less expensive a/o burdensome I would think that to be incentive enough to dump USC account holders.
@Hard Pressed
“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. ”
While having my eyes examined during my yearly check up in the navy, the doctor ask if I had any difficulty with my vision or experienced anything unusual with my eyes. I answered no. Apparently, during the examination he noticed my eyes doing something that was not usual and he asked about it. I said “yep, that’s what they always do” and he got very angry with me. “What do you think I meant when I asked you earlier about experiencing anything unusual with your eyes!?” “Not unusual to me, they have always been that way.” Doc: “Why didn’t you tell me about it when I asked you!?” Me: “How in the hell am I to know that the only eyes I have ever had the experience of seeing through act differently than other people’s eyes, I ain’t no eye doctor?”. Stunned into silence for awhile, he then, much more politely, tested and prescribed eyeglasses for me and my life long headache disappeared. He never asked if I had frequent or constant headaches and I had no reason to attribute them to my eyes, having had them examined many times by many different doctors during routine vision checks through out childhood and the service.
A lot of lessons in that, I think, but what I would like to focus on is what is unusual to one or even to most may be perfectly normal to another. The converse is also true. I tell my students studying medicine to never tell their patients any condition is normal nor any procedure routine. The doc may have cut into hundreds of patients but the patient in front of them most likely does not routinely go under the knife.
The IRS instructions to me and their threat, while unheard of by you and many here, is as real and usual to me as my eye sight.
Having that experience and reading in the TAS ARC of massive fines for simple errors, it is not so easy for my to discount my own experiences.
However, as Heidi pointed out, they don’t keep paper returns more than 7 years, so that point is mute except that letter is the one and only reason I stopped filing tax returns.
Yes, Norman is helping out, especially with details and possible alternative routes.
@JapanT
Here is a guide by Phil Hodgen re calculation of division of assets between spouses for 8854
http://hodgen.com/question-about-expatriation-from-reader/
http://hodgen.com/community-property-and-form-8854s-balance-sheet/
Thanks, that helps.
Following
Forgetting for now the dearth of time I have to deal with any of this, is the following feasible?
Gain Japanese Nationality (JN) 2 yearish from now
Receive CLN without filing, 2 years after JN.
File tax returns one year after receiving my CLN.
I have nowhere near enough of my own cash in my accounts to trigger FBAR reporting. We closed our joint account a year ago. By the time I would be filing FBARs my wife’s money would no longer be reportable, six years having passed since we split our finances. Thus, I would not need to file FBARs at all.
Of course, I could still possibly lose my passport before gaining JN and/or my bank accounts before receiving my CLN (although I am looking into the postal accounts here), but otherwise, does this seem workable?
On another point, does anyone know what the current law is for children born overseas to USC parents who have not been registered with the US Embassy? I am especially interested in whether they can enter and more importantly leave the US with a nonUS passport.
@Japan T, you’re making an assumption that it will take 2 more years to receive your CLN – there’s no way to say how long it takes for it to arrive. You could relinquish the day after you gain Japanese citizenship and the CLN could arrive 6 months later for all you know. You can have a look in the Consular Report Directory for others’ experiences of dealing with renunciations/relinquishments all over the world. Unfortunately, there’s only a couple for Japan and maybe a bit out of date, but in both cases the CLN arrived within a few months of the relinquishments..
http://catseyesap.com/crd/Consulate%20Report%20Directory%202016.04.c.pdf
If your children weren’t born in the US and you haven’t registered them, they’re invisible as far as the US is concerned. Okay, their law may say that they’re US citizens because they were born to a US parent, but without registering them at a US embassy/consulate no one knows of their descent. For travel purposes it might be better for them to enter with your wife and you enter separately at border control otherwise seeing your US passport might trigger questions of whether or not they’ve been registered and if not, why not. Of course once you have Japanese citizenship and have lost the US one, that won’t be a problem because you’ll be carrying a copy of your CLN with you and it’s details should be in the border control’s computer system.
@ Japan T,
Re:
No, the deadline for filing the tax returns is June 15th of the year after you notify DoS of your relinquishment (sign your 4079 at the consulate). So, if the consulate meeting is in 2016, the deadline is 15 June 2017.
26 US Code 877A(g)(1)(B)
8854 instructions
To minimise your wait time for an appointment, you don’t need to wait until you have your Japanese citizenship to set up the relinquishment appointment. As soon as you get the date for getting your Japanese citizenship, you could set up a consulate appointment to occur as soon as possible after that occurs.
Impossible to predict when you would get your CLN, but as Medea suggested, check out the CLN delivery time chart, pages 224 to 235 of the Directory. For relinquishers so far, it’s ranged from 2 weeks to 13 months. Note: So far, the really long CLN turnaround times tend be Western Hemisphere District. Your district, East Asia/Pacific, has tended to be relatively fast in comparison, though one recently took ten months.
Ah, yes I did. I guess I was thinking that since I had 2 years to relinquish USC before I have my JC annulled that I could somehow use up as much of the time as possible. Very different from what I was thinking earlier, so I have no idea where I got this idea. Just trying to be hopeful, I guess.
Hmm, got to rethink the timing.
For my child, he has been entered on my wife’s family registry (koseki) upon which my name, birth date, nationality, and if I remember correctly, my birth place, are also registered.
Japan recently issued what they call “my number” to every resident in Japan. This number links all data. So, when the “my number” system is fully up and running, each bank account he has, his tax information, his residence, passport (?), and with whom he lives and the fact that his father was an American at the time of his birth will be known to one and all who have access to his my number. His banks will know, so will his schools and later his employer, and if will be on his passport, every country he visits may know as well.
As of yet, as far as I know, this info is not being shared with foreign governments. I believe it will be, and sooner than later.
The reason I ask, as much as I had planned to take to the US to meet the American side of his family and tour the historical places etc, if he is under any threat whatsoever from that gov. I will not being taking him there. In that case, I will also not be going back and won’t worry about their damned paper work.
I think you have to submit your family register to the embassy when you relinquish, so your kid having been born while you were a US citizen would become known to the State Dept. then.
That is both very good news and bad news. The good side is easy to see. The bad side is I do not want to report my wife’s assets to thise criminals and would like to stretch this process out for five years if I coukd safely do so. Might end up like that anyway, with no time to spare for this and needing to meet the language requirement.
But thanks. Knowledge is power, or so they say.
Bloody hell, what in the hell does the Embassy need with a Japanese Koseki?
Proof of when you naturalized, I suppose. And that you naturalized and weren’t just born dual?
If so, perhaps if you renounced instead of relinquishing, they might be satisfied with just a Japanese passport?
All just guessing, of course.
The law is this:
“Birth Abroad to One Citizen and One Alien Parent in Wedlock
A child born abroad to one U.S. citizen parent and one alien parent acquires U.S. citizenship at birth under Section 301(g) of the INA provided the U.S. citizen parent was physically present in the United States or one of its outlying possessions for the time period required by the law applicable at the time of the child’s birth. (For birth on or after November 14, 1986, a period of five years physical presence, two after the age of fourteen, is required. For birth between December 24, 1952 and November 13, 1986, a period of ten years, five after the age of fourteen, is required for physical presence in the United States or one of its outlying possessions to transmit U.S. citizenship to the child.) The U.S. citizen parent must be the genetic or the gestational parent and the legal parent of the child under local law at the time and place of the child’s birth to transmit U.S. citizenship.”
https://travel.state.gov/content/travel/en/legal-considerations/us-citizenship-laws-policies/citizenship-child-born-abroad.html
Whether you registered the birth or not, the US assumes that your child is an American citizen if you meet the residency requirements. Unfortunately, you can’t renounce on his behalf, that will be up to him when he’s old enough to do so if he wants to go through whatever rigmarole they’ve come up with by that point in time. Frankly as he hasn’t been registered I would just ignore the US’s assumption.
Presumably, once you get Japanese citizenship your “number” can be changed to reflect that fact once you’ve relinquished.
As for any threat, well, until he’s old enough to earn an income that’s unlikely unless there are Japanese bank accounts in his name and the bank wants proof he’s relinquished too. Travel-wise you may get told off by border control if he doesn’t have a US passport when he enters, but that’s about it. Worst case is they refuse to let him in, in which case you turn around and go home again.
As he isn’t in the US system in any way, there’s nothing the IRS can do. His birth isn’t registered, he has no SSN so isn’t in their tax system.
Still, if Trump gets in he wants to get rid of birthright citizenship so maybe we’ll all luck out in that case. Gee, an actual reason to vote FOR him! EEK!