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
Larry, many(most?) of us (in Canada), do not (as of yet) have a CLN. We may be able to fly under the radar for now, but should not get too complacent as the US person hunt follows a phased in approach. What may be possible today, may not be possible a year or two from now. Much like a couple years ago, many had hoped the Canadian government would resist FATCA or ensure exceptions for resident Canadians who long ago left their US connections behind them.
@Larry, it has been discussed, practically every time someone new comes along looking for info – and IF it fits their personal circumstances. That is the key.
@Larry,
I have and continue to look into that option but it looks less and less viable for me and from what I have learned for many if not most who are just learning of this.
Larry,
I’m not saying that you would have trouble each and every time you use your new passport, as I take it you did not get trouble with your US passport each and every time. You have not had trouble yet, hopefully you won’t. However, as the noose is tightening, many who are currently enjoying a false sense of security will learn that it is indeed false. If not prepared for that possibility….
Currently have Canadian US and UK citizenship, and lived in Canada a long time. I just took an Government of Canada employment test for a Field Interviewer (Determinate Part Time position) with Statistics Canada. Assuming I get one of these positions e.g. with references approved, qualifications and skills judged suitable, and required clearances, I will take up this position with the intent of relinquishing US citizenship effective the date of employment, i.e. as someone who took a position with a foreign government. I’ll start using my Cdn passport instead of US, won’t vote, and send in a DS-4079 with a request for an appointment as the first step towards getting a CLN. Will this be accepted as a relinquishment I wonder?
Frank,
Is there any reason you prefer to relinquish in this way rather than by renouncing? My understanding is that for a current relinquishment, the manner of relinquishment doesn’t make any difference to your tax reporting obligations – you’re still liable for US tax until the day you appear before a consular officer to document your relinquishment or to renounce. The fee at the consulate is now the same for renunciation and prior relinquishment. I can see only two differences (others who are more expert than I am may come up with others):
1. If you relinquish by taking employment with a foreign government (I have no idea whether Statistics Canada qualifies for this), then you lose citizenship for immigration purposes immediately and don’t have to wait for an appointment to start using your Canadian passport to enter the US (though US border officials may see it differently).
2. The relinquishment route (rather than renunciation) will require Department of State to rule on whether you have, in fact, relinquished. This will add to the processing time for your CLN and may result in them denying your relinquishment (depending on whether they think your job qualifies). With a renunciation you remove this uncertainty without any additional cost.
@Karen, IMO relinquishing is “less harsh/radical” than renouncing. Again IMO, in the future it MIGHT be better to have relinquished because of lets say a job then go down to a consulate and renounce. I say this wearing my red, white and blue tinfoil hat.
@Frank Norman, you may wish to submit a letter with your employment application that you are taking the job with the intention of relinquishing your US Citizenship, telling them in writing so there is no misunderstanding. That letter will then be part of your official file that you can get a copy of if needed.
The other advantage of relinquishment is that on the “hire date” you are no longer a US Citizen!! You could mail your US Passport to the consulate requesting cancellation because you are no longer a US Citizen at that point and want to do the “right thing.”
Whilst I am NOT recommending my path to anyone because it would be very hard to mirror, my US Passport was sent back to a consulate, it was then duly cancelled and returned to me cancelled.
@George – point taken. The red, white and blue tinfoil hat may be a useful accessory. OTOH, I don’t trust the State Department – as seen in the recent post on the Philippines, they don’t always stick to the statutes as written.
Under the current regime, I don’t think there’s any way to avoid paying the $2350 if you want a CLN. Of course, if your bank accepts alternative proof of loss of citizenship (and if you aren’t worried about the IRS), perhaps you can do without an official CLN.
@Frank Norman, @George
Keep in mind that the $2350 is non-refundable, whether or not your request is approved. If your request for relinquishment is rejected, you’ll have to book another appointment as well as shell out another $2350.
So my recommendation is to try to relinquish for the reasons George mentions, but when you go for your appointment, ask the consular if s/he thinks your request is likely to be granted. If s/he says there’s a chance it might get rejected, I would opt to renounce instead because, as Karen points out, these are generally approved (except under extreme circumstances, such as evidence you’re not of sound mind, etc.).
Points taken. Given that relinquishment does not save any fees, and entails uncertainty in some cases, I conclude that relinquishing instead of renouncing has no advantage except when the expatriating action took place years ago.
@Frank
“Given that relinquishment does not save any fees, and entails uncertainty in some cases, I conclude that relinquishing instead of renouncing has no advantage except when the expatriating action took place years ago.”
Yup, that’s pretty much in a nutshell. Given what you’ve told us of your situation, my choice would be to renounce.
(My sense is that it’s can be difficult to prove that you intended to relinquish by accepting a job with a foreign government unless accepting that job required making an oath of allegiance. That’s not to say that some people with government jobs that didn’t require that never get approved, but it’s a crap shoot and there doesn’t seem any real way to appeal a rejection.)
@Larry wrote:
“if you are in another land living a life as a citizenship of that land, who is to know you used to be a US citizen unless you tell them?”
Just last week I spoke to the FATCA officer of a European bank. In accordance with their IGA obligations they had noticed that a client’s European passport showed birth in “Brooklyn” and wanted to confirm that Brooklyn is in the USA. (This client has filed FBARs for many years and anyway has little cash.) I changed the conversation to inquire whether the bank intended to close accounts of US Persons. The officer replied, “Not yet”. A troubling answer. We then discussed the implications for existing mortgages.
A harder case: I am caring for my non-US grandchild today. Three years ago when he was born I had an exchange with the State Department to get their views on his status. His mother was born abroad and lived just over a year in the USA as a baby, near the Canadian border. Thus certain presumptions discussed in a Foreign Service Journal article apply: http://www.afsa.org/citizenship-and-unwed-border-moms-misfortune-geography The State Department said they’d be happy to affirm the child’s American citizenship based on an affidvait that the mother did not, in fact, travel to Canada over the period. That affidvait, which anyway would be false, will never happen. One has to wonder over the ambiguity, and more than that the inplicit racisim when compared with the Mexican cases discussed in the article.
and
“the King of Thailand was born in Massachusetts; do you think he needs a CLN?”
I’ve looked online for facts, and there are none except for some speculation on Reddit and here: http://www.thailandqa.com/forum/showthread.php?8489-Interesting-facts-about-HM-King-Bhumibol-Adulyadej The point really is the visa and residence status of the parents at the time his father was a student in Cambridge, Mass. Typically foreign sovereigns — royalty and the like — travel on diplomatic passports. That is not relevant to “status” unless the visa and residence status denote immunity: and “sovereign immunity” is even grander than the diplomatic kind. I found no confirmation online that this was or wasn’t the case of King Bhumibol Adulyadej’s father.
In any event, State Department practice is pragmatic for foreign government officials who fail to renounced their US citizenship. US citizens will not be granted agrément (as Ambassador) or diplomatic status (and American spouses of foreign diplomats do not get such status, or tax exemption, creating an interesting issue that the IRS avoids in relation to community property income). Short official visits are another matter: the Executive Branch can do what it wants in such cases. Minor children of diplomats of foreign government officials are already an excepted class with respect to entry and exit with US passports. 9 FAM 202.1-2(c) https://fam.state.gov/fam/09FAM/09FAM020201.html
@Medea Fleecestealer:
As you know, Switzerland does not include place of birth in its passports or on its ID cards. Which means that the reply attributed to them in this GAO report is either erroneous or ironic: http://www.gao.gov/assets/210/209508.pdf
ID cards of EU/EEA/Swiss countries have the same status within Europe as passports. No country or bank can ask for more, although there can be issues when a border guard or bank officer has never seen one and doesn’t know the rules. Most banks seem to be accepting forms W8-BEN at face value. There are, after all, still many former US citizens whose loss of status pre-dates “expatriation tax” and had no legal reason to seek a CLN thereafter. While the IRS implies in its rule-drafting that SCOTUS re-attribution of nationality was automatic, international law is to the contrary absent some assertion by the individual of an “attribute” or “right” of citizenship, and the State Department follows that rule.
It is said that some Swiss and other banks have closed accounts of US Persons. I had a discussion with one bank last week that was revelatory: they were not doing so “now”. Obligations of banks are less in relation to accounts worth under $50,000. A bank may not be able to call in an existing mortgage: I know that Credit Suisse has a particular practice in relation to mortgages held by US residents since a small savings account has to be maintained to make the instalment payments. Doubtless other banks do so as well, and of course Swiss Postbank (PostFinance) is obliged to open at least a simple account for any Swiss citizen living anywhere: http://www.bilan.ch/argent-finances/postfinance-ouvrir-un-compte-aux-suisses-de-letranger
I am aware of nonresident holders of Swiss mortgages whose properties are “under water” — worth less (given “developer’s premium”, Lex Koller, Lex Weber and a disappointing property market since 2008) than the mortgage. Even without reading the mortgage documents or the law, I think banks’ calling in of such loans unlikely. (I do know of mortgage offers to Amcits withdrawn in and around 2010 on the eve of completion/closing, leaving buyers to scramble.)
@andy05, things have calmed down on the banking side here somewhat, but when FATCA was first on the horizon several Swiss banks threw their non-Swiss residency based US clients out, refused to open an account or placed restrictions such as needing to have a C permit (permanent residence) for an American to be able to open an account. Here’s a few English Forum threads:
http://www.englishforum.ch/finance-banking-taxation/92380-raiffeisen-doesn-t-want-b-permit-holders.html
http://www.englishforum.ch/finance-banking-taxation/139915-current-bank-won-t-allow-me-open-accts-my-us-de-children.html
http://www.englishforum.ch/finance-banking-taxation/152032-raiffeisen-terminate-all-us-customers.html
And there are still problems with banks like PostFinance and even UBS and Credit Suisse at times. This English Forum thread from February this year shows it’s still not easy
http://www.englishforum.ch/finance-banking-taxation/249371-no-go-postfinance.html
Everyone needs to read the links provided by M F above. This is the future many if not most of us face.
M F thoughtfully included the links in chronological order, read them in the order provided to see the progression of US Persons losing their accounts and moving them to the one bank that would accept them only to have that bank begin refusing to take new USp customers beginning this year.
From the last link,
“So, it could then be deduced that a C permit is now needed to open a bank account with Postfinance. This is bad news.
“In December the US Dept of Justice fined Postfinance $2 million for not being able to demonstrate that all US Persons, who had or had had accounts with it, had properly declared their accounts to the IRS.”. ”
The poster then wonders if this new refusal is blowback from the fine.
Once banks start getting fined even after they spent all the money on the new IRS compliant systems, they will have to toss us overboard like a ship foundering lightens ship by jettisoning cargo to stay afloat.
@Media Fleecestealer wrote: “my Swiss driver’s license gives my nationality as US”
Just noticed for the first time that Swiss licences specify “lieu d’origine” which for foreigners is interpreted as nationality, not place of birth (looking at my spouse’s Swiss licence: I have a GB licence which specifies “country of birth”.
I thought of getting a Swiss one but at our age it means a medical. Which I have to get this year for Québec too. And I already have more licences than I need, enough to fan them out to car hire companies (as I did to Sixt in GVA airport a couple of weeks ago: “Pick a card, any card.”).
If you have multiple driving licenses it is advisable not to show more than one at a time. In most jurisdictions in the US and Canada it’s illegal to hold more than one.
I’m still trying to find out the waiting time for an appointment to renounce in Vancouver. Anyone?
I’d like to know also. I asked the same question of a US tax Lawyer yesterday, and was told that this varies greatly from month to month as the volume changes and sometimes slots open up.
This lawyer will coach you for the appointment and accompany you to it. He communicates with Appointment Schedulers in various consulates to get you a better appointment date, and sends some clients to Bermuda or the Bahamas when Canadian consulates are too slow. Calgary and Toronto generally have the longest waits in Canada. Unfortunately the fees are in the region of $10000 to $12000 for the expatriation process, not including any tax filings you might want. His strength is in getting the expatriation timing and details right and coodinated with any asset moves you might need to avoid covered status, and he has the experience and up-to-date tax knowledge some others do not.
It was suggested the US State department may be playing games by reducing the number of expatriations they process monthly, to minimize the news media attention that happens when the number of names in the Federal Register increases again.
i don’t have $10000 for this myself but it may be worth it for some.
$12,000 for something that is relatively easy to do without a lawyer. Unreal! i guess that’s good if you are prt of the .01 %
What’s next, a complete package that includes hotel, food and transportation?
@ Frank,
I suspect you’re referring to a Moody’s seminar this weekend. Scaremongering. I recall they have the following on their website:
It’s not clear to me why their clients apparently are “coming to a crescendo with a one-hour interview” and being asked the purpose and intent of their decision – because we’re not getting reports of that occurring. See our 239-page Consulate Report Directory.
If a consulate is routinely going on for an hour, they are most likely going out-of-bounds – it would be absurd to have a lawyer to sit there and let them do it.
These meetings usually take about 10-15 minutes of face time, most of which is pushing papers back and forth. Contrary to the Moody’s article, you are not required to give a reason for renouncing, and from the reports we’re getting, they generally don’t even ask. (Occasionally they do ask – if so, you give them a nice neutral one-liner, like “because my whole life takes place in this country” or “my life has no connection to the US, so I prefer to have just one citizenship” And that’s the end of it.)
“This lawyer will coach you for the appointment and accompany you to it.
Bull. Lawyers can’t accompany you to your appointment…no one can. Not even your car keys, cell phone, cigarette lighter, coffee, or purse can accompany you.
Although two US Consulates in Canada previously allowed lawyers to accompany the person who was expatriating to the appointment (Calgary one of them), that has changed with new procedures for all US Consulates in Canada: http://www.citizenshipsolutions.ca/2016/02/17/new-instructions-to-book-canada-appointments-to-relinquish-or-renounce-us-citizenship/
Not necessary (even someone without *requisite mental capacity* must not have any influence or assistance in their decision???). My one appointment in Calgary sure didn’t take even one hour to complete.
@Frank
If this is what they are saying they are permitted to do and at that cost, I now hang my head in shame as a lawyer.
I should know better that trying to catch up on posts late at night before I head to bed.
As posted above, we now know the procedure is not to be allowed to be accompanied by your solicitor. By all means consult one you trust before hand who has the rare experience in this area but be aware that you should not be billed for their attendance at your hearing because it CANNOT happen.
I despair.