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 ย large for our software to handle well. See Renunciation and Relinquishment of United States Citizenship: Discussion thread (Ask your questions) Part One
@Frank, and re “…a U.S. trained and licensed attorney accompany them for the interview.โ Exactly what was the specialized expertise they had that would be worth 10,000. – 12,000. ?
And the evidence of vast expertise and training in US law pertaining specifically to renunciations? And what type of special licensing exists in the area of US law pertaining to renunciation specifically?
“… a U.S. trained and licensed attorney…” is a pretty wide and vague category. Trained and licensed WHERE, and in WHAT and for HOW LONG?
For ex.
JD, 2010
Bar admission:
2010 (State of….. US)
2010 (State of…..US)
BS BA Finance/Marketing, 2006
Thousands of people without those meagre credentials have successfully renounced/relinquished themselves.
Sorry, left out this one;
LLM (Tax), 2011
The “complimentary seminar” is meant to hook you before reeling you in.
Please understand I was reporting on some of the information I heard from the lawyer, not defending it. I may not have reported 100% accurately, but we were clearly told that a US licensed lawyer with a signed G.28 form could go with you. But, as has been pointed out, the current instructions say that an attorney cannot go with you.
Moving to a slightly different topic, namely that of avoiding becoming a covered expatriate, one thing I learned that might be helpful in some cases was that if you are a US person married to a NRA spouse, having two names on your Vancouver or other house title as joint tenants with right of survivorship doesn’t allow the US person to declare only half the value when filing the 8854 – the names must be on as tenants in common with 50% each for that to happen. Also I wonder about is how to value a Defined Benefit Pension from a company you worked for. The pension plan administrator doesn’t want to quote so I’m wondering if it’s possible or desirable to estimate by multiplying the annual pension by the number of years of life expectancy remaining for one’s age, plus amounts going to a surviving spouse? Any thoughts are welcome.
@Frank, just so you know, my “bull” comment was not directed at you, but at the scaremongers raking in the cash.
I expatriated myself, for $450 and the price of two plane tickets…because I needed my husband to hang on to my puse, phone, keys, etc. If someone wants to give me $10,000-$15,000 to do so for them, I’m in!
@Frank – multiplying your annual pension by life expectancy is going to give a value that is HIGHER than the current cash value of your Defined Benefit Pension. If you want to estimate the value, you should be doing a present value computation with the highest feasible interest rate. For example, $1000/year for 25 years at 3% is worth about $17,400 today, not $25,000. If you’re nowhere near covered with the larger number, then go ahead; but if you’re getting close to the $2m, then it will pay to get someone to value the pension for you. The higher the interest rate and the longer the time period, the larger the difference will be. An exact valuation will require an actuary to use the applicable life tables, though just using life expectancy will get you pretty close.
Thanks for the perspective on valuation of pension income. I will dig out my old financial calulator, put batteries in it and relearn how to use it for the company pensions. I seem to remember reading somewhere that retirement benefits from governments (Social Security, CPP, OAS, UK State Pension, etc.) do not need to be included in the net worth calculation.
@Frank, here is an annuity calculator online
http://www.investopedia.com/calculator/annuitypv.aspx
If its a monthly payment you need to divide the interest rate by 12. You want the highest possible interest rate you can justify. As a note the City of Chicago based on their professional advisors uses 7.5%. Hey, Obama is from Chicago…
The number of payments will be your life expectency in months. You want the shortest life expectency. Look at US tables, look at Canada tables.
But that will give you the lump sum value at retirement age.
Then you need to do a simple present value.
Use this link;
http://www.investopedia.com/calculator/pvcal.aspx
Interest rate is an annual rate so no dividing by 12. Again the Chicago rate is 7.5%.
Insert the number of years to retirement and presto….
Example;
Age 40.
Retire age 65
Monthly; $1,000
Life expectency: age 82
Interest Rate; 7.5%
PRESENT VALUE; 18,876
@Frank
Re the difference between joint tenant and tenants in common is hugely significant, especially in real estate markets like Vancouver and Toronto. I would imagine the majority of married couples would be registered as joint tenants.
It’s quite possible that Boris Johnson would have paid more US tax than we imagined if it was assumed that he paid tax on only half of the net proceeds of the sale of his home – that is if he in fact has renounced US citizenship.
Oops, Boris’s property was no longer in his possession if he renounced when he said he was going to, so it wouldn’t be included in an exit tax calculation – that is if he wasn’t a dual at birth and the exit tax actually applied to him.
As Roseanne Roseannadanna used to say – NEVER MIND! ๐
The difference between joint and tenants in common is still hugely significant though.
@Bubblebustin, Boris was born dual and no he didn’t renounce when he first said he would which is why he got caught on the capital gains tax on the property sale later. In 2015 he said again he was going to renounce, but I’ve no idea whether he’s actually done it or not.
https://en.wikipedia.org/wiki/Boris_Johnson#Personal_life
Re. Owning a house in Toronto or Vancouver and being a covered expat. So what this means for me is that, in addition to sticking it to the Canadian grandmothers, the legislation is giving an extra twist of the knife to widows. It’s hard to imagine how much worse the story can get.
Thanks Medea, I came to the same realization when the coffee finally kicked in ๐
Re valuation of future pension earnings. it’s almost impossible to value the present value of the future payment of a stream of earnings in a defined benefit pension plan- most of which also include death benefits, widows payments and so on. There are a lot of assumptions that may or may not hold water. Actuaries charge a bundle for this. Best to not mention it.
@Noname, ” Itโs hard to imagine how much worse the story can get.”
I can, and I can see it getting much worse!!!
Has anyone else followed that link on the life insurance, health insurance, casualty insurance excise tax we should have all been paying and naturally with a $10,000 non filing penalty?
Hey MonaLisa….as you like to worry….your 8854 is now likely void as you did not file any 7210’s and pay the insurance excise tax on foreign insurance premiums.
@George
I guess that’s why you have to pay the pros the big bucks to get you out of US citizenship. How is any mortal DYIer ever going to know this stuff?
Add the cost of a professional guide on to the renunciation fee, currency conversion, exit tax and five years of tax certification. Infuckingsane. I want to cry when people say “just renounce”!
@George
Like you, I believe that things can and will get much worse, but I am not surprised by the excise tax on insurance. As of 2011 there were 7322 pages of nonsense that we were to read through to determine our filing and tax obligations. Who knows what horrors are buried within that massive stack.
Much, much more is waiting to be discovered to our detriment.
The founding fathers of the U.S. eventually gave up in favour of the easy way out.
They did it by armed revolution.
@George
Certification on 8854 is about income tax only. Failure to pay an excise tax wouldn’t invalidate it.
@Shovel
“The founding fathers of the U.S. eventually gave up in favour of the easy way out.
They did it by armed revolution.”
Because that is they only way to stop a government that will not follow its own laws.
@George, *lol*, for once I don’t need to worry in this instance, as have never taken out any insurance. My spouse pays for buildings and contents insurance.
My primary concern is that the US might introduce retroactive changes that could tax citizenship on former citizens. However, I’ve thought more about it and now think that hopefully people like myself who’ve renounced and filed all the required paperwork and certified 5 years tax compliance on 8854 should be cleanly out, at least once all the statues of limitations have finally closed.
However, future legislation could make it impossible for those wanting to expatriate to renounce U.S. TAX citizenship. It certainly would deter applicants from expatriating, especially if FATCA could be tweaked to enable expats to retain local banking and mortgages.
@mona lisa mona lisa……let me appeal to your “inner homelander instinct.” Hey we both have it. ๐
You understand Congress Critters. Are they honourable?
You also understand the finances of the USA are in a shambles and its no longer possible to repay the national debt.
Can you see Chuckie Schummer ten years from now introducing the Payback America Tax (PAT)? That tax would bring former “deserters” back into the tax fold to payback America for everything it did for you afterall students have to payback student loans and if students have to payback student loans, deserters need to payback America. Whats fair for students is fair for deserters.
You say what would the Supreme Court say? Remember, the judges in black robes determined that the Obamacare fine was in fact a tax when BOTH the arguing plaintiffs and defendents argued it was a fine.
FATCA and the IGAs have made George very jaded. Its for that reason partly, I remain a “partly documented” relinquisher not having a CLN but only an explicit letter from a certain government agency that is not State and my cancelled passport from State. Note, I do not fault nor criticize those that get CLNs and jump through other hoops.
The battle we have to fight is for our country to protect its citizens against all foreign powers.
@George, as I’m no longer U.S. citizen, they can go f**k themselves! ๐
The US is NOT coming after us. They are forcing our banks and the governments of the countries we live in to round us up for them. And no longer being a USC won’t matter went they get down to you.
Whoops, that went thru. ๐
I mean to say, I only now feel obliged to pay US taxes on any U.S.-sourced investments I still have (less than $2000). My biggest fear now isn’t so much FINCEN or the IRS as much as them making it difficult to visit family.
Can I ask everyone’s consensus on how to post out the final paperwork? I just got my tax stuff back from the tax guy. 1040 + 8854. Do they both go to the same place?
After everything else, I don’t want to muck this part up. I recall reading here before about it. Is there a “return receipt” type thing in AU? I’ve never had to even think of it before!