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
@InNeedOfHelp, ouch! Very bad advice from the accountant as there is absolutely no need for you to file to get an CLN. Be prepared to sue for such bad advice because I fear they’ve cost you your relinquishment. If you filed after applying for your relinquishment then yes the State Department is quite likely to take the view that you didn’t intend to relinquish – otherwise, why did you bother to file tax returns? They’re not concerned with the fact you got bad advice, it’s your actions that speak and to them your action in filing means you didn’t really intend to relinquish. Although Streamlined can be used to get up to date before exiting the US tax system, it’s really meant for those people who aren’t compliant to become so without incurring any penalties and the expectation is that they continue to be US citizens and will continue to file in future.
Sorry, I can’t help with advice about appealing, but if all else fails you still have the option to renounce. That can’t be denied unless they can prove you’re either mentally unable to understand what you’re doing or they believe you’re under duress to renounce. You will get a CLN, whether you bother to file further returns to exit the system cleanly is up to you.
@InNeedOfHelp
Do you have any evidence from the accountant eg an email stating that you needed to file first before applying for a backdated relinquishment? Even with this I believe you will be facing a long uphill struggle to receive a successful appeal.
Why not renounce and back file the preceding two years to exit quickly and cleanly?
@Medea
This is a bit of a long story but I’ll try to explain as well and concisely as I can. I applied for some additional bank accounts and they asked for ID, when I showed them my Canadian passport with a US birthplace they asked if I was a U.S. citizen. I said no, that I had given up my U.S. citizenship years ago and they said I needed documentation to prove that. They mentioned a CLN which I had never heard of and suggested that I seek legal advice or perhaps talk to an account on the matter. I chose the route of an accountant because I assumed it would be much cheaper. The accountant basically said I could seek legal aid to try and clear up my citizenship status or I could get a CLN by going through the streamlined process.
I was born in the U.S. to an American father and Canadian mother. I came to Canada and became a Canadian citizen when I was 10 years old. I am well into my 40’s now. The U.S. is a foreign country to me and I know nothing of their laws. I knew nothing of this whole tax mess and kind of blind sided by it. I definitely did not handle acquiring my CLN in the best manner, however I also don’t think it should matter since it’s supposed to be impossible to re-acquire U.S. citizenship. The time between my relinquishment and when I did taxes was nearly 20 years.
In any case, I am considering renouncing just to get this whole mess cleared up so that I can be free of it. I only did three years for the streamlined process and if I’m not mistaken I will have to do two more years of taxes before I can renounce? Also, I will be late on last year’s return since I have not yet filed taxes to the U.S. for this year. They have sent me four dates for renouncing but have not yet confirmed whether I will have to pay their exorbitant fee again which is why I am considering appealing.
@heidi
I am trying to get confirmation from them that I won’t have to pay the $3000 again since I have already flown from Regina to Quebec City and paid the fee for the formal relinquishment/request for a back dated CLN.
And unfortunately, no I don’t have any proof of what the accountant said. That advice came over the phone..
And people wonder why I am reluctant to spend time and money I do not have on accountants and lawyers.
What a mess. I do hope you can free yourself of it.
@InNeedOfHelp
You will have to file 5 full years and one partial (for the year you renounce) If you have filed 2013, 14, 15, you can back file 11,12, additional streamlined, then partial 2016 and 8854 by June next year (if you renounce this year).
Explain the bad advice situation to the embassy staff and maybe they will take pity re fee.
@InNeedOfHelp, unfortunately “impossible” isn’t a word the Americans use in relation to losing your citizenship. As you can see from Polly’s posts a bit earlier in this blog, they can change their minds any time and you have no way of knowing unless you keep up to date with changes in US law. Ridiculous I know, but nevertheless true. What she’s asking about US citizenship-wise may even apply to you, I don’t know.
You will need to pay again if you go ahead and renounce. You tried the relinquishment and it was refused so this will be a new application and hence subject to the fee again.
My advice to clear the tax quickly – file an additional earlier year to the ones you’ve already filed making up you up to 4, file for this year (I think you can have an extension until October 15th) giving you 5, and then file the 8854 form next year with a partial return to cover what’s missing between now and your renunciation date. You can go ahead and renounce, you don’t have to be up to date with your tax filing to do so. I did my renuncation first and then did the little bit of filing I needed to do to become compliant.
@InNeedofhelp – it may have been refused purely as a result of box-ticking. (If {vote / use passport / pay taxes} then refuse) without any actual brain cells being employed to determine whether the resulting decision is correct or not.
I should think it might well be granted on appeal. Hang on, someone who knows how the appeal procedure works will probably be along shortly, with advice on how to proceed. If not, try googling this website with the words “relinquishment” and “appeal”, cos I know it’s been posted about in the past.
Good luck!
@InNeedOfHelp
Iota does have a point, nothing ventured, nothing gained.
Did the Consulate refuse your relinquishment or was it sent and refused by the State Dept? Did you explain that you were advised to file back taxes?
Can you in some way get proof of the advice that firm of accountants are giving, maybe by another email enquiry stating the same situation that you were in?
@InNeedofhelp – have a look at this thread: http://isaacbrocksociety.ca/2011/12/16/from-the-archive-did-you-relinquish-here-are-some-proofs-that-the-state-department-uses/
A comment on that thread suggests an argument that might be useful for you in lodging an appeal:
According to this line of argument, at the time you filed streamlined, although you were not a US citizen under State Dept rules (because you had long ago relinquished by performing an expatriating act with the intention of losing your U.S. citizenship), but you were a “tax citizen” under IRS rules because you had not received a CLN.
They can’t have it both ways. They can’t require you to file taxes post-relinquishment until you receive a CLN, but refuse to let you have a CLN because you’ve obeyed the law and filed taxes. (Caveat: I’m not a lawyer, so am only commenting as a layperson, not offering advice.)
Rats. I only meant to bold the word “were”, but messed up the closing html bracket.
@InNeedOfHelp
Did the consulate give a reason for your relinquishment denial?
Did you become a citizen of Canada when you were 10, or did you just register your birth abroad? You may have been considered a dual from birth, which would exclude a relinquishment, but also excuse you from an assessment for the exit tax!
Hopefully some of the Canadians with knowledge of the Canadian situation will chip in here.
Thanks everyone for all the replies.
@heidi
The State Dept. wrote in the letter pretty much what the consulate officer said to me which was that it looks like I only recently found out about my employment at a crown corporation being an act of relinquishment and that I essentially failed to prove otherwise. They also mentioned the that paying taxes is not consistent with having relinquished.
Obviously I have no proof – it’s not like I was going to video tape getting a job and there were no rules that I was aware of at the time that I had to notify anyone in the U.S. Were there even any because if so I can’t find it documented online anywhere? I explained the tax issue as well. Essentially I panicked once I started reading about all the absurd financially bankrupting penalties they levy and that they can freeze and/or seize my money in my Canadian accounts.
I have never had a U.S. passport, have no family in the U.S. and now have no desire to ever go back there.
InNeedOfHelp
I have never had a U.S. passport, have no family in the U.S. and now have no desire to ever go back there.
then don’t play by their rules.
go to a local client based credit union to bank at and they will not ask you about your birth place.
if you really need to use one of the big 5 banks and they need proof of your non Americanness provide them with a “reasonable explanation” notorized by a lawyer or notory.
stop and take a breath and read here at IBS and else where before you make any decisions about what to do going forward
I have been living this nightmare for 3 1/2 years and am finally after about 2 and a bit years of duress be comfortable in my decision to be an undocumented relinquisher/renouncer.
b.c. doc and others here can fill in the nuances way better than I can but it certainly is an option to the comply comply comply cry heard from accountants.
don’t give up hope 🙂
@InNeedOfHelp
I am not sure of the advantage of applying for backdated relinquishment when you had already filed 3 yrs of streamlined and also as a dual from birth, you would be excused the exit tax assessment? There didn’t seem to be much to gain by taking a risk of refusal. If you were not aware of the added risk of having to pay twice, then the embassy should have informed you. You could approach them with this argument and ask for the fee paid to apply to a renunciation.
Sorry, I missed this question in my previous post but I am not a dual from birth. I obtained Canadian citizenship when I moved here within less than a year of moving here. I was able to acquire Canadian citizenship by right of birth due to my Mother having been Canadian.
@INOH
I think that makes you a Canadian at birth. I moved to Canada at 12, and even though my mother was a Canadian, the laws were different then and I had to naturalize in order to become a Canadian citizen. Forward to 2009 where changes to the Citizenship Act made me a Canadian at birth, and exempt from the exit tax if I was fortunate enough to meet its thresholds.
I suppose though, that if I hadn’t done anything to reinstate my US citizenship (like voting) I could claim a relinquishment today based on taking the oath of Canadian citizenship in 1996.
@Meunier
Congratulations, that’s wonderful news!! I think you’ve broken a record for getting everything done within a year of starting the process. I once spent a few days in Slovakia and found it was a pretty place to visit, so I hope you had a chance to do some sightseeing while you were there 🙂
In need of help. I think I could help but prefer not on a public forum. If you wish, we could ask the admins to give you my e mail address.
One option is to not do anything further. B C Doc was also refused relinquishment. He then resolved to have nothing more to do with the IRS.
That bank deserves to be ditched pronto- they can’t be trusted with your finances.
@Portland
Sure, I can use all the help I can get.
Also, just to give some additional background, I was called from someone in the State Dept. who gave me a contact at the Vancouver consulate and he also said that I would not have to pay the fee again. I am currently trying to get confirmation of that from the contact at the consulate but they have not been very helpful at all. The State Dept. called because not having the pay the fee was not included in the letter they sent back with the refusal.
@DofD
INOH has already sent 3yrs of tax returns, so is in the system, address and all. If she/he can get a renunciation with no further fee, then it’s a clear way out. Hope PLC can help. Good luck.
As i reported here about 2 weeks ago, CIBC placed restrictions and holdbacks on my investment account without even confirming if i was US person. I do not fully understand the meaning of the letter from them, but i presume it means if i close my account they might hold back 30%. It has been in this state now for over 3 weeks. I provided them with my CLN 9 days ago, but so far all i get is apologies.
I had told my advisor several months ago i had renounced. It is legal for them to take this action without first asking for confirmation such as W8-BEN or W9?
Is there a Canadian government or governing body i can raise the issue with? I assume this is an issue with the bank bureaucracy and that the US government is not directly involved in lifting these restrictions.
@JGIT
How infuriating! If this is any indication of how banks will respond to “false positive” indicia, this is a disaster. If I were you, I’d be screaming at my MP, and demand the Revenue Minister confirm whether your banking information has been sent to the CRA to be sent to the IRS. I would also add that your bank is required to inform you upon your request whether your account information has been sent to the CRA.
I would also consider availing yourself as a witness in the ADCS lawsuit.