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
Congrats fn0! Just over one month, you’ve done well.
We renounced on 16 June. One of 3 CLNs received so far. Second is in the mail, but who knows when the 3rd will arrive.
Congrats to you both! Wish I could join you, gotta several more years to go before I can.
Congrats from me as well. Really quick turnaround fn0, and yours not bad either Karen. Cross fingers the 3rd one is on it’s way to you soon.
I lurk around the comments here from time to time, see people celebrating their CLNs and I’m happy for those who have them and the peace it must bring. I too wish I had a CLN to celebrate but for every CLN issued I can’t help but think about the $2350 renunciation fee that the US extracts. Never mind all the other costs! I understand that every person’s situation is different and I respect that. But for me personally, I just can’t bring myself to willfully hand over a single penny to the government of a country that I haven’t lived in since I was 2 months old, can’t/don’t vote in, hold no SSN, have no relatives in (and never have), and a country that fails to recognize that my hard earned money, earned here in Canada, was earned by me and not them. US entitlement to my money, my personal information, my freedom, and anything else they wish to lay claim to is simply self-proclaimed on their part and I just won’t wilfully participate.
Canadian Girl, you have absolutely no need to. With no SSN, no tax info and no US passport you’re pretty much untraceable. Unfortunately, that’s not the case for many Americans. Back to the individual circumstances again. Each person is different, their situation different, and each has to do what’s best for them.
I also had copies of my CLN notorized, gave one to my investment advisor and attached one to my will (just so there’d be no questions). I travel with a notorized copy. I’ve crossed the border three times since I’ve received my CLN – no questions, no problems.
@CanadaGirl
Many of us felt just the same way but we had no choice but to obtain a cln. European banks were closing our accounts . Good luck to you.
I totally understand how it becomes a necessity for those who have the threat of closed bank accounts hanging over them. I do appreciate, and am grateful for my individual circumstances that allow me to take my position. I have nothing but empathy for those who have been ensnared in this big mess.
Has anyone had experience with gifting and renouncing in the same tax year? Is this possible?
@ Kiwi
It depends who you gift to and how much. It’s important to gift before expatriation as your net worth is calculated the day before you expatriate.
http://hodgen.com/tax-free-gifts-to-reduce-net-worth/
The figures may be a little out of date, but the principle stands.
This is from a recent Phil Hodgen’s newsletter. I don’t think it is on his website. Phil appears to be a guru who most IBSers trust . He appears to be very conservative ( no cutting corners- some may choose to do less) and ,i’ve heard, expensive. However he is liberal with his free advice. he states you should not gift and renounce in the same calendar year. Of course , you could choose to gift and renounce in the same year if you had no plans to file a gift tax return.
@DoD
I don’t understand the rationale for that. If you gift before expatriation (gifting and expatriating in the same year), you were a USC at the time of gifting, and thus should be able to avail yourself of the unified credit.
And, if you cannot avail yourself of the credit, then it begs the question: what else are you not entitled to? For example, are you still able to claim the $250,000 home sale tax exclusion if you sell in the same year that you expatriate?
Don’t ask ME for a rationale. This is the IRS we’re talking about. Nothing is rational.
From reading Phil, I think it has to do with your status at the end of the year.
More from Phil Hodgen. This is earlier so he seems to have changed his mind.
@Kiwi & DOD
At DOD, surely, you pretend you die on the day before expatriation? 🙂
We were told by our lawyer,( who specialized in expatriation) that as long as we gifted (and also filed a gift tax return) before the day of expatriation, that was perfectly OK and unified credit would apply.
Sounds good to me. I’m only saying that Hodgen isn’t sure? Another alternative is to forget to file the gift return. What can they do?
DoD
“What can they do”
Not much if your heirs are not US citizens, but there may be a sting I the tail if they are.
Fellow Issac Brookers
I was advised by several US accountants and tax lawyers that I could gift assets and expatriate all within the same year. Then in the following year hand in the last return together with FBAR and 709 and claim the unified tax credit on the gifts from the previous year.
I have done exactly so and now I’m in a disastrous position and don’t know what to do.
The tax code is written so ambiguously in places that even tax gurus like Phil were left guessing [ blog dec 2015]
Is there anybody else in the community who is in the same position as I am?
Is there anyone who got caught out? As every body was left guessing up until Phills blog Dec 2016 am I the only one who fell into this trap???
I have been poring over all the comments for two days as I have decided to renounce my citizenship after the past few years of tortuous emotional strain. I do not have SSN and feel very fearful of obtaining one but do understand I have to have one to complete the taxation process after renouncing. I do not understand how one can obtain a SSN after renouncing as you are no longer a US citizen. I am a Canadian citizen but born in the US 68 years ago and was brought back to Canada at age 2 by Canadian parents. I held a US passport for 20 years …..got it in a hurry when one was required to go on a cruise and because I had a US birth certificate it was recommended it would be easier and faster to go to American consulate in Toronto and get the passport…..my biggest mistake.
I would also like to get out under the streamlined process but cannot say I was unwillful ( I think that is the term they use). My biggest fear is the banking system and everywhere I turn the organization wants to know if I am a US citizen/US person. Just a year or so before Fatca became law a bank froze my RRSP account when they learned I was a US person. It was just for a few days but was a terrifying experience.
There are so many processes with renouncing ….making the appointment which could take months, obtaining a SSN, all the forms involved and what exactly is involved regarding filing one year after renouncing …8854
I do not even know what to ask but would welcome any input from anyone who has renounced.
I understand a little with the issues of hiring an accountant but feel I am unable to complete these forms correctly. I have little assets now so it has been recommended that it is a good time to renounce before my husband passes (should he pass before me …lots of health issues with MS). He, a Canadian only, holds the bulk of our assets. I would have to sign a W9 with the financial advisor who holds his portfolio should I inherit so I do not want to deal with this tremendous stress anymore. Would welcome any advice. I was on this site a few years ago but have not posted for a long time. However, I have tried to keep up with checking all the info and so admire so many of you who share your stories and advice here.
I have never worked in the US, visited 4 – 5 times, hold no investments there and never voted. No family there either. Just the passport which I try not to regret because it does me no good. Thank you for your time. xo
Re: SSN This will not be relevant to most, but I mention it as it could be an easy way to get a SSN for a tiny few. I was dual US/Canadian, my wife Canadian only, both living in Canada, and filing Married Filing Jointly with the IRS. She got an ITIN via the closest IRS office across the line, based on a letter from a US bank confirming that one was needed to report the interest on a (small) savings account. When she reached the qualifying age for Social Security we visited a Social Security office across the line in Washington State and I applied for her Social Security based on my own number of quarters. The SSA got her a Social Security number which apparently is a necessity to receive Social Security. It replaced the ITIN, and the number was in sequence confirming “not valid for work” as she is not a US person.
@robert1 – is the IRS actually asking for money (gift tax or income tax)? Is it on assets held in your country of residence and acquired after leaving the US? What country are you in?
@Tortured “Would welcome any advice.”
First, you’re right to call what the U.S. is doing to you, but has no right to do, as torture. But try not to be a willing participant in your own torture. It’s O.K to be fearful, but maybe try gradually shifting some of that into good, healthy anger. Get attitude. You owe the bullying torturers nothing.
If the best path for you is renouncing and full tax compliance, and you need hired help, read and read and read some more here as well to make sure you are not being further victimized by bad “compliance professional” advice. If you choose this path, you will need to get the SSN before you renounce.
Think carefully whether you ever need to go near the U.S. again. If not, you might consider just renouncing, getting the CLN for the banks and your financial advisor with his W9 (you say your biggest fear is the banking system), ignore the tax compliance, and stay away from the U.S. from now on. But you might continue to feel the torture with this choice.
Tortured. It seems you are 68 and have been in Canada for 66 years. You are concerned about what the IRS can or will do to you and about what a bank can or will do.
Please read and reread the thread titled ‘Accidental Americans….. do nothing.’ If in doubt, keep reading it until you are no longer in doubt.
a) It is difficult to get a S.S.N.
b) Your bank can ask if you are ‘U.S. person’ You can answer no and cheerfully sign a W8-BEN. You do not have to give your place of birth or show a passport.
c) in the unlikely event that you are told at the border to get a U.S. passport, nod sweetly and say thank you for the advice and then ignore it ( like Ginny and Gwen and so many others)
d) If you decide you must renounce, it will take 6-9 months to get an appointment and then a further wait for a CLN and cost $3000.
e) as others have said, it is possible to renounce and then not file anything. You would be a ‘covered expatriate’. Not a big problem as you have no US assets or US heirs.
f) if that is too stressful for you and you decide to become compliant be sure to do it while your assets are below 2 million USD. The accountant will charge in the order or $5000.
g) note we do not recommend e) or f) If tempted , go back and read “Accidental Americans…do nothing” Best wishes.
Tortured –
I have little assets now so it has been recommended that it is a good time to renounce before my husband passes (should he pass before me …lots of health issues with MS). He, a Canadian only, holds the bulk of our assets.
In light of the above, you may be able to change your name to NoWorries, and do almost nothing besides. Provided you really do have few assets either jointly or in your own name. (Not clear what “holds” means.) Get absolutely clear on this one particular detail. If this is true, then see a good lawyer (not just a lawyer). It may be possible to structure any transfer assets so you have access to everything you ever need, yet without those assets ever suffering from your US-person taint. Not a lawyer, not advising. Just pointing to an idea.
@Tortured:
In your 66 years in Canada, has the IRS ever contacted you to ask why you aren’t submitting US tax returns? Consider maintaining the status quo– i.e. doing nothing. Hiding in plain sight has worked well for many of us Canadians here at Brock.