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
Tortured: it appears that so far the only thing that happened was the freezing of your RRSP, temporarily. As others here, I would seriously consider continuing to fly under the radar. This is the best route. It appears that in Canada one can bank without disclosing one’s birthplace (impossible in the country I live in, in the EU). Do so. Deny US personhood and give them no reason to suspect it.
@Tortured
I missed the part about the temporary RRSP freeze. That would be fairly stressful I imagine. How did that happen if you don’t mind me asking?
@Tortured
It is a bit overwhelming, but there’s a lot of information here and the approach I’m using — I got my CLN last year and have to do the final paperwork (8854, etc.) this year — is one step at a time. You could get your SSN and your CLN this year, but the 8854 isn’t filed until the year after you officially renounce.
My advice is to book a loss of nationality appointment. The wait times are apparently better than they have been in the past, but you should have enough time to drive across the border and apply for a SSN. A friend of mine had to do that for the same reasons you did and it was no big deal. The biggest inconvenience she found was having to apply for a US passport in order to be able to cross the border to get to the office that issues SSNs (if yours is no longer valid, you’ll have to renew it).
https://www.americansabroad.org/obtaining-reclaiming-your-social-security-number-ssn/
If you indicate your province, I’m sure someone here would be able to recommend an accountant. Better yet, maybe the mods could start a post for recs? Another post that would be incredibly useful is an exact breakdown of the final paperwork — especially the 8854, which has to be sent to two locations — because it intimidates most of us, including me.
By the way, many of us just back-file quietly without going through the official streamlined process. What that means is that you just need to file five years of tax returns and FBARs. Once you have an accountant, s/he will be able to do this in one fell swoop along with your 8854.
Given your situation, I think you’ll feel much better once you stop fretting and start taking action. At least, that was the case for me. I procrastinated for years about renouncing, getting more and more stressed, but finally biting the bullet has given enormous peace of mind and I know I’ll feel even better when after my accountant submits my final paperwork later this year.
Good luck!
Tortured I forgot to mention. Streamlined is for those who wish to remain US citizens. Bear in mind streamlined applications are sent to the criminal division and closely scrutinized, You are not a criminal!
Compare B.C. Docs good advice to WestCoasters advice. WestCoaster would have you renew your US passport to cross the border in order to get a S.S. number. Getting a new US passport is not necessary. Getting a S.S.N. is not easy. Renouncing is neither quick nor inexpensive. (or necessary). If you insist on renouncing, I agree that back filing 5 yrs. is much preferable to streamlined. Hope we haven’t stressed you further. Try to put the whole thing in the very back of your mind. I know that might be easier said than done. Good luck.
@Portland
Speaking of bad advice, you are recommending Tortured ignore the fact that it is illegal for US citizens to cross the border into the States without a valid US passport.
https://travel.state.gov/content/travel/en/legal-considerations/us-citizenship-laws-policies/citizenship-and-dual-nationality/dual-nationality.html
https://uk.usembassy.gov/u-s-citizen-services/u-s-passports/u-s-passport-faqs/u-s-citizenship/
I can personally attest that, although it may not be enforced all the time yet, enforcement is on the rise. I used to drive across the border all the time with just a Canadian passport. After being warned by US border staff that it was illegal for Americans to travel to the US without a valid US passport — like Tortured, I have a US birth place so they could tell just by glancing at my Canadian passport that I was also American — and that I wouldn’t be allowed to do it again, I started taking my US passport along. As an experiment, I continued handing over only my Canadian passport first just to see if I’d be asked for the American passport. More and more, I found that I was indeed asked to produce my US passport. I haven’t been to the US in five years but friends with dual US/Canadian citizenship report that this is still the case.
As for applying for a SSN, the process is simple and straight-forward. All Tortured has to do is make an appointment (via email or phone) and show up in person to the office on the specified date with the required documentation. The appointment is free and there is no charge for a Social Security card.
@Tortured: What do applying for a US passport, applying for a SSN, renouncing your US citizenship, or filing anything with the IRS all have in common? The answer: all will bring the fact that you even exist to the attention of the US government. As of right now, as far as the US government is concerned, you don’t exist and that is the way you want it to remain. Don’t let your fears push you into making yourself a target.
BC_Doc is right. Do nothing. It works for him. It works for me. If your bank tries to freeze your RRSP again (very unlikely), scream bloody murder to your bank, your MP, and the media. It will be unfrozen immediately. RRSPs aren’t even reportable accounts under FATCA and that past incident was a mistake on the part of your bank.
I started down the road you are now contemplating but fortunately came to my senses before I made too much of a mess of things. Read the current thread “Accidental Americans (And Others): Do Nothing!” Relax. The US government can’t touch you.
Tortured has explained her situation, including how stressful she found it to have her RRSP account frozen because her bank identified her as American, plus the situation with her husband’s health. She has decided to renounce “after the past few years of tortuous emotional strain.”
She says, “I do not even know what to ask but would welcome any input from anyone who has renounced.”
There are people on this board who have chosen not to legally sever ties with the US. Fair enough. But it’s also important to respect her decision, because it’s every bit as valid and advising Tortured to bury her head in the sand is NOT helpful.
WestCoaster: trying to comply is likely to bring on much more stress than doing nothing. And it’s been posted here many times, just about the only people hurt have been those trying to comply. And those who tried hardest were hurt the most. Because this is opinion that is hard to find elsewhere, it is very important, vital, that we voice it. Ignoring the US, its filing “obligations”, the IRS, etc, is very easy if you’re not on their radar. The IRS will not and cannot go after a 68 year-old Canadian with a low net worth. They need to choose their battles and will go after the millionaire residing in the US and “hiding” money abroad. The agent who chooses a fight will need to show some return on the dollar, not a public relations nightmare and no money to show for it.
Nobody is disrespecting anybody’s decision here, we all make our own. It’s important to be well-informed, though, and the various opinions and experiences here are vital for that.
@Fred (B)
“Nobody is disrespecting anybody’s decision here, we all make our own.”
I believe that all of us on the board are trying our best to be helpful, so I don’t believe anyone is purposely being disrespectful or dismissive of Tortured’s choice. However, that’s exactly what you’re doing.
Tortured tells us that she’s read the comments posted to this site, so she knows what her options are because there are a number of individuals who have opted to keep under the radar and have talked about how that has worked well for them. Tortured has also told us how hard it was to come to a decision and how she needs help going forward, which is very different than asking for input from those who have chosen otherwise.
It can take a lot of courage to ask for help, even anonymously. Tortured has been quite clear in the type of support and information she’s looking for. If, like me, you’ve renounced, please share your knowledge. If you’ve chosen a different path and you’re happy with your choice, that’s great but she’s not looking for your input and all it does is imply that your way is the right way. Which is not true, because what works for one person may not work for another.
I agree it’s very unlikely the IRS will go after a senior with low net worth, but not for the reason that the agent would not be able to show some return. If they become aware and can find some $10000 penalties they might pursue them. I remember a tax specialist telling me he saw his first $10,000 penalty in 1995 and it was levied against a 105 year-old woman with $38,000 in the Royal Bank of Canada in Edgemont Village in North Vancouver that had not been reported on a TDF90-22.1. After some negative PR, the IRS waived the penalty in that case but usual;ly they would not. I agree if you are completely off the radar, e.g. no US assets or income or rents, this should not happen.
@ tortured……if you have no plans on ever crossing the border again to amerika then do nothing….like b.c. doc has said…hide in plain site
if you are worried about your banking move to a “local client base” credit union….they are non fatca reporting
if your bank raises a stink about you not wanting to tell them where you were born ask them “that is a recist question, are Canadian born citizens born else where less Canadian. I do not answer racist questions” and get up and walk out. I did. never heard back from the bank and I still deposit biweekly to that rrsp account.
read more here and then read some more
each one of our situations are unique unto ourselves and only we can answer what is best for us given our situation
don’t be in a rush to decide. take your time and make the best decision for your self and only your self
It is a fact that the most stress (and potentially the most harm) is suffered by those who try to comply with these so called “US obligations”. Everyone in Canada who has been harmed by the IRS has, in effect, volunteered for that abuse, due to either fear or to bad advice from a “compliance condor”, (not to mention trying to be honest people trying to “do the right thing”). Conversely, those who have opted to resist this gross injustice have not been bothered. Resisting is not “burying your head in the sand”. It is a rational response based on all the evidence available that I am aware of.
It doesn’t matter whether the IRS waives FBAR penalties or not. The Canadian government will not collect for the IRS. My guess is that the first mistake that105 year old woman in North Van made was filing a US tax return. Its not surprising a so called “tax specialist” would mention that situation…creating fear and doubt is part their game. I know, because I talked to some of them before I figured it out. I don’t believe that trying to dissuade someone from making a serious mistake is doing them a disservice.
I stand by my previous post, except I should have added (as I will to this post), that’s my $.02.
A member of my family was born in the US. She has only had a Canadian passport for 35 years. In that time she has crossed the border at least 100 times using her Canadian passport. on 2 occasions the customs agent mentioned that she could (not should) get a U.S. passport because they had changed their minds and allowed dual citizens. On these 2 occasions she answeed ‘Thank you for the kind advice” and that was that. I suspect they treat older travelers differently than younger ones. i stand by my earlier post.
as far as the process for a S.S.N., if Tortured was never issued one, it isn’t quite so simple. The required documentation includes having to prove where she has lived for each of the last 66 years.
Much easier and less expensive to avoid entering the system.
@Portland
Apparently, all of that isn’t necessary anymore. No mention of all the documentation I had to provide in 2011, when I applied for my first ever SSN.
“Information on U.S. Social Security enrollment and benefits can be found at the website of the Social Security Administration. U.S. citizens in Canada may apply for a Social Security number and card at the U.S. Embassy or a U.S. consulate by appointment, or in person at a Social Security office in the United States.
You may submit an application for a Social Security card when you apply for a U.S. passport, a Consular Report of Birth Abroad (CRBA) for a minor (under the age of 18 years), or by making an appointment for a notarial service. The Social Security application form (SS-5) is available at the Consulate or at the Social Security website.
Ahead of your appointment, please bring original: (1) proof of birth, such as a U.S. or foreign birth certificate; (2) proof of U.S. citizenship, such as a U.S. birth certificate, U.S. passport or Consular Report of Birth Abroad (CRBA), or Certificate of Naturalization or Citizenship; (3) proof of identity, such as an original U.S. or Canadian passport, and any other signed U.S. government-issued photo ID, such as a U.S. driver’s license; and, if applicable (4) proof of identity of the parent signing the application for minors under 12 years old, such as an original U.S. or Canadian passport. Please note the Social Security Administration does not accept the following IDs: Canadian driver’s licenses, Canadian provincial health cards, NEXUS cards, and U.S. Emergency Photo Digitized Passports as proof of identity.”
https://ca.usembassy.gov/u-s-citizen-services/social-security/
@Tortured, you have several options to choose from, but only you can decide which is the best one for you – the one that will cause you least heartache and pain, the one that you can go with so you can finally relax, sleep at night, etc, once it’s all over. Know that whichever choice you make we WILL be here to support you and offer advice if you need it.
@Bubbles & Portland
Wow BB, that was not at all what we had to do to get my son a SSN so he could renounce. I spent days (because he was living in Ottawa and could not run around Toronto getting this stuff) running to the bank, to his high school, etc ad nauseum, documenting why, for each year of his life, he did not live in the U.S. And we had to drive to NY for him to submit the application.
@Trish
My experience was similar when I had to go to the Bellingham “field office” to get my SSN for my shiny new passport I was applying for and to enter the US tax system. It was only made worse by the fact that the representative there got sick that day and was away for several weeks and my application wasn’t dealt with in that time. The stress of that and OVDI was unbelievable!
When I decided to get an SSN as an older adult, I had to say where I had lived, but didn’t need to provide any sort of proof. (I had recently finished applying for a security clearance with Canada’s National Defence, so I had all of the information gathered and filed.) The hardest part was getting a copy of my birth certificate, which required contacting the state government and paying some money, and I did the final SSN application in person (since the border is only a couple of hours from here). It was quite straightforward and was accomplished in a few weeks. I wonder, @Patricia, if it was because you were doing the work for your son and not just for yourself that there were extra hoops?
@Tortured, for what it’s worth, our situations are very similar, although I’m about 20 years younger than you are. Born in the U.S. (to two Canadian parents), moved to Canada at 1.5 years old and never lived or worked in the US over the succeeding decades. Given that my family are Canadian citizens and I’m the only USC, and the growing threatening environment of FATCA, etc., I decided that renunciation and silent disclosure was the best way to go. I went to one of John Richardson’s seminars (highly recommended if you can make one!!), and I’ve been avidly following Phil Hodgen’s freely provided guidance on the in’s and out’s of the IRS.
I wasn’t willing to pay $10k+ of my family’s scant resources to fill in forms with lots of zeroes, and my financial situation is pretty simple, so I spent about a year working through all the details my own, reading those wretched IRS forms, and seeking the very helpful advice and more helpful encouragement of fellow Brockers. I renounced early 2015 (after 6+ months on the waiting list for appointments), received my CLN a few months later, sent in all the forms (5 years of filing), more hesitantly filled in 5 years of FBARs, and cheerfully sent in the magic form “8854” (all of this in 2016) which tells the IRS that you’re done with them. All DIY. I figure that any possible moral obligation was satisfied by just doing my best at understanding the details. If I’ve missed or misinterpreted anything, well, we’ll see what happens.
My understanding is that you hopefully never hear back from the IRS until the Statute of Limitations runs out. So, when I received a letter from the IRS about 2 months later, I had a minor heart attack (figuratively). However, it was just a single sheet of paper that said, in effect, “we received your non-resident alien filing and we agree with it.” Weird and uncommon, but not a problem in itself.
So, there’s my story. Now I wait for the statute to run out. In the mean time, I have a notarized copy of my CLN that I carry in my Canadian passport. I’ve crossed the border (land and air) with just the Canadian passport 3 times since my renunciation, and no one has said anything. For what it’s worth, that’s been my experience.
As others have said, listen to the various options that are presented here, including the extremes. Don’t panic. Don’t rush. Get all the guidance from Brockers and related folks that you can. Avoid the professionals like the plague. Make an informed decision that fits with your conscience, your financial situation, and your appetite for risk. And we’ll be here to support you and provide lots of guidance when you’re looking for it.
@OddlyNamed
That was the procedure at the time, so I don’t know why you didn’t have to provide the same documentation. I also had to answer a bunch of questions under oath at the Social Security office.
Thank goodness they’ve changed all that in the last couple of years. It was ridiculous.
@OddlyNamed
Thanks for your whole story; don’t think I’ve seen it before.
No, it didn’t have anything to do with me. The folks at SSA told me we had to account for each year of his life. I had lots of docuentation about schools etc but they required something I didn’t have for high school. And the bank records (though I am probably forgetting that was in order to prepare FBAR-I threw it all together at the same time. It was an excuse for a trip to Ottawa which was nice and we went to the Ogdensburg NY office. Charming little town…………
I knew they now allow you to apply for a SocSec number from within Canada (I think it was Bubblebustin’ who alerted us to that). Up til then, if I recall the SocSec website correctly, people on other continents could do it at an embassy/consulate, but not in Canada (probably not in Mexico, either, don’t remember). They seemed to think people in our vast country all live a short stroll from the border?
I didn’t know, though, they no longer require proof of residence for the time living outside the US. That is also a big improvement. It was downright unbelievable when they were requiring this documentation. Bizarre and complicated, even by US standards! Decades ago, not much data was stored on computer, so a lot of personal records, if they still exist, can be very, very hard to find and retrieve.
Several Brockers reported on this. I particularly remember one reporting that s/he and his/her sibling had to drive really far (like 6 or 8 hours each way) to the nearest Soc Sec office (Montana, or some state around there, as I recall) and were told they needed to provide proof for each year they’d lived in Canada – this was going back to the early 1960s. Fortunately they got someone higher-up the food-chain at SocSec to allow them to provide proof for each decade instead of each year –- better, but bad enough, though, as records of one’s life from the pre-computer era can be very hard to get. So, I guess if you made enough noise and it involved records from ancient times, SocSec had some flexibility of how much documentation they’d require. But it was still ridiculously difficult.
@Tortured
Re streamlined: it is a perfectly legitimate means to become compliant in order to renounce. I used it for this purpose, and so did others. FWIW, it is the official means of becoming compliant for USCs living abroad who are non-compliant. As well, there have been no, repeat no, reports of anyone going the streamlined route and having a bad outcome. Having said that, there have been no reports of anyone going the quiet disclosure route and having a bad outcome either, so pick your poison.
Re the need for a SSN: if obtaining a SSN will be problematic, you could renounce, get an ITIN (which are apparently given out like candy), and then file (ITINs are what non-USCs use to file). Phil Hodgen seemed to think this may automatically make you a covered expatriate, but with little assets, that may not matter. (Note that pensions, RRSPs, etc are considered assets)
So, you could renounce and
1) file nothing, or
2) file 8854 (there’s a $10,000 penalty for not filing it), or
3) file 5 years of returns and 8854
And you could do the filings on a best-effort do-it-yourself basis (people here are more than happy to help with questions), which in all likelihood would be more than sufficient for the resource-strapped IRS.
Or, you could, as others say, do nothing. Only you can decide what will let you sleep at night.
@tdott
“Only you can decide what will help you sleep at night.”
I prefer, “Only you can decide what you think will help you sleep at night.”
There’s the rub, as no option is ideal and involves some degree of sacrifice- leaving one to wonder that if they hadn’t chosen the route they had, would they have eventually fared much better having chosen another course?
For the life of me, I can’t understand why a person would voluntarily suffer through all the hassle of obtaining a US SSN for the sole purpose of filing all of the obnoxious forms required to exit the US tax system after renouncing. If a life long Canadian citizen and resident who also happens to technically be a US citizen due to place of birth has never had a SSN, that person simply doesn’t exist as far as the US government is concerned. Such a person is not presently in the US tax system and has never been in their system. The act of renouncing doesn’t suddenly enter that person into the US tax system regardless of what the State Department might send to the US Treasury Department. (Not even sure if this actually always happens; there is no love lost between these two branches of the US government. Some names eventually appear on the infamous list, some never do.)
Although personally I chose not to bother, I can understand why some might choose pay the exorbitant $2350 fee to obtain a CLN because possessing that document once and for all eliminates any future bank problems, airline security issues or border entry hassles. But beyond that, if you have never had a SSN, you are done. Without a SSN the IRS doesn’t have a clue, even if the State Department passes something on to them. So why get a SSN and enter the US tax system only to immediately exit the US system and run the exit tax gauntlet for assets that were never in the US in the first place? Doing so makes absolutely no sense to me.
One fee that I would be willing to pay would be a reasonable amount to the Canadian government for changing the birth country field on my Canadian passport. This would be easy; simply delete “USA” and substitute “CANADA”. There is an Ontario city with the same name as the US city I was born in. Presto, all problems solved. (Yeah, I know. Its nothing but a fantasy but it is something our government could do to protect its citizens from the US government’s crazy fixation on people’s birthplace.)