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
@tdott
Thanks for confirming. That’s what I thought, too. However, I decided not to push the issue. Rather than relying on the accounting firm to send out all my paperwork, I’m doing it myself.
@EmBee
Thanks for confirming. I will use Canada Post’s Xpresspost USA prepaid envelopes (which include tracking and delivery confirmation) to mail the 1040NR/1040/8854 to Austin, TX and the 8854 to Philadelphia, PA. According to the Canada Post website, it’s guaranteed to get to the destination within 2 to 3 days, but the clerk at the counter said 4 days was more realistic.
I’m going to send it off tomorrow. If I don’t get delivery confirmation for both destinations by May 31st, I will get my account to e-file Form 4868 to get an extension. (I didn’t want to get an extension unless I needed one, because I didn’t to extend the three-year window unnecessarily.)
@tdott
Forgot to finish my thought. The reason I didn’t bother getting him to verify it is a) I figured fellow Brockers would be able to confirm it for me; and b) I’m planning to mail it out myself, so I can determine what goes in the envelopes.
My head is ready to explode. Rather than mail everything out as soon as I left the accountant’s office, I decided to take the papers home to review them one last time — sure enough, I found a significant error: The 1040NR asks if I’d ever been a green card holder and somehow the NO box got left unchecked. ARGHHHHHHHHHHHHHHHHHHHHHHH!
I’m going to take the evening off from this mess, give everything yet another review just in case there’s anything else. After that, it’s definitely out tomorrow via Canada Post Xpresspost USA prepaid envelope!
Thanks for the congratulations!
And thanks for the tip about the original, EmBee. I didn’t think a copy would be enough to travel with. I’ve already made several photocopies and scanned the original, while enjoying a drink!
Congrats and good luck, WestCoaster, crossing the last Ts and dotting the last Is…
A copy is more than enough. You will probably never need it.
@Rebecca, congratulations and what a nice, quick turnaround on the CLN delivery.
Second/third the advice about copies of the CLN. Keep the original safe and use a copy when travelling just in case. I have several copies of my CLN scattered about the house and I keep one with my passport. Took it with me to the States last year, but didn’t need it. Some people like to get copies certified/witnessed by a notary, but I can’t see the point. The info in is the US border system so just an ordinary copy should be fine if you’re ever questioned about it.
In March I sent in a signed 1040NR return, an unsigned 1040 statement, 8854s for my 2016 dual-status USC>NRA year. Two weeks ago received a letter from the IRS saying they need a signed 1040 and supporting docs so I sent copies of everything again but with signatures added on the 1040. Today I received another envelope from the IRS which included a Form 9143 “Request for missing Info or Papers to complete Return (international Returns)” with X’s marked against boxes 1 (no valid original signature) and 24 (submit a signed 1040NR). They sent back the original 1040 but not the original 1040NR. Thinking that responding to the second request by sending everything a third time might confuse, I phoned them, and, miracle of miracles, got through. I was advised i should wait for a few weeks to allow time for the forms I sent last week to be processed. I could not find out how to check if the forms have been processed. Transcripts would be available 3 weeks after processing. Maybe I’ll try calling them again in mid-June to find out if they still need the third set of forms. I’m probably agonizing too much over this, but being a worry wart has been helpful in keeping as compliant as possible over the last 15 years with no direct professional help, and stopped me from opening a Canadian Tax-Free Savings Account, which i have done now that 3520s are off the table.
The idea that US citizens living outside the US are both non-residents and US residents is confusing until you recognise that residence for tax is a separate concept to physical residence for other purposes. In August 2016, months after I had converted my long-established UK basic bank account from individual to jojnt, the bank sent a form for me to certify tax residency in up to 3 countries (if more than 3, to add a sheet). The bank was aware you can be resident in multiple countries at the same time. I was able to hold off until after renunciation before returning the form and supporting docs to show residency in only one country.
@fn0 – sorry to hear they’ve written to you. How very inconsistent of them to tell you to sign the 1040. Proof if proof were wanted of the lack of logic at the heart of the enterprise. A letter about the 1040 being unsigned sounds like the type of event that might be triggered if your 1040 was mistakenly routed through the automated processing for “normal”, non-renouncing 1040s. Is there any code on the letter you received? Googling it might bring up info on the circumstances that cause that particular letter to be generated.
“In August 2016, months after I had converted my long-established UK basic bank account from individual to jojnt, the bank sent a form for me to certify tax residency in up to 3 countries (if more than 3, to add a sheet). The bank was aware you can be resident in multiple countries at the same time.”
That would be the CRS due diligence kicking in. I opened an account around that time (road-testing my CLN), and I was given a tax-residency form to fill in. The UK’s laws on domicile and residency are a rats’ nest of complexity.
@fn0 Well, good grief. I thought everything I’ve read says to sign the 1040NR dual-status return, and leave unsigned the 1040 dual-status statement. I was going to be inclined to sign the 1040 anyway, out of habit, perhaps. It seems now that is a good idea, depending on who checks it. I’m not at that point yet. I just actually looked at the 1040NR for the first time — more pages than I’d thought — and am now pondering how to transfer over the 1040 figures to the 1040NR, e.g., wondering how that works for itemized deductions. Or just leave lots of zeros for the NR part? I’ll get there. I’m looking forward to pulling some weeds in the yard when this part is done, but the weeds are getting a good head start.
Given the tiny volume of dual-status “exiting” returns as compared to regular returns and dual-status “entering” returns, which both require signed 1040s, it did not surprise me to be asked for signatures on the 1040, probably an automatic response. In an attempt to forestall this I had written into the signature boxes on the 1040 statement “See 1040NR returns for signatures” but that did not work. I now see that the IRS letter which arrived today, 2 weeks after the first one, was actually dated a week earlier i.e. had taken 3 weeks longer in transit. So the forms I re-sent a week ago were actually responding to the later request, which had demanded a reply within 30 days and gave reference numbers and an address. The form received today gave neither.
@fn0: “I had written into the signature boxes on the 1040 statement “See 1040NR returns for signatures””
Just a guess – that might be what triggered the letter. I’m guessing that the automatic processing system diverts unsigned forms (signature box blank) for manual attention, but for forms where the box is not blank but what’s written there fails the “is this a signature” test, a letter would be generated.
They probably regularly get forms with signature boxes containing oaths and expletives rather than signatures; the creaking automatic system may have treated your entirely sensible explanation as one of those.
Just a guess.
@fn0
Yikes! I too would be agonizing about this, if this happened to me. I’ll keep my fingers crossed this gets sorted out quickly for you.
Now I’m debating whether to send a signed 1040 and an unsigned 1040, along with a note telling them to use whichever is appropriate.
@fn0
How frustrating about the IRS letters and a bit of a worry that they take so long to arrive.
Maybe I am mistaken but did you say somewhere that you filed married filing jointly for the 1040 but single for the 1040NR?
Maybe that’s why they needed the signature on each one because each return had a different filing status thus not considered one return which should have one filing status.
Just a thought if this is how you did file.
By the way, should I be including a copy of the CLN with the 1040NR/1040/8854 to Austin? And what about including it with the 8854 to Philadelphia?
Yesterday afternoon I thought everything was more or less sorted out and I knew what needed to be done, but now I’m filled with uncertainty again.
@WestCoaster, no you don’t need to include copies of your CLN. The info is already in the IRS/Treasury databases. The State Department sends copies of all CLNs issued to the IRS as a matter of course.
@ WestCoaster
A bit different situation for my husband. Not knowing if or when his CLN would arrive he filed a full year 1040 as usual. After it arrived he did his final filing with a 1040x (adjusted income to expatriation date and pro-rated standard and personal exemptions) plus a 1040NR (all zeros — no US income). Not knowing about this not signing thing he signed both the 1040x and the 1040NR. That was over 3 years ago. He got a thank you letter for his amended return (1040x) and that was it — nothing else, so far. At least it was proof they received his final papers, along with the mail tracker which said they had arrived. If you sign your final 1040 I doubt very much they’d reject it and as fn0 has demonstrated there seems to be some inconsistency at the IRS, depending on which machine and whose eyes tax returns pass by. Put your papers in that envelope, seal it, send it and then hope for the best. It’s all you can do.
@Westcoaster – Embee is right, put it in the post. You may well find you feel less worried once you’ve sent it on its way. No need to worry – there’s nothing they can do to a law-abiding Canadian. Form crime is over, for you. 🙂
@Medea Fleecestealer, thanks — that’s what I figured, but I’ve learned never to assume!
@EmBee, thanks. It does sound like your husband’s situation is far different. I’m inclined to sign it, rather than send it in unsigned. As fn0 said, the folks at the IRS are probably not used to dual status returns so not signing is more likely to cause problems than not signing.
@iota, you’re right. And I know you’re right when I think about it rationally. But psychologically is another thing, though I do intend to put this out of my head once it’s in the mail.
Just got off the phone with a friend of mine who went through the process in 2013. (Sensibly she renounced as soon as she found out about all the paperwork she’d have to do annually!) Her accountant dated the 8854 January 1 to her CLN date; mine and a few of you put Jan 1 to the day prior to the CLN date. Logically, it probably doesn’t make a difference but now it’s yet something else I have to make a decision on.
I think the most frustrating thing about this whole process is the lack of clear documentation. It’s almost like we’re being punished for having the nerve to break free!
In any case, thanks again for all the help — without the support of fellow Brockers, this would be a much lonelier (because only someone in the same boat can truly understand what it’s like) and stressful experience!!
I feel like I need to say something about my accountant, because he really is a good guy. I’m the very first client of his that has renounced, which is why there’s been such a big learning curve for both of us. That, and the fact that the IRS documentation is anything but straightforward. It’s also not his fault that I didn’t get started on all this until last month, when it was the busy time for the accounting firm, what with doing Canadian returns.
If I had to do it all over again, I’d have started working on this in February. Not just to give myself more time, but that’s also a slack time for accountants so it would’ve been easier getting his time to work on this.
If you can afford it, and assuming you can find an accountant experience with 8854s, I’d highly recommend doing what UK Rose did. That seems to be the best way to minimize accounting costs while making sure it’s done properly.
As for those of you who did this all on their own, my hat’s off to you — I am in awe, no exaggeration!
@Rebecca,
Congratulations –super to hear your CLN has arrived! That’s the fastest we have on record for the Western Hemisphere zone, which has often been abysmally slow – and would be really fast anywhere in the world! Thanks for the update to your timeline, which I’ll add to the chart. Sure, if you’d like to write something for the Directory, it’d be most appreciated, as long or as short as you’d like. You can post it as a comment here or email it to pacifica at isaacbrocksociety dot com
I join the chorus it’s best to keep your CLN in a safe place and bring a copy instead when you enter the US, and that the border guards can see record of it in the DHS database. That what the consul at Toronto told me, and she seemed to be (unlike some of them) quite on the ball about expatriation. It seems, from reading the reports on the Crossing the Border thread, that they often don’t ask to see it, so you can just have it handy and only need to pull it out if they ask for it.
What @fn0 said: “Given the tiny volume of dual-status “exiting” returns as compared to regular returns and dual-status “entering” returns…” I have thought about this, too, and figure it’s part of the reason they don’t use some of that $2350 per person to provide clear instructions and relevant examples for people exiting.
@EmBee, Over 3 years ago? Wow — It doesn’t seem that long. Time flies. I’m glad to hear that all seems to have gone well. And Rebecca, congratulations on receiving your record-setting CLN after just 2-1/2 weeks.
FYI:
I ended up calling the IRS for confirmation about what date range to use at the top of the 8854, and he told me something mind-blowing: None of the forms should have “other tax year beginning” dates filled in on the top — not the 8854, not the 1040NR, not the 1040, not the 8938 — as my fiscal year should be all of 2016 regardless of the fact that I ceased to be a citizen at some point in the year. He did agree that there was a lot of confusion on this point, but said not to worry about it too much as it would be clear in Part I of that form that I had renounced and on what date. (Initially, he said that the 8854 did need a date range — Jan 1, 2016 to CLN date– but then he put me on hold to confirm, and backtracked on that.)
The other thing he said was that, yes, technically, only US citizens are supposed to sign the 1040 but he recommended signing it anyway because of some staff (as in fn0’s case) automatically reject an unsigned 1040 even if it’s part of a dual status return.
In terms of any other 8854 questions, he said they weren’t trained to answer those and that I’d have to talk to my accountant.
He also confirmed that I could indeed e-file the 4868 extension, even though my return is going to be old-fashioned paper, send via snail mail.
@WestCoaster
Thanks for this. this pretty much sums up what my accountant said, no dates on any of the forms. it was actually my tax lawyer that told me to put the date on the form 8854 (not the accountant). and I looked back and double checked and it was the renunciation date I was told to put on it not the date before. I filed end of February so I think I probably would have heard back by now if there was a problem.
The tax accountant i used for my prior 5 years filings was not that experienced with renunciation returns sort of like the one that you used. but for the final return, i had the very experienced firm check them over and they were twice the cost so can’t say I saved money except I had peace of mind. I was recommended 3 firms, they are well known firms here and I winded up going with the first one I called because I felt comfortable with them.
Hope your anxiety is eased now that you are at the end of the process.
@ Westcoaster
It’s good you were able to have the IRS recommend signing the 1040 to avoid the chance of it being returned.
What you were told by the IRS about the date range to use at the top of forms echoes what I posted earlier but I cannot see on the website. This has happened a few times and I don’t know if I am looking in the wrong place or they failed to be posted. My comments included a summary of the relevant parts of the detailed IRS explanation of “tax year” which is at https://www.irs.gov/businesses/small-businesses-self-employed/tax-years
Another thing I am ignorant about is what putting @namehere does to the post.
@fn0
A few days ago, I happened to see that one of your comments was in Spam, so I pulled it out and put it online. That’s happened a couple of times to some other people over the years and we have not been able to figure out why. So far, though, when that’s happened, the system has corrected itself in a day or two.
If it happens again that your comment doesn’t post, would you let me (pacifica at isaacbrocksociety dot com) or all of us moderators (e-mail addresses at the bottom of the screen at “Administrative”, “Contact Us”) know, and we’ll check the Spam before we dump it.
@namehere just works as a salutation when replying to someone’s comment and to visually refer readers back to that person’s comment. It doesn’t have any technical functionality.
@UKRose Re: did you say somewhere that you filed married filing jointly for the 1040 but single for the 1040NR?
The filing status on the two 1040NR returns (one for myself and one for spouse) was “married resident of Canada” because married filing jointly (MFJ) was not an option on the 1040NRs. Identical copies of 1040 statements with filing status = MFJ were attached to each 1040NR. A few years ago for good reasons I had elected to have my NRA spouse be treated as a tax resident so I could file MFJ, and that election was ongoing and would only be suspended for a tax year in which neither of us would be a US citizen or Permanent Resident at any time, i.e. 2017. I did not get any answers from an expert or from the IRS to my questions about this approach. I am leaving it to the IRS to work out how to transfer amounts from the joint 1040 to the separate 1040NRs, or whether to just treat my return as a short-year 1040 filing. If the latter they could ignore the 1040NRs which show zero taxable income anyway. I don’t owe any tax on the 1040 what with Foreign Tax credit on pensions, Foreign Earned Income exclusion on a pittance of employment income, and some itemized deductions.