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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

 

10,433 thoughts on “Renunciation and Relinquishment of United States Citizenship: Discussion thread (Ask your questions) Part Two”

  1. Looks like http://www.renunciationguide.com has closed. Just went to the site and got a domain website instead. The name expired on 15th Feb. Anyone heard anything about this? Are they under a new name?

    Another question – possibly a silly one. Say a US citizen has renounced and some years down the line decides they want to get American citizenship again. Could they go through the naturalisation process and be granted the citizenship or does “irrevocable” really mean a lifetime ban? I know you can probably do the rest of the usual US things like get a visa or green card, but I think regaining your citizenship this way is a no no. Only by appealing to the courts could you get your citizenship back by overturning the renunciation. We’re having a bit of a debate about it over on the English Forum and I wondered what the views on the subject were here.

  2. In theory, there’s no obstacle to going though the process of becoming a naturalized US citizen. In practice 1) I wouldn’t be surprised if it caused problems from cranky officials and 2) if you thought there was a near- or medium-term possibility of wanting to work or live in the US, it would be silly to renounce.

    So best to think of it as a life decision.

    Appealing to the courts (though initially the State Department looks at these cases) would involve arguing that your original renunciation was invalidated by a lack of valid consent. Some of the FAM publications go into some of the possibilities in this department – cults and abusive marriages come to mind. So it does come up. It’s not unlike getting an annulment as a Catholic – you have to be able to argue that there was a defect of intention in the original act.

    See from page 6 here: http://www.state.gov/documents/organization/121610.pdf

    The individual’s signing of an Affidavit of Expatriated Person or Statement of Voluntary Relinquishment does not preclude the vacating of a previously approved CLN; however, in such an instance, it is incumbent upon the individual to present evidence of factors such as parental coercion, mental infirmity, misinformation provided by a consular officer, etc., that would refute the contents of the affidavit. All such evidence must relate to the time when the potentially expatriating act was performed and not to a subsequent “change of heart.”

  3. @A Broken Man, don’t give ’em any ideas; they might come up with the notion of rescinding on past renunciations as a means of restoring U.S. personhood and thus more of a tax base! *lol* 😛

  4. I was just reading the old posts (part 1), and noticed some were receiving form emails after making their appointments. I booked mine online at the Toronto consulare, but I haven’t emailed or called them. I haven’t received anything from them. How do they know why the appointment has been booked? Do I need to email them a reason?

  6. @ The Mom,

    Unless they’ve changed their procedure, Toronto doesn’t need to know which “notarial and other service” you’re booked for.

    I had my appointment at Toronto last year. I phoned and asked how to book a relinquishment appointment, and they said to just book an appointment online under “notarial and other services.” So, I had the same question you did – did I need to do something else, would they know what my appointment was for? The person told me that all I needed to do was book under “notarial and other” and show up with my documents. So I booked online, never heard anything from them, showed up for my appointment, and it went like clockwork.

  13. I have an important question: I am a dual citizen who has resided in Canada my entire life – I am working in the US for this one year July 2012 – June 2013 – I plan to renounce my citizenship this June 2013. I have all the necessary requirements in place for renouncing my citizenship – ie. backfiled taxes and FBARS – but what I am wondering is what happens to my taxes from January 2013 – June 2013 – will this prevent me from renouncing until those taxes are filed in 2014 – or can I still go ahead with the process??? Your comments/experience/guidance is appreciated!

  14. @Joe, you’ll have to file next year for 2013 up to the renunciation date. I have the same issue as am hoping to renounce before the end of April. I don’t understand if my accountant will pro-rate the foreign earned income exclusion and the standard deduction/personal exemption or just use foreign tax credits via form 1116 to mitigate any tax liability.

    I may also have to file a 1040nr for the remainder of 2013 since I have some US-sourced interest. Confusing, it all is… you’ll also have to file form 8854 next year when you file for 2013 to officially log out as a U.S. person for tax purposes.

  15. JoeP. Renouncing is independent from filing. The state dep’t are not supposed to care about taxes other than to inform IRS that you renounced. Renounce whenever you wish. File (if you feel you must) for 2013 before the deadline next spring . April15 2014 plus an extension accorded to non residents.

  16. @JoeP: File a part-year return by the overseas filing deadline in 2014, along with your 8854.

    The only way the timing matters for a renunciation is: if you want to get things over with, it’s worth renouncing late in the year, as opposed to early in the following year. On the other hand, if you want to give yourself extra time, scheduling the renunciation early in a new year will do that.

  17. Thanks for all the responses. So, when I choose to expatriate this June 2013, I cannot file the 8854? I have to wait till the following year 2014 to do this? I noticed on the IRS website the 8854 is dated 2012 – for those expatriating during that calendar year. Will the updated form be released January 1, 2014 to reflect the 2013 form or are they just behind in updating the form for those of us who expatriate in 2013?

    I read the following from the IRS and the HEART act:

    Under the HEART Act, the actual act of expatriation for a U.S. a citizen for tax purposes occurs when the individual formally renounces U.S. citizenship. A U.S. citizen shall be treated as relinquishing his or her citizenship on the earliest of the following dates:

    1. Date on which he or she renounces nationality before a diplomatic or consular officer of the U.S.
    2. Date on which he or she furnishes a signed statement of voluntary relinquishment to the U.S. Department of State.
    3. Date on which U.S. Department of State issues to the individual a certificate of loss of nationality.
    4. Date on which a U.S. court cancels a naturalized citizen’s certificate of nationalization, provided that renunciation or relinquishment under (1) or (2) above is subsequently approved by the issuance to the individual of a certificate of loss of nationality by the U.S. Department of State.

    So I am a little confused on this form 8854 – according to the above – “the actual act of expatriation for a U.S. a citizen for tax purposes occurs when the individual formally renounces U.S. citizenship”

    From what I have read in the 8854 – they are trying to determine if you are a covered expatriate – to hit you with an exit tax – so bottom line is that do I file this when I go to renounce in June 2013 or do I need to wait until 2014 – and if I have to wait till 2014, what if I become a covered expatriate in the time inbetween?

  18. @ Joe,

    If you renounce, your date of expatriation will be the date you sign the oath at the consulate.

    If you renounce this year, your final tax forms as a US citizen will cover from January 1, 2013, up to and including the day before you renounce. (If you have US income after the day before you renounce, you’d also file for the rest of the year, only for US income, on a 1040-NR).

    Regarding exit tax and if a person is covered or not, the 8854 instructions ask for listing and computation of what the person’s assets and liabilities were on the day they renounce.

    You say you’re a dual who resided in Canada your entire life. Were you born a dual citizen? You might be exempt from exit tax anyway. As I understand it (but I don’t know much about US tax law), a person who is born a dual citizen is exempt from being a covered expatriate but they still have to file an 8854.

    Here’s an excerpt from the 8854 instructions about dual citizens at birth:

    “Dual-citizens and certain minors (defined next) will not be treated as covered expatriates (and therefore will not be subject to the expatriation tax) solely because one or both of the statements in paragraph (1) or (2) above (under Who Must File) applies. However, these individuals will still be treated as covered expatriates unless they file Form 8854 and certify that they have complied with all federal tax obligations for the 5 tax years preceding the date of expatriation as required in paragraph (3) above (under Who Must File).
    Certain dual-citizens.
    You may qualify for the exception described above if you meet both of the following requirements.
    • You became at birth a U.S. citizen and a citizen of another country and you continue to be a citizen of, and are taxed as a resident of, that other country.
    • You were a resident of the United States for not more than 10 years during the 15-tax-year period ending with the tax year during which the expatriation occurred. For the purpose of determining U.S. residency, use the substantial presence test described in chapter 1 of Pub. 519. “

  19. JoeP. You are over thinking this. Whether or not you exceed the net worth threshold is determined by your NW on the day before you renounce. Remember they will have zillions of these to deal with. Make your best effort and then forget about it. If you were born Canadian as well, you don’t need to worry about NW or income. You are only supposed to state that you were tax compliant for 5 yrs.

  20. @JoeP: … do I file this when I go to renounce in June 2013 or do I need to wait until 2014 – and if I have to wait till 2014, what if I become a covered expatriate in the time in between?

    You file 8854 with your 2013 returns, due in April 2014. 2013 will be a “split year”, so you complete a normal 1040 for Jan to June and, if needed, a 1040nr for the rest of the year. Add the 8854 to the pile, and don’t forget to also send separately to Philly (because the IRS isn’t capable of doing its own internal communication, you have to do it for them).

    The 8854 measures your assets on the date you renounce. See notes for Part V. So once you’ve renounced you cannot later become “covered” if you weren’t already, no matter how much you make, inherit, win or even steal or embezzle(!) afterwards.

    One final note. Be careful when reading the instructions for the 8854. It covers lots of different situations besides your own, and it’s easy to find yourself reading stuff that only applies to folk who renounced before June 2008 (that is, pre-HEART). A common point of confusion is that pre-HEART, form 8854 had to be filed as soon as you renounced, and until that was done you remained fully taxable by the US even though no longer a citizen or permanent resident (file that one under: incredible, but true!). Post-HEART, that’s no longer the case.

  21. FWIW I renounced in early spring last year, and have yet to file my 8854 and so on for this reason. (I guess I could now, but I’ll wait for us to do our Canadian taxes.)

    The one thing I’d change about the renunciation is changing the date to the end of 2011 – I wasn’t aware at the time of this aspect of how things worked.

  22. @Mona,

    I believe I read that IRS will not allow use of the standard deduction/personal exemption for a short year return. I expect I will pro-rate all forms of income; which will come to comically pathetic amounts for a grand total of 19 days of citizenship for 2012! ;-P

    @Medea,

    When I was worried that our son was not going to renounce, I agonized over the thought that if my husband died, I would want to live close to our son which I assumed I would not be able to do if I renounced. But, as a US citizen, our son could sponsor me/us for a greencard to start the process. See chart here:

    Family of U.S. Citizens

    http://www.uscis.gov/portal/site/uscis/menuitem.eb1d4c2a3e5b9ac89243c6a7543f6d1a/?vgnextoid=1d383e4d77d73210VgnVCM100000082ca60aRCRD&vgnextchannel=1d383e4d77d73210VgnVCM100000082ca60aRCRD

    This page describes how you (a U.S. citizen) may petition for certain family members to receive either a green card, a fiancee visa or a K-3/K-4 Visa based on your relationship. (If your relative wishes to naturalize or obtain proof of citizenship, see the “Citizenship” section of our website.)
    Type of Relative for Whom You May Petition
    Spouse
    Children (unmarried and under 21)
    Sons and daughters (married and/or 21 or over)
    Parents, if you are 21 or over
    Siblings, if you are 21 or over

  23. @JoeP – As others have already stated, you’d need to file the 8854 for 2013 in 2014. Since the version for 2013 won’t be available until late 2013, early 2014, it leaves you with a bit of uncertainty as to what the treasury may change for those renouncing in 2013, but unfortunately there’s really no way around that.

  24. @nobledreamer – yes, I see no problems (theorically) in getting a green card, but whether you could re-apply for US citizenship, and whether it would be granted, once you’ve renounced is the question. Given the current climate in Congress I’m not at all sure you could.

    Even appealing through the court is difficult as you’d have to prove coersion or possibly economic hardship and there’s only a short timescale in which you can apply anyway I believe. I haven’t found any recent cases that have been successful; only one which was refused as being over the time limit back in the 80s and one successful for the Black Hebrews back in the 1990s which was based on both economic and coersion reasons.

    Not that I’m looking to reclaim it back. I give it up in a week’s time and then have the fun of sorting out any tax liabilities. Roll on 4th March 2013 – my Independence Day!

  25. @Medea,

    Yes, I’d imagine you are right plus I have NO desire to get my USC back. What do you mean a “short timescale?”
    Great! March 4 is sooo soon. And you will feel soooo good!

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