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
I understand this came up before, but being the pig-headed person I am, I’m not convinced yet. So here goes:
Successfully going through the Streamlined procedure means a person would be fully up to date with *all* their tax obligations, correct?
If so, then they are also up to date with their tax obligations for the preceding 5 tax years, correct?
If so, is it not the case that they can truthfully and accurately answer “yes” to the question on form 8854 (“Initial and Annual Expatriation Statement”) that asks:
Form 8854 and instructions do NOT, as best I can tell, ask if you’ve filed 5 years of returns and forms. It asks if you have complied with tax obligations for the preceding 5 years. I submit that Streamlined means you can answer “yes”. If you think otherwise, can you please explain what tax obligations are you are not compliant with?
TIA
@tdott –
I raised this question on another web site:
http://www.expatforum.com/expats/expat-tax/159310-conflict-8854-vs-streamlined-filing-procedure.html
One answer was that the 8854 requires 5 years going back in order to renounce. The streamlined Procedure requres 3 back years as “good enough” to re-join the system going forward. The thought being that the two are unrelated and renouncing still requires 5 years.
I still don’t know if it’s true or if that is just somebody’s logical interpretation of the apparent conflict.
@Benedict
I’m looking at 7 FAM APPENDIX C FORMER INA 350 again. Point “d” says:
The 3 years starts at age 22. My 3 years therefore ended on my 25th birthday in Jan 1979, 3 months after the Oct 10 1978 change. Therefore, it seems like point “d” is saying that it doesn’t apply to me because I missed it by 3 months. And, I’m 3 years older than you.
It may be that INA 350 is what the consulates had in mind when they told us both that we were not USCs?
@tdott
Just file the three and by the time the IRS gets back to you, at least another 2 years will have passed for a total of five or more 😉
19 months now since we entered OVDI and not a word, for a total of 10 years of tax returns in their hands.
@WhatAmI
That is where it gets confusing…(I don`t agree with the need to determine reality 34 years after the fact, when I actually lived and experienced the decisions enacted upon me in 1979 – one can play Devil’s Advocate, but I am not falling into that trap..)
First off…the rules, as now written, were not common practice even if they were DATED as per these documents…
2nd…isn`t age 18 the real age of majority?…(as evidenced by that 2009 letter suggesting 18 1/2 automatic loss of citizenship – quid pro quo) – (which begs the question why 22? and 3 years later?)
3rd..the interpretation of these rules is well after the fact…
4th..I`m not certain when the Oct 10th, 1978 actually became effective (for all I know it may have been retroactively put in place)…there are many adjustments that don`t even come into effect until the 1990`s…
5th..I’ve noticed from FAM documents, that the bias is for KEEPING US Citizenship,,,very little thought was given to losing US Citizenship…
6th..I forced the determination ( I do have a FAILSAFE) but prefer to have this resolved on the basis that: I did not claim US Citizenship by age 21 (Sept 1978) and have plenty of valid “preponderance of probality” to ascertain that fact.
Therefore…I await a resolution…I will update once I see the actual CLN…However when I walked out of the Calgary consulate..it was accepted…but subject to Wash. D.C.
My lawyer is also waiting for the result before taking any action on my behalf…
PS..I didn’t invoke the 1978 ruling…I simply said…I WAS TOLD I WAS NO LONGER A US CITIZEN by both Stanford Admissons and the Vanc US Consulate and therefore acted accordingly…
(But I do have a FAILSAFE..which I will invoke if necessary)
The changes were signed by the President on Oct 10th, 1978 and came into effect on that date, but I guess it’s not clear how that affects you and me.
Don’t know why the strange magic age of 22 + 3 years in INA 350. However, I think there is a note on the back of the Canadian Registration of Birth Abroad that says you will lose your Canadian citizenship 3 years after your 21st birthday if you are not resident in Canada and you don’t take action to retain it. Somewhat similar.
I agree that all the supreme court decisions and changes to the laws are all in the direction of protecting citizenship rights of those who want and deserve them, and to confirm that Congress etc doesn’t have the power to take away a person’s citizenship without their consent. They shouldn’t be interpreting these laws in such a way as to deny relinquishment claims going back a lifetime.
@WhatAmI
Don’t forget…the INTERNET did not exist…you and I did not have access to FAM articles …unlike today…
We had to rely on the experts…
@tdott & @ whatamI
“One answer was that the 8854 requires 5 years going back in order to renounce. The streamlined Procedure requres 3 back years as “good enough” to re-join the system going forward. The thought being that the two are unrelated and renouncing still requires 5 .”
Yes that is exactly correct, according to my accountant in international firm as of Fall 2012. He had been thinking that with the streamlined coming in that 3 years total might be enough to satisfy the US to avoid exit tax as well and that I could possibly renounce last Fall yet. (I had filed 3 years in 2012) But he double checked with their experts in the US & no, I still need to be able to have 5 complete years filed & then the partial year for whichever year I renounce in. So target of renouncing in 2014 remains…..
@northof49
Well, that’s unfortunate. Can you tell me whether you discussed with him back-filing the 2 missing years rather than getting them by going forward (and waiting)?
@Shunrata
My partner and I renounced here in Melbourne,Australia. I think you can relax and you’ll have nothing to worry about. If, like us, you are not by any means wealthy, and have filed US taxes over the past years, the whole process should be easy and painless. I spoke several times on the phone and more times still by email with a consulate employee before our first appointment. She seemed quite knowledgeable, was really helpful, and told me Melbourne does quite a few renunciations and relinquishments. Our city’s consulate can also help direct you where to get answers to tax related questions. We had to wait a number of weeks to get an initial appointment however, as there was strong demand at the time for these services. Of course each consulate in Australia is different, they may well have different rules and procedures in place. No worries, you just email the one closest to you and ask. She’ll be right.
Welcome in becoming an Aussie citizen later this year! You might consider applying for an Australian passport at your post office the very next morning after your citizenship ceremony. Our initial passports arrived in about a week; wise to get that done straightaway. The consulate of course required our Australian passport numbers from the very start of things. When you email the consulate you can mention that you got Oz citizenship intending to renounce your US citizenship, Already the posts you have put on this site give proof that such was your intention and the wonderful people on this site would certainly vouch for you on your behalf to that effect, There should be nothing for you to worry about or be afraid of. You are making a good choice and it will all go smoothly. Enjoy being in this country and very best of luck in finding work too.
@tdott
No I didn’t. I had already filed the 3 years and it is easier for us to go forward than go back.
@NorthOf49
Just saw your post of July 2nd – looks like there are 2 of us….
@ozteddies,
Thank you! We are apparently neighbours 🙂
If the Melbourne consulate is informed and reasonable about relinquishments that eases my anxiety considerably.
If you’d like to expand on your experience with the consulate I’d be interested….
And yes, I have my passport application ready, we are just waiting to hear when our ceremony will be.
Thanks again 🙂
shununtra,
Please check out the Australian section of the Consulate Report Directory: http://isaacbrocksociety.ca/consulate2/. The great account of that experience, I believe, is there.
@Shunrata
You are in luck if you’re in Melbourne. The consulate here was excellent and treated us in a helpful, professional fashion.
Like you, the process of making our decision led us to this wonderfully superb Isaac Brock web site, to the Renunciation Guide and other helpful resources. There is so awfully much I could share with you, yet I will try not to be too unduly lengthy here out of respect for the kindly (and sorely beleaguered) Canadians who have set up this excellent site and generously shared these resources with others. Their issues are far more grave than yours are and ours were.
My partner and I had been citizens of Australia for many years when we finally decided to renounce. We began the process by checking out the Australian US consulate’s web site. If you need URLs or email addresses for making contact, I can provide those to you, though they can easily enough be found on your own I’d imagine, given that you found this site.
Your renunciation is handled by the ACS section of this consulate. Although their web site has an online appointment-booking facility, you cannot use that to book renunciation appointments we discovered. The renunciations require a special appointment; these are handled only on Fridays when the consulate is closed to the public for other business. They don’t seem to want you to ring them up either to make such an appointment; the standard procedure appears to be contacting them via email initially.
So first you must email the ACS department at the Melbourne Consulate, tell them you wish to relinquish or renounce, and request a special appointment for doing this. We received a very length reply which was packed with information. We were asked to answer eight questions they sent us in order to get the process begun. These questions included the date on which we got our Australian citizenship and where this occurred. I reckon it is not appropriate to contact ACS initially until after your citizenship ceremony has actually taken place.
They were supposed to get back to us with a first appointment date. Instead I had to send follow-up emails and make several phone calls before this got set up. Melbourne’s consulate is very busy processing renunciations/relinquishments mind you; when I rang the ACS I was told they do quite a good number of those and were simply swamped with requests for that last year. My partner and I had to wait several weeks before an appointment was available. These appointments are done at the consulate’s convenience, not at yours, which meant my partner and I had to arrange time off our jobs to attend. We were permitted to book an appointment for the both of us together, which was nice.
At first I tried to argue that we should only require one appointment in order to renounce. The two of us had discussed renouncing citizenship for more than ten years; we were absolutely decided on this course of action finally and had no reason whatsoever to take time to reconsider it. However the consulate does require two separate visits without exception for that, like it or not. From what I understand, each consulate is a law unto itself. They decide how to process loss of citizenship according to their own whims, regardless what the formal US laws might dictate. If you don’t like their rules, you are free to approach a different consulate to process your request.
At every point in the process, the consulate treated us in a friendly, helpful, professional manner. It was very civilised. We sent them the information they requested in my initial email response. We got our first appointment booked (with a bit of patience). Security at the consulate was incredibly over the top, yet the Australian employees who process you are so friendly and sweet that it feels truly harmless. The consulate was enormously helpful about answering our questions, providing heaps of information (far more than we really needed), and easing things along.
We had already filled out the various forms and brought them with us on our first appointment, though we hadn’t been asked to do that. The consulate would not accept these, to our surprise. Instead they gave us fresh copies which we had to fill out at home (they told us we couldn’t simply fill those out whilst at the consulate) and post back to them. Once they received these, we were contacted promptly for a second, final appointment a few weeks later. At our first visit, the clerk actually asked us whether we had taken Australian citizenship with the intent of losing our US citizenship. We truthfully replied no, as we were still in the process of deciding that years ago. Yet it was made clear to us that relinquishment was a possibility were that the case. When you leave the consulate after your first appointment, you are not given any proof whatsoever that you have been there to do this. Most of our time at the consulate (for both appointments) was spent waiting. The face-to-face time for our meetings was at most fifteen minutes. Note that there are no toilets, there’s no water or food available either, so it’s best to have some refreshment and relieve yourself if need be before entering the consulate.
The second, final appointment went really smoothly. We were treated with respect, kindness, and in the most professional fashion. There was even one point when we all laughed merrily. It was at the point where it was being explained that any children we had henceforth would no longer become US citizens. The Vice Consul then asked us whether we intended ever to have any future children (we are a grandfatherly aged same-sex couple, a fact we had clearly made known to them). The look on my face made both the consul’s clerk and my partner begin involuntarily chuckling, and we all ended up having a hearty belly-laugh. So much for the solemnity of swearing away our former citizenship. We each did get a receipt for the 450 dollars we had paid, with our name on it and stating this was for loss of citizenship, thus after our final appointment there was proof in hand that we had done this.
From what I’ve seen, the consulate will help you out every step of the way. This is Melbourne after all, we’re friendly and civil in this part of the world, aren’t we. At first we were nervous like you about going through all of this. We need not have been, it was all simple and painless really. The worst part was simply our own fears about doing this all, as we did not know anyone in Australia who had gone through this process.
So you can relax Shunrata. It will all be just fine. Before the end of this year you should have your CLN and enjoy the indescribable peace of mind knowing that you’re free of US jurisdiction for the rest of your life. No more tax filings hanging over your head, no more foreign laws clouding your existence, no more troubles about future changes in the US, no more fears or anxieties on that regard; only peace, liberty, and the pursuit of a happy life. With the caveat that you might be best off avoiding setting foot in that country in future if you can, or having any further dealings with it.
My apologies for such a long post. A shame there’s no web site like this for Australia. But Americans here are so few and thinly spread, there simply isn’t the audience to justify it. I have followed this site for years, but until your posting Shunrata I have preferred to maintain my silence. I cringe at reading what these dear Canadian-Americans are being put through, it sickens me to the very core. But for the slightest twist of fate my partner and I might easily have migrated to Vancouver years ago rather than here. Makes me wish we could help them somehow, but we are very humble folk of scant means and powerless to tackle the juggernaut of our former homeland’s imperialism. Nations, just as people do, can contract mental illnesses; psychosis, paranoia, schizophrenia and the like. We can only protect ourselves as best we can from the fallout of such dangerous situations. You are doing the right thing in pursuing your path toward freedom. It is what you deserve and well worth any trouble and expense along the way I believe. Keep your chin up, forge ahead, and you’ll be right. If I can provide any further information or assistance, please do not hesitate to ask. Cheers.
Just curious.. If you are in a small country and the consulate is trying to force you into renouncing, can you go to a consulate in a different country that is familiar with relinquishment? I’m not trying to jump the gun but I have a feeling the little consulate here in NZ is oblivious to relinquishment and will try to push me into renouncing. I thought if this is going to happen maybe I could go to Melbourne Aus. to sort this out (I have heard good things about their consulate and relinquishment). I have contacted my consulate today requesting a meeting so I can have my ds-4079 signed by a consulate officer. However I have a feeling they will tell me I need to fill our renouncement forms and bring $450. I should know more soon hopefully. Thanks guys
@pukekonz, yes, you can go to any embassy and any consulate which does relinquishments in the world.
Wow, that’s great to know and somewhat a relief. It makes me feel like I have a back up plan if they simply will not be amicable here. Although it would be quite some expense to go elsewhere I am willing to do whatever it takes to get this sorted out.
@pukekonz check with the US embassy/consulate in a country first. Iirc I think I read that Germany were restricting applications to German residents only and other countries may be too. It’ll just depend on how many they are having to deal with. If Melbourne’s that busy they may not accept you coming from NZ. E-mail them and ask.
@ozteddies,
Thank you so much for your detailed answer and your reassurances.
It’s true our problems with the US system are much less than our Canadian brothers and sisters, for whom I feel immensely. Thanks guys for letting us in your discussion 🙂
Them asking you if you are planning on children is really funny – it’s probably on their list of questions they’re required to ask no matter how ridiculous. (In my job I have to do something similar so I can empathise.) As I am a grandmotherly aged single parent it would be just about as relevant, though.
As far as staying away, I still do have my aging father there. Entering the US the last time, though was so bad it really put me off the experience. Hadn’t been in many years and was shocked to be treated as a potential terrorist and interrogated about my plans. If this is how they treat the citizens what do they do with ex citizens?
I’m still hoping to be able to do it at one go, as I am relinquishing not renouncing, but whatever…
I’ll let you know how I get on.
@pukekonz, good luck, yes considering how busy they seem to be in Melbourne you should best contact them before hopping across the ditch 🙂
@Medea Fleecestealer
In fact the US consulates in Germany are even more restrictive than that. They only allow you to go to the US consulate which is closest, e.g. if you live closer to Frankfurt than to Berlin, they wouldn’t let you go to Berlin. So the idea that you can go to any consulate in any country you wish is only a theoretical possibility which may be practically impossible…
Hello, does anyone have any experience as a “covered expatriate” in the expatriation process (for the reason of not having flied 5 years’ tax returns) ? Specifically if you there are any repercussions for not having filed, bearing in mind the intention of expatriation. This seems to me a preferrable option to filing 5 years’ tax returns if you can avoid the exit tax, or come in below the threshold. Thanks in advance,
David
@David..Phil Hodgen did a summary of this here–
http://hodgen.com/deliberately-choosing-covered-expatriate-status/
@WhatAmI
I have so many e-mail memo’s on file, referencing things I have read that I forget sometimes…
I just came across this one this morning that you might find interesting..NOTE where I BOLDED
This was from a 1998 TREASURY Guide…
Again, as I was a minor when I was issued my Certificate of Canadian Citizenship, the Consular Rep argued I did not qualify as one of the 6 expatriating acts…HOWEVER, if you read this report, you will see a conflict in print BOLDED Again the reference to 18 1/2 and failure to re-assert claim to US Citizenship.. I think it is quite clear…
http://www.treasury.gov/press-center/press-releases/Documents/tax598.pdf
(ii) past statements indicating a belief that he or she is not a U.S. citizen (e.g., applications
for employment, applications to educational institutions, financial transaction
documentation, foreign tax returns, requests for a visa for travel to the United States,
and entering the United States on a foreign passport).
Once an individual becomes aware of his or her U.S. citizenship or, based on objective facts,
should have become aware of such status, the individual could under this regime have a period of time
(e.g., six months) to abandon that status without U.S. tax consequences (including the effects of
section 877), so long as he or she does not utilize the benefits of citizenship during that period. Cf.
8 U.S.C. § 1483(b) (a U.S. citizen who commits a potentially expatriating act prior to his or her
eighteenth birthday is not deemed to have lost citizenship if he or she asserts a claim to U.S.
citizenship within six months after attaining the age of eighteen).
Similar criteria could be applied to grant “restored” citizens an exemption. A restored U.S.
citizen is an individual who was treated by DOS as having lost U.S. citizenship under certain statutory
provisions that were subsequently held to be unconstitutional by the Supreme Court, as discussed
above. See Afroyim v. Rusk, 387 U.S. 253 (1967); Schneider v. Rusk, 377 U.S. 163 (1964). The
term also includes an individual who was treated by DOS as having lost U.S. citizenship on the basis
of an evidentiary standard of intent that was held impermissible by the Supreme Court. See Vance
v. Terrazas, 444 U.S. 252 (1980) (the United States must prove that an individual had specific
subjective intent to relinquish citizenship). In general, these cases, as well as lower court cases
addressing the issue, retroactively restore U.S. citizenship to affected individuals (including children
born to these individuals that would have been citizens by reason of the citizenship of the parent with
restored citizenship). In so doing, the courts apparently assume that all affected individuals prefer
to be U.S. citizens, without considering the adverse tax consequences that may result from the
reinstatement of citizenship status. DOS estimates that several thousand individuals may be restored
citizens who have not yet applied to DOS to have their CLNs vacated.
As discussed in Section IV.A.1.a, supra, IRS and the judiciary have attempted to provide
relief from retroactive taxation for restored citizens for those periods when the individual’s citizenship
was not contemporaneously recognized by DOS. See United States v. D’Hotelle de Benitez Rexach,
558 F.2d 37 (1st Cir. 1977); Revenue Ruling 92-109, 1992-2 C.B. 3; see also Revenue Ruling 75-
357, 1975-2 C.B. 5; Revenue Ruling 70-506, 1970-2 C.B. 1. However, the guidance and cases do
not provide reliable relief for any citizens whose citizenship is restored after the issuance of the
guidance or the judicial opinions, even for those persons who genuinely thought that they had ceased
to be U.S. citizens and who have conducted their lives accordingly. For example, Revenue Ruling
92-109 states that an individual who applies after 1992 to DOS to have his or her CLN
administratively reviewed and whose CLN is vacated (and whose citizenship is thus restored
retroactively) is entitled to retroactive tax relief only for pre-1993 taxable years. Furthermore, if an
individual expatriates upon learning of his restored U.S. citizenship status, he or she could be subject
to tax under section 877.
The extent of the relief granted by the just-cited revenue rulings is based on Code section
7805(b)(8), which allows IRS to prescribe the extent to which a ruling shall be applied without
retroactive effect. The rulings state the longstanding general rule that during any period a person is
in fact a U.S. citizen for nationality law purposes that person is subject to U.S. taxation as a U.S.
citizen, regardless of whether the person knows he is a citizen or whether the DOS would
contemporaneously regard him as a citizen. The rulings then provide, however, that with respect to
the specific factual patterns being addressed, the general rule will be applied prospectively only,
pursuant to IRS’ authority under section 7805(b)(8) of the Code to limit the retroactive effect of
rulings. Because the connection between the nationality law definition of citizenship and the tax law
definition is both clear and longstanding and in light of the inherent limitations of providing
prospective relief in this situation through administrative rulings, it is Treasury’s view that further
relief, if any, for restored citizens be effected by explicit statutory amendment. Specifically, the Code
could be amended to provide that an individual who (i) committed an expatriating act under a
provision that a court later held to be unconstitutional, and (ii) has not availed himself or herself of
any benefit of U.S. citizenship since the occurrence of that act, will not be taxed as a citizen unless
and until the individual applies to DOS to have his or her CLN administratively vacated or otherwise
seeks to take advantage of the benefits of citizenship. In effect, such an amendment would allow
individuals who genuinely thought that they had ceased to be U.S. citizens to decide whether to
accept the benefits and burdens arising from the availability of restored citizenship. There may be
other potential solutions that should be considered. Treasury is putting this idea forward as one
possible solution to the problem identified.
@Calgary411
Read page 39…you may find it interesting…
http://www.treasury.gov/press-center/press-releases/Documents/tax598.pdf