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 suspect Helen will have to prove coercion.”
Yes. Not easy. Like proving intent.
@Helen
Re: “The US counsel in Slovakia said I could stay 6 months in the US for each calendar year. Maybe he didn’t know that as a former US citizen, I can’t stay as long as a Slovak citizen.”
It should be noted (or possibly restated) that there’s no rule saying a Slovak citizen who is a former US citizen cannot stay as long as a Slovak citizen who is not a former US citizen.
Sorry to interrupt, but does anyone has a recommended legal assistance for my matter?
@Bear33
As in the name of a lawyer? What country, but more importantly, what are you trying to achieve? It’s going to cost you the same US$2350 to document relinquishment or to renounce, so the details of your affidavit etc. may ultimately not be important. What is causing you to move on this now? Is your bank threatening you with FATCA reporting or account closure?
@Bear33, there should be no need for legal assistance, at least not initially. You present your case to the embassy/consulate and they decide if they agree or not. If they agree then the documents will be forwarded to the State Department in Washington for final approval and if they also agree you’ll get your CLN. If the embassy/consulate disagree you can insist they send the documents to the State Department for a final decision regardless. There’s nothing much legal assistance could do to help the process along.
It will rest on whether the State Department considers where you were working a government department or not. If you can get a copy of the affidavide then that adds weight since it’s proof of what was actually stated at the time. The DS-4079 will show that you’ve taken no actions since like voting in US elections, doing tax returns, etc, which an American citizen would be doing.
@bear33
I know this has developed into a long thread, but did you read Pacifica777 comments
http://isaacbrocksociety.ca/renunciation/comment-page-307/#commentsDiv.
Perhaps you can get a statement from your Government agency that this action was required when you took the job? Otherwise you could sign a new affidavit to this affect and add this as extra proof to your relinquishment form 4079.
Take a look at this form, you can demonstrate that you have not acted as an American in the past.
@nononymous
A backdated relinquishment can enable one to exit cleanly and not have to to the 5yrs of tax compliance and 6 of fbars.
Thanks guys. I knew ds-4079, just wondering if I should provide evidence of un-American behaviors besides replying on the form. I was thinking if a legal assistance can make my case more solid, ease the process and to increase my odds. Also to support me that this is actually applicable, not just me convincing myself.
I would want a CLN to reflect the reality of my past, and also to keep my career record compliant to the regulations.
@Heidi
Not disputing this, just curious. How does a back-dated relinquishment remove the need for returns and FBARs?
@Bear33
Not sure that paying a lawyer is going to do much. Basically just take your papers to the US consulate and present your case. If they agree, great. If not, you renounce. Either way it’s costing you $2350.
@Nononymous, if it was before 2004 there’s simply no need to file any returns or FBARs. There’s a thread here with links as well giving more info.
http://isaacbrocksociety.ca/relinquishing-acts-performed-prior-to-2004/
@Bear33
I think you will glean more knowledge from the experience reported here than any lawyer’s experience. Just hold your ground.
If you feel comfortable, then please add any experience you may have to help others.
Good luck.
@ Bear33,
RE:
The main evidence you need is proof that the relinquishing act occurred and of the date on which it occurred.
Most of what’s on the 4079 (or a supplementary statement) isn’t easily provable – except for a few things like passport use, which they can easily check on their database.
So, for most of what’s on a 4079 or statement, they basically take you at your word. (Eg, Q. 13 “What ties do you retain with the United States?”, would be trying to a prove a negative. And for Q. 12 “What ties did you have to the country where you performed the act or acts indicated in Questions 8-11?”, take sub-question (a) “Do you maintain a residence?” That would be provable with a lease or title deed, but I’ve never heard of them asking for such proof (or, come to think of it, ever heard of anyone submitting it with their 4079).
The consul reads your file before meeting with you. If the consul wants clarification on something, they’ll ask you at your meeting, and if s/he has concerns, they’ll tell you. But generally, these documents seem to speak for themselves and they take them at face value and the meetings generally go pretty quickly.
As for general evidence /supporting documentation, it seems that quite a few (perhaps most or all?) of the consulates are now have a checklist of what documents they require — such as proof of US citizenship (US passport, if you have one, and/or birth certificate), and some other docs, if applicable) — which they send when you e-mail them requesting an appointment (Canada) or they have their list on their website (eg, UK https://uk.usembassy.gov/u-s-citizen-services/citizenship/loss-of-u-s-citizenship/required-documents/. Note: this is just an example, these lists can vary a bit from place to place.)
@ Bear33,
I was thinking about your affidavit from your government employment — and then my thoughts got rambling about affidavits in general, so I’ll post the whole thing:
(A) Contemporaneous Affidavit:
I think the timing of an affidavit signed as part of government employment is important because the relinquishing act, per S. 349(a)(4) INA requires, “accepting, serving in, or performing the duties of any office, post, or employment . . .”
Scenario 1: If the affidavit had to be filled out, say, upon submitting the application, I don’t think such an affidavit would be useful because:
(a) The person hadn’t accepted the job yet. And if the person wasn’t a USC at application time, they wouldn’t be a USC when they accepted the job, so they wouldn’t have a US citizenship to relinquish by accepting the job – they’d have to have relinquished earlier (and prove that relinquishment);
Or:
(b) if they were a USC when they signed the affidavit, the affidavit would be false and raise overall credibility concerns. (Bear, I’m not implying yours is false, just thinking of scenarios)
Scenario 2: But if the affidavit was signed as an act of accepting the job, or after accepting the job, that would be good evidence.
(B) A 2017 Affidavit in which the affiant states he knew he was relinquishing his citizenship upon accepting or performing the job in 1992
The 4079 is a sworn statement and that fact is sworn to on Q. 18 of the 4079. A 2017 affidavit would be a second sworn statement (in 2017) of the same fact, so I don’t see it carrying extra weight. Basically it’s redundant, though I can’t think of it being harmful either.
(C) Miscellaneous:
Is having or not having a contemporaneous affidavit regarding intent a game-changer?
No, it’s just very good evidence. Most relinquishers I’m aware of did not have contemporaneous statements regarding intent, sworn or unsworn. So, great to have, but I don’t see it as a deal-breaker.
Is an affidavit the only contemporaneous document I can use to bolster my proof of intent?
No, anything that’s dated can be used as contemporaneous evidence. Eg, a relinquisher in Central America was asked by the consul if he’d mentioned in an e-mail, to a friend or family member that he’d be losing (or had lost) his US citizenship when he naturalised in new country, before or around the time that he naturalised.
Do I have to have a contemporaneous document indicating intent?
No, few people do. If you have one, it’s great evidence. But if you don’t, it hasn’t prevented any relinquishments that have been reported here.
General comment on affidavits
Affidavits don’t create truth, but they create a presumption of truth, a rebuttable presumption. (Eg, that’s why the Crown lawyers examined our ADCS plaintiffs on their affidavits – to see if they could poke holes in them (Fat chance!). That’s very commonly done in litigation because sometimes people do lie or are inaccurate/misleading in sworn statements).
In a sense, a contemporaneous affidavit is very good, not so much because it creates a presumption of truth, but because it locks in a date, as it indicates the person had the intent at, or close to, the time they needed to have the intent.
That said, I can’t see a downside to a swearing an affidavit in 2017. Some relinquishers get their supplementary statements sworn, some don’t.
thank you Pacifica777, gladly mine was the scenario 2 🙂
Helen:
“I think the UK is the most advanced in Europe for services for special needs children. ”
Although Brexit makes it uncertain whether you would be able to enrol your child in a UK private school and remain throughout his school years, it occurs to me that if staying under EU rules ceased to be available, you might be able to apply for a “Parent of a Tier 4 Child” visa (https://www.gov.uk/parent-of-a-child-at-school-visa/eligibility)
At present EU citizens aren’t eligible for this visa, but logically that should change following Brexit. Your son would need a Tier 4 visa (https://www.gov.uk/child-study-visa)
You might be able to choose an appropriate UK independent school now, move to the UK, and shift to Tier 4 if it became necessary to do so during the course of your boy’s education.
This is NOT meant to be renunciation tax advice because I have no tax expertise, but I just want to alert you to an IRS problem related to my final year filings I am still experiencing, probably of my own making:
I renounced U.S. citizenship in 2016, and began the process of renouncing U.S. tax citizenship in 2017, by filing in March 2017 a final 2016 1040 (Jan 1 up to the date of renunciation), a final 2016 1040 NR (for the rest of the year when I was not a U.S. tax citizen), and the 8854.
I believe that my mistake was filing two separate returns, a 1040 and a 1040NR, whereas probably I should have filed only one return, a 1040 NR with the 1040 attached (do not take my word for this).
The consequence for me of filing two separate forms is that my March 2017 filings have still not been “accepted” or “processed” by the IRS and have been turned over to the examination/audit section awaiting someone to examine the forms to make sure that they are ok, etc.
What an IRS audit person told me today is that any time two 1040 returns are filed, one has to be considered an “amended” return. My submission of two separate forms (1040, 1040NR) would be confusing to IRS and was therefore flagged for examination/audit. “Dual status” was written on my return.
As part of the audit IRS has confirmed that it has received no indication that I had any U.S. source income during the time period of my 1040 NR, for which I reported no U,S. income.
The IRS examination agent was friendly and told me that although my filings are in the audit section, I am really only awaiting “classification”, rather than a real audit (in which I would be asked for further information), and that I should not be worried and might never hear again from IRS….
So…. my suggestion is that when renouncing U.S. tax citizenship you find out from a real expert (this topic has been mentioned before on Brock and see Hodgen) on what to do re final forms. You might not want to do what I did and file a final year 1040 and separate 1040NR in the same package.
If I am incorrect in my thinking, please point this out.
Stephen, You can be forgiven for being confused. It isn’t possible to understand it. The instructions for non resident aliens are 67 pages of gobbledegook.
Even the introduction is confused. This is what they say (google ‘taxation of dual status aliens’)
The instructions consistently conflate citizenship and resident status. So, in spite of being told that dual status does not refer to citizenship, the IRS considers all citizens to be tax residents and therefore dual status!!! But to add further confusion, they talk about the part of the year we were citizens as the part of the year we were US resident aliens!!
I’m confident you will be fine.
Our solution will probably be to file 8854 but neither 1040 or 1040NR.
P.S. I believe the correct procedure is to file a 1040NR (all zeroes) with the 1040 unsigned as an attachment or statement. The only real confusion I have left is what exemptions one is allowed to claim for the first part of the year. i.e. is the personal exemption pro-rated?
@All
i filed through a reputable firm, one of the big firms that deal with tons of streamlined filings and renunciations and are cross border specialists.
The correct way to file a final return according to them is you need to prepare a 1040 for the part of the year you were a US citizen showing your worldwide income received in that period. Write “Dual Status Statement” at the top.
Copy the numbers to a 1040NR from line 38 adjusted gross income (this could very well be zero but mine was not, standard deduction and personal exemption does not wipe out all my passive income). Tax credits from the 1040 are also copied over to the 1040NR so in my case both forms winded up zero owing. Add in any US-connected income to the 1040NR received after you renounced. If you had none, use the same numbers. Write “Dual Status Return” at the top of the 1040NR. Put the 1040NR on top signed, put the form 1040 statement under the the form 1040NR unsigned.
Put all your other forms in numerical order, starting with the lowest number. For those that didn’t know, every form has a number in the upper right hand corner and they should be placed in order lowest to highest., The signed form 8854 will be in this bunch too placed in sequence, the form 8854 for example has numeral sequence number of 112.
staple and sign and mail.
Having said all this, many have filed differently and it could have passed without notice. But this was the correct way to file according to the accountants I used. and I had confidence that they had lots of experience with this and all their final returns passed and were processed.
also one minor correction to the above when i said
(this could very well be zero but mine was not, standard deduction and personal exemption does not wipe out all my passive income).
i meant only the personal exemption here. you can not use the standard deduction on a final dual status return. so my passive income was not wiped out by my personal exemption alone.
however again maybe some have used the standard deduction without incident on a final return but I was told one can not take a standard reduction for the final dual status return
Thanks UK Rose. Do you know if the personal exemption is pro rated for the partial yeat you are a US citizen?
As has been noted, the 1040NR is the return for the year in which you expatriated, and the 1040 is not a return, just an attached statement that explains what happened in the part of the year before expatriation. Even when the 1040 is clearly labelled as a Dual-status Statement, the IRS sometimes starts off by treating the 1040 and 1040NRs as separate returns return, leading to further questions. A cross-border tax specialist said it’s not rare for the IRS to be confused by dual-status returns, and this is almost always resolved without by providing additional explanations as necessary. When that happens, it’s an example of a taxpayer or taxpayer’s advocate educating the IRS folks, instead of the IRS educating the taxpayer. Specialist experience suggests that transferring amounts from 1040 statement to 1040NR return is a good way to go, but to call it “the correct way” needs evidence. I did not carry over amounts from 1040 statement to 1040NR return as I was unaware that specialists were doing that, and it was not spelled out in any of the related IRS documents I could find. Not knowing about the transferring method saved me some head-scratching as it would have required me to work out how to split $s from a single Married Filing Jointly 1040 statement to put on separate individual 1040NR returns.
@ Stephen Kish
My husband apparently did it all wrong but he got his first acknowlegement of receipt, ever, from the IRS. He assumed all was well and has never heard from them since. It’s been over 3 years. All will be well for you too. It’s just bureaucrats trying to fit your slightly squared forms into what they believe is their perfect circle. “Classifications” are so overrated but they don’t think so.
@DOD My understanding is that the personal exemptions are not pro-rated and the standard deduction is not allowed on a dual status return – this is the way I filed.
@fn0 We prepared our 1040 part year statements using married filing separate (both of us were US citizens who renounced mid-2016). I didn’t think we were able to use married filing jointly for the period we were US-taxable-citizens.
IRS info page on dual status returns: https://www.irs.gov/individuals/international-taxpayers/taxation-of-dual-status-aliens
(probably raises more questions than it answers)
@Karen
My decision to complete a married filing jointly 1040 statement for the portion of the year prior to expatriation was based on the Dick and Jane example on page 9 of the 2016 Pub 519. Dick was a pemanent resident who had been filing joint returns with his non-res alien spouse. He abandoned his green card when he left with his NRA spouse on Jan 10, 2015. The Pub says “Dick and Judy could have filed joint or separate returns for 2015 because Dick was a resident alien for part of that year”. If it was OK for a permanent resident to file jointly in the year he abandoned status then so should a US citizen be able to file jointly in the year they abandon US citizenship. This misaligns with the fact that you can’t submit a joint 1040NR. But you can on the 1040. It worked for me but others mileage may vary.
@DoD
As Karen also stated, the personal exemption is not pro-rated. you can claim the full. what is pro-rated is the FEIE and for the time period that you are a US citizen only,
The form 1040 is only a statement. Again copy over the numbers from line 38 on the form 1040, on to the form 1040NR. Never carry over any figures that are exempted from the FEIE on to the form 1040NR, that’s why I say from line 38, basically your second page of the form 1040 in full gets copied over.to the form 1040NR and any US source income after you renounce gets added in.
You can also write “From form 1040 Statement” next to the numbers copied over to the form 1040NR
If someone just has income earned and exempted by FEIE (and nothing else, no bank interest, rental etc), then you could ever well be copying over zero to the form 1040NR. This wasn’t the case for me.
What this method produces in one return joined together. remember the form 1040NR is your main tax return and the form 1040 a statement.