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.
Participants will need to provide their e-mail address (real or fake) and an alias. The only written rule is that participants must use a same alias each time they post (and not “anonymous” or derivatives thereof).
Bear in mind that any responses that you get from participants is peer-to-peer help, and it is not intended as a replacement for professional advice. Also, the Isaac Brock Society provides this disclaimer: neither the Society nor any of its members are professionals. We offer our advice here only in friendship and we recommend that our readers seek professional advice if they need it.
If you wish to receive an e-mail notification of comments, check the box to that effect when making your first comment.
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
@fn0
You were filing using a specific example and while there is no clear instructions on what to do (when is anything ever clear though).
There is information about the dual status return online in the IRS Submission Processing instructions.
this below that I copied was specific to when the form 1040NR was the controlling document. there is a lot of other submission instructions but this relates to this discussion. and this is probably why the more knowledgeable accountants are doing this.
“If the amounts on the Form 1040 and 1040NR or Form 1040NR-EZ are not the same, combine the amounts from the 1040 to Form 1040NR or Form 1040NR-EZ. “
UK Rose. Thanks very much appreciated.
I didn’t know it was available so thank you for pointing us to the IRS manual (at http://www.irs.gov/irm)
3.21.3.75.5 (01-01-2017) para 9 says the following about Processing Form 1040NR and Form 1040NR-EZ for dual status returns:
“Combine all related T-Line amounts from Form 1040 and Form 1040NR or Form 1040NR-EZ. See Figure 3.21.3-44.
Reminder:
Add all T-lines amounts together from both forms and watch for amounts that are identical and may have already been transferred by the taxpayer.
Exception:
If taxpayer’s entries are identical on both Form 1040 and Form 1040NR or Form 1040NR-EZ, do not combine the figures from the two returns.”
I don’t know what T-line means, but the reminder and exception suggest that although the the taxpayer may transfer amounts already, this is redundant as the IRS will do it. Just saying.
Thanks again – I am so glad that is all academic for me now, I hope.
@fn0
Yes I stumbled across that IRS submission instructions and then felt more confident with my accountant. there is even an image example there somewhere
Once I knew this, it made sense why my accountant was combining all the numbers on the form 1040NR.
Also if anyone else is reading this, no dates on any forms. the 1040NR is for the full year and the 1040 is a statement. Many people put dates on the form that will make it even more confusing for the IRS.
but of course none of this is clear in the publications that the taxpayer is supposed to read for guidance.
Yes I feel like you, free and relieved not to ever have to deal with this again. My final retuirns winded up costing a lot and were zero owing. it’s totally unacceptable really. and a waste of time, resources and money.
UK Rose,
Thank you for clarifying for all of us how these final forms should be filled out.
Reading your last comment I see that I am also one of those who made a mistake as well on the dates.
I did make it through college but it seems that none of that helped.
@stephen
Many have made this mistake and filed as you filed without incident. The IRS knows this and judging by the submission instructions are supposed to carry everything forward themselves.
I think what might have happened with your forms is that they got separated somewhere along the line and maybe not clear that they belong together. I am sure it will be resolved for you. and the only reason that you have this issue now is that you complied in the first place. This is why I so strongly tell people now not to comply. there are no real risks in the UK providing the person has no financial ties at all to the US and are not expecting any sort of US inheritance in future. I found that once you comply, you are on a one way path to renunciation. There will be no other remedy to end the compliance nightmare.
if I have less than 2m when I renounce do I have to file a tax 8854?
@annie, yes, if you don’t want to be considered a “covered expatriate”. The 8854 instructions are quite clear: even if you’re under the income/wealth figures if you don’t file an 8854 form you’ve a covered expatriate.
I didn’t. No problems.
Hi guys, I’ve been doing some digging about “renounce/relinquish first then get an ITIN for back filing”
Some people in the past has similar problems (no SSN), does anyone know what happen to them since?
@Tortured: discussed about this earlier this year, how did it go then? (http://isaacbrocksociety.ca/renunciation/comment-page-279/#comment-7798792)
@Chris: Received IRS rejecting his ITIN application earlier this year,
what happen since? (http://isaacbrocksociety.ca/renunciation/comment-page-239/#comment-7318062)
@Wren: haven’t heard for a long time
@Mr.A: decided to not get into compliance? 8854 sent?(http://isaacbrocksociety.ca/renunciation/comment-page-279/#comment-7798487)
@joe: In Sweden I remember, how did it go afterwards?
(http://isaacbrocksociety.ca/renunciation/comment-page-223/#comment-7098622)
@Bear33 I applied for the ITIN in conjunction with the back filing. I hired a CPA to do the filing and he also did the application for the ITIN (which later was accepted). He had some kind of license to do that. The taxes were filed prior to the renunciation. I tried to file the final year and the 8854 by myself.
The IRS contacted me by mail and said that they couldn’t find my FBARs. This was probably because they were filed with my Swedish id/tax-number as the they were filed before the ITIN was ready. I let them know about that detail and now that seems to have been settled. In the final return that I did on my own, I had missed some form that needed to be filed. I did as I was told but after the latest Ietter to the IRS I keep getting robotic letters in which they say they need another 45 days to get back to me. I renounced in February 2016 so it is annoying to still have to worry about this.
@joe: Wow, so you actually submitted your ITIN application before you even renounced and they accepted! That was surprising (and encouraging). Was your ITIN application using your Sweden passport or US passport? Did your CPA do the back filing via streamlined or quiet disclosure?
@Bear33 I am not sure of when exactly the TAX batch + the ITIN-application was submitted to the IRS (the CPA sent the batch from his office in New York). The accountant wanted me to have the returns ready prior to the renunciation in case they would ask me about the 5 year tax compliance (I didn’t think this was necessary but he thought it would be good anyway). The CPA wanted copies of both of my passports but my Swedish passport-number was used in the ITIN-application. After the renunciation the CPA asked for a copy of the renunciation fee receipt so he could send it to the ITIN-group to clarify that I was no longer a US citizen. The ITIN-application was accepted but I haven’t reached a closure yet regarding the tax returns. They are still on it so it is too early to say if this is a safe procedure to choose.
I have an appointment in Sydney for renunciation next month. I have not filed my taxes for 2017 yet. Is it ok to go through with renouncing before I have filed my taxes for last year? Then do my taxes afterward? Ty in advance.
@ Angie,
Yes, you can. Renunciation is not contingent on having been up to date on filing. Department of State is concerned with only the citizenship aspects (not taxation aspects) of expatriation. To cleanly exit with IRS, the deadline to get caught up (on previous 5 years tax obligations) is June 15th of the year following renunciation.
I’ve put details with source links about this at Renunciation/Relinquishment: Interactions between Department of State and the IRS.
@Angie, yes you can. That’s exactly what I did when I renounced. I hadn’t done any tax filing at all, but renounced first and then did it all afterwards. The only thing you need to be careful of is that the 8854 has to be filed the year after your renunciation which means if you renounce in December this year, all the paperwork including the 8854 has to be filed by June 2018. This is why getting the renunciation timing can be crititcal depending on your tax filing situation.
For me I renounced in March 2013, but had until June 2014 to get it all done. If you’re up to date on your tax filings though, doing the final year and 8854 form shouldn’t be a problem.
Ok tysm! This definitely puts me at ease.
@Angie
This may or may not not apply to you but if there is a chance that your net worth is over over US$2million because for example you own a house in Sydney or London or Vancouver, consider gifting some of it to another family member to reduce net worth on the 8854 below the $2million “covered” expatriate level. if you have to gift stuff, do it in the year before you renounce, meaning 2017 if your renunciation date will be in 2018. Not having done this myself I don’t know whether a gift tax return must be filed in 2018 or whether it can wait to be filed with the rest in 2019 following a 2018 renunciation. Do not rely on this as advice.
@angie
also important to remember that if you renounce on the 1st of January, you will be liable for taxes for 2018. If you renounce during 2017, then that will be the last year to file taxes.
Dec 6th is my appointment so it will be 2017 still. So I wont file for 2018? I was thinking I had to file both years but if not that is great!
Ty. No doesn’t apply to me at all. I haven’t bought a house at all. We don’t even rent atm. We are living in my husbands grandparents house that was given to his parents. It has been a rough 5 years! Had to pat $5000 just to stay here. Then I ended up with endometrial cancer and had a full hysterectomy. I just had my citizenship in October. Just received my passport for Australia. When I contacted the ACS I thought it would be months down the line for an appointment but they gave me one the same week! But I could not do it that fast. So chose the appointment I could make it to with work.
if you renounce this year, you have absolutely nothing to file for 2018.
Angie – sounds like you’ve been through the wringer! Hopefully 2018 will be better to you.
If you renounce in December, then you’ll file a final 2017 return that will be due 15 June 2018 – after that you’ll be free!
If you haven’t yet filed the 2016 return (that was due 15 June 2017) – that just needs to be done before you send in your final 2017 return (with 8854 certifying 5 years tax compliance).
I renounced in Sydney last year – they were professional and business-like. It didn’t take more than half an hour, including going through security and waiting. It was a bit strange going through the shorter line for US citizens knowing that I would not be a citizen when I came back downstairs.
Good to know they were nice
After reading John & others tales….I’m actually relieved my renunciation as of 2012/finalized 15 irs, is done.
I’m now debating my USA/AU cit kids.
Gut says for them to renounce/relinquish. Be done with that shadow, creepy place.
I’m very frightened, too, of GOP reinstating the draft (poor fight their wares).
Opinions?