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
“can i just not sign anything at all and just renounce with 0 notification to the irs”
Yes. There’s no need to worry about US laws once you’ve renounced – you’re free. Hang on to the $2350 receipt, until your CLN arrives.
@patrick, as plaxy says, don’t worry. You’re not in the US system, even if you got a SSN when you were born, since you’ve never worked there. They don’t know you and can’t trace you even if they wanted to. Either fill in the 8854 form with a whole load of zeros and the explanation that you’ve never met the reporting thresholds for filing or don’t even bother with the 8854 form.
Do you have an SSN? Did you ever get a US passport?
i have a us passport and a ssn because i was born there.
but i never filed ,no one ever told me i had to and now my bank wants me to renounce or they will close my account,unreal,the us tax system is unreal,it’s faschism,why should i declare anything in the us if i’m not living there and do not use the schools roads hospitals services,all the reasons why you pay taxes an any other countries..totally crazy.
Welcome to Brock Patrick
Yes, you echo the thoughts of all of us.
As a dual from birth whom I presume has lived in his other citizenship country you are exempt from any exit tax even if you are over the threshold. I would be tempted to do as Medela suggests. Send in the 8854 as simply as possibly with all zeros for the last 5+yrs of taxes with an explanation that you were below the filing threshold. That way you can be sure not to be labeled a covered expat (whatever that means in the future, no one knows).
Thanks heidi medea and plazy for your kind answers.
can the irs look to audit or freeze my account or ask the local tax agency overseas to seize money once i renounced because they feel i owe penalties from not filing fbars from example ?
@patrick
No the IRS does not have the authority to freeze your non US accounts. They can audit you but there has been no reports of them auditing minnows. They are overworked and understaffed and can hardly deal with US tax delinquents. If you do receive a letter from them you can wipe your feet on it.
PS Patrick
There are a handful of countries that have a tax collection agreement with the USA (I can’t remember which, but hopefully someone will) but FBARS are not tax, there are arbitrary penalties and I would assume not defined as tax owed and therefore not legallycollectable.
PPS Patrick
Here are the 5 countries but all seem to state that they will not collect if other provisos are met.
https://isaacbrocksociety.ca/2016/11/01/dual-citizens-of-sweden-france-netherlands-denmark-canada-take-note-your-country-will-not-collect-for-the-u-s/comment-page-1/
No country collects US tax from citizens.
My advice is to forget about the 8854. You don’t need to sign their damned form under penalty of perjury – you’re not a criminal and once you’ve renounced you won’t be a US citizen. Your assets/income are none of their business.
I’m with Heidi. Don’t file any returns . But do file 8854. It’s relatively simple. Part IV (A)is the key.
Put 0 for income tax liability for each of the previous 5 years (2013-2017) . Put down something (anything) for net worth)
Question 3 is a yes. Question 4 also yes.
Note the tricky double negative. Question 5 No Q6 yes
Almost done ! part V is optional. You can fill in column Sched 9A) column(a) to demonstrate your net worth is under 2 mill. Sched (b) is blank.
Sign and send in ( but probably not until after jan 2019. You won’t ever hear from them.
Or forget about it.
does anyone know if Mexico has a tax collection agreement with the USA? I renounced last year and will file my 8854 form this year. waiting for my CLN now.
No.
https://www.irs.gov/businesses/international-businesses/mexico-tax-treaty-documents
Patrick. Is Italy still requiring 2 appointments? Canada had so many people renouncing the US consulates streamlined the system. All the spade work is done in advance and forwarded by e mail and then only 1 appointment is required. Appointments to all the consulates in Canada ( 7 or so) are controlled by one office in Vancouver.
Portland,
i don’t know if i will have 1 or 2 appointments
i emailed them 3 weeks ago ,they asked for a copy of my us passport and once i sent it ,they told me i was added to the waiting list.
so basically ,i renounce, get my CLN and file the 8854 after that in jan 2019(with 0 everywhere) ,no need for form 1040 or any other forms?
And do i need to bring documents to the consulate for those who have done the procedure already?
certificate of residency ,birth certificate….
thank you Heidi Plaxy Portland
Patrick – they’ll probably tell you what documents you need to bring. At a minimum you’ll need proof of US citizenship (e.g. birth certificate), proof of Italian citizenship, and two or three forms/questionnaires which you can download from the UCSIS website once you’ve been told what to bring. The forms are very easy to complete – stuff like “do you understand the consequences of renouncing?” etc.
@Patrick, each embassy/consulate seems to deal with this in a slightly different way, but here’s the info on documentation for Switzerland. I would think it will be similar and will give a chance to look over things before you have your appointment.
https://ch.usembassy.gov/u-s-citizen-services/citizenship-services/lon/required-documents/
thanks Medea and plaxy
i have a copy of my us birth certificate but translated in french
They may not accept a French translation of your US birth certificate.
I ordered mine from this website:
https://www.vitalchek.com
Others may be able to suggest cheaper or quicker services.
when you guys say that i shoud file the 8854 form not to be considered a covered expat ,isn’t the 8854 form just for covered expats?
And can the us make thing anymore complicated please……
@patrick, not it’s not. Everyone who wants to exit the US tax system cleanly must fill one in. Even if you’re below the amounts stated, if you don’t file the 8854 form you will be a covered expat.
“Covered expatriate. You are a covered expatriate if you expatriated after June 16, 2008, and any of the following statements apply.
1. Your average annual net income tax liability for the 5 tax years ending before the date of expatriation is more than the amount listed next.
a. $139,000 for 2008.
b. $145,000 for 2009.
c. $145,000 for 2010.
d. $147,000 for 2011.
e. $151,000 for 2012.
f. $155,000 for 2013.
g. $157,000 for 2014.
h. $160,000 for 2015.
i. $161,000 for 2016.
j. $162,000 for 2017.
2. Your net worth was $2 million or more on the date of your expatriation.
3. You fail to certify on Form 8854 that you have complied with all federal tax obligations for the 5 tax years preceding the date of your expatriation.”
There are a couple of exemptions so it might be worth reading the instructions to see if they fit your circumstances.
https://www.irs.gov/pub/irs-pdf/i8854.pdf
@patrick
No, the 8854 is for everyone who expatriates.
It’s purpose for you is to demonstrate that your net worth is below 2,000,000.without it you will be considered a covered expat.
As Portland said you can finish at part IV and state your net worth, or demonstrate it on part V schedule A. I would stop at IV.
Part 5 Schedule A and B are really for calculating your unrealized gains for tax purposes If your net worth is over 2,000,000,.
Under US tax law, a USC is supposed to file 8854 in the tax year after renouncing.
But the person is no longer a USC by then, so they’re no longer subject to US tax law.
In other words, it makes no sense – like a lot of US tax law.
My advice would be not to file anything. You don’t owe any tax and don’t need to enter the US tax system at all. You can renounce the citizenship and get back to your normal life.
But if you do decide to file the 8854, you don’t need to worry about it. Nothing will happen, either way.
Heidi – “It’s purpose for you is to demonstrate that your net worth is below 2,000,000.without it you will be considered a covered expatriate.”
Without the 8854 he won’t be considered at all, since he has never entered the US tax system.
Medea Fleecestealer – “Everyone who wants to exit the US tax system cleanly must fill one in.”
He is already out of the system. No need to enter.