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
@Ben
Regarding FATCA, I’m not super familiar with Israel, but if it has a Model 1 IGA then the national tax authorities take the account info reported by banks for identified US persons (year-end balances only) and pass it on to the IRS. (Under Model 2 agreements the banks report directly to the IRS.) If however you are worried that the Israeli tax authorities report anything about your income or tax status to the IRS, then no, they do not.
Your having served in the army could possibly be seen as a relinquishing act, but now it costs the same (US$2350) to document relinquishment as it does to renounce, and it’s probably more hassle, so there’s no real advantage to proving your case unless having your loss of US citizenship backdated saves you from some sort of taxation grief.
However, in your case I would just stay the hell off the US tax radar. Don’t get an SSN. Don’t start filing returns of FBARs. If your banks don’t know that you are a US citizen, don’t make life easier for them by saying so.
If the banks do figure it out from birthplace, you might want to renounce if they threaten to deny investment services etc. because you are American. Or if you they are currently unaware you might want to renounce preemptively so that your assets are not reported to the IRS. (It won’t be a huge problem if you are reported under FATCA, but if you can avoid it, worth doing.) You can renounce without US tax compliance. Just make the appointment and get your CLN but don’t worry about any tax filings. (Some people will want to make a “clean exit” and do all the correct filing after they renounce. Not worth it if you owe the US money, is my view.)
The key thing for you is not to panic and do something silly to become compliant. But don’t worry, the IRS will have no ability to penalize you or collect taxes owing if you have no US assets or income. There is no collection agreement with Israel. You can safely ignore the US. Renounce (or not) and get on with your life.
Also don’t count on the US changing laws or otherwise making things easier. Maybe something good happens, but I would not bet money on it.
Thanks again Portland and Medea!
Re:
It seems that volunteering is not required in order for it to be a relinquishing act.
S. 349(a) of the
Immigration and Nationality Act, s. 349(a) specifies:
The Foreign Affairs Manual 7 FAM 1270 Military Service and Loss of Nationality goes into detail about this section of the Immigration and Nationality Act, in particular 7 FAM 1277 Duress and Conscription:
Nononymous – thank you!
My main concern is the situation worsening, like my country signing collection with the IRS, etc, and also to avoid further hassle. I have no intent complying, I just want a CLN.
Another question: the guide here says I should complete SS-5:
https://il.usembassy.gov/u-s-citizen-services/renouncing-u-s-citizenship/documents-required-loss-citizenship/
Is that correct?
@Ben
Just to add that if serving in the army as a commissioned or non commissioned officer before June 2004, it could count as a backdated relinquishment, in which case you would not be required to file tax returns or 8854.
http://isaacbrocksociety.ca/relinquishing-acts-performed-prior-to-2004/
@Ben
That’s the spirit!
I’ve not heard of it being required to have an SSN, or application for an SSN, to renounce. Others may know more about this than I do, however.
If you can backdate your relinquishment in such as way that you are not legally required to do any tax filings, per the previous comment, that might be worth the extra trouble. Then you can avoid compliance without any concern about loose ends.
Otherwise it sounds like your best move is to just ditch the US citizenship as soon as possible.
Re:
I don’t recall hearing of or seeing that requirement before either.
I notice that it’s on the US Embassy in Israel website’s List of Required Documents. I don’t know, but I suspect it may be a requirement specific to them (procedure does vary a bit from place to place). The Social Security form is not listed on the London Embassy or Bern Embassy websites nor in the most recent e-mail List of Required Documents I got from the Embassy/Consulates in Canada booking system.
If this is the case, might be worth renouncing somewhere outside Israel.
I have both good & bad news:
Good news: I did join the army before 2004. I wasn’t an officer, but I did take an oath. Reading the law, it does seem like it’s a relinquishment on its own:
“taking an oath or making an affirmation or other formal declaration of allegiance to a foreign state or a political subdivision thereof, after having attained the age of eighteen years”
Bad news: I did apply for a US passport some years back, after serving in the army, which I now deeply regret. Did anyone manage to negate this act? Do they check if I obtained one?
Too bad about the US passport. Just renounce then, no big deal, you aren’t going to fill out the tax forms either way. I would seriously question the requirement to apply for an SSN when you renounce. That’s probably specific to the embassy in Israel, and could be challenged. Worst case go renounce somewhere nearby, it doesn’t need to be in your country of residence.
OK, thank you all so much!
Passport use is very dicey. A few people who applied for a passport after their relinquishing act (having been told by a border officer that they had to) were successful in receiving CLNs based on their relinquishing act. But these cases were reported in 2012-2014 (and even in those years, it was iffy). Unless it’s really important, I think it’s best to just renounce. If, however, you’d like more information about these cases, let me know and I’ll dig up the specifics.
patricia – I’d love to know the specifics.
Renouncing puts me as a covered expat; I’d like to avoid that if at all possible.
Even a crayfish understood why it has to renounce US citizenship.
http://www.foxnews.com/food-drink/2018/06/04/crayfish-severs-own-claw-to-escape-boiling-soup-in-unbelievable-video.html
@ Ben,
Here are links to passport-use-after-relinquishing-act reports (a couple without links because the people didn’t post but contacted me by e-mail).
2012 Halifax
Baird: 2012/10/28
Baird: 2012/12/17
Got passport because border agent told him he had to.
CLN received 2 months
2012 Vancouver
David: Submitted on 2012/12/20 at 10:41 pm
Used passport to enter US, thought he had to.
CLN received 3 months
2013 Jerusalem
BenPloni: Consulate Report Directory, p. 195-199
Renewed/used passport.
After lengthy back and forth (a couple of months) between person, consulate and DC, person was told could only renounce.
Renounced
2013 Consulate in Western Hemisphere, but not in Canada.
Anonymous
Had been given a very hard time in secondary entering the US on non-US passport, so got a US passport.
CLN received 3 months
2013 Toronto
AtticusInCanada: Submitted on 2013/09/26 at 10:48 pm
Used passport.
CLN received 13 months
2014 Toronto
Anonymous
Used passport until it expired. Did not renew.
Was told could only renounce.
Became self-documented relinquisher
2014 Vancouver.
BC_Doc Submitted on 2014/05/16 at 6:39 pm
Renewed (used?) passport.
Was told could only renounce.
Became self-documented relinquisher
2014 Vancouver
Ghost66 Submitted on 2014/04/20 at 11:56 pm
Used passport.
Was told could only renounce.
Renounced
2014 Amsterdam
Murdo: Submitted on 2014/12/03
Renewed/used passport.
Relinquishment claim sent by embassy to DC but rejected 2 months
2014 Melbourne
Anonymous
Renewed/used passport.
Relinquishment claim sent by embassy to DC but rejected
Renounced
As I mentioned, it’s pretty dicey. Loss of citizenship determinations are to be made on the balance of probabilities, which is generally considered a pretty low burden of proof, but it still gives DoS room in their evaluation. They tend to consider passport a pretty strong indicator that the person considered themselves to be US citizen at the time they applied for it, as the person signs a declaration on the passport application form that says “I am a citizen or non-citizen national of the US . . . ” We only have a small sample of about 10 people, but from this it looks like DoS stiffened up on the passport matter around 2014.
It’s nuts! There is no reason why they would want a SS5. No other consulate mentions that. Why would anyone apply for a SS no. in order to renounce.
Serving in the Israeli army is not considered enough because it’s required.
@ Portland.
Re:
Conscription is not an automatic disqualifier because, 7 FAM 1270:
” e. . . . The Department’s position is that conscription will be considered as a factor highly relevant to possible duress, but must be weighed with all the other evidence in the specific case to determine whether duress was in fact present.
f. The Department advised posts that the Department does not consider a person who was conscripted (as opposed to one who enlisted in the military) must be held as a matter of law to have served involuntarily. One can enter the military by means of conscription but nonetheless have been willing, even eager to serve in the military. On the other hand, one who has been conscripted is in a far better position to assert that such service was involuntary.”
Agree with you that Jerusalem/TelAviv requiring SS5 is nuts, though.
Pacifica.. State uses the act of serving in a foreign army to suit their purposes. If someone wants to ditch their citizenship they say it’s not a relinquishing act. If someone wants to KEEP it they say it is. Go figure.
@Ben
Becoming a covered expatriate isn’t the end of the world. Really the only known drawback is the punitive tax on gift/bequest to US taxpayer. So don’t have kids who move to the US basically.
“Becoming a covered expatriate isn’t the end of the world. ”
Unless, of course, maintaining control of who knows what about your finances is of any importance to you.
Notice in all this, the individual had no right to decide to which group they belong. We must be “allowed” or abtain “permission” after paying moneyto someone in most cases.
Um, how exactly does becoming a covered expatriate by virtue of *not* filing any US returns after renouncing mean that you are not “maintaining control of who knows what about your finances”?
IF they wish to clear it up, they must share saud info. If not, eventually the data will be shared.
Think FBAR. For 40 years it was ignored and now new tech and FATCA are discovering who has not been filing FBARS.
And what if he does not wish to “clear it up” by filing tax returns or FBARs? What info is shared then?
At this point it sounds like Ben’s banks are not aware of his US personhood. If one day they get suspicious and ask, and he shows them a CLN to make them go away, presumably they won’t share his data, and won’t have shared in the past.
@Ben, it’s not renouncing that makes you a covered expat, it’s the fact you haven’t filed an 8854 form. But since you’re not even in the tax system it’s a moot point. There’s no real problem with being one since they can’t impose any theoretical tax owed or penalties on you and the Reed Amendment trying to bar covered expats from entering the States is unworkable.
As for the SS5 form, it’s totally unnecessary since renouncing your citizenship has nothing to do with your US tax situation. The embassy/consulate isn’t even allowed to talk to you about it, only to point out that you might still have outstanding US tax matters to deal with. I would either strongly challenge the need for this form or as others have said look to renounce in another country. It doesn’t have to be done in the country you’re resident in. Quite a few people have hopped over to other countries to do this because of the long waiting times in their own. So you could look at doing it in Italy or France say, book an appointment and have a few days’ break to enjoy some sightseeing as well.
@Ben
One way to avoid covered status is to gift to spouse, family or anyone you can trust, you could then transfer back after renouncing.
This would mean you would also have to enter the tax system and back file + 8854. Do you really want to give them all that info and enter their system.?
https://hodgen.com/make-big-gifts-year-expatriating/
Ben – regarding SSNs – sometime around 1988, the US started to require SSNs for all dependents claimed on form 1040. About that time many US hospitals started including SSN applications in the paperwork done automatically after birth, so most born in the US after that time would have SSNs.