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
@Norman
A very old story. But a very reliable informant, if only a single case. And if I have any more information it would identify the family.
Hey, what do I know. But I trust this native speaker of Japan who went on to important executive positions after Japanese university.
I don’t mean to generalise from a single case, however insightful it’s proponent.
@Japan T, from escapeartist.com:
“Golden Visa/Investor Visa
Dominica has a citizenship by investment program. This program offers investors an irrevocable second citizenship and passport in only four to six months, without even requiring any visits to the country. It also provides visa-free travel to 118 other countries to those who qualify. Additionally, there are no language, age, educational requirements, or any need for an interview. These second passports are available for the cheapest rate in the world, at only $100,000 USD.
In order to qualify, you need to have a clean background check showing no criminal record, excellent health, and no contagious diseases. You’ll be required to make a significant contribution to either a government fund or a real estate investment. You do not, however, have to make the full $100,000 investment right away. You can invest a portion, and then submit the rest after approval. Obtaining this visa will grant immediate citizenship, which can be dual citizenship if that is what you prefer.”
FYI
Jane and others,
Thank you for the information on citizenships for sale. I do mean that.
However, that cost is about 3 years pretax wages.
@Japan T
Well, I’m sorry to hear that— I sure wish you had access to do this. I’ve basically been looking at info about other residencies “just because”. I’ve now become paranoid at having only my one citizenship now that I’ve kicked the USA ball back over the fence. $100,000, one-time and guaranteed, is the cheapest around, unfortunately….
Just going through the documents I found in our Swiss storage room. I have the CRBA of my younger siblings but only a (somewhat fancier but smaller) Certifiation of Birth for myself, with less information, signed by consul in London. Wonder if that is the same thing, at an earlier time period. Sort of like the summary birth certificates issued in many states, not the “long form” that Trump harried Obama over, and probably still does.
@Japan T
We don’t know your background or skills. But I have to say, having some knowledge of DoD civilian jobs, that there is something wrong: even a non-appropriated fund position pays better, and gets you SOFA privileges and no local coutry tax. DoD civilian pay scale is here; https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/18Tables/html/GS.aspx
Another way to avoid the nastiness of FATCA: you get to bank at a military banking facility outside its scope.
Mr. T doesn’t work for the US any more. I wonder why he doesn’t consider borrowing from Ms. T. to buy Dominican citizenship, which would let him remain with the T family.
Thanks again.
My reason for bringing my experiences into this discussuon is to provide background for my warnings that things are not as simple as some give them to be.
The greater the automation, the greater the likelihood of;
1. Getting “caught” with a birth in the US or a parent from there.
2. Having your ID stolen by a much greater number of people.
3. Suffering horribly due to a typo by some faceless unknown data entry clerk in an unknown office in an unknown country, if not by yourself.
4. Major changes occuring automatically without any way to prevent or correct.
5. Changes that are expected to automatically occur when certain conditions are met not taking place with no way to correct.
Obviously, the last 4 apply to everyone including those with our US problems and those who do not.
“Mr. T doesn’t work for the US any more. I wonder why he doesn’t consider borrowing from Ms. T. to buy Dominican citizenship, which would let him remain with the T family.”
Loans must be paid back. Took me over tens years to pay back my school loan of $33,000. I’d have to live to a near record age and earning money the whole time to pay that amount. Damn large gift. Still would need to exit cleanly from USCship if I hope to avoid banking problems.
@Japan T
“Since moving to Japan, I have learned of the probability of a person or persons securing home loans, possibly including VA loans and other VA benefits in my name.”
Wouldn’t freezing your credit reports (now a free service) prevent this?
Or, since you know so much about, have you considered stealing a non-US identity? That would solve multiple financial and bureaucratic problems, I expect.
I know what I have experienced and observed .
I would prefer to not cross the line into real criminality.
@Gone Soon and others.
Thanks for the suggestions., however I did not provide my experiences for any purpose other than to show that there are grave dangers associated with data sharing and more and more automation. Not a new revelation, I know, yet there remain those that continue to give the same advice that I received decades ago that played a large part in myself being in the mess I am now in.
sorry to bother – still working on my last declaration (2017 year of renunciation) – I can’t use FEIE (form 2555…) with the dual-status return can I? So I have to use foreign tax credit? hope it works out ok.
Juliette – why can’t you use FEIE? Do you have a cite that says it’s not allowed?
I thought FEIE was fine on the dual status return, though the exemption amount might be pro-rated.
Thank you for your response. That’s what I started with, using form 2555-EZ and a pro-rata; but then when I printed out the forms and checks, is says “You may use this form if you… are filing a calendar year return that covers a 12 months period”; then I checked on the IRS site, and nieces concerning forms 2555 and 2555-EZ, seem to say it doesn’t work (actually this comes from notice 54):
You must be one of the following.
a. A U.S. citizen who is a bona fide resi- dent of a foreign country or countries for an uninterrupted period that in- cludes an entire tax year.
b. A U.S. resident alien who is a citizen or national of a country with which the United States has an income tax treaty in effect and who is a bona fide resident of a foreign country or coun- tries for an uninterrupted period that includes an entire tax year.
c. A U.S. citizen or a U.S. resident alien who is physically present in a foreign country or countries for at least 330 full days during any period of 12 con- secutive months.
or does c apply? except if I file a 1040 plus a 1040NRA c doesn’t work… or should I file with 2555 pro-rata the period I was a USC?
at the same time Hodgenlaw says :
“Is Dual Status Really That Bad?
Betteridge’s Law of Headlines says no.
Also, tax law says no. F.N. does not lose the foreign earned income exclusion entirely in the year of renunciation. He just loses a prorata amount of the exclusion.
F.N., maybe things won’t look as bad as you fear. If you are living in a country with a high income tax rate, you are going to pay tax on your income, no matter what. The foreign earned income exclusion and the foreign tax credit are designed to prevent double taxation of income. If the dual status return allows you to use these tools to avoid double taxation up to the date of renunciation, that’s all you need. After you renounce, you are not at risk for double taxation because, after all, you have successfully escaped.
Juliette. As per, the IRS can’ make it clear. This is from their wbpage Aliens- how many exemptions can be claimed.
Depends what they mean by personal exemptions. Also you are in fact a bona fide resident for the whole year. Just to add to the confusion, they clearly stat that a dual status return doesn’t refer to citizenship when of course it does. Must be because they simply cannot believe anyone would give it up voluntarily.
The 1040. is not your tax return. It is a ‘statement’ attached to your 1040NR.
In the end, I doubt it will make a difference. Make your best effort.
thank you Portland! will do!
Cheers,
“The 1040. is not your tax return. It is a ‘statement’ attached to your 1040NR.”
Would someone please be so kind as to explain the above statement. I would have thought, perhaps incorrectly, that it would be the other way around.
“then I checked on the IRS site, and nieces concerning forms 2555 and 2555-EZ”
Then the following must be an IRS nephew instead of niece:
‘b. A U.S. resident alien who is a citizen or national of a country with which the United States has an income tax treaty in effect and who is a bona fide resident of a foreign country or coun- tries for an uninterrupted period that includes an entire tax year.’
The IRS knows that the US’s tax treaties apply to residents of countries with which the US has income tax treaties, not to citizens or nationals of countries with which the US has income tax treaties. The IRS (and Tax Court) knows that the stands alone in CBT, except maybe if the US has a tax treaty with Eritrea. So for example if a Canadian citizen has both a US green card and an employment visa for a tax year in a country that doesn’t have a tax treaty with the US, the Canadian gets double-taxed and Canada isn’t one of the taxing countries. And if a citizen of a country that doesn’t have a tax treaty with the US has both a US green card and an employment visa in Canada, the person primarily pays tax to Canada and leaves the leftovers (probably zero) to the US, unless their citizenship is Eritrea.
Anyway, c. very likely applies to the period of being a US non-resident citizen. Form 1040NR is the return, an unsigned Form 1040 is a schedule to the return, Form 2555 is a schedule to the schedule, and Form 1116 is a schedule to the return.
If the person is a US citizen or resident on the last day of the tax year then Form 1040 is the return and Form 1040NR is a schedule; otherwise it’s the other way around.
Trebor The following is from the IRS page on Taxation of Dual Status Aliens.
Note, as I said before, they conflate resident and citizen
To understand their gobbledegook, whenever they say resident, you should substitute citizen and when they say non resident alien, substitute non citizen. Only then does it make sense.
Thank you @Portland @Norman Diamond
I’m slow, but beginning to understand. I also read parts of IRS Publication 519 ..
One more question — Could those who have renounced in Canada please give me a rough idea about the typical time to receive the CLN form in the mail ?
4-6 weeks