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
They may think it’s odd, but nothing they can do about it. If you want to renounce, then do so.
Kabby–I renounced earlier this year and as I’ve never been in the US tax system, I don’t plan to file anything. That includes the 8854. All of my income and assets have only been in the UK and I take offence at the idea that the US has any right to know about any of it, so I’m simply not going to tell them.
SamieB–it’s your right to renounce. The London Embassy staff didn’t even ask me why I was renouncing.
BirdPerson. I like your style. Many years ago Dan posted on IBS “ don’t tell them anything they don’t already know”. Good advice.
Portland–it was this site which encouraged me to stand up for my rights. I’m certain it was someone here who referred to the 8854 as ‘a shopping list for the IRS’. That really helped to make up my mind for me.
@SamieB
No, they won’t think it odd. I was in exactly the same position as you 6 yrs ago. I had nautalized in the US and spent 30+ years there. I returned home to retire and in a matter of weeks found my bank and Forex exchange accounts were being closed. I renounced a month later. The embassy staff were completly understanding. It is your RIGHT, and you do not need to justify anything to them.
That should be ‘ naturalized’, my nautical days are long gone
@SamieB
It’s the exit tax you need to be concerned about if your net worth is over two million. If it’s not, it doesn’t matter how soon you renounce.
If it is over the threshold, then you might need to hold off renouncing for another year. If I recall correctly, US citizens who have been citizens of another country since birth and move to that country (i.e., become tax residents) for at least two years before renouncing do not have pay the exit tax. Double-check this information, though — it’s entirely possible these rules have changed over the years.
@ Samie and WestCoaster,
I don’t think there’s a requirement of two years residency. Here’s the info in the IRS 8854 instructions re exemption from exit tax for persons who were dual from birth (page 3, column 1).
8854 instructions, 2017
8854 instructions, 2018 (draft)
“If you are a citizen of the country in which you now live then your Gov will not collect anything on the US behalf.”
No. If you are a citizen of the country where you have assets then your Gov will not collect anything on the US behalf. For example whether I (Canadian) move from Japan to Canada or stay in Japan, Canada will not help the US but Japan will.
@pacifica777
Thanks for clarifying what the current rules are!
I’m still so traumatized by the whole experience that I couldn’t really bring myself to research this (which is very unlike me, but even thinking about USG/IRS matters stresses me out so I try to do it as little as possible since filing my own 8854) before posting my warning to SamieB, so I’m glad you did.
SamieB Unfortunately, as far as the exit tax is concerned, the “dual citizen at birth” exception would not apply to you because you were not a USC at birth.
The easiest way to deal with taxes after you expatriate is to ignore them.
@SamieB
I don’t see where SamieB was asking about exit taxes, but they are always a consideration only if he has over 2,000,000 in assets, then any ‘unrealised’ gains will be taxed at 15%.
In that case he can consider ways to lower those assets by gifting etc beforehand. The net worth calculation in based on the day before you expatriate.
@Norman
Most govs around the world do not have collection agreements with the US.
Those 5 countries posted are the exception that one must also be a citizen of that country at the time the debt was incurred for the lien to be unenforceable.
@heidi, Portland, Westcoaster, NormanDiamond, MedeaFleecestealer, BirdPerson,pacifica777.
I was not US citizen at birth but Britsiha nd a naturlaized US citizen. I have filed all my tax forms whilst a citizen so far but only left 1 year ago so last tax return ticked box had overseas account but not filed farbar as there wasnt over$10,000 in account. Once i remounce and then presumably file the last tax forms will obviously ave to file a FABAR. My concernw as that seeing I only left a year ago and would that raie a red flag to the IRS or the State Department even tough I do not have assets over $2M and maybe they will think why is this person renouncing so soon after leaving the US when he was naturalized. Reason is I did not want to stay anymore in the US and retunr to my country of birth (the UK) but I am sure the embassy the State Dept and the IRS must be suspsoicous of everyone renmouncing and the reason why. last thing anyonei want is for audits, quesitons and more stress! I read on here that the package is sent to the IRS after you renounce and that package includes your dates of residence someting Ii see Kabby was enquiring about. As Kabby said one just wants to get it all right and everythign go smoothly with as little problems and trip ups as possible. it seems the whole thing is stressful for everyone not just me
@SamieB
As I said, I renounced within 2 months of leaving the US, it did not cause any problems, I was British and Swiss but became a naturalised American. Although I enjoyed working in the US, I always intended to retire back home where I felt safe and in tune with the ethics of my home country. I would have kept my US citizenship and continued to file US taxes if it weren’t for problems with bank, forex and financial access in Switzerland.
I renounced back in 2012, I was not audited, nor does the IRS have the time and the inclination to chase up minnows.As far as I know there have been no reports of audits here on Brock.
The IRS are overwhelmed, understaffed and there is nothing to gain especially as they can’t collect.
As I said , you are free to renounce, it is your right and you need not justify it to anyone.
@ SamieB,
Re:
No, the package isn’t forwarded on to IRS. The only thing DoS sends to IRS is a copy of the CLN: “CA/OCS provides copies of all approved CLNs to the IRS.”7 FAM 1243(a)
Note, no one has reported being contacted by IRS as a result of this. This includes people who renounced but did not file with IRS.
As Heidi wrote above: “The IRS are overwhelmed, understaffed and there is nothing to gain especially as they can’t collect.”
Re:
Neither department has the time or manpower to be suspicious of everyone, even if they had the inclination to, and the embassy doesn’t get into tax issues as your tax status does not affect your citizenship status. They’re not even supposed to answer questions about tax issues if a renunciant asks about it 7 FAM 1243(f).”
For more information on the relationship between DoS and IRS in renunciation matters, see this post, Renunciation/Relinquishment: Interactions between Department of State and Internal Revenue Service, and the Foreign Affairs Manual, 7 FAM 1240 Inter-Agency Coordination and Reporting Requirements.
Also, if you haven’t yet, check out people’s renunciation stories in the Consulate Report Directory. The meeting with the consulate officer tends to be about 10 or 15 minutes with few, if any, questions. Most of the time seems to be pushing documents back and forth and signing them.
Questions, if there are any, tend to be of an administrative nature. However, occasionally someone is asked why they’re renouncing. You do not have to tell them why, but just to keep things flowing smoothly, have a neutral one-liner ready, something along the lines of “I will be living the rest of my life here in Xland, so I want my entire focus to be here.”
Thanks Heidi and pacifica777. I am sure i read somewhere in the State Dept manuals tag on this web site soething about your entire application package being sent to the various departments such as the IRS, etc and other departments including presumably the questionare. and the forms you sign at the embassy? Ithought the State department sent all that not just the CLN but it seems I have read wrong is pacifica777 states.I realsie now reading the embassy interview should not be that daunting its just I worry about the rest of it after.
@pacifica777,heidi, Kabby. I just relaised the CLN includes your dates of residence on it and if thats sent to the IRS you neded to make sure the periods of residence is correct surely? If you cannot remember exactly the periods of residence in the US like Kabby earlier it could; be a problem as any tax return has to tally with being in or out of the country I would think
@SamieB
Trust us on this – it’s not a problem. Make an appointment, fill out the form as best you can, renounce while saying as little as possible, and if you don’t have any US financial ties, ignore the tax compliance business.
@SamieB
The Isaac brock society has been going since 2011, it has accumulated a wealth of information from its participants and renunciants. As Nononymous has said, trust this wealth of information. Your dates of residence in the US if not known can be approximated, they bear no relevance as embassy staff has assured others in the past.
PS SamieB
A CLN does NOT contain your dates of residence in the USA
See examples of CLN’s here.
https://www.google.com/search?q=certificate+of+loss+of+nationality+of+united+states&source=lnms&tbm=isch&sa=X&ved=0ahUKEwiqg_Xl0cneAhUNMewKHW_EBDMQ_AUIDigB&biw=1366&bih=599#imgrc=mACb_bbwrAEYDM:&spf=1541846837973
@heidi, some of those seem to ask on one of the lines “He/She resided or never resided from start date to end date. Some have put from birth until a certain date and it looks like it does have the dates of residence and presumably those dates are taken from the questionare. Does your CLN have the dates of residence on it.
The current form can be seen at https://eforms.state.gov/Forms/ds4080.pdf
What answer are you hoping for?
If you’re finding the prospect of going through the renunciation process so stressful that you’re having second thoughts about renouncing, you can always just cancel the appointment. Continue as before, maybe think it over again when you’re feeling better?
@heidi, look again at those forms. They do include residency dates I just checked mine and it has from birth to 1968 on it.
That said, they’re not going to go away and check dates to see if someone got it wrong. Use best guess when filling in. Just use the year if you don’t have anything more definite than that. I think that’s what I did, since I couldn’t remember when exactly in 1968 we left the States.
@Medea
Mine does not have residency dates, that line was crossed through by the Embassy although I told them I was resident for 30+years up until 2 months before my renunciation!
What does it matter when you were resident there if they consider you a tax resident wherever you live?!
Maybe they want to check you weren’t wanted for cattle rustling while on their soil, who knows what goes through their heads! 🙂
I do know that Samieb is over reading this.
“they’re not going to go away and check dates to see if someone got it wrong.”
Not routinely, no. Whether the IRS could request the dates (should a query arise), I do not know.