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
“Just a little reminder that children born outside the US don’t have much hanging over their heads. No US birthplace > no US indicia > no FATCA or banking problems. Renunciation might be overkill.”
Not true in all cases, including my childrens’, for whom I took out US citizenship (for potential educational opportunities), who got US passports, who voted… long before we knew anything about the whole mess. I had always enjoyed the flexibility of being a dual and had filed US taxes for decades, no problems at all.
There are so many different situations here.
Duchesse – I registered my offspring as USCs, and got them passports (mainly for ease of family visiting). Not knowing about CBT.
As they grew up, they had no interest in their US citizenship, and, fortuitously, ended up in relinquishing-act jobs. So they had relinquished their US citizenship by the time FATCA came along, and having no US birthplace, have never had any problems from their early spell of citizenship.
Anyone with no US birthplace can self-relinquish for free. The CLN is only needed by the US-born.
“There are so many different situations here.”
Indeed.
I have been advised by a tax lawyer well-known here that they cannot relinquish because their holding of a US passport and being registered voters “proves” they intended to live as USCs. They must renounce.
My children too have US passports, among others, without US birthplaces.
There’s no way they can ever be “detected” as US Persons by any bank, for instance.
Will the US someday look into people with passports but no tax filings? Perhaps. What can happen then, a letter saying hey, we think you should file. What about if you have no income and are not legally obligated to file. It’s up to them to prove that. They have zero interest and zero ressources for that.
Of course many wounds are self-inflicted but for someone with a minimum of common sense that US passport with no US birthplace is no trouble at all.
That’s bad luck but I can see the logic. 🙁
Fred – to keep and use the passport (claiming citizenship in order to obtain the passport), while denying US citizenship when convenient, is not right, IMO.
It’s one thing to self-relinquish. Lying is a different matter. IMO
“There are so many different situations here.”
Indeed!
For dual citizens who live outside the USA, who have a net worth of less than 2 million dollars, who are in a fairly simple financial situation and who have no intention of ever moving back to the USA, my advice is the following:
1- if you are not already tax compliant, become tax compliant by quietly filing a bunch of 1040s (covering at least 6 years);
2- if you have not done so, file a bunch of FBARs (covering several years) and make sure you check the box “did not know I had to file”;
3- renounce;
4- file 1040, 1040NR, 8854 for the year of renunciation.
For most people the total cost of this operation is 2350$ + a large amount of time learning how to properly do step 1, step 2 and step 4.
The gain is enormous! After you file for the year of renunciation, you will never have to deal with the IRS again. Never. For the rest of your life. Peace.
Many people here are suggesting that one should skip steps 1, 2 and 4. It may be okay for some people but there is a risk, however small it may be. Heck, if you are willing to pay the 2350$, why not go a step further and do all the filing. It’s time consuming but it buys you peace of mind. I like peace of mind.
P.S.
I am sorry for the poor wording that I used in my last post. I did not mean to accuse people of cheating or lying. I meant to say that I would not like to have the feeling that I am cheating or that I am lying. The law may be unfair but it’s the law. If you renounce and you do not file all the required tax forms, what will you do if some day you enter the USA and some border agent questions you about your lack of IRS filing? I agree that it is unlikely to happen. But it could happen in a few years.
“The law may be unfair but it’s the law.”
It’s not the law where I live, and the IRS doesn’t try to pretend that it is.
“ If you renounce and you do not file all the required tax forms, what will you do if some day you enter the USA and some border agent questions you about your lack of IRS filing? ”
If that’s your fear, filing the tax forms may be sensible, to soothe your anxiety. But to suggest that others also need to do the equivalent of sprinkling the spilt salt over their shoulder, or avoiding walking under ladders, or crossing the road to avoid that black cat, is not helpful at all, IMO.
Hyperanxiety seems to be the maladie du jour.
@ Duchesse,
Re:
I’m not clear about something in your comment.
Could you clarify:
Did they obtain the passport and register to vote AFTER performing a potentially relinquishing act? In that case, the tax lawyer’s statement is correct. DoS infers from such actions that the person did not have the intent to relinquish at the time of performing the act.
Or were they in possession of a passport and registered to vote BEFORE performing a potentially relinquishing act? Holding a passport or having registered to vote prior to the relinquishing act does not prevent a person from forming the intent to relinquish, regardless of whether they were born in the US or born overseas.
While the lawyer is technically correct about your children having US citizenship, in reality, if they have a non-US birthplace on a non-US passport, they have nothing to fear from FATCA or the IRS because they have no need to identify themselves as US persons if ever asked by any financial institution.
@plaxy
“But to suggest that others also need to do the equivalent…”
Others can do what they want.
Others will do what they want.
I don’t really care.
My understanding is that this forum is a place where people exchange ideas, share experiences and help out people who are new to the idea that renunciation may be their best course of action.
When someone like SamieB shows up on this forum, I think it is dangerous to simply tell them “the USA is a crazy place, FATCA is unfair, the IRS is a terrorist organization, renunciation is the way to go, you don’t need to file 1040s, FBARs, 8854, just renounce, they don’t go after minnows, case closed”.
People come here for advice.
You give your advice.
I gave my advice.
You don’t have to agree with what I say.
SamieB should have the opportunity to hear different opinions.
You say “It’s not the law where I live”.
When SamieB goes back to visit friends in the USA, he (she?) can say “I’m from country X. The laws of the USA do not apply to me” but that won’t be of much help. I can smoke pot in Canada. But I can’t go to the USA, smoke pot and say “Sorry Mister Policeman. I am a Canadian. I have the right to smoke pot”. And I can’t say “Your marijuana laws are stupid, therefore I choose not to obey them”.
HEY, HEY FormerPatriot
“When someone like SamieB shows up on this forum, I think it is dangerous to simply tell them “the USA is a crazy place, FATCA is unfair, the IRS is a terrorist organization, renunciation is the way to go, you don’t need to file 1040s, FBARs, 8854, just renounce, they don’t go after minnows, case closed”.
NOBODY told SamieB not to file, he HAS filed, he doesn’t have over 10,000 in foreign accounts for FBAR filing . It was suggested that he wait until after he renounced before moving his money to his resident/home country to avoid filing an FBAR for his final year. As a non American he can then get a FOREX account and move his money with the best exchange rate. This is all legal in both the US and his home.
Why are you stating SAMIEB as an example?!
Horses for courses.
“When someone like SamieB shows up on this forum, I think it is dangerous to simply tell them “the USA is a crazy place, FATCA is unfair, the IRS is a terrorist organization, renunciation is the way to go, you don’t need to file 1040s, FBARs, 8854, just renounce, they don’t go after minnows, case closed”.”
Are you under the impression I said those words to SamieB? I didn’t. I certainly don’t think the IRS is a terrorist organisation. What a bizarre idea!
Actually, I suggested to SamieB that if renouncing was causing so much anxiety it might be better to leave it for a while in order to regain a little peace of mind.
“You say “It’s not the law where I live”.”
Correct. It’s not. UK law doesn’t in anyway require UK residents and citizens to file US tax returns – and couldn’t, in fact, require such an outlandish thing.
“When SamieB goes back to visit friends in the USA, he (she?) can say “I’m from country X. The laws of the USA do not apply to me” but that won’t be of much help”
Of course not. If a US citizen or a former US citizen goes to live in the US, obviously they are then subject to US laws and must report their worldwide income to the IRS, just the same as other US residents.
If a former US citizen visits the US, they’re not subject to US tax law, not being a citizen or a resident.
Get it?
Nobody’s defying the law, or trying to get away with something. You’re warning people about dangers that don’t exist. I’m explaining to people, in your wake, that the dangers are imaginary.
“they don’t go after minnows, ”
They don’t go after anyone who doesn’t volunteer. Not ever, decade after decade after decade after decade. Have you not noticed?
It’s because it’s not the law, in other countries.
Damned!
I should have read the last54 posts more carefully.
Let me try again.
Here’s a cleaned-up version of my last post.
I am simply replacing “SamieB” with “Ex-pat-#31416” and “@plaxy” with “@a-lot-of-people”:
+++++++++++++
@a-lot-of-people
“But to suggest that others also need to do the equivalent…”
Others can do what they want.
Others will do what they want.
I don’t really care.
My understanding is that this forum is a place where people exchange ideas, share experiences and help out people who are new to the idea that renunciation may be their best course of action.
When someone like Ex-pat-#31416 shows up on this forum, I think it is dangerous to simply tell them “the USA is a crazy place, FATCA is unfair, the IRS is a terrorist organization, renunciation is the way to go, you don’t need to file 1040s, FBARs, 8854, just renounce, they don’t go after minnows, case closed”.
People come here for advice.
You give your advice.
I gave my advice.
You don’t have to agree with what I say.
Ex-pat-#31416 should have the opportunity to hear different opinions.
You say “It’s not the law where I live”.
When Ex-pat-#31416 goes back to visit friends in the USA, he (she?) can say “I’m from country X. The laws of the USA do not apply to me” but that won’t be of much help. I can smoke pot in Canada. But I can’t go to the USA, smoke pot and say “Sorry Mister Policeman. I am a Canadian. I have the right to smoke pot”. And I can’t say “Your marijuana laws are stupid, therefore I choose not to obey them”.
+++++++++++++++++++++
@FormerPatriot
Please read Samie’s questions and our answers again. They in no way tell him not to file!!
SamieB has decided to renounce, finish his filing and 8854. His questions were about when the date FBAR filing ends and whether it looks odd to renounce so soon after leaving the US. There was NO question or answer leading SamieB to disobey the requirements!
Personally I think it is ‘dangerous’ for YOU to scare people here into thinking that the IRS have indomitable powers that will reach into their law abiding lives outside the USA. They rely on scare tactics and when prospective renunciants come to a decision everything should be kept in perspective. .
We have had many moral people here including priests, whom once renounced have decided not to file a thing, that their lives spent outside the US are no longer US business.
Contributors here on Brock try to give all options, please don’t accuse us of leading people into making decisions.
OK, here we go again. I will do a little supplementary cleaning up.
“When a poster asks questions about renunciation on this forum, I think it is dangerous to simply tell them “the USA is a crazy place, FATCA is unfair, the IRS is a terrorist organization, renunciation is the way to go, you don’t need to file 1040s, FBARs, 8854, just renounce, they don’t go after minnows, case closed”.
Who has said that? Can you post the URL, please?
“You say “It’s not the law where I live”.”
Correct, I did say that and it’s true.
“When a former US citizen goes back to visit friends in the USA, s/he can say “I’m from country X. The laws of the USA do not apply to me” but that won’t be of much help. ”
Help with what? Why would a visitor to the US make such a rude boast? What US law is s/he breaking?
I can’t help you with the marijuana situation. 🙂
Heidi:
“Personally I think it is ‘dangerous’ for YOU to scare people here into thinking that the IRS have indomitable powers that will reach into their law abiding lives outside the USA. ”
Well said. I completely agree.
@heide and plaxy,
What the hell is wrong with you?
I am unchecking that “Notify me” box and I’m out of here for good.
Best wishes to you all!
@FormerPatriot
I was just angry you hadn’t read Samie’s posts thoroughly and my replies before making your comments and judgements.
I am glad we agree on something. I too was thoroughly compliant before and after renouncing and can rest at ease when visiting my Kids in the US but it is not everyone’s answer.
Go well, enjoy your non USness. 🙂
Actually I think it was his wife’s citizenship he was renouncing.
@Plaxy
Irony? Otherwise you have lost me. 🙂
@formerpatriot,plaxy, heidi. I appreciate everyones input and different points of view so formerpatriot please do not leave the forum as you and everyone else including plaxy and heidie along with many others have given invaluable information and advice. Everyone sees things differently and it is good to get others opinions and hear their stories of others going through this or who have gone through this. Please no one take offence or get angry with each other that achieves nothing and I want to thank everyoe on here for the invaluable information. I feel the more informaiton one has the beter informed you are now matter whose opinoin that is.
Heidi:
No, not irony. I’m just going by what was posted here:
http://isaacbrocksociety.ca/renunciation/comment-page-370/#comment-8487650
re “they (my adult children) have nothing to fear from FATCA or the IRS because they have no need to identify themselves as US persons if ever asked by any financial institution”:
My adult sons file US tax returns. If asked if they are USPs by a FI, and they say they are not, they are lying. Would they do that? Some things a mother doesn’t want to ask.
If their US citizenship is important to them (they have not decided yet), they can sidestep the worst of the traps. (We are Canadians.)