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
Heidi:
“Why would I give myself all this stress of fighting city hall when all I needed to do was what I had always done for the last and final time and file?”
As I said above, if a person feels like it will be less stressful to file the 8854, that’s a possible reason they might decide to do so.
It’s up to the renouncer to make their own decisions, they just need to be aware that it’s up to them – a choice.
That’s what I said, we agree!
Horses for courses 🙂
Heidi
“That’s what I said, we agree!
Horses for courses ”
No. There’s two possible consequences to filing 8854. Either nothing happrns, or the person pays.
The first is good, and easily attainable; the second is bad, and easily avoidable.
If you don’t file Form 8854, nothing happens (good outcome).
If you do file Form 8854, then depending what you put on the form and send with it, you may end up significantly out of pocket.
It’s up to the renouncer to decide.
@Plaxy
What’s all this about something bad happening, I haven’t heard any reports of ordinary people being out of pocket after filing 8845, except of course those with large unrealized gains who have had Tax compliance condors ‘help’ them.
Nothing is owed if you don’t have over $2,000,000! If you do and haven’t made more than $693,000 in unrealized gains, then Still nothing is owed.
Heidi – “What’s all this about something bad happening”
It’s the only other thing that can happen as a consequence of deciding to file, or deciding not to file, Form 8854.
Either nothing happens, or you pay.
Out of curiosity, why persist in trying to get me to agree with you? You have an opinion, I have an opinion. What’s troubling about that?
@ Plaxy
That you seem to think one answer fits all ,ie Don’t file anything.
It doesn’t apply to everyone, it didn’t apply to my situation, yet you feel you know best.
Barbara is right about these Socratic discussions, they can go on forever arguing small points when we basically agree on the big ones.
I am going to end it here.
Heidi –
“That you seem to think one answer fits all ,ie Don’t file anything.”
No. It’s not necessary to file anything. As I keep saying, it’s obviously up to the renouncer to choose what they want to do.
You see it differently, and that’s fine. We can agree to disagree – as I suggested a couple of pages and several hours ago. 🙂
Nonymous said “I haven’t renounced. I’m a dual citizen in Canada, no US assets or financial ties, not compliant with US taxes. There is literally no reason to renounce at present because there are no negative consequences to having the US birthplace. Lie to banks and you face no FATCA problems.”
Question surely if you are a US citizen and have a bank account outside the US and living outside the US, then are you not supposed to file tax retunrs or have you never filed? In my case I have always filed tax returns so I am in the system and as living oversea. I would have to file the 8854 and final 1040’s just so I feel I have cleanly left the IRS system..
I’ve sent in my forms today so obviously having some remorse at having to do this and go back and forth whether I am doing the right thing but feel its the only way to not have to keep filing US tax returns and FABARs and the expense that goes with it for life when not even living in the US. What a travesty but I am hoping it all goes smoothly when i hear form the embassy at my interviw and the subsequent things after…..and now for that stiff drink!
@Kabby
“Did you feel sick and regret once you sent off the renunciation forms? One part of me says Phew the other says gosh what have I done.. but I know deep down this is the best for the future. did anyone have any regrets or does everyone now wish they did it long ago Deep breath. I think I need that drink now!”
Yes, I did feel a bit sick once I sent in the forms and booked the appointment. In no small part because it involved such a huge amount of money! Plus I’d moved around a lot, so filling out the 4079 was complicated and hard for me (even though I was renouncing, the consulate insisted on me filling this out even though I left it unsigned). I spent endless hours going through what old passports I had (rarely did they get stamped when I was a kid, I usually just got waved though with a smile) and questioning my mother about dates. Ultimately, it didn’t matter at all because I was renouncing not relinquishing, so there was no need to establish I’d performed expatriating acts.
Some Brockers are comfortable dismissing the situation and living under the radar, but I was not. The minute I found out I had filing obligations, I complied.
Over the years, that got harder and harder to do. There were new forms almost every year (such as the one to opt out of Obamacare or risk a $600 fine, even though only homelanders are eligible for Obamacare). One of the financial institutions I bank with publicly announced they’d stopped accepting American clients (when I phoned them to ask what that meant for existing American clients, I was told they’d be closing their accounts as soon as they could identify them). The expatriation fees kept going up steeply (over the course of a few years it had gone from free to $450 to $2350), so I became increasingly worried that the decision would taken out of my hands if the fees became more expensive.
My net worth is well under the threshold, so I’m a minnow but chose to exit cleanly by filing the 8854 so as to avoid any future complications. As stressful and expensive as it was to renounce, I am now (mostly, but for occasional and fleeting bursts of resentment and regret) extremely relieved to be free.
There were some weird aftershocks about losing a part of my identify, which is strange because I’ve never actually lived in the States and neither of my parents are American. If I ever visit the land of my birth again, it will be as a foreigner; which is apt, but messes with my head a bit.
However, I now get to identify as solely Canadian and that feels good. It’s like that old MasterCard commercial — to me, that’s priceless.
@Kabby
I am a dual US-Canada citizen with US birthplace. I filed for a few years when I lived in the US, in the 90s, stopped when I left and never filed again. Needless to say I’ve not heard from the IRS. FATCA is easy, Canadian banks only ask you to answer a question about citizenship, don’t ask for proof of where you were born. So I lie and say I’m only Canadian. Problem solved.
No reason to comply or spend money to renounce. Lots of fun toys out there I’d rather buy with US$2350.
Nonymous. Im also a dual national but what happens if you want to renew your US passport or dont you have or need one? I thought as a US citizen you must enter and leave the US on a US passport if a citizen? What about filing US tax returns and Fabars or dont you bother?
I don’t file returns or FBARs. No reason to, the IRS cannot punish me, it doesn’t know that I exist.
I travel to the US (infrequently) with a Canadian passport. Only once was I bothered about the US birthplace. I do have a US passport but only carry it as backup in case they ask again. I probably won’t renew it though, I’ve never needed to show it.
Nonymous. Wow I thought if you travelled to the US and you were a US citizen naturalized or by birth you had to go in and out on your US passport and your Canadian passport shows place of birth the customs border patrol would know? Wasnt there something on this wen site about the passport office now linking passport renewals to tax returns and each dept know? I have been filingvtax returns so dont think I could suddenly stop and not file …maybe thete was no need for me to send those forms and renounce! Now Im even more confused and wondering whether Ive done the right thing renouncing. Problem is if you did ever want to move back to the USA it maybe hard to get your money back to buy a house or whatever or possibly work again as the IRS surely and bank in US would question where the money came from and if you then have to start filing. My minds spinning and going back and forth. Habe I done right thing renouncing. Ugh
@Kabby
Best of luck to you, and I hope it all becomes less stressful now. I renounced over 6 years ago – and have never felt a scintilla of regret (nor had any difficulty with travel to the US – which honestly draws me less and less, as time goes by). Immediately after renouncing at the Embassy, I went for a splendid refreshments at a swanky hotel – to celebrate my release. Champagne, the works! A month or so later, nearer home, I hosted an upbeat ‘Reverse Boston Tea Party’, inviting over 100 of my local friends to celebrate publicly my permanent independence from the US. The celebration tea blend I then offered to my guests on that occasion has since become my nostalgic signature gift. (Here is the Recipe = Assam:Earl Grey:Lapsangsouchong in a ratio of 5:3:1 by weight, well blended, using the very best tea leaves you can get hold of). No regrets, Kabby. None at all.
@ Kabby: One of the most useful things I read when I first found Brock was the person who said, “Whatever solution you choose, you aren’t going to like it.” Because the situation is fraught (for many of us), a feel-great solution is not likely. We make a choice, based on an analysis. I know dual citizens who have chosen very different approaches, depending on circumstances and temperament.
What ifs are recipes for misery. I hope you can declare it done and live a life of meaning and peace. Perhaps there will always be regret that the situation came to that, but as I have learned from other arenas of life, very little is 100% ideal.
@Kabby
Relax, you’ll be fine. If you live in the UK, as opposed to Canada, renunciation is if not necessary then certainly much more valuable. You may need your CLN to lead a normal financial life.
Canada has a couple of advantages over the UK and other countries. First, our banks are completely half-arsed about FATCA enforcement. Say you’re not a US citizen and they believe you – end of story. If you don’t want to be reported, don’t check that box on the application. And even if identified as such, there are no restrictions on what you can do or which accounts you can open, unlike lots of other countries where banks don’t want US-person customers. Second, we don’t need ESTA waivers to enter the US, so we can just declare ourselves Canadian citizens at the border and 99 percent of the time they don’t notice or care if there’s a US birthplace on the passport.
As a general point, there’s the law, and there’s real life. Yes, US law states that US citizens must always use a US passport to enter the US (there’s no rule on exit because there are no exit controls). In reality, it’s rarely an issue, and funnily enough they have never defined a penalty for breaking that law. I was questioned once on a business trip but had tucked an expired US passport into my bag just in case, and they let me in. I continued using the Canadian passport after that but a few years later renewed the US passport to have as insurance, though I’ve never needed to use it. In an overabundance of caution I renewed the passport while temporarily resident in Europe, so it wasn’t linked to my home address, because supposedly name and SSN are passed on to the IRS, but we’ve seen no evidence that they do anything whatsoever with that information.
Under a new law, passports can be revoked, or renewal denied, if a person owes the IRS a debt in excess of $51k and various attempt to collect have failed – in other words, it’s a threat for someone in the system who owes a lot of money and hasn’t paid. But this is not a problem for someone who’s not compliant, because they are by definition not in the system; by not filing returns, they cannot owe money. (When it’s morning in Japan, in a few hours’ time, someone will be along to explain how even the non-compliant are at great risk.) This is however not an issue for someone like me who already has a better passport and doesn’t care if they lose the gross one with the eagle on it.
I have no desire to move to the US but if I did I expect I would have no problems at all. I’d move down whatever money I needed, begin filing returns once I was working, answer whatever questions were asked, and all would be well.
@Kabby
It is easier for US/Canadians to enter the US on their non US passports as they don’t need ESTAs or visas. If you intend to travel to the US again the ESTA asks you all your citizenships past and present. I would not want to lie on the ESTA.
Kabby if you are having second thoughts, it ‘aint over til its over’ you are stil a citizen until you take the oath, your appointment can be canceled.
Unless you intend to work in the US again, life is much simpler and less stressful without US citizenship. As a non citizen you are permitted to travel and stay in the US for up to 120 days/yr rolling average .
Kabby – “Now Im even more confused and wondering whether Ive done the right thing renouncing. Problem is if you did ever want to move back to the USA it maybe hard to get your money back to buy a house or whatever or possibly work again as the IRS surely and bank in US would question where the money came from and if you then have to start filing. My minds spinning and going back and forth.”
There’s no need to renounce now, if you think you might want to move to the US. US citizenship is a valuable asset, for anyone who wants the privileges it brings – especially the right to live and work in the US.
Think twice or more than twice, before you get rid of it. You can’t regain it.
You don’t have to make your decision out of fear. The IRS has no power in the UK. If you continue as a US citizen, with a view to maybe living in the US, personally I agree with you that it would be sensible (and reasonable) to keep complying with the tax obligations attached to US citizenship. But that’s another decision that’s up to you.
Plenty of US citizens, including me, never even knew we were supposed to file, until FATCA came along. The US wasn’t bothered in the slightest. But if you decide to keep the citizenship in case you might decide to move to the US, it would make sense to keep filing to keep all your paperwork in good ordet and not have any anxieties (however needless).
You just need to take your time and be sure you really don’t want the citizenship, before you renounce it. Because once it’s gone, it’s gone.
@kabby
I went through all my soul searching for lack of a better word before I renounced. But for me it was the best option and I felt a sense of relief after I renounced. And to be free from anymore future legislation that they could pass that would make things even more difficult. Of course it was not done lightly but it was the best choice for my situation. I should never have succumbed to scaremongering in the first place and filed but once I did, i had no choice but to renounce if I wanted a normal financial life. And since then other things have happened in my life that made it definitely the right choice.
As far as filing the final paperwork or not. no one ever hears anything back or very rarely and I know of no one that heard back about a form 8854. Maybe on a mistake on the tax form itself. and for all we know these forms just disappear into a black hole somewhere. People should do what fits best with their situation. You want to exit and feel stress free and for some that is not filing and for some that is filing.
@WestCoaster, KingOfTheRoad, Nonymous,Duchesse,Nonoymous, Heidi, plaxy.
Terrible nights sleep gooing back and forth have I dont right thing yes, have idont right thing no but reading on the blog it seems others have had the same emotional roller coaster and maybe this is soemthing that I have to accept. Maybe I have to accpet I have made the decision and move forward with it whatever the consequences. I am close to retirement now and so moving back to the US maybe I woudl work for a very short whhile but not many years and so one of the tigns that puts me off moving back is the health care costs, property taxes and general costs of living. In retirement maybe the US is not the place to be anymore.More of you do not regert the decison and some think about it carefulyy it cant be got back which is a good point. Its like a see saw this wholel thing and I have to make a decsion and stikc with it. one does wuestion obviously whther its the right one but as Duchesse says very little is 100% ideal. Iworry that the embassy may flag me anyoway if I cancel my e application to renounce now anyway and wonder what the heck I am playing at. I have to stick by my decison I think and as some of here have said life is simpler after. Its like a merry go round and very stressful.
@Kabby, I’d say it’s normal to be worrying whether you’ve made the right decision or not. It’s a big step, no matter what circumstances brought you to it. As said, you have right up to the time you stand in front of the Consul/Vice Consul and swear the oath to change your mind and I seriously doubt the embassy/consulate would flag you for doing so. No figures here, but it wouldn’t surprise me if some people have indeed cancelled appointments after having made them.
As for not getting the citizenship back, as far as I know there’s absolutely nothing to stop you applying to be naturalised as an American again if you moved back to the US for a job, went through the naturalisation process, etc. Not heard of anyone doing it, but theoretically it’s possible.
“I have to stick by my decison I think and as some of here have said life is simpler after. ”
Definitely – especially after you retire. The US is certainly not a good place to retire in, if you have UK-only retirement income!
Sounds like you’ve weighed up the pros and cons and have made a good decision. Congratulations!
Medea – “As for not getting the citizenship back, as far as I know there’s absolutely nothing to stop you applying to be naturalised as an American again if you moved back to the US for a job, went through the naturalisation process, etc. Not heard of anyone doing it, but theoretically it’s possible.”
Yes, you’re right, I should have mentioned that. The renunciation can’t be revoked, but there’s nothing stopping a former citizen from naturalising.
UKRose:
“People should do what fits best with their situation. You want to exit and feel stress free and for some that is not filing and for some that is filing.”
And for a third group, all that matters is the fact that their US citizenship ends with the swearing of the oath. If tax forms aren’t required to renounce US citizenship (which they’re not), and they can afford to pay the fee, they can solve FATCA problems within a matter of weeks, stress-free.
@ Kabby: re “I worry that the embassy may flag me anyway if I cancel my e application to renounce now anyway”:
I cancelled my appointment once, three weeks before. I received a polite e-mail asking me if I wanted them to keep my file open and telling me that if I closed it, I would have to begin from scratch by submitting another application.
When I re-applied 15 months later, there was no censure whatsoever. During that time, I became certain this was the best option in my case, but being at peace does not equal being “happy” about a choice—just satisfied.