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
Hey guys…
I will hand over my US citizenship and fill out the form at the moment. Here I am asked for my last address in the USA. However, I was only about 9 months in the US when I was 5 years old. I do not know this address. I have never lived there otherwise. What am I doing here now? I am grateful for help.
Just explain that you left in childhood and don’t know the address.
@Pauly, I’d say exactly that on the form. Not known, because I was a 5 year old child and only there for a very short while.
A mostly irrelevant comment, but interesting nonetheless (at least I think so): When I was at the consulate renouncing, the person handling my renunciation went away with the paper work and then came back and asked me about my last previous address. Can’t recall the exact details, but it was something like he wanted to know if it was correct. I looked at it and realized I had made a typo in either the street name or the city name (think it was the street name). I said as much and he googled the corrected info to confirm it. I had also made the same error in another place – thanks to copy and paste. It wasn’t an issue, but I was surprised that he had apparently tried to confirm the existence of my address.
@Pauly, having said that, I agree with the others, if you don’t know what your address was, just say so and provide an explanation. If the explanation doesn’t fit in the form, say something like “unknown – see attachment” and state the reason why you don’t know there. Can’t see why this should be an issue.
@tdott
Similar story: when my wife requested her renunciation appointment, she made a mistake on her form DS-4080, in the section where they ask for her last address in the USA: she had the correct address but she put down the wrong state! (A simple absent-minded mistake: she wrote down the name of the state where she was born instead of the name of the state where she last lived!). A couple of days before her interview, she noticed the error. She filled the form again, printed a copy and took it with her to her interview. But she did not have to turn it in because they had discovered her error and they had already corrected it!
@Pauly
I suppose you could write something like “Somewhere in Vermont”. You must remember the state, right?
“I was surprised that he had apparently tried to confirm the existence of my address.”
Speculating – maybe one of the things they do during the limbo period is notify your last state so you can no longer register to vote using that address.
Hello everyone. I was born in the U.S. to Canadian parents, then left at age 2 never to return. I am considering renouncing and would like to avoid being a covered expatriate. If I am now a resident of Canada, would that make me eligible for the following exception:
An individual shall not be treated as meeting the requirements of subparagraph (A) or (B) of section 877(a)(2) if—
(i) the individual—
(I) became at birth a citizen of the United States and a citizen of another country and, as of the expatriation date, continues to be a citizen of, and is taxed as a resident of, such other country, and
(II) has been a resident of the United States (as defined in section 7701(b)(1)(A)(ii)) for not more than 10 taxable years during the 15-taxable year period ending with the taxable year during which the expatriation date occurs
Thanks for your opinions.
If you were a dual citizen from birth, you do not have to pay an ‘exit tax’. However, if you want to avoid being ‘covered’, you’d still be required to complete the Form 8854 which requires, amongst other things, five years’ worth of tax filings.
I’ve renounced and decided not to file a thing (I left the USA 31 years ago and never entered the tax system in the first place). From what I can see, the ‘covered’ label makes no difference unless you have US heirs, and perhaps not even then.
They can be a bit dense at the consulates regarding that last address in the US. On my form, because I left as an infant, I entered only city and state, and noted I was an infant. Despite that, the male consulate employee continued to ask me repeatedly for the full address. He seemed incapable of understanding that babies do not know their home addresses. One of my parents was deceased, the other had dementia. Even if my parents were available, I highly doubt they could remember their last address more than 50 years ago.
I think some of those consulate workers go on autopilot with those forms, I know I probably would.
Fillenchen. Bird person has it precisely right.. Better to not enter the system.
https://www.propublica.org/article/how-the-irs-was-gutted?fbclid=IwAR3TYUoVdwce1RLezgiIxCFU4fQcF6w-bHigUZHR64uDPmeIfaoYTmnDo7s
@Fillinchen
I agree with BirdPerson and Portland
It is of course your choice whether to spend the time, money and effort in back filing 5 yrs of tax returns to avoid covered status.
Covered status is a lot of ‘sound and fury’ signifying not much unless you have a US tax deferred compensation items or pension funds or US person heirs to your Estate.
The reed amendment that seeks to bar covered status renunciants has proven to be unenforceable,.
Canada will not collect any tax penalties for the IRS if that person was also a Canadian citizen at the time .
http://isaacbrocksociety.ca/?s=collect+sweden
You can analyse you situation here,
http://www.renunciationguide.com/expatriation-and-tax-details-of-current-law/exit-tax-on-renunciants/
@Fillinchen
Reposting more specific link
http://isaacbrocksociety.ca/2016/11/01/dual-citizens-of-sweden-france-netherlands-denmark-canada-take-note-your-country-will-not-collect-for-the-u-s/
Thanks for the links. I will have a read through.
Are you saying that being covered doesn’t matter, it is unlikely that I will receive an exit tax bill?
Does the unenforceablity of Reed also mean I cannot be detained upon entry to the U.S.?
I am also concerned because, although I am Canadian, I am currently a tax resident of a country not in that list.
Fillinchen
They can only tax what they know about. Being ‘covered’ only matters in the circumstances Heidi mentions.
Reed was only meant to bar entry to the USA to those who renounced for tax reasons. If your’e worried, then don’t give a reason when you renounce. When you’re at the Embassy, and if you’re asked for a reason (I wasn’t), then just say ‘To simplify my life’ or ‘because I only want the one citizenship.’
Countries which are not on the list do not even have a collection agreement with the USA.
And, again, if you’ve never filed, the IRS doesn’t even know if you’d owe them anything (under their laws, which I maintain don’t extend past US borders anyway).
@fillinchen
Most countries do not have tax collection agreements with the IRS, those 5 have the added stipulation that one also needs to have the citizenship of the country in which one was resident when the so called tax debt was incurred for non collection.
An exit tax of 15% is only assessed if one has over $2,000,000 in assets and then it is only applied to unrealized gains over $699,000.
How do they know anthing about you to assess if you have never given them any information?
The reed ammendment has never been passed and is unlikely to be.
There have been no reports of ‘non compliant’ renunciants being stopped at the border.
@BP
Covered status was devised to be an easy way of labelling those they deem as renouncing for tax reasons , even though it really signifies nothing.
ie, your covered , so you did it to avoid tax.!
Except that those who are ‘covered’ and did everything by IRS rules have probably paid a large amount of tax, based on that 8854…
@Fillinchen
Lots of people here will say “Don’t bother filing 8854, don’t bother filing 5 years of 1040s, don’t bother filing FBARs, etc. etc. They can never catch you. They can not do anything. Etc. etc.”
I assume that you are renouncing because you want peace of mind. Well then, why not have complete peace of mind? Renunciation will cost you 2350 USD and it will give you 95% to 99% peace of mind. Spend a few hours filing 1040s for the last 5 years (assuming your situation is simple, with form 2555 you won’t have any tax due) and file one last 1040 and a 8854 for the year of renunciation. This will cost you 0 USD (and only a few hours of work) and your level of peace of mind will go up to 100%.
Your choice.
Each person has to make his/her own decision.
For me, not filing has given me greater peace of mind. Think of all the small business owners who have faithfully filed all these years, and are now facing GILTI and the repatriation tax.
I don’t want the IRS to know anything about me, so that they can never change their minds and come after me in the future.
Fillinchen:
Be aware you can renounce and wait until after to decide whether you want to do anything further.
You lose US citizenship as soon as you swear the renunciation oath in the Consulate.
(Note: they wouldn’t let you do that if it wasn’t okay to do it. 🙂 )
Then you can decide in your new status as a non-US citizen whether you think you need to backfile five years worth of meaningless US tax forms for years gone by. 🙂
Happy renouncing.
“I assume that you are renouncing because you want peace of mind.”
Peace of mind about what?
I suspect most post-FATCA renouncers just want to stop getting wretched FATCA letters and get back to a normal financial life.
“I suspect most post-FATCA renouncers just want to stop getting wretched FATCA letters and get back to a normal financial life.”
That’s right! They want peace of mind! 🙂
@plaxy : Stop pretending you disagree with me!
I disagree with the myths and scare-stories that the tax industry tries to lay on dual citizens.
Unfortunately, a lot of US citizens, and even some who have never themselves had US citizenship, get frightened by the scary-scary, and start spreading the myths in their turn. Which is not helpful, though probably intended that way,
@ Formerpatriot @ Fillinchen
Perhaps Fillinchen tax returns will be quick and simple, perhaps they will not.
Perhaps Fillinchen will owe the IRS gains made on investments/ real estate etc, etc all perfectly legal and tax deferred in his country of residence, yet all deemed taxable in the USA..
If he has not lived there since childhood, why should he feel obliged to play their game? What right do they have to reach into his pocket and into the treasury of his resident country where he has been paying taxes as per the law in the country where he resides and from which give him the benefits and protections bestowed on him through those taxes and those laws.
I was compliant having lived in the US for many years, I knew the requirements. He may have had little or nothing ever to do with that country.
We all come from different positions and our decisions are based on different factors. We don’t advocate one over another, just lay out the pros and cons.Of course it is for him to decide after being fully informed.
PS
Of course being a dual from birth would excuse him from ‘covered’ status as long as all forms were filled in correctly and of course he would be giving them a wealth of information about his financial life that they had no knowledge of before, all spent outside their jurisdiction and all up for scrutiny.