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
@ Kabby: Thank you. I too could not have made my own choice with as (relatively) clear mind without many Brocker’s information and support. Please tell us how it went.
@Kabby, the worst thing I’ve felt is angry that so many are being forced into this. I have never regretted actually getting off the roller-coaster. As far as that goes, all I felt was relief.
Big hugs to you.
🙂
@Kabby. US citizenship is not like most other citizenships that you can hold ready and waiting in the background for some as yet, unimagined future need. If you don’t presently need and use your US citizenship it will do nothing but cause you complication and hardship wherever you go.
The US government’s record is one of continually increasing the unfavorable treatment of its expats because the US hates all things foreign. The time to leave is now, before it gets even worse. You already know this, otherwise you wouldn’t have made that appointment.
Good luck today…I guarantee you will feel better after the deed is done.
@Kabby
I hope this day goes well for you. I too went through some emotions but after I renounced there is no comparison to the peaceful feeling of being free to the other feeling of dread and stress from this ball and chain. There are no easy solutions to these issues but renunciation is the one thing that fixes the problem permanently. Don’t look back and instead look forward to a life of freedom.
@ Kabby
The pill may seem bitter but the relief will be sweet. Hope all went as smoothly today for you as it has done for many before you.
@Nornam diamond, Medea Fleecestealer, plaxy, Japan T, Bird Person, Duchesse, Jane, maz57, Heidi, UK Rose, Embee, portland, plaxy, Nonymous.
I wanted to give you an update about yesterday at my renunciation at the London Embassy. I counted about 14 people around the time of my appointment. OIam not sure if there w3as more before or after me.The new US London embassy is like a fortress to get in with various layers of security and what must have been 1 ft (300mm) thick glass and doors, so thick they were hard to pull open. The floor where I had to go was like an airport check in with maybe 40 counters a bit like a cash teller where you speak through armoured glass and stand. There was no sitting in a room. You waited in a large communal space with all the booths along tne long line with numbers above them. On arrival on this floor, I was given a number and took a seat. Various ages and people were there from young accidentals to families with children to people like me. One had lived on the UK for sol ong one had left the US at age 3 all different stories. The first counter i was called to was to go over the paperwork I had provided and they make sure you understand the severity as he said of the forms. He asked for my US passport and my British passport and the e mail apopintment letter wich they retained and the origianl questionaire form and informal acknowledgement form. After that I sat down and was told to go to the pay window. $2,350 later I sat down again. All communictin so far was from behind armoured glass and you only speak and stand in a sort of booth with sides but open at the back to the communaal area. Then the next call was to pay for the courier and envelope for the CLN and this varied from the cheapest at £8.88 to the most expensive of over £30. I chose the cheapest epscially as i had jsut paid $2,350. Then there were various renunciaants gettting up and going to windows as me and we built up quite a little group chatting but not sayting too much. We did not know if the plae was bugged! The last time i was called was to a window with a consualr officer. He asked me do I want to swear or afirm I wasnt sure the differenc so chose to the swaer and then I was told to read the loss of citinship questionaire and the infomral acknowledgement which he pushed through a metal drawer. The form DS 4079 was not required to renounce. He then made me read the oaf to reverse my citizenship of which I cannot recall but basically said I swear that I want to renounce my US cIitizenship and this act is irrivocable etc etc and then made me signed the form I had just read to him as he watched. All this wa done behind the armoured glass he stood on the other side me the other. He then gave me my passport back and kept my US passport, natuarilaztin certificate and at the end before I was finished he asked me ” why are you taking this action today to remounce your citizenship” I was prewarned this by another renuciant beofre me. I just said I did not need my US citizenship and wanted to come back to my home country.He then said to me ” I understand” Then he said “well we are sorry to see you go and wish you good liuck for the future” wich made me feel a bit chocked up. He was very pleasant and just went trhough the process and the forms and did not try to trip me up in any way. He did however keep stressing the seriousness of the act i wwas about to take and this was irrevocable. I guess he was jsut doing his job and apart form the question at the end no surpises. I then left and walked out of the heavily aromoured fortress. The whole process took aprox 50 minutes. It was a strange feeling walking out and the security gaurd said to me good luck. I flelt sad in one way and relieved in another and last night was thinking had I done the right thing and then started to remiss about the past something maybe I should not do. I feel in a way I left a part of my life behind and the experiences and life I had living and workinng in the US but maybe as time goes by I will feel I did the right thing. It is a shame as others on here have said that the US puts us all through this. I did not feel elation just muted sadness that I had to do this but now have to look forward and not back as so many on here have told me. I want to thank all and every one of you on Brocks, Thoseon here that have been through this and those that have not yet, but without your support, guidance, and advice that psuhed me on I would not have learnt the process and got from A- Z asI I did. It was strange waking up as a non US citizen although the consular poffice did stress to me I am still a US citizen until the CLN comes back to me. I will let you know when this arrives.Thank you to each and every one of you for your valuable and caring help and support. Now to do last years tax return and then hopefully in 2020 the final one! Hugs to you all and Thank you. Kabby.
@Kabby, congratulations. Strange thing to say when you’ve given up part of your life I suppose, but hopefully you’ll come to realise you haven’t really lost anything important. You still have your memories of your time in the US and they will always be with you. You’re still able to travel to the States if you wish, just need to organise an ESTA.
I too felt a bit odd when I left the embassy here in Bern after I renounced, but for me it was the right choice. I no longer have American views of the world, I will never want or need to live there in future so there wasn’t really any need to keep the citizenship.
Life’s journey takes some unexpected turns at times, but it will work out for the best.
Well done, Kabby, and congratulations!
Thanks for the report. Sounds quite similar to what I recall of my own experience.
“It was strange waking up as a non US citizen”
Personally I identify nowadays as a Brit of American origin, and feel more at ease with that identity than I ever felt with the “dual-citizen” identity.
“although the consular poffice [officer?] did stress to me I am still a US citizen until the CLN comes back to me.”
It’s just a kind of bureaucratic technicality.
À propos organizing an ESTA after renouncing, I’ve heard of some consulates taking the other passport that you bring with you to the renunciation to prove that you won’t be made stateless by same, and putting a US visitor visa in it. ESTAs are only good for two years, and the questions one must answer to get one have become horribly byzantine and complex. Visitor visas, on the other hand, are granted for either 10 years or indefinitely, if memory serves me correctly, and cut the hassle considerably. It would seem to be the least the consulate could do in return for snatching that enormous renunciation sum from you. I’d be interested to hear about people’s experiences in this regard.
Re US visas:
When I renounced in September, I was told that if I applied for an ESTA, this would be refused, and I’d need to apply for a visa. The visa form (completed on line) is horrendous, and requires a personal visit and interview at the Embassy. After attempting to complete said visa form, I decided to try for an ESTA, and this was granted within two hours.
In other words, the visa is far more hassle than an ESTA!
“I’ve heard of some consulates taking the other passport that you bring with you to the renunciation to prove that you won’t be made stateless by same, and putting a US visitor visa in it. ”
That sounds odd. As I understand it, a consular officer doesn’t have the authority to issue a CLN on the spot without Washington’s approval; it would seem to follow that s/he also doesn’t have the authority to issue a visa on the spot.
@ Kabby: “Muted sadness” describes how I felt last December, too. It was the best solution to a bad situation.
The next morning I awoke and went about my life. I realized no one viewed me any differently. I’m still the same person— as are you. I hope you’re sleeping better now.
The recommended way of filing a final tax return for the year of renunciation is the following:
a 1040 “Dual Status Statement” for January 1 to Day Before Renunciation and a 1040-NR “Dual Status Return” for Renunciation Day to December 31. Worldwide income on 1040, only US-source income on 1040-NR.
In an old discussion on the Serbinski Forum (2013 or 2014?) I read that one could choose to simply file a 1040 for the whole year.
Anybody here familiar with that?
Anybody done that?
Additional details:
This is for my wife. Tax situation is simple. Salary from Canadian employer is wiped out by form 2555. Additional income: 3500 CAD in interest from a TFSA, thus we declare it. It used to be wiped out by Standard Deduction on 1040. But with a 1040 part-of-the-year statement, we can’t use the standard deduction. The result is 170 USD owed to IRS. If we were to do a 1040 for the whole year, we could use the Standard Deduction to wipe out the tax liability on the interest earned.
The Canadian embassy in Tokyo is an armoured fort too. The armoured fort has been here for longer than 20 years, but for some reason around 20 years ago they brought me in to an inner office while applying to renew a passport, and now they no longer even do that.
The US embassy in Tokyo is an armoured fort, but that’s to be expected. Weirdly, they too, in 2011 brought me in to an inner meeting room for renunciation interviews, twice since they still required two meetings in those days. State Department employees and I sat in chairs at tables with only around 1 metre of air between us. It’s no surprise they don’t do that any more, but maybe it’s a surprise that 10 years after “9/11” they still did.
“Visitor visas, on the other hand, are granted for either 10 years or indefinitely, if memory serves me correctly, and cut the hassle considerably.”
Or granted for 3 months, or denied, etc. Also if you look at the application form and the lineups at US embassies, they do not cut the hassle.
“In an old discussion on the Serbinski Forum (2013 or 2014?) I read that one could choose to simply file a 1040 for the whole year.”
It’s hard to believe that that would have been allowed, but … this is the internet, so it’s easy to believe that you read it ^_^
“If we were to do a 1040 for the whole year, we could use the Standard Deduction to wipe out the tax liability on the interest earned.”
If your wife wants to be a guinea pig, go ahead. I’d say to expect letters, though it’s unpredictable whether they’d be very nasty or very very nasty or very very very nasty, and whether there might be a way to enforce some of them.
ND, forget my last comment.
I’m definitely doing the 1040 + 1040-NR approach.
But the mechanics of it is still a mystery to me.
I was going to do the following:
Approach A:
– Report Canadian salary (up to renunciation day) on 1040 line 1 (in US dollars of course).
– Report Canadian taxable interest (up to renunciation date) on 1040 line 2b (in US dollars of course).
– Fill 2555-EZ to nullify the amount on 1040 line 1 (i.e. 2555-EZ ==> Schedule 1, Line 21 ==> 1040 next to Line 6 in parenthesis… so that 1040 Line 6 ends up being equal to 1040 Line 2b. Tax due on the amount of Line 6 (which is same as Line 2b) is 170$ (on 1040 line 11 and 1040 line 22).
– Take this 170$ tax due on 1040 statement and bring it to 1040-NR Line 42 (check box c and write “See 1040 statement”). Done!
But maybe I should do this:
Approach B:
– Report Canadian salary (up to renunciation day) on 1040 line 1 (in US dollars of course).
– Report Canadian taxable interest (up to renunciation date) on 1040 line 2b (in US dollars of course).
– do not use Form 2555;
– the amount on 1040 Line 1 should be transferred to 1040-NR Line 8,
– the amount on 1040 Line 2b should be transferred to 1040-NR Line 9a,
– 1040-NR Line 41 (Taxable income) would end-up being (in our simple case) the sum of Line 8 and Line 9a,
– Use Form 1116 and report the foreign tax credit on 1040-NR Line 46. Done!
Which one is correct? Approach A or Approach B?
Why can’t you pro-rate the standard deduction up to renunciation day just like you do with the salary and interest income? Does it actually say that you can’t somewhere in the instructions?
I think Form 2555 (even the full one since I never tried the eezed version) is easier than Form 1116. If your wife paid Canadian taxes on interest income she’d need a Form 1116 for that, but I don’t see any reason to choose the hard way for salary.
When I did my dual status return there were instructions that the standard deduction was not available. There used to be exemptions which were available, which are not supposed to be available now because they were trumped, but there seems to be some question of whether they’re still available to non-resident aliens.
@Formerpatriot.
There’s another way to look at this situation. As of renunciation day your wife is no longer a US citizen. She is now a non-resident alien just like the majority of the people on the face of the earth. Non-resident aliens don’t have any obligation to file anything with the IRS. (Except non-resident aliens who own US assets or have US source income.)
The US government would have you believe that you must file a final tax return and a Form 8854 to exit the US tax system but there’s not a heck of a lot they can do to you if you don’t. It sounds as if she has been filing zero balance owing US returns all along so the IRS already knows there’s not much point in chasing after her. Many have renounced, filed nothing, and have heard nothing from the IRS. I haven’t heard a single report of the IRS coming after a person after they have renounced.
Or she can cobble together one more return, whether its correct or not nobody cares, and send the IRS 170 more dollars. I’m sure they won’t complain. Its $170 more than they deserve. Either way, doesn’t matter, she’s done.
I’ve never filed a US tax return in my life, and I have no intention of doing any paperwork following my renunciation in September last year. I’ll let you all know if I ever hear anything from the IRS.
After many hours reading forums here and there (including the Isaac Brock Society, the Phil Hodgen website, the Serbinski forum) and reading IRS publications and instructions to various forms, I have come to the following conclusion regarding the year of renunciation dual status return for a Canadian who has renounced US citizenship in 2018 and who has only two types of income: salary from a Canadian employer and interest from Canadian sources.
I am writing this down so that it may be useful to others and so that someone will point out my mistakes, if any, before I mail the darn thing to the IRS.
– On the 1040 “Dual Status Statement”, report salary on line 1 and interest (say 1,800$ for the sake of illustration) on line 2b for period from January 1 to day before renunciation.
– Use form 2555-EZ to eliminate the salary income. I am assuming that the salary reported on line 1 of the 1040 is less than (N/365) times 103,900$, the maximum foreign earned income exclusion.The result of the 2555-EZ is reported in parentheses on line 21 of Schedule 1 of the 1040, and then on the space just to the left of line 6 of the 1040.
– Final result: The Adjusted Gross Income on line 6 of the 1040 is same as line 2b, say 1,800$, since the 2555-EZ has eliminated the salary reported on line 1.
– Do not fill the rest of the 1040 (lines 7 to 22). Instead, next to line 6 write “this amount moved forward to 1040NR”. Do not sign the 1040.
– Page 1 of 1040NR “Dual Status Return” is a bunch of zeros, except line 35 where the Adjusted Gross Income from the 1040 is now inserted with a note like “From 1040 Dual Status Statement”. So this is 1,800$ on line 35, same on line 36, same on line 41 at top of page 2.
– The “Tax” on line 42 comes out to 181$.
– If appropriate, use form 1116 to claim a foreign tax credit which would reduce or eliminate the 181$ tax. That’s it for page 2.
– Nothing to write on pages 3 and 4 of 1040NR.
– Answer all questions on page 5 of 1040NR.
– Done!
Other forms to include:
– Schedule 6 of 1040.
– Schedule B of 1040.
– Form 8938.
– Form 8854.
And of course…
– FBAR (online)
Form 1040 has numbered schedules now? They ran out of letters?
“Form 1040 has numbered schedules now? They ran out of letters?”
Variety. It’s the spice of life.
Lots of changes for 2018…
– the personal exemption is gone.
– schedule 1 “Additional income and adjustments to income”.
– schedule 6 “Foreign address and third party designee”.
I am only mentioning the changes that affect our situation.
Also, the 1040 is simpler and shorter. It is still 2 pages long but the bottom half of each page is blank. They could have shrunk it to one page.