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
@DukeofDevon, this is what I also believe, especially if one has correctly logged out by having been five years’ compliant plus the final partial-year tax return/FBAR and 8854 filed. As I would see it, they’d thus no longer have any legal claim on me after that, apart from my continuing to be subject to audits for returns and FBARs with open statutes of limitations.
My earlier amended returns for 2008 and 2009 would be in the clear by July 2015 and July 2016; my correctly filed 2011, 2012 and 2013 tax returns should be in the clear by October 2014, Late 2015 for 2011 (due to an extension) and hopefully October 2017 for my final filed return for 2013.
FINCEN will still be able to audit my final FBAR as late as July 2020, as I understand it. So I should be totally free from all this in seven years, though would have thought that autumn 2017 will be the real cut-off point. But nothing since I renounced should be any of their business.
My main concern is the very real risk of ID theft. My 8938 and FBAR have all my account numbers, etc.
@King of the Road
The procedure I gave is straight from the UK/US IGA. Having now looked at 5.7 of the Guidance Notes, I think that the “self-certification” is in fact the W-8 from the IGA in which you state that you are not a US person for tax purposes and you can make a claim under a dual taxation treaty for the treaty rate of withholding. It’s possible that banks would construct their own form but a W-8 should be acceptable.
@Edelweiss, I’d imagine that if this whole FATCA thing takes off as planned that my building society would probably request more information whereby I’d then be able to show them all my documentation and fill out a W8-Ben. But until then, I don’t really see any need to close the account, especially as I’m quite happy with them. They’re also very good at freezing the account temporarily if anything unusual takes place; they would thus be quick to deal with any potential ID theft. 😉
I recall how an online share dealing account I was using (called Selftrade) had me fill out a W9 several years ago which I promptly returned, thinking nothing of it at the time. Recall my spouse filing in a W8-Ben.
Question: Can Canadian PROVINCIAL (let us say from a province other than Quebec) income tax be applied as a credit on Form 1116 against US federal income tax? I know that, under the right circumstances, Canadian federal income tax can be applied on Form 1116 against US federal income tax. But what about Canadian provincial income tax? In this case, assume that the person last lived in a US state which has no state income tax–so US state income tax won’t be part of the picture.
I was just kind of curious: I was wondering what people here thought of Bobby Fischer. Of course, Bobby Fischer was the former world chess champion. He was always a rather eccentric guy, and in later years he ran afoul of US authorities legally. In a form of asylum he was granted Icelandic citizenship and spend his last years (2004-2008) in Iceland, avoiding prosecution for his alleged US crimes for the rest of his life.
To keep his assets away from the US authorities, he deposited his assets in a Swiss bank account (UBS). However UBS closed his account and attempted to transfer the funds to Iceland. It is unclear what happened then and perhaps Fischer died before the matter was fully resolved.
However, I can’t help but wonder if this situation with Fischer wasn’t a sign of things to come. I mean, here we have a US citizen who had a bank account with UBS. Did the situation with Fischer somehow trigger the larger US crackdown on offshore accounts?
Dash Provincial taxes (including Quebec) are deductible on 1116. All you really need to do is google 1116 and read the instructions.
” Provincial taxes (including Quebec) are deductible on 1116.”
Is this true all the time or only as a default position if there is no other overriding rule? For example, I seem to recall that there are agreements between certain pairs of provinces and states (eg Ontario and New York) where provincial taxes are to be applied as a credit against state/local taxes, and vice versa. I haven’t lived in New York for many years so I don’t recall the details.
“All you really need to do is google 1116 and read the instructions.”
So you are saying that all these people on here who are spending thousands or more on accounting/legal fees really just need to google a few forms?
From the instructions for 1116
Spending thousands on accounting and legal fees complicates the issues. Just ask monalisa.
You can do it yourself if it’s an simple return. I know nothing about New York State Income TAX except that it is probably residence based.
Dear Fellow Brockers,
Does anyone have any experience with a Nexus card, post-renunciation of US Citizenship? Just noticed that my current Nexus card lists me as a US citizen, not Canadian 🙁
Thus, seems 100% certain that I have to return my Nexus card along with my US passport when I finally make my appointment with the US Consulate.
Then, my real question is: would I be able to reapply for a Nexus card or would I be automatically denied?
Thanks for any and all advice!
@Flash
Sorry no answer from me. Just a comment that I had previously asked if anyone had obtained a Nexus card after renouncing so as to ease border crossing concerns. Unfortunately, no responses.
tdott and Flash,
As renunciants of US citizenship, by having Canadian citizenship, we should be eligible: http://www.cbsa-asfc.gc.ca/prog/nexus/elig-admis-eng.html.
Now being on the FBI list, might we be barred from obtaining a Nexus card: http://www.cbsa-asfc.gc.ca/prog/nexus/lcpv-clvp-eng.html?
@Flash,
One item I was asked for at the Vancouver consulate, was a Nexus Card. I told them I did not have one, and they filled in N/A.
I would think you would be able to apply for a Nexus Card in Canada once the renunciation is complete.
Phil Hodgen has a new blog post about expatriation. FYI, not endorsement. Note, I don’t agree with his last sentence that 450 is small potatoes for those who could relinquish instead of renouncing.
http://hodgen.com/relinquishing-u-s-citizenship-and-expatriation/
badger – Thanks for calling attention to the latest oracle from guru extraordinaire Phil Hodgen. I can’t pass up reproducing this paragraph from his conclusion:
People care about this because they are angling for an earlier expatriation date than “now”, whatever “now” is. It won’t work. If you are a U.S. citizen, you will not have an expatriation date earlier than an objective event involving paperwork. Invoking the time traveler exception again, this is impossible to do unless you have that special ability. Determine your expatriation date for tax purposes as of right now (whenever “now” is for you), and compute the tax consequences accordingly.
Notice how Hodgen gets a strong refrain reverberating through the piece. To quote one instance: ” For tax purposes, the Internal Revenue Code looks for an objective date, easy to determine: when the individual submitted the paperwork to the Department of State.”
A lot of ancient Brock pixels have been spewed around over this very point. I have felt beaten down by ideologues who seem more attached to what they think the case should be than to what the words say. Specifically, all that fervor over tax-reporting-free nirvana achieved via “backdated CLN.”
Well, what about Phil Hodgen flatly saying It Won’t Work? This looks like the big news in the piece. I don’t endorse it or not. It’s all a matter of what works, and what is correct understanding. Sauve qui peut.
Huh? Now I’m confused. Aren’t there many people here on IBS who have obtained back-dated CLNs and have had no (current) tax filing obligations?
If “450 is small potatoes”, then give it back! I need the money to pay my taxes.
@WhatAmI, yes there are many people here who have relinquished because they became Canadian citizens years ago with the intent to lose their American citizenship and most will not have any filing requirements now they’ve applied for a back-dated CLN.
http://isaacbrocksociety.ca/2012/06/19/if-your-expatriation-date-is-before-2004-the-rules-are-different/
http://isaacbrocksociety.ca/2011/12/16/did-you-relinquish-before-february-6-1995-then-you-did-not-have-to-inform-the-state-department/
Obviously, if you’re going to relinquish now then there is the tax compliant obligation, same as with renouncing.
@ usxcanada, et al,
Let’s assume a long term Canadian citizen who committed a “relinquishing act” in 1980, applies for and receives a Certificate of Loss of US nationality in 2012. Also assume she is long term Canadian resident who is employed in Canada, and has no US-based property or assets.
How would any US revenue claim regrading exit taxes be collected from this Canadian citizen in Canada?
Canadian courts typically do not enforce foreign revenue claims. A 2012 revenue claim by the US against an individual who is also certified by the US to have lost citizenship and nationality decades earlier (and who has no actual US economic activity or presence) likely has dim prospects in a Canadian court.
CRA will not offer any assistance in collection from her regarding any US revenue claim after 1980, because she has been a Canadian citizen since 1980.
What happens next? Has anyone who received a “backdated CLN” ever received any kind of collection letter? Is there any Canadian case law or example of enforcement of this kind of extraterritorial revenue claim?
@usxcanada, this being so complex, and filled with so many variables, I leave it to others to read and ponder over the rest of what Hodgen said, in combination with the experiences reported here. He also has a specific client base.
No surprise that the IRS asserts timing and evidence that is most convenient and profitable for them – as in the quote from Hodgen; “”….. For tax purposes, the Internal Revenue Code looks for an objective date, easy to determine: when the individual submitted the paperwork to the Department of State.”…..” Our best interests, and those of the IRS are locked in essential conflict. They are not at all bothered by any other considerations and will never voluntarily be moved to reconcile the many stark contradictions.
As you say, people must do what works for them.
That is the big question — what happens next?
Will our countries sign away our rights with various forms of IGAs and let the US in to collect from their ‘US Person’ citizens (who claimed a relinquishment from a back date) and from their own countries’ treasuries?
Will this contravene, in my country, the Canadian Charter of Rights and Freedoms?
Will Canada’s Finance Minister Flaherty stand by his published promises?
Have these expatriates who have claimed a back-dated relinquishment make the choice to never again cross the US border? Will that be their protection?
Will it ever be possible that the US would swallow its pride in favour of common sense, its sense of entitlement? http://www.usa-patriotism.com/
@WhatAmI
As someone born dual, I have no choice but to renounce, so have not been following this thread too closely, but isn’t Phil saying that for tax purposes it makes NO difference whether you relinquish or renounce? If so, then aren’t there people who have obtained back-dated CLN’s who think they are tax compliant, but are not? In effect, then the only benefit of relinquishing is a savings of $450.
When you relinquish (not renounce) do you also have to fill out the form (excuse my ignorance but don’t know which one it is), where you certify you have 5 years of tax compliance?
More and more, I become convinced that staying under cover is the only way to deal with the unreasonable beast USA has become.
The choices we are forced to make are immoral and absurd, WhiteKat.
More from Mr. Hodgen on Expatriation
He also points out:
We just saw Petros enter the US as a free person. He has not filed an 8854. Will the US use its limited resources to chase those who do not file 8854, people for whom no US tax would be payable but penalties levied? Will our country, Canada, and others help in the witch hunt?
What will the future bring?
I predict that the US government will begin to view the renunciations as a ‘problem to be solved’. What’s unknown is whether they’ll attempt to solve the problem with a stick or a carrot. Given their propensity for using sticks to discourage what it considers to be bad behavior, I believe that the USG will focus on all matters renunciation and eventually plug the hole that allowed Petros to reenter the US.