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
@Saddened
Congratulations. I remember how much more included I felt when I finally became a Canadian. It does change things.
You can imagine how I felt when I just recently learned that changes to the Canadian Citizenship Act made me a Canadian at birth. Two times the pleasure!
Say, just another question. If one gets a meeting for a renunciation and goes through the motions at a US consulate in Canada, how long does it take to get a CLN? Any further advice as to what to do/not do at such a meeting? Thanks.
@Pierre D, it can take between one month to a year or more. Mine took two months, which is probably the standard.
At the meeting, just follow basic orders and don’t volunteer Information. I had to show the two passports, fill out the papers, change the address to where I last lived, rather than where I was registered to vote, and confirm that I understood the conditions of renouncing. Other than that, I gave no explanation and provided no other information. It’s a rather simple and formal process.
Here’s a hypothetical situation:
You are a US born US citizen living in Canada but haven’t yet taken the step to naturalize as a Canadian. You find out that due to changes to Canada’s Citizenship Act in 2009 that you are a Canadian at birth because one or both of your parents were born in Canada. I imagine that when you apply for Canadian citizenship, Citizenship and Immigration will determine that you are already Canadian and just send you a citizenship card. Changes to Canada’s Citizenship Act has eliminated the ability of certain people to take the oath of Canadian citizenship with the intention to renounce US citizenship therefore are unable to relinquish US citizenship. The downside is you must pay the $450 to renounce US citizenship, the upside is that you are likely exempt from any exit tax where applicable. Net worth determines which is preferable!
OMG, this person seriously needs help!
Just learned I need to file American taxes as a Canadian
I have just learned some news that is causing me a lot of stress.
It seems that I am considered an American by the US because I was born in the US. This comes as a complete surprise to me because I have never voted in a US election and have never held a US passport and while it is true that I was born in the US (my parents were returning by train from visiting my maternal grandparents when my mother went into labour. The ripcord was pulled; the National Guard came and took my mother off the train to a hospital in New York; I was born; my father came and brought us back to Canada; I entered as a landed immigrant as an infant), I have always considered myself to be a Canadian. And only a Canadian citizen.
The initials FATCA have come together and propelled my life into a nightmare scenario. I understand there are three options for Canadians who are did not know about all of this and fit their five categories
1. Do nothing
2. File with the IRS for 2011 and every year from now on aware that there could be severe financial penalties for late-filing (as in decades!)
3. File with the IRS for the last five years and every year from now on (and deal with the penalties as above)
I understand that as of January 2014, my name will appear on a register in the US and should I travel to/from the US (or be on a plane that has to land for emergency reasons in the US), I could not only be stopped and not allowed to return to Canada, but could be imprisoned until such time as all of the late-filing charges have been paid and filing has happened.
As a law-abiding, tax-paying Canadian citizen (senior – will be 69 in a few months), I am scared. Not just for myself – but for my son who, because he has a mother who was born in the US, is apparently in the same category I’m in and has the same three options facing him … and the same possibilities of imprisonment in the US should he go into the US for whatever reason.
I don’t travel to the US very often but now that I am retired, was hoping to do a bit of travelling in the next 5-6 years while I still have my health and Hawaii is one of the places I’d love to go to in the winter time. Friends live in the San Juan islands — there are conferences in Washington State and California that I’d love to participate in. But now — is that all going to be “off limits” as of January 1st, 2014?
I understand that I can renounce my “US citizenship” but that to do that, would cost lots and lots of money and as a woman who spent most of her adult years as a single parent, working in a profession that did not pay women as they did men for many years, and … well, suffice to say, I can’t afford anywhere near what that would cost.
I understand that you are well versed in cross-border tax issues and would appreciate any input you can offer. I seldom have sleepless nights but since learning about all of this, I find it very difficult to set it behind me and sleep has become a distant experience. I’m very tempted to write President Obama but to be perfectly honest, am aware that if I do so, I am no longer “under the radar”. And right now, that’s the place I want to be.
I welcome your thoughts and any input you can offer. Thank you so very much.
Sincerely,
Fran
http://themoneyguide.ca/forum/showthread.php/354-Just-learned-I-need-to-file-American-taxes-as-a-Canadian
@bubblebustin
You might want to point out that at least the following fear is misfounded: (her son is not a US Citizen)
Since from the above comments in the original, there is NO INDICATION Fran lived in the US for 10 years, 5 after the age of 14 and therefore cannot transmit US Citizenship ..and I am assuming since she is 69 her son was logistically born between 1952 and 1986…
@Benedict Arnold be me
I’m going to see if Fran is picking up. In the meantime, others can log on the forum and respond to her. So far only Phil Hogan has, and he’s encouraging her to enter Streamlined. She may have relinquished her US citizenship although she didn’t say if she naturalized as a Canadian or not (sounds like she’s a Canadian at birth due to changes to Canada’s Citizenship Act in 2009).
It makes me want to cry that those people who should be enjoying the fruits of their live’s labour are being terrorized by the USA! Thank GOD that her parents haven’t lived to see the day that their baby born on US soil has to endure the aftermath of her untimely birth!
@Benedict Arnold be me
Yes, even in her child was born out wedlock she would have had to lived in the US for 12 months continuously prior to the child birth:
If the applicant was born out of wedlock to a U.S. citizen mother:
The applicant was born prior to Dec 24, 1952, then the U.S. citizen parent must have resided in the U.S. for any period of time prior to the applicant’s birth. The mother’s birth in the U.S. is sufficient to transmit citizenship.
On or after Dec 24, 1952, resided in the U.S. for twelve months continuously prior to the child’s birth.
Do I have to enter streamlined when filing back five years? There is one year they owe me a refund and I am being told that if I enter then because of that one year I will be considered “high risk” This scares me to death. All other years my tax returns would be filled with zeros as I had zero income. This will look odd and I am really afraid about filing. I was told by IRS I hadn’t met the requirement to have to file for all years except that one. They owe me 6 hundred for that year but, I did not file it 2011. I did not file it to claim the money because I would then be “high risk” Nobody seems to know what I should do?
@AtticusinCanada
Streamlined requires 3 years worth of returns (and 6 years of FBARs). Are you planning to file 5 years in order to be in a position to renounce? And did you ask the IRS if they would accept 5 years of returns in streamlined?
At any rate, is it possible to just not claim the refund for that troublesome year?
@tdott asked
I ask this question every chance I get. I’ve gotten 2 answers (one from Moody’s (either Roy or Alex)), and the answer was yes, you can send 5 years instead of 3 into the Streamlined Procedure.
Something to now consider is how long it will take to renounce US citizenship. You may end up filing 6 or even 7 while you wait. My husband and I have filed 2 years since we entered OVDI, for a total of 10!
I called the IRS before I knew I was renouncing and nobody even knew if I should file for the years I didn’t meet the requirement IF I renounce.
As to above. No there apparently is no way I can not accept the refund so to avoid being “high risk”
@bubblebustin
I’m under the impression that most people suggest renouncing first, then catch up filing with the IRS afterwards. I’m talking about people going into the Streamlined Procedure.
But that does raise a question. Is it safe to say you have renounced once you get the receipt for $450, or is there still a change Washington DC might reject your renunciation? I do know that relinquishments are not decided at the consulate, but decided in DC. Does the consulate have the decision for renunciations right there during your interview?
@ Atticus,
Recently I was speaking to several professionals to get some assistance with US forms. Their clients did not enter Streamlined (or the OVD programs). They had quietly filed going forward, or quietly backfiled in the past, and made a range of choices depending on their circumstances. I cannot give you US tax advice, and don’t know your circumstances, but Streamlined may not be your only option.
A reliable source told me that someone from the IRS itself said that a refund in the 2009 and 2010 tax years due to the ‘Make Work Pay’ tax credit did NOT make one high risk and did NOT make one ineligible for the Streamlined program. That would make sense because so many people were eligible. On the other hand, if that was the case, why not say so in the FAQs, and clarify it for all those filing 2009-2011 returns as the Streamlined instructions indicated? This of course is not tax advice, and you can’t rely on it. The information I mention was verbal only, and who knows if the IRS would honour it or if they are consistent.
I had wondered if it was possible not to claim a refund (although there is a box on line 74a, page 2 of the 1040 return where it says “amount of line 73 you want refunded to you”). I had wondered myself if it counted as ‘claiming’ the refund if a taxpayer left it blank even if line 73 page 2 shows a refund / amount overpaid. On the other hand, I can’t see that the Make Work Pay credit would be a mandatory credit to claim. I also had wondered whether someone backfiling quietly, who claimed the Make Work Pay credit and a refund would be more scrutinized than a return with a straight zero tax owed and zero refund. There had been similar questions in various places. On the other hand, after paying professionals big bucks to prepare the returns, it seems harsh not to claim a refund that might offset their fee.
Just my thoughts and questions. Not tax advice.
Everybody especially bubblebustin, Atticus, and Victoria, I go downtown Vancouver tomorrow for the coveted second appointment. My thoughts before tomorrow are (1) it would never happen ten years ago, as I could not connect with the common thoughts (this is like the Arab Spring!), (2) related is that forming friends who support you is very important. Besides the support provided by this blog, just today a colleague at McGill University finally said he would make a second appointment, based upon the fact that I was doing it. The bad part is my credit card will be debited $450 for something that might cost them $100.
Unless the rest is for security.
@kermitzii,
Good luck tomorrow at the Vancouver Consulate. This time tomorrow, you will be rid of the albatross. I will be thinking of you!
Atticus, what am I, badger, bubblebustin, et. al.
I backfiled my IRS taxes for 7 years in 2009 and filed them the past two years. Last night, as tomorrow is my second interview to renouce, I called the Philadelphia office (they respond to international questions) and after getting lots of verification of my ID,the person said my tax returns were fine. Its all on their computer. This is the main thing to make sure you are not renouncing to avoid taxes. Of course they never send the tax summary that Canada sends so just call them and waste their time. It costs more to the USA than sending a computerized receipt. 20 minutes of this person in Philly is like 20 bucks. Dig into the American deficit!
The other thing is FBAR but I am not an authority on this but FBAR is not a taxation issue, it is an accounting thing handled by another branch of the US government who does not get along with IRS. There are other posts here and elsewhere that discuss whether not filing FBARs is called avoiding taxes and thus being “covered”.
Good luck, kermitzii! From my experience, it can be emotionally difficult to renounce, but one feels so much better afterwards, even with a temporarily smaller account balance due to unnecessary expenses.
Since renouncing, the US hasn’t given me any trouble. Yet, when I do a refund check, I’m still told that: “Your tax return is still being processed.” This is either because I renounced or because I snail mailed the forms instead of e-filing. In the past, my tax returns got processed within a week. Now, it’s been 3 months and they are still working on it. I can’t help but to wonder how much more in national debt the US is falling simply because of my tax return?
@WhatAmI, yes you can. Although Washington has the final approval, unless there’s some compelling reason for rejection they are simply rubber-stamping the decision of the embassy/consulate and I haven’t heard that DC has rejected anyone’s relinquishment or renunciation. Has this ever even happened?
Also the fact that when you get your CLN it’s effective from the date of your renunciation, not the Washington approval date, means you can say you have renounced once you’ve paid your money, sworn/affirmed the Oath and signed it. That is what I told my bank when I got the “we believe you are an American” letter and W-9 form for signing. Even though it wasn’t yet approved by Washington, I told them I’d renounced a few days before I received their documents. They agreed to put things on hold until I got my CLN. When I received it, I sent them a copy of it so my status with them could be changed.
The date of your renunciation is also the date you work to for US tax purposes with regard to filing FBAR’s and the 8854 form.
WhatAmI – I’m under the impression that most people suggest renouncing first, then catch up filing with the IRS afterwards.
Phil Hodgen (international tax lawyer with specialization in expatriation) isn’t most people and he doesn’t think it’s a good idea. Unless you are a risk junkie looking for a cheap adrenaline thrill. Something gets tangled up, you run out of time, and you could wind up being a covered expatriate. Nothing about income, nothing about net worth. Just missing a deadline. Good luck.
@all
Hooray, we are now Australian citizens, one more step taken!
Next is dealing with the consulate…. ozteddies has told me that Melbourne is pretty good, hope that is still true.
I’m happy that I started filing returns over 10 years ago, but generally get a refund – is that something to worry about? (I’d think they’d be happy to be rid of me, I’m costing them money.)
@Shunrata, Congratulations!
Ha, yes they probably will. After all, you’re taking money out of a system that they’re desparately trying to fill. I shouldn’t worry about it, you’re tax compliant that’s the main thing.
@Medea
Thank you 🙂