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.
Participants will need to provide their e-mail address (real or fake) and an alias. The only written rule is that participants must use a same alias each time they post (and not “anonymous” or derivatives thereof).
Bear in mind that any responses that you get from participants is peer-to-peer help, and it is not intended as a replacement for professional advice. Also, the Isaac Brock Society provides this disclaimer: neither the Society nor any of its members are professionals. We offer our advice here only in friendship and we recommend that our readers seek professional advice if they need it.
If you wish to receive an e-mail notification of comments, check the box to that effect when making your first comment.
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
Nina No worries. After you renounce your citizenship, you will be told that you are supposed to ‘contact ‘ the IRS. This ‘contact’ consists of IRS form 8854
You can download it. It is also a fillable form
When you read the instructions , you will find a section for dual citizens from birth. That’s you and you are in good shape.
It is called ‘Initial and annual statement’ but you only do it once.
Fill in Part I. Skip parts II and III
Part IV section A question 1 put zero for each yr.
2 put in your net worth. This does not need to be exact for several reasons. Make your best estimate. You do not need the present value of a life insurance contract or an appraisal of your house for example. The reason is that as a dual from birth you cannot be a covered expatriate on the basis of your net worth. Therefore your best effort at net worth is good enough. No need for professional help.
3 YES
4 YES (notice the confusing negative in the question)
5 NO
6 Yes
Section B Omit : Section C Omit
Part V Schedule A This is not relevant because you are a dual from birth but it seems reasonable to fill in column (a) only. Again , best guess.
Part V schedule B All of this seems to apply to US income so a bunch of zeros seem appropriate.
You also file a 1040 for the partial year up to the day you renounce. Some people say you need a 1040NR for the balance of the year but it is my understanding is that only applies if you have US source income.
THAT’S IT. Don’t be concerned that you haven’t heard from them about previous returns -unlike Canada they only write back if they don’t like your return. Whether or not you send in more FBARs is optional. Clog the system if you choose. Don’t sweat it too much. You are a minnow and being dual from birth, they really don’t care about you. You are in fine shape.
There is a ton of good info at the renunciation guide at the bottom of the website.
Also check the consulate report directory as to where to go. Vancouver is impossible.
@Nina, at the following link, you can check to see if the IRS processed your forms:
https://sa1.www4.irs.gov/irfof/lang/en/irfofgetstatus.jsp
Enter 1 for the refund amount. It it has been processed and you heard nothing, then you are good to go. You can also call the IRS and inquire if everything is in order. I’ve done that before. The staff is usually friendly. It is very possible that they haven’t seen yours yet, since they haven’t processed mine.
@Nina
How have you come to the conclusion that you are a US citizen? Did your parents register you as one? Have you done anything to exercise your US citizenship?
@bubblebustin, yes unfortunately she’s filed US tax returns. That will make her American in the eyes of the IRS.
What he’s alluding to is that even though you were born to American parents, if they didn’t register your birth with the US officials and you hadn’t done anything to claim it once you reached 18 you might not be an American in the eyes of the current law. Unfortunately, filing tax returns is one indication that you have claimed the citizenship. Do you know if your parents registered you?
@Medea
“She” 🙂
It could be argued that filing a US tax return is exercising a right.
Oops! Sorry, bubblebustin. Brain like a sieve, me.
Whether it’s a right, obligation or something else, she’s done it and is now definitely going to be viewed as an American by the IRS.
I’m sure that there are others here who know more about this than me, but if acquiring US citizenship is as easy as filing a US tax return, why aren’t more people doing it to become US citizens?
That said, receiving a SSN to file would have required some documentation.
@Bubblebustin, it’s not about acquiring citizenship, it’s more like confirming it. If you can claim US citizenship, i.e. born abroad to American parent/s, then voting in US elections, filing tax returns, etc, are viewed as signs you consider yourself American. So someone with a green card will file tax returns, but can’t claim citizenship because they don’t have the necessary criteria to do so, i.e. not born of American parent/s.
Thanks so much, everybody–it’s really nice of you to take time out of your day to help me with this.
I am definitely a US citizen because when I was a kid my parents obtained a US passport for me. They thought they were going to move back to the States, then didn’t. I let the passport expire in my teens, but I’m sure I’m still on the books somewhere. I try not to be (too) annoyed with my folks for this. 🙂
All of what you say is reassuring, so I guess I will move ahead with this process after I try what SwissPinoy suggests in following up with my tax forms (thanks, SP!) I am still very nervous about the process…eeee. I’ll let you know at the end how it went…or sooner if I get confused again!
One thing I have seen suggested on other sites is that if you renounce, you will no longer be able to visit the US on vacation, to visit people, etc. I don’t think that could possibly be true, but I thought I’d check with you all. I probably go less than every 3 years, but I do still have a few relatives down there…plus I would like to see the Grand Canyon someday!
Thanks again for your help–you folks are a bright spot in this gloomy process!
Nina
@Nina, no it’s not true. At present you are still able to cross the border for visits. Always take a copy of your CLN when you get it with you so you can show it at border control if needed, although if you were born in Canada there shouldn’t even be any query about your citizenship. You’re tax compliant so do your renunciation and then the final tax filings when they’re due. Then it’s over and done with. Which embassy/consulate are you planning to use; avoid Vancouver if at all possible as it’s the worst in the world from what I’ve read here.
Nina, your circumstances are very similar to my husband’s, although my husband was of age when he took US citizenship via his father. My husband is glad his father didn’t live to see the head/heartache that citizenship has caused his son.
@Medea, in my mind (what I have left of one) I was reflecting back on the Canadian brother and sister who went to the US consulate to establish their US citizenship so they could renounce it. Nina’s circumstances, from what she’s revealed, are different.
@Nina
If you’re in Calgary, a week ago there were only a few appointment slots left. (They do them 4 per day, Tue/Wed/Thu). I have no idea when they’re closed for the holidays.
When you heard about being denied entry to the US, you may be referring to the following: If you are a “covered expat”, and the Reed-Schumer amendment ever passes, you could be denied entry into the US. (The existing 1996 Reed amendment apparently have never been enforced.)
However, since you are born dual-citizen you will not be a covered expat unless you don’t file for the last 5 years, which you’ve already done.
Hi – I have looked through a number of these older comments but am not sure I unread stand e process of renunciation and what it gains over just being silent. I would appreciate guidance.
I was born I in the US to an American mother and a Canadian father and lived there until I was 8. We moved to Canada and I became a Canadian citizen by being registered as a birth abroad. I went to college in the US and got a US passport then to travel with the school. I returned to Canada where I have lived ever since – for the past 40 years. I have never worked in the US and have not filed taxes there. I did briefly have a US passport in my 20s as I thought I was supposed to. I have had only a Canadian passport since then and have always travelled on my Canadian passport, even when I had the US one. I had no idea for many, many years that there was any expectation that I file income tax returns in the US
I have stopped making any trips to the US, including booking flights that might stopover in the US.
Do I need to renounce? What would happen if I am happy to never go to the US again? I am just sick about FATCA and rue the day I ever thought having dual citizenship was a good thing.
As you have surmised, there is no need to do anything.
@ DM56
“Being silent” would have worked if FATCA hadn’t come along. But it did. To be completely free you would have to renounce but then there is still the IRS dilemma. Along comes the exit tax form (8854) where you certify you have filed US taxes for the past 5 years. If you haven’t filed then you are deemed to be a “covered expatriate”. However, with or without the IRS filings, you will still be given a CLN (Certificate of Loss of Nationality) when you renounce which you can show your Canadian bank if they ever identify you as a US citizen.
Now this is just my opinion but if a person has a) no US assets, b) no intention to ever go to the USA (even for a visit), c) no expectation of an inheritance from a US person and d) no plans to gift or bequeath anything to a US person then being a “covered expatriate” MIGHT not be too terrible — as things are at the moment, that is.
You can get a better idea of the consequences of being a “covered expatriate” from someone far more qualified than I am. Here’s the link …
http://hodgen.com/deliberately-choosing-covered-expatriate-status/
Em How on earth would DM56 become a covered expatriate? A covered expatriate is someone who renounces and doesn’t bother filing. Big deal- he’s already said that he won’t be going to the US. You shouldn’t worry people unnecessarily.
Like many others he can comfortably do nothing.
@DM56 it would probably be good to renounce so that you have a CLN to show a bank if it were to ever threaten to close your accounts. If I were you, that’s what I would do. Pay the $450 to get the CLN and then file it away somewhere where it is very safe and accessible. Paying $450 is a waste of money, but a CLN might come in handy someday.
@swissPinoy thank you. I think I will look into that. But, when I renounce, in order to get the CLN, do I not need to complete the form that attests that I am current with IRS filings, as suggested by Em ? If so, I can’t do that as I haven’t and won’t. In re-reading, @Em, it is suggested that I would still get a CLN but I am just not su I want to provide the IRS with any information about me. Not to sound all paranoid or anything…
@ DM56
The renunciation which gives you the CLN from the Department of State is separate from the IRS. The US consulate will not query you about your tax status. We’re all of differing opinions here about the extent to which FATCA will affect us in the future. I think we all hope, no matter whether it is realistic to do so or not, that FATCA will be repealed. It’s a bad law and it belongs in the dustbin.
DM56 If you choose to renounce, you can do so before having any contact with the IRS. Upon renouncing, you would then be reminded to ‘contact’ the IRS. If you ignore that, you would then be a ‘covered expatriate’. That in itself is no biggy if you have choose to have nothing to do with the US.
Much easier to do nothing. There is lots of very good info at RenunciationGuide.com
The website has been archived. There is a link at the bottom of the IBS webpage.
DM56 If you renounce, you will get a CLN and you don’t need to have filed any tax info beforehand. You will then be reminded that you are supposed to ‘contact’ the IRS. You can choose not to bother. Since you plan to have nothing to do with the US, that would be no big deal.
Still, probably a lot easier to do nothing. Fatca will not affect you unless you have a million bucks in a non-registered account.
@KalC
What is your source for this?
The published regulations and IGAs boil down to the following for financial institutions to report accounts held by so called US persons.
1. Accounts under US$ 50,000 are exempt.
2. Registered retirement plans are/will be exempt. As each country signs a new IGA, they include various forms of registered savings plans from reporting. E.G. I expect that if Canada signs an IGA, RESPs and TFSAs will be exempt.
3. Accounts between $50,000 and $1 million are subject to an ‘electronic search ‘ for ‘US indicia’ (i suppose they mean indicators but they prefer not to use English.)
This means that if a FFI doesn’t have on its books that a client is a US citizen, was born in the US, has a US forwarding address, etc. then that client will not show up in the electronic screen.
In the particular case of DM56 and many many others there is no reason to panic.
Sorry for the duplicate post yesterday. I thought my first attempt had disappeared into a black hole.
@KalC,
The IGA is between the two governments, not the bank and the IRS. Surely our government is therefore responsible for the effectiveness of the “US indicia” search. Our government knows our birthplaces even though the bank does not.
You repeatedly post that our government won’t give up US birthplaces if the banks don’t have it. What is your source for this, or is it based on wishful, reasonable and logical thinking on your part?