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
I didn’t hear back after turning down the November appointment. I wonder if there is a trick to this. I sent in my first request 2 weeks ago, as I detailed above.
@DM56, if you want, please email me and I can tell you more about what I’ve done and who is doing it for me.
@admin, please provide DM56 with my email address for the above reason. TIA.
tdott / DM56 — done.
Thanks, calgary411!
As my husband is now in waiting mode to attend a relinquishing appointment 4 months from now we have been thinking about what his final disconnect from the USA will mean, besides our obvious escape from formaggedon. Although neither of us is inclined, at the moment, to live anywhere but Canada it gives us a good feeling to know that if we ever do want to move to another country (anywhere except the USA — we won’t/can’t go there) we will not be treated by the CRA as shabbily as we have been by the IRS — thanks to residence based taxation. This is a little bonus for disconnecting from the USA that others may or may not have thought about. If you decide that Canada is not to your liking or you seek greener/warmer pastures somewhere else then you can just go for it without bringing along banker’s boxes to be filled with paperwork for the CRA or the worry of additional taxes or exorbitant penalties. There’s nothing wrong with looking back, post-relinquishment, at what you have lost in the process but maybe it will help a bit to think about this little bonus of being free to move to another country without undue hassle.
@ Em. One other thing to think about, if ever you move elsewhere, is your retirement. When I moved to the UK from Canada, after living and working there 6 years, and continued to work in the UK, I never thought about those few years in Canada in financial terms. But when the time came for me to apply for my UK state pension, they took that time into consideration, and under agreements with Canada, not only did I get credit for more years’ work, but also my Canadian OAP was incorporated into my UK amount, increasing it by about 25%. For just those few years. And not taxed in Canada, of course, only in the UK. They wished me well. US Social Security hasn’t been such a pleasant story.
@all regarding filing after renunciation,
For 2013 renunciation, I am now looking at forms I’ll need to file in 2014 and
am confused. Form 8854 is very confusing, but I am especially puzzled
as to where and how to include Canadian RRSPs on this form that
include some cash and some securities. From what I’ve read elsewhere
it seems RRSPs aren’t considered foreign pensions. So do they get
lumped in with Securites issued by foreign companies and with cash OR do
they get lumped in with Other or are they listed as something else????
How have other Brockers who have already filed 8854 (either self filed or
filed by a tax professional) included amounts for RRSPs in the net worth table
on form 8854?
In addition to the earlier posts on IBS about if/how to file the FBAR for the
final year of filing after renouncing, I also am wondering how to file:
a. Form 8938 – do we fill it for max value of foreign assets only for the
portion of the year up to renunciation date? If so,
how do we indicate this on the form?
b Form 8891 – what value do we enter on line 8 for the plan balance? The
form asks for plan balance at end of year but if you’ve
renounced during the year would you still put end of year
value or value on day before your renunciation date? If
the later, should we somehow indicate that the 8891 is for
the period up until the day before renunciation?
@moonstruck,
My RRSP and my husband’s RRSP were included in the amount inserted for our forms 8854, Part V, Balance Sheet and Income Statement 3) Marketable stock and securities issued by foreign companies.
Others may be of more help than me for your questions regarding 8938 and 8891 forms.
I, unfortunately, was unable to understand the nuances of 8938 and 3520 and 3520A and others. Because of my low level of confidence in preparing all my required forms adequately, I used retirement savings to employ a US tax professional firm to avoid draconian US IRS penalties. It certainly should not be this way!
I finally have a confirmed relinquishment appointment in Calgary for early February. It took 3 weeks of emails and reminders. My mother’s renunciation appointment was requested, booked an confirmed in 3 hours. It seems they either reply within an hour or not at all.
@WhatAmI
Just WAGing here, but could it have something to do with renunciations being more straightforward than relinquishments? The latter would likely require the US to do some amount of verification to determine that the supposed relinquishing act actually took place and is valid. Whereas, that’s not the case for the former.
@Calgary411,
Thanks for your quick response. So you had a U S tax professional prepare your 8854
and final tax return and he/she included the RRSP amounts on line 3 of the Balance
sheet of part V ? If you don’t mind me asking, if a professional prepared the final year’s
tax form, did they fill out any 8891s or 8938s for you and your husband?
@All,
Other Brockers, please feel free to jump in and provide your inputs about how you or
your tax preparer filed these forms after renunciation.
Also, this may be a stupid question but what did you do for part V, line 1 cash (including
bank accounts) – do we just put the same value in both columns a and b and assume
no gain/loss here? Or are we supposed to figure in the interest?
@moonstruck,
Note: Section V, Line 3, also of course shows the gain from inception of investments. Same amount in columns (a) and (b) for Section V, line 1.
Also note that if you were dual from birth, yours may not be as onerous. My daughter, born in Canada to US parents, so dual from birth, prepared her own 8854 and then had her Canadian accountant review it before she sent it. She also does not own real estate nor are her investments for retirement as mine are.
The full-meal deal for me — 1040NR and required schedules, 8891, 8938 (I did, though, complete the duplicative FBARs for me and my husband, fairly easy to do when you have all the documentation in front of you), 3520 and 3520A’s for “foreign trusts” Canadian Registered TFSA and RDSP that I hold for my adult son — and various other required forms: 8833, 1116, 6251, 8582, 7004. Documentation is about 1″ thick for my portion and my husband’s less than that. We’re two retired persons who owed Canada $0.00 for 2012, but I owed the US $250 in partial year 2012. We are not “covered expatriates” by virtue of our net worth.
@moonstruck, I filled it out myself to the best of my ability. I figured out that my net worth is about -60k since my non-US spouse owns half of me and I pay all the debt.
I am a dual citizen at birth that is planning on renouncing in 2014 (Calgary). I also haven’t lived in the US for 10 of the last 15 years, and will have 5 years tax compliance at time of filing the 8854 in 2015.
Is there any indication of requirements to prove citizenship at birth (to qualify for this exemption)? I have a Canadian birth certificate (I was born to 2 US citizens who had up to that point lived their whole lives in the US). I have a US passport because my parents felt it important for me to have one. I haven’t used it ever, and it is now almost 20 years old (expired). I have a SSN as my parents had me apply for one. This is my connection to the US. How do I prove or what proof do I need (if any) that I am a dual at birth so I can fit this exemption for the 8854?
I really appreciate the excellent community that Isaac Brock has become. I come here regularly and have met others in person at various meetings. Thank you – you/we are setting the stage for the 90% of “US persons” that will come out if FATCA is forced on us. I hope to be “out” before July 2014 (if FATCA doesn’t get delayed…again – can you say government shutdown?), but there will be many more if the US continues to pursue people like me who were born, raised, educated, and have worked their whole life in Canada. I have never made a penny in the US. My “crime” is that I was born to 2 US citizen parents in Canada. I feel like I am running a marathon I didn’t ask to run. I can’t wait to be done.
@BorninCanada, I didn’t have to prove anything. I told them that I was a dual since birth and that was enough for them. If they want more, then they will probably let you know.
BorninCanada,
You are the same as my daughter born in Canada to two US parents (and my son who is entrapped into supposed US citizenship as he has a developmental disability so he cannot renounce because of ‘mental incapacity’ and a Parent, Guardian or Trustee of such a person does not have the right to renounce on their family member’s behalf even with a court order). She renounced in Calgary as did my husband and I.
My husband and I brought our completed forms with us — the Calgary Consulate didn’t even want to look at them. They acquired all the information they wanted with a questionnaire that was faxed to them before the appointment.
A procedure different than other consulates is you email the Calgary Consulate (Calgary-ACS@state.gov) to book your appointment (unless that has changed). They will send information to read and the following questionnaire to send back to them.
RENUNCIATION QUESTIONNAIRE
IF YOU WISH TO RENOUNCE YOUR U.S. CITIZENSHIP PLEASE PROVIDE THE FOLLOWING INFORMATION:
1. YOUR FULL LEGAL NAME (including former names):
2. DATE & PLACE OF BIRTH:
3. SOCIAL SECURITY NUMBER:
4. CURRENT LOCAL MAILING ADDRESS:
5. CURRENT TELEPHONE # HOME ____ – ____ – ______ OTHER ____ – ____ – ______
6. LAST ADDRESS IN U.S.
8. DATES OF RESIDENCE IN U.S.
9. ACQUIRED U.S. CITIZENSHIP BY BIRTH IN U.S. OR, ABROAD TO ONE/TWO U.S. PARENTS. (please circle appropriate answer)
10. ACQUIRED U.S. CITIZENSHIP BY NATURALIZATION:
DATE __________________________ PLACE _____________________________________
11. OTHER NATIONALITY: ___________________ DATE ACQUIRED: _______________
12. WILL YOU BE PROVIDING A WRITTEN STATEMENT REGARDING YOUR REASONS FOR RENOUNCING YOUR U.S. CITIZENSHIP? ____ YES ____ NO
(if yes, please attach your written statement)
13. WHEN YOU TAKE THE OATH OF RENUNCIATION WILL YOU
____ SWEAR, OR ____ AFFIRM, TO THE OATH?
All forms prepared from this information and were ready to sign when we got there. Very efficient and professional experience. No hassles.
@SwissPinoy and Calgary411 – Thank you. I really appreciate your help and dedication (I’ve seen your countless posts and comments in various places across this place called the internet). I might not be very vocal on the boards, but I am fighting in my own ways (many conversations/letters/visits to countless people/organizations). What is happening and happened to many of us is beyond frustration. I will share my experience and add it to the list of others once I am finished. Thank you again.
Note:
ACS Calgary doesn’t put question #12 on their “Relinquishment of U.S. Citizenship” questionnaire. Otherwise it is pretty much the same as for “Renunciation of U.S. Citizenship”.
@BorninCanada
This is my understanding (so do your own diligence): you will need 5 years of tax returns filed at the time of renunciation (2014), not at the time of filing 8854 (2015). This is because 2014 will be a split year and so does not “count”.
I’m also hoping to renounce in 2014, and so I’ll have done filings for 2009 thru 2013.
Unfortunately, I can’t help with your actual question. I’m in a slightly different boat – born in the US, but dual from birth. What I did was get an updated Canadian citizenship certificate that shows my “effective date of citizenship” (that’s the phrase used on the certificate) as being my date of birth. I have no idea if it’s possible to get US documentation that explicitly shows you being a US citizen from birth.
@BorninCanada
The dual citizen exemption is claimed when filing Form 8854 and is separate from and independent of the renunciation process at the consulate.
Form 8854 Part 1 Question 7 asks you to list the name of the country (other than the US) of which you are a citizen and the date you became a citizen of that country. Since you were born in Canada, that should be your date of birth. Form 8854 Part 1 Question 8 asks “How you became a US citizen” and only offers two alternatives – by birth and by naturalisation. Since you didn’t naturalise as a US citizen, it seems safe to claim “by birth”.
Part IV Section A Question 3 of 8854 asks “Did you become at birth a U.S. citizen and a citizen of another country, and do you continue to be a citizen of, and taxed as a resident of, that other country?” This is the dual citizen exemption question (together with questions 4 (US residency) and 6 (5 year filing record)). The answer to this question obviously needs to be consistent with the answers in Part I. Although I’m not an expert, it seems to me that you are in safe territory in claiming the dual citizen exemption (if you also can answer questions 4 and 6 appropriately).
Form 8854 doesn’t ask you to document your citizenship status(es) though you are signing the form under penalty of perjury and affirming that “to the best of my knowledge and belief, it is true, correct, and complete”.
I also am a dual citizen – born in Canada to US and Canadian parents and my US parent registered
my birth abroad with the US consulate. I’m scheduled to go renounce my US citizenship and am
wondering if I would be considered a dual citizen from birth. I’m renouncing in Montreal and they
ask that you fill out form 4079 (no questionnaire like Calgary consulate), but I’m confused about
how to answer some of the questions. I have an SSN but never had a US passport and have never
lived in the US nor do I have any US source income. Since I got US citizenship by virtue of my US
parent registering me, how should I answer any of the questions on 4079 after question 8? I don’t know
if any of questions 9-13, and 18 and 19 are applicable in my case. Also, I’m wondering if I will get
into trouble for answering NO to filing US tax returns and answering question 14 that I use my Canadian
passport to travel to/from the US since I never had a US passport. Help please???
@ Dually Confused,
I think the reason that Calgary and some other consulates have produced their own quite short questionnaire for renunciations is because the 4079 is quite awkward (and much of it basically irrelevant) for renunciations. As you’ve seen, it’s titled, “Request for Determination of Loss of Citizenship,” and in general the form makes more sense for a relinquishment.
4. US Passport. Where it asked for the passport number, I wrote “never had one,” and for “issued at” and “Issued on,” I wrote “n/a.” When it asked which passport I used on page 4, I put “Canadian.” No problem.
13(e). “Do you file US income or other tax returns?” There’s no problem to write “No.” Dept of State doesn’t care if a person is tax compliant or not and it has no bearing on successfully renouncing. [However, according to regulations, DoS is supposed to forward a copy of each approved CLN to IRS.]
18 and 19. I’d write n/a. As you have not, as of yet performed a relinquishing act, they would be not applicable.
As for 9-13, I’d just answer them. They’re mainly yes or no. Where it says, “If yes, please explain,” there’s no need to go into much detail.
@DuallyConfused – Unless I’m missing something, you need to quickly (certainly before you renounce) get educated on the ramifications of renouncing US citizenship without being tax compliant. Note that it is possible to get compliant after renouncing and be “OK”, or not get compliant and be mostly “OK”, however, if you do not now understand all of the issues it would behoove you to start learning – this is something you most definitely do not want to have catch you by surprise.
So, the short answer to the question is that IMO there is no short answer. Sorry. The one thing I can say is that as far as the US is concerned, you have unfulfilled tax filing obligations (possibly unless you’re between 18 and 18 1/2). Many of us here are or were in the same boat, so you’re definitely at the right place.
Brockers, is there a FAQ-like web page that people can be pointed to for stuff like this? [if not, do others agree that it would be useful to have one?]
On a side note, I found a reference on Phil Hodgen’s web site about delaying the filing of returns (and thus the dreaded 8854 form) until Dec 15. This could come in useful for a person who renounces before being compliant, but wishes to be compliant for 8854.
See:
http://hodgen.com/2012-filing-extension-until-december-15-2013-heres-how/
@TDott and Dually Confused,
That’s a good point, TDott.
I wrote “There’s no problem to write “No” to “do you file US income or other tax returns?”
Not having filed taxes definitely does not prevent renunciation and, in fact, whether one ever does or not they remain a non-citizen as of the date of their renunciation.
So, the potential for problem is not writing “no.” That won’t prevent or invalidate a renunciation. The potential for problem is that renouncing (or applying for a CLN based on any other sub-article of 349(a)) puts a person on the radar as DoS is supposed to forward a copy of the CLN to IRS.
Though it’s irrelevant if a person is up to date on taxes on renunciation day, to avoid being a covered expatriate (and basically to wrap things up legally with IRS), one has until June (or with extension October or December) 15th of the following year to file the 8854 (exit tax form), on which one should certify that they are in tax compliance for the previous 5 years. Eg, if one renounces in 2013, one has til June 15th, 2014, to file 1040s for 2008-2012 plus the partial-year 1040 for 2013, and the 8854.
If a person is born dual, they are exempt from exit tax, but they still have to file the 8854 to avoid being a covered expatriate.
8854 instructions, page 3: