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
@tdott
I’ll speak up and mention I had always wished this site had a good and comprehensive FAQ page to assist people. With so many people finding IBS now and needing answers, with so much information scattered all across this site now since it began, it’s increasingly difficult to search out important facts. A well-organised FAQ would be an immense help.
@Pacifica,
Thanks for your response about form 4079.
@tdott,
I have been reading and I think I do understand the ramifications of renouncing and tax filing. I just
wondered if answering “NO” to that question on 4079 would trigger something bad now. My story
is that I have no gross income to speak of as I’m not working and haven’t been for some time. I
don’t have investments, RRSPs, or much savings and I’m being supported by my family until I
can get on my feet. I’m under the filing limit and I’m under the FBAR reporting limit by a long shot.
I want to stop being a USC so that in the future I can live my life here in Canada without USG
interference. My dilemma is how do I deal with the IRS prior to the 8854 – do I file 5 years of
tax returns with zeroes or do I just send a letter of explanation with the 8854 and final year tax
return? Should I file FBARS for previous years even though I have a single foreign account well under
10K USD? I won’t have much to put on the 8854 either, but will the IRS believe me??
I’d really appreciate some input from people on this site about what I should do.
I think it’s more accurate to say that being dual born can exempt you from 2 of the 3 tests used in determining covered status (and thus being subject to the exit tax). If you’re not tax compliant, then the tax compliancy test results in you being covered and thus subject to the exit tax. I’
We’re saying the same thing, but I think you do say it more accurately — certainly more clearly 🙂
@DuallyConfused
Good to know that I was missing something! From the sounds of it, the safe thing is to file the 5 years of zero returns. You seem to be under the FBAR limit, so I would *think* that you don’t have to file FBARs (technically, FBARs aren’t part of the compliancy test anyway, since they’re not a IRS reporting requirement, as I understand it).
Perhaps others can be more definitive than me.
@DuallyConfused
Is there any reason you cannot quickly send in the past five years of tax forms showing zero for virtually everything and nothing owed? If it is clear you are rather poor (like we are) what incentive is there for the IRS to harass you for money/fines they couldn’t even hope to collect anyway. Once you sent those then you could fill in that 4079 form and say yes, you’ve filed taxes, in full honesty thus not bringing any attention to yourself about the matter.
We never had anything close to 10K total, so we never filed any FBARs; it is only required if you meet that threshold. Our 8854s were a vast sea of zeros due to no money, no investments, no to practically every last item on the page. It isn’t a worry whether they will believe you or not. You’re by far not the only person of meagre means who has ever filed. If they want to spend hundreds of thousands of dollars investigating each person who has virtually nothing to report, it will just drive that country all the quicker into bankruptcy and ruin. They’re more likely to hassle people who actually have assets they can demand as tribute, not those of us who have practically nothing.
@DuallyConfused @ozteddies
Someone correct me if I am wrong but my understanding is that someone with no income (and no spouse with income) – or if their income is less than $9,500 then they do not have to file a tax return. (and they did not make over $400 in a business, etc –
The IRS has an interactive questionnaire here
http://www.irs.gov/Individuals/Do-You-Need-to-File-a-Federal-Income-Tax-Return%3F-
It says 2011 but I see the page was updated in 2013.)
At any rate if you are NOT required to file for those years then you should be able to answer YES to the tax compliance question even if you haven’t filed, as you have done everything required of you, which is nothing. You will still have to file the 8854 though which should make it obvious to everyone that you’re broke.
Like I said please correct me if this is wrong. Don’t hold it against me but my mum worked for the IRS processing returns, and she would mention those people who didn’t need to file but did, which for them was just extra unwanted paperwork.
And by the way a FAQ would be excellent – I’ve read through a lot of the comments and posts but organized it’s not.
@Shunrata,
The question on the 4079 form asks ” Do you file US income or other tax returns? If yes, please explain.”
This is different from what the 8854 asks about being tax compliant. I didn’t have a requirement to file
any US income or other tax returns for the US as far as I can see, so I don’t really see how I can answer
“YES” to that question on 4079. Am I missing something??
I have my appointment already scheduled and wanted to do it before we pass the “magic line” of
the debt ceiling limit date, in case things get really shut down at the consulates and Dos in terms of
services. I just don’t know if I’m sticking my neck out if I answer “NO” to that question on 4079 if I
go ahead and proceed as planned.
@Pacifiica, @All,
Just a couple more questions about filling in 4079. As a dual citizen by virtue of being
born in Canada to a US parent, I’m not clear just how I should answer questions:
6: When did you first become aware that you might be a US citizen?
7: How did you find out you are a US citizen?
How have others in this situation answered these 2 questions.
@ Dually Confused,
Re the 4079: Rather strange questions, all right. I’ve heard or read that this form was also designed for people claiming US citizenship (or that parts of the 4079 were copied from such a form). I can’t source that, it may be an “urban legend,” but it’s possible – some of the questions, like 6 and 7, don’t make much sense in the context of terminating citizenship.
You could answer something like
6. I’ve known since I was a child because I was born in the US.
7. I’ve known since I was a child because I was born in the US.
FWIW, my situation was different as I was born only a USC and relinquished it upon becoming a Canadian citizen. A lot of us in that situation are also initially kind of baffled by that question too (I was). So this might be useful to someone else. I wrote:
“6. Apprx 26 August 2011. (Born US 1953. Relinquished 1979.)
7. I found out that the US might still consider me to be a citizen from Canadian media reports apprx 26 August 2011. I had been told prior to relinquishing 1979 that taking Canadian citizenship would automatically terminate my US citizenship.”
@dually confused
You are analyzing it too much. Those questions on the 4079 are designed to figure out whether you are a US citizen. If you claim to have relinquished and then subsequently filed tax forms as a citizen, that is point against you.
The 4079 questions are weird and clearly not intended for people like you. This is not the same question as the 8854. If you have not filled out tax forms, and you haven’t, say no. If they ask you why (they won’t) tell them you didn’t make enough money. Remember, the State Dept is not the IRS, and they really don’t care if you are tax compliant or not. “I don’t remember” is a perfectly reasonable answer for the 4079.
@shunrata
I was never sure about not filing due to extremely low income; felt worried there might be some exception requiring you to file anyway if you lived abroad regardless of that. Our first couple years in Australia long ago we had a near-zero income due to not having permission to work in this country yet. Just to be safe, we filed our taxes anyway. A mate of mine in the US couldn’t find me a clear answer and said it was safest to file regardless. That was so many years ago however, and the rules keep changing, so who knows. Someone might try looking that up on the IRS site, though good luck trying to find a clear answer.
You may very well be right that DualConfused could simply answer yes to the question about filing. Probably would do no harm sending in the previous years’ forms either indicating nothing was owed, if they wanted. Either way it seems this person shouldn’t have any worries, given the lack of assets or income to report.
Dually confused : Pay close attention to CanuckDoc. She’s been down this road and is correct.
1. You are a dual cit. from birth.
2. 4079 is confusing because it is designed for people trying to KEEP citizenship who might have done something to lose it. In the case of those trying to renounce it is basically dumb, confusing, and useless. Just fill it in. You won’t get into any trouble.
3. AFTER you renounce, you can fill in 8854 as a dual from birth. You can honestly answer ‘YES” to the question….’Have you complied for 5 yrs?’ because you were always under the filing limit. There is no requirement for fbars in your situation. Relax, go to your appointment, and have a nice glass of wine afterward. You are in a relatively straightforward place.
To All and Dually Confused,
You know that disregarded at the border US law that we “US Citizens” are to only use a US passport when entering or leaving the US, here is what Travel.gc.ca says about the Canadian passport: http://travel.gc.ca/travelling/publications/dual-citizenship
Wish I had these words when the over-zealous US border guard intimidated me into life-changing actions as I could have claimed relinquishment of US citizenship with my becoming a Canadian citizen in 1975. Please, please, no one make the same asinine mistakes I did. $42,000 later, a lesson learned and passed on to others. Never be intimidated into getting a US passport and re-entering yourself into the US clutches.
@Calgary411
We’ve all done things we wish we would have done differently. I wish I’d renounced a long time ago. Try not to be so hard on yourself, you were acting in good faith. Who would have known?
@Duallyconfused
Sorry about that, didn’t read back far enough.
As others have said – if you are asked on the 4079 if you filed and the answer is no, it’s no. In your case it’s for a good reason.
As far as the 8854 goes it seems obvious that you can say yes you are compliant, as you have fulfilled all your obligations.
@bubblebustin,
That’s exactly why I won’t throw in the towel (that and my son’s situation) even now when I think that am safely renounced and all returns, 8854 filed. If others learn from my mistakes, that helps.
As badger said today:
@DuallyConfused – and everyone else – am I missing something here? I’ve looked at the Montreal reports on renuncations and only one person mentions a 4079 form. No one else has mentioned it for renouncing. Frankly the form isn’t needed for renuncations so I’m wondering if Montreal are wasting their time and yours by asking you to fill the form in. You’re a dual citizen from birth (born in Canada with birth registered at American embassy) so there’s no argument you’re Canadian/American so why do they need the form? Or are Montreal just being awkward by requiring a 4079 form when it isn’t necessary?
My mother recently booked a renunciation appointment in Calgary for December. She did not receive a 4079 form.
I recently booked a relinquishment appointment in Calgary for February, and they did send me a 4079 form.
CBC.ca has a lead item about the time it is taking for a long-term resident to become a Canadian citizens.
http://www.cbc.ca/news/canada/british-columbia/longtime-resident-seeking-citizenship-hits-bureaucratic-wall-1.1991517
Although it focuses on one particular person, it also says:
“At the end of last year, 349,249 people were caught in the citizenship application backlog. The posted wait time for “routine” cases is two years. Kurland said the wait can be up to six, if the applicant is sent to appear before a judge.”
Clearly, US citizens who are permanent residents of Canada but who have not yet become Canadian citizens are going to have increasing difficulty getting rid of their US citizenship.
Thought for the day.. on the lighter side…
Do you feel like a PANDA?
It seems that PANDA’s are CHINESE PROPERTY…
http://finance.yahoo.com/news/china-swaps-pandas-uranium-trade-025100939.html
Picture this Cartoon:
FATCA PANDAmonium….
(Picture a ring off Pandas holding up placards…”down with FATCA, we are not US Citizens”
definition…..an uproar over ownership regardless of birthplace…
Actually, they’re a nice little earner for China. It’s costing Edinburgh Zoo £600,000 a year to “rent” a pair.
@Benedict Arnold be me
So does this mean that China owns the genetic rights to panda bears, for instance if Monsanto wanted to use panda genes to produce a new species of plant, China could block it?
Hooray, had my consulate appointment, signed all the papers, was charged nothing, given no attitude – all the staff were friendly and helpful.
All told about six weeks from the first time I contacted them until we had our relinquishment meeting (except for going to collect the CLN, hopefully in a few months).
I was neither as relieved as I hoped nor as emotional as I feared. As I personally have not suffered at the hands of the US government (except for the little matter of my job being eliminated), my action was based on logic and prudence rather than raw emotion, and my outrage is on behalf of others who have suffered and the general stuffed-up-ness of the country I was born in.
How do I write my entry to the consulate report?