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
@Medea Fleecestealer,
I might consider renouncing and never filing anything (I’m born dual national), but as I think most people here agree, I would never enter the US again after that.
WhatAmI,
Really, this is all from crazyland. We should just accept that they denied our application — we could not and they cannot prove we are US citizens.
Hi Medea,
I just saw your “test post” and found your 3 attempts at posting your comment in the spam — no clue why. (Your “test post” seems to have appeared online right away, though.) I’ll take a look and see if I can figure out why — if I do, I’ll let you know off-line. Hopefully just gremlins and it’s a one-off.
…and OffRadar does want the ability to enter the US. He/she says: “… I just want to close all the loopholes in my life, so that when later, if there is a day when I need to travel to US for 3 days business trip, I won’t be flagged in the border guards computer.”
It’s a Catch 22.
@WhatAmI, I’m no expert at this, but I suspect, if FATCA gets enforced, that those who renounced without filing 8854 could be defined as being “US persons” and then get then kicked out of their local banks for not being US-tax compliant. That’s probably the main risk that one should take into consideration when renouncing without filing tax returns.
and now more US encroachment coming online: http://isaacbrocksociety.ca/2013/07/31/us-wants-its-police-in-canada-and-to-have-them-exempt-from-canadian-law/comment-page-1/#comment-631332
@WhatAmi, and SwissPinoy,
I tend to think the same as SwissPinoy. It might be better, at least in Canada, to stay completely under the radar, as opposed to only going 1/2 way out the door by renouncing(and popping up on the radar) without catching up on filing. If you want out, do it by the book, in my opinion. Otherwise, hunker-down for the storm, and depending on how the wind goes, be prepared to renounce/file at some point . With no crystal ball, it is hard to know what to do, and when to do it – everything is a gamble.
@SwissPinoy,
Geeze Louise, we really need to know all the details of FATCA compliance by FFIs. I assume my (Canadian) banks will ask my birthplace. I could renounce just to get a CLN to show my banks and not file with the IRS.
To close the loop that you suggest, either the Canadian banks would have to send all client’s records to the US for them to scrutinize, or the IRS would have to send a list of US persons on their “watch list” of non-tax-compliance for the foreign FFIs to search.
Have you seen any talk about these extra steps to close the loop?
There are people here who’ve insisted all along that the banks can’t or won’t even ask our birthplace, but I’ve never believed that for a minute, as much as I hope(d) it is true.
@WhiteKat,
Yes, doing all or nothing (not 1/2 way) makes sense while waiting to see what FATCA in Canada means.
I still have a chance (with unknown odds) at a back-dated CLN, but of course the fear in trying for that is that if it is denied, then I’m on the radar and have little choice but to follow-up with renunciation and filing. That’s OK if I make the decision up front to renounce and file if the relinquishment claim fails, but I’m not at that point yet.
@Pacifica777, I’ve no idea why the site didn’t want to play ball. The only thing I can think of is that I was flipping between the post and the RenunciationGuide section which may have screwed something up. But I have done that a couple of times before when I wanted to reference something. Or copying info from the Guide, but again I’ve done that before. Yes, the test post went through straightaway, but when I tried the actual post I wanted again (I copied the second before posting having lost the first one) it still didn’t appear. Interesting that it went in 3 times because when trying the 3rd attempt I got a message saying I’d already posted the comment and it was a duplicate post. So should have been my original post and a slightly altered 2nd post only in the spam. Totally weird.
@Calgary411, Everyone has to make their own decision about whether to file or not if they think they may ever go over to the States after giving up citizenship. I just wanted to let OffRadar know there is another option – which is going to be way, way less hassle, but may or may not have a risk for any future travel plans. Of course, if the FATCA extremists get their way and ban any renunciant/relinquisher from ever entering the US again the point is mute anyway.
@Medea Fleecestealer and OffRadar
I’m sorry, but I believe that’s incorrect. Being dual from birth (and satisfying the residency requirement) relieves one of the net worth test and the tax liability test. The tax compliance test still applies. So even if you’re dual from birth and satisfy the residency requirement, you’ll still be a covered expat if you can’t certify 5 years of tax compliance, and thus you will be subject to the exit tax.
See section 4 of http://hodgen.com/chapter-4-are-you-a-covered-expatriate/:
Nobody would be happier than me if the dual from birth get-out-of-jail-free card also applied to the tax compliance test.
The more research anyone can do on all options, which includes doing nothing, the better their decision will be. It sure isn’t something one can do in a hurry, on the spur of the moment, on a lark. %&#@ all this.
@Whatami
This has been discussed before and it was speculated that the USG didn’t think of this detail – that those who present a CLN may choose not to be tax compliant. I’ve heard a couple of accounts here where people have presented CLN’s at the bank, which the bank accepted – end of story. As far as I know, the banks will have no obligation to report these people as they are no longer US citizens. For the same reason, what obligation would the banks have to report to the IRS someone with a CLN who may turn up on a watch list? As far as I know, the bank’s obligation is to report USP’s, not former USP’s. I do see however, the watch list being sent to the border.
@tdott
My husband and I are both duals from birth, and you are correct. We certainly would not have entered OVDI if we could have gotten away with not filing!
Thanks for all the comments and advise. It is a comfort to hear so many voices facing similar situation.
I have 2 main objectives to do the renunciation:
1. Can enter US safely for temporary visits if there is a business need, without being stopped or detained for tax reason
I would not bother filing or renouncing if I don’t travel to US ever again. I would just burn the passport in the basement.
How stupid would I sound to the future employer if I say “Sorry I can’t do that trip because of tax reasons”
2. Stop the citizenship passing onto my unborn children in the future
> Getting CLN for local banks are not my main concern. Because they never know I am a US citizen.
> I have zero asset, limited cash and limited income because I am a student.
@calgary411 @WhiteKat @WhatAmI I am aware that ITIN is not for people who can have a SSN. But I will file the first and last tax after the renunciation (when I am not a resident any more), so I won’t be valid for a SSN. I tried apply for SSN 2 years ago, and yes I got a very difficult situation because it is so hard to prove my stay presenting overwhelming amount of documents. It got very complicated so I just backed off.
@Medea Fleecestealer The exemption thing is really tricky for me. I have a US passport. I guess I am A-country citizen by birth (by local definition that I have A-country citizen parents), but have never got a A-country passport. I have never claim to be a A-country citizen so I don’t havea paper proof. However I live (and have right to permanently reside) and file tax in a special city in A-country. I also have a B-country passport which I got when I was 5 years old. This is the main identify I use. I am not sure if this is qualify the exemption, because if the “by birth” thing is critical, I will have to bring up the issue of TRI-nationality plus identity problem in this city. Ah, this is driving me insane. (Now you guys can guess where I am)
@calgary411 What is Catch 22?
It is like travelling to the realm no man has gone before. I want to do it by the book, but no one has the exact book. I feel like if I ask the authority, they will be interested in me immediately.
I wonder if there is anyone who has no SSN but entered to the US with any trouble with the border guards because of tax reason?
Also, I wonder if anyone has travel to the US after renunciation can share their experience.
OffRadar.. You will get lots of conflicting advice. Firstly, You can choose to do nothing.
Secondly you can choose to renounce and not file any tax info. You are supposed to file a 8854 and 5 yrs of tax returns but you are not forced to. You will still get a CLN.
Unfortunately, the exemption for duals at birth only applies to the first 2 tests for the exit tax but does not apply to the requirement to file 5 yrs. of tax returns.
Thirdly you could file 5 yrs of returns with a letter saying you don’t have a SS number and you can’t get one.
I don’t have any idea which option is best for you. If it were me, I would pick option 1 or 2. At this time, there is no requirement to be up to date on taxes in order to visit the US.
http://en.wikipedia.org/wiki/Catch_22
@OffRadar
You do not meet the US residency requirements to be able to transmit US citizenship to your future children (you left US as a baby and never resided there again, right?). Of course, that could change in the future.
See http://travel.state.gov/law/citizenship/citizenship_5199.html
If the other parent of your hypothetical future children was a US citizen, then the residency requirement does not apply and the kids would be US citizens.
FWIW, there’s a $10K penalty for not filing the dreaded 8854. Whether it would be collectible or not is a different issue, but it would be there.
@bubblebustin, it may be true for now that the CLN is all that one needs. However, the US is the one who controls the definition of “US Person” and I’ll bet all my cards on it that, with FATCA, it would eventually ensure that Covered Expatriates fall under the definition of “US Person”.
Good point, swisspinoy.
@all, FYI;
note that the online appointment system bookings for renunciations/relinquishments at the Toronto consulate are full for November, but that there are plenty for December.
I note also that they added a substantial number of spots for December. Initially there were very few.
Better book now if you can.
@tdott, yes you’re right. I’ve looked the IRS instructions for filing 8854 form and it specifically says that the exemption doesn’t apply to point 3) non-compliancy, it only applies to points 1) and 2) . However, I suspect that is something that has been added later once they realised the implication because I don’t believe the folks at RenunciationGuide.com wouldn’t have pointed this out. Pacifica777, is there any way to change the info there to reflect this point?
By the way, can anyone answer this conundrum? You’re not allowed by US law to expatriate for tax purposes yet the 8854 instructions says “You must file Form 8854 to: Establish that you have expatriated for tax purposes;”. If you haven’t expatriated for tax purposes do you then need to file 8854?
Even with two US parents, it could be possible that nationality wouldn’t be passed on.
“A child born abroad to two U.S. citizen parents acquires U.S. citizenship at birth under section 301(c) of the Immigration and Nationality Act (INA) provided that one of the parents had a residence in the United States or one of its outlying possessions prior to the child’s birth. The child is considered to be born in wedlock if the child is the genetic issue of the married couple.”
It really depends on how they classify “residence”. I can certainly see a married couple (both accidental Americans) who were born but left the States a few months after their birth and never returned being able to argue that their children don’t qualify.
@OffRadar, no it doesn’t sound as it the exemption would apply to you unfortunately. When did you last renew your US passport? The form has a spot for a SSN number so I’m wondering if the embassy/consulate found that you had one when you last renewed. Doing nothing a KCal suggests is a possibility, but again it depends if you ever want/have to travel to the US. If your B-country passport shows your American birthplace you’re likely to be queried about why you’re not using your American one as under US law all US citizens must use their American passports to enter/leave the US. The other potential problem is the future possibility that renewing American passports will be linked to being tax compliant.
It does look as if KCal’s option 3 could be a possibility too because the IRS 8854 instructions say this:
“Identifying number. Generally, this number is your U.S. social security number. An incorrect or missing
identifying number may result in a continued obligation to file U.S. tax returns as a citizen or resident of the
United States for persons expatriating after June 3, 2004, and before June 17, 2008, and/or a penalty of $10,000. If you were never issued a social security number, please attach a statement explaining the reason.”
So you could file the necessary back year along with an explanatory letter for why you don’t have a SSN.
@bubblebustin, yes I agree. That’s exactly the attitude that the Swiss banks have taken imho. If you’re a US citizen then you have to either sign the W-9 or present them with a CLN to be able to keep your account. They’re happy to have either because one allows them to pass on info and the other exempts them from the need to do so.
Looking back over the various 8854 instructions in previous years it seems the non-compliance/exemption rule was always there. In which case it was a major mistake on RenunciationGuide’s part not to point that out. I know they were mostly concerned with people who would be covered expats, but still inaccurate info doesn’t help anyone.
I’ve been helping a friend help her parents with a past relinquishment. She sent an email just now thanking me and I just sent her this reply:
I’ve spent more time on this over the last two years than I did researching choosing a creer, finding a wife, buying a house and deciding to have children, __combined__, and I still don’t know what I should do about my US citizenship.