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
@ Just Me
I think you just daisy cutter bombed Brock with that comment. Now I’ve lost track of where I was in my daily catch-up. Oh well, back to modifying the 123 questions. 🙂
@Em…
I did. 🙁 Not a good practice, but didn’t have time for a post by itself, and wanted to be sure that it was seen by some regularly read threads…
It was seen and seen and seen and thank you! 🙂 You can practice anyway you want. You are a Brock hero! I’m going cross-eyed with the 123 question challenge but the process is actually clarifying a lot of things for me and of course it will put another arrow in my anti-FATCA quiver.
I was born in the US in 1952 of an American father and a Canadian mother. My parents permanetly seperated and my mother moved back to Canada when I was about 4 months old. I have lived in Canada ever since and was rasied as a Canadian. When I turned 21 in 1973 I immediately applied for Canadian citizenship and took the oath with every intent of relinquishing my US citizenship. I had been told that the act of becoming a Canadian would irrevocably end my US citizenship. I did so willing. Since 1973 I have voted in virtually all Canadian federal, provincial and municipal elections. I have worked in Canda raised a family, paid taxes, etc. I have no contact with the US. I have never had a US passpo5t, SSN, owned any property, earned any income, etc. Should I be applying for a back-dated CLN. If I don’t have one will my FI report me as a US person? Will I have any US tax liabilities if I proceed with obtaining a CLN? I have always been very reluctant to voluntarily make my self known to US authorities.
Thanks to everyone who contributes to this site. Your thoughts and expertise are a real assistance to those of us struggling with thie grossly unfair fishing expedition.
@Stoneman,
I wish I were in your position rather than mine. Both my parents are Canadian so I am a Canadian since birth and didn’t have to naturalize as a Canadian like you did. That makes it difficult or impossible for me to get a back-dated CLN, but I’m working on it.
I believe the answers to your 3 questions are: yes, yes, no, although you could wait until we find out what the Canadian agreement to FATCA looks like. I wouldn’t enter the US ever again without a CLN to negate my US birthplace (unless I were caught up with my US filing obligations).
You just have to make an appointment at a consulate to notify them of your relinquishment in 1973 and you should get a back-dated CLN. There is no charge. Be sure you understand you are not renouncing, and know the difference between renouncing and having relinquished years ago. If they try to charge you $450, you’re being processed the wrong way!
As of April 2009, you can apply for a citizenship certificate showing that you’ve been a Canadian citizen since birth. I don’t see that you need it for anything. It doesn’t affect your US (non-)citizenship case at all. It does really help people who have to renounce and catch up with US filings: it removes them from potentially being a “covered expat” and paying exit tax.
@Stoneman, Whatami
I believe Stoneman may in fact also be a Canadian at birth, as his mother was a Canadian. I also naturalized as a Canadian in 1996, but Canada’s Citizenship Act changed after that making me a citizen at birth (my mother was born in Canada). Good news is that that if you are a Canadian citizen at birth, you won’t be subject to the US exit tax. See how the Act has changed:
http://www.cic.gc.ca/english/citizenship/rules_2009.asp
@IRSCompliantForever,
re http://isaacbrocksociety.ca/renunciation/comment-page-62/#comment-694702
I suspect that there will be people who are not literate, perhaps older, not internet or form savvy, and who will not /cannot afford to pay the fee.
I have helped some people with the citizenship test, which some also found daunting.
In case people don’t know what bubblebustin and I are referring to, back in the day if you were born outside of Canada you were only a Canadian born abroad if your _father_ (or both) was Canadian. Both mine were Canadian so I’m Canadian since birth. Stoneman and Bubblebustin (and Benedict Arnold be me) only had Canadian mothers, not fathers. That’s why they had to naturalize. Lucky for Stoneman, he didn’t naturalize until he was over 18 years old which counts as a relinquishing act. Benedict Arnold, unluckily, was naturalized as a child which the US DoS would not accept (even though they should have according to the laws at the time).
In April 2009, Canadian laws changed retroactively such that having only a Canadian mother was deemed “good enough” to have acquired Canadian citizenship since birth. If you are forced to renounce, or relinquished in some way after Feb 1995 but didn’t notify the US, then being dual since birth at least gets you out of the first two of the three tests for being a “covered expat” on Form 8854. Among other things, not being a covered expat protects you from the Reid-Schumer amendment when it passes. That law basically says “poor people who renounce are free to re-enter the US to visit friends and family, but rich people who renounce are forever barred from re-entering the US”. In this case, the definition of rich (from Form 8854) is a net worth over $2 million (or a yearly tax bill over $150,000), even if you earned all that money in Canada and paid (higher) taxes here.
Thanks very much for your feedback WhatAmI and bubblebustin. It’s much appreciated. It’s an interesting twist that I may now have been a Canadian since birth retroactively. This whole situation is like Alice through the looking glass in its complexity. It really borders on the absurb. Too bad so much is at stake for everyone. What are the 3 tests for being a “covered expat”?
@Stoneman, it’s shown here:
http://web.archive.org/web/20120719031309/http://renunciationguide.com/Exit-Tax-on-Renunciants.html
The link is also at the bottom of the page if you want to investigate the info there further.
A couple of questions. Is your birthplace shown on your Canadian passport? Do you ever plan to go to the US in future? If the answer to both is “no” then I wouldn’t do anything. Your bank will have no way of knowing your American connections and neither will the US for tax purposes. Don’t stir up things if you don’t need to.
I mentioned the first two. The third is that you must certify that you have complied with your tax filing obligations for the previous 5 years. See page 2, “Taxation under Section 877”:
http://www.irs.gov/pub/irs-pdf/i8854.pdf
@Stoneman
It’s also very interesting that Canada made those changes the year after the US exit tax was introduced. Coincidence?
Stoneman
See postings on sidebar “Did you relinquish before Feb. 6, 1995” (in particular a post from Lagoon on Feb. 15, 2013 regarding legal opinions he/she had obtained), and “For those who expatriated before June 3, 2004” also on sidebar. As well, a lawyer, Michael J. Miller, has quoted unofficial sources in the IRS as confirming that people who expatriated before Feb. 1995 would be unlikely to have tax obligations. Theoretically. I’m not sure where Michael Miller’s postings are exactly – can anyone find them for Stoneman?
Michael J. Miller article:
http://isaacbrocksociety.ca/2013/03/05/michael-miller-paper-on-the-exit-tax-applies-propsectively/
http://www.robertsandholland.com/siteFiles/News/03-05-13_Expats%20Live%20in%20Fear_MJM.pdf
And three other lawyers on pre-1995 relinquishments:
http://isaacbrocksociety.ca/2013/02/16/pre-1995-relinquishers-and-the-irs-three-recent-legal-opinions/
MedeaFleeceStealer my birth place is shown on my passport and I will not be going to the US anytime soon and certainly not if I feel there is any risk in doing so. What I have never been clear on is what my FI’s will ask me.
Stone man, You are no longer American. You relinquished when you turned 21. Above all, don’t do anything to lead to the idea that you could still be American-such as applying for a SSN. You are not American so you are not entitled to one. Since you have relinquished, you could get a CLN if you wish to. After that, there is NO obligation to fill in any more forms. If ,OTOH , you don’ t get a CLN you will probably be just fine.
Thank you KalC. If I don’t get a CLN won’t my FI’s report me as a US person? I would rather avoid that hassle and where that might lead.
At this point in time you can only get guesses to that question, and they will range from “absolutely not” to “absolutely yes”. We’re waiting for the feds to announce what their FATCA plan or agreement is. If the text of that doesn’t answer the question, who knows when and how the answer will come down and if all banks will follow the same procedure.
Here are some quotes.
From the FATCA regs: http://maplesandbox.ca/wp-content/uploads/2013/01/FATCA-Regulations.pdf
From (a review of) the IGA with France: http://thefranco-americanflophouse.blogspot.ca/2013/11/a-review-of-franceus-fatca-iga.html
Who defines a good explanation? Will the same explanation be accepted by every one of your FFI’s? Do we just have to explain once, to the CRA, and not to each bank?
My good explanation is that a US consul told me face-to-face in the mid-70’s that I was no longer a USC. Most people think that story won’t get me a back-dated CLN from the DoS. Will the CRA and/or every one of my FFI’s accept it?
Of all the citizenship stories that I’ve read here, yours is the one that I most wish I had for myself as I think it is the most cut-and-dry history that leads to a sure-fire back-dated CLN. Having said that, I would still probably wait for the Canadian FATCA announcement before taking any action.
Thanks again WhatAmI. Your information has been much appreciated. I wish you nothing but luck in dealing with your situation.
@Stoneman, they have no reason that I can see to think you’re anything but Canadian so why would they bother to even ask? Unless you’ve shouted it from the rooftops that you were born in the States how can they know? You’re not going to tell them and the IRS/Treasury don’t know you exist because you’re not in their SSN system. Just ignore the accidental American birth, never go to the States again to avoid any border hassles about not having a US passport and enjoy your Canadian life.
I just found out that I am probably an accidental US citizen. I was born in the US to two Canadian parents (1962) who were at university. I stayed a few months as a newborn and then spent the next 50 years in Canada. I’ve never had a US passport, and always used my Canadian passport to travel to/from the US. I’ve always done my Canadian taxes, and it’s never occurred to me that I might have to file US taxes. I live close to Toronto. I’d like to renounce my US citizenship. Should I renounce first, and then file my 5 years of taxes? Does the Toronto US embassy ask for proof of the past 5 years of taxes? I’d like to get this done as soon as possible. Many thanks for any advice.
@MedeaFleecestealer,
Depending on the implementation of FATCA in Canada, one probably becomes a criminal in our country by lying to the CRA about not having a US birthplace. It’s bad enough worrying about one country catching up to you; now there will be two to lose sleep over. With the billions of dollars in cost of FATCA, I still can’t believe the Canadian government and/or banks will be that lax in their due diligence to root out US indicia. What about all that “FATCA responsible person” or whatever it’s called? Who’s going to put their neck out to protect a client or taxpayer?
@mykitty, I don’t think that you should file anything. Renounce if you feel it is necessary. But you are a Canadian and you owe nothing to the United States. Filing may end up being an expensive and certainly a time consuming activity.
Now the only consideration is whether you have any US-based assets. You can certainly sell them and realize any gains or losses before renouncing (or even after). But I wouldn’t have any US-based assets if you decide that you don’t want to take the risk of filing–I strongly discourage you from filing anything to the IRS. You owe them no allegiance.
Collaborateur: Some years ago I attended a wedding in a European country that had been occupied by the Nazis during World War II. The bride’s side of the family was not in attendance because they had not been invited. The groom’s family objected to having the bride’s family attend since her grandfather, who was the mayor of a town, had been a collaborateur with the Nazis during World War II. More than 50 years later this family was still being shunned for what the grandfather had done.
As a thought, perhaps the Canadian banks and their employees should be put on notice that they may be shunned for acting as traitors to their American-Canadian neighbors. They may get the idea that customer background checks for US indicia should be cursory. Perhaps the sole question should be whether the customer files a US tax return. If not, the customer is not a USP.
Just a thought.