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,
For shunrata, I believe it should be reporting the relinquishment of taking on new citizenship, so the date of that. There are CLN’s back-dated to dates of decades ago.
Not sure the best place to post this, it is from an anonymous user on Reddit who created a throwaway account:
“Throwaway because NDAs and stuff, but I know for a fact that one of the largest banks in the UK have decided that separating people who fall under FATCA from those who don’t at the back-end systems is “too costly” so they’re just shipping all the logs from everywhere into a central database as part of their FATCA compliance project. That’s regardless of nationalities or sizes of investments, it’s everything.
Apparently the Americans will be filtered out and reported to the IRS on at the back-end, but I have strong suspicions that this central DB gives GCHQ and by extension the NSA a central database to query containing full transaction histories of everyone’s accounts.
I’m not willing to risk doing a Snowden on this but let’s just say that as of June this year if you live in the UK then assume that Big Brother has direct access to your bank statements.”
Correction – my above post should have read:
“Form 4079 is used for relinquishments, not renunciations.”
@Pukekonz, that is indeed disturbing though not surprising. The UK have long had a rather blase attitude about surveillance; we have cameras virtually everywhere –even on busses! You are bbeing filmed as soon as you go onto any main street and even on some residential streets.
In some ways, I could see that it might actually be better for them to have too much information so that they’ll have quite a job just to determine who they’re really looking for. I still suspect that they’ll (at least initially ) really only have the manpower and resources to go after whales when they start discovering all the non-filers and undeclared accounts here. I could see the IRS perhaps sending out red letters warning Expats that they should be filing and with a copy of Publication 54 for filing from abroad.
They might, at worst, try it on by assessing non-filing penalties since it would be a clear-cut way to determine who to fine, plus, it would be straightforward and thus not a lot of work for the IRS. But I believe it will more likely be affectively a threat to get people to file and report FBAR, etc.
@MedeaFleecestealer, the date put on the CLN is the date of the relinquishing act, not the date of the Consulate visit to inform them that you are no longer US. However, in an accompanying letter, I was told that my date of relinquishment was the date of my appointment (for tax purposes). I indulged them by filing to the April 7 date (appointment date), not the Feb 28 Date (relinquishing act). This creates a bizarre situation in the law suggesting two kinds of relinquishment: the real date and the tax expatriation (the term the IRS uses). This is completely effed up area of US law and hardly see how it could stand up to any kind of court challenge.
As for being turned back, to be sure. The US can insist on a US passport. Yet this too is a contradiction. If they deem you to be citizen, they have absolutely no right to refuse you entry, because that is an unalienable right of citizen is to return to his country.
I am not sure anyone can predict what is the best thing to do under such circumstances. But I would am greatly reassured by being able to show my CLN to my bank (i.e., my institutionalized financial stool pigeon).
@Shunrata, in the case of a prior relinquishment, the date on the CLN is always the date of the relinquishing act. Thus, my CLN has 28 Feb not 7 Apr. This is the case for people who have relinquished 40 years ago and haven’t needed a CLN until recently. They have gone in and explained to the US consular official that they are no longer a US citizen, and if they meet State Department criteria, they will receive the CLN dated to the year they committed the relinquishing act.
In your case you aren’t a citizen. But you don’t have proof as far as the dumb asses who work for the US government are concerned. It’s like scarecrow: brains but no diploma.
@medeafleecstealer/others
RE: still waiitng for CLN and what to do if it doesn’t arrive before 2014 filing dealines for final US tax returns, Fbars etc?
I can’t be the only person who renounced in 2013 and still has not yet received a CLN (going on 6 months now) I am wondering what to do if the CLN doesn’t arrive before the filing deadlines in June 2104? I have my receipt and as far as I am concerned, I am no longer a US person, but is the receipt enough to justify filing returns only covering 2013 up to the date shown on the renunciation receipt? Thanks for all advice past and present!
@allou
Yes, I would file as if I had it, using the renunciation date of your consular appointment. Just think about the mess it would create to file as if you hadn’t renounced, and later amend everything to reflect that you had! Just my opinion, of course. In any case, you’ve still got several months before it becomes an issue. Don’t panic (yet). 😉
@Allou, I believe you can still file for an extension up to 15 October (form 4868). You can even, with special permission, request an extension to 15 December.
@MedeaFleeceStealer
I renewed my US passport without having yet received a SSN. I simply put a series of zero’s in place of a SSN on the application (as I read on a blog I should do). The potential for penalty is if you have an existing SSN and you don’t put it on the application. I’ve been through the US border several times since, without incident – and after 2 years in OVDI, I WISH I would hear from the IRS!
@allou, not a problem for me thankfully, but I can’t see why you can’t file as required. It’s just a question of how you can let the IRS know that you renounced. With FBAR’s needing to be filed online this year there’s probably no way to attach a note saying you’ve renounced. If you have to file a 1040 form, assuming that’s not online as well, then attach a letter with a photocopy of your receipt explaining you renounced on such and such date and are still waiting for your CLN when you send it all to the IRS.
That’s one advantage of renunciation over relinquishment. Although the State Department say they have to approve it, they can’t really refuse when you’ve stood in front of a US official and declared you’re giving up your citizenship as outlined in the Immigration & Nationality Act.
http://travel.state.gov/law/citizenship/citizenship_776.html
Providing you’re not trying to do stupid things as in the case outlined, they can’t refuse you and it’s a done deal as of your US embassy appointment date.
FWIW my mother’s Canadian citizenship ceremony was scheduled too late in December for her to have a consular appointment in 2013. She wrote a letter to the consul (the actual consul) saying that she intended the act to be expatriating, and sent it by registered mail. Arguably this counts as “notifying the Department of State”. She plans to use this date on her 8854, avoiding an entire additional year of tax filing. The actual visit to the consulate can happen at some point in the future.
@allou, medea
Please see again http://isaacbrocksociety.ca/2011/12/12/relinquish-dont-renounce-if-you-can/ where I outline advantages to relinquishing. Renouncing by all means will speed things up. However, relinquishing could avoid future problems. For one, the exile provisions of the Reed Amendment (1996) and the Ex Patriot Act (pending) appear at this point to be limited to those who “renounce”, not to those who “relinquish”.
Thanks for this, Pukekonz,
Turning over everyone’s financial information is related to all the rest of governments are allowing: Will Obama put new restrictions on the NSA? What will Canada do?
Here’s a crazy thought (I’m good at these). What if FATCA is a huge coverup? What if the NSA has been stealing all of this information all along? (It taps undersea cables, intercepts satellite transmissions, has back-doors into electronic data devices, has encryption breaking tools, has algorithms to correlate everything and has a bottomless datamine in Utah.) With FATCA/DATCA/GATCA the USG can say we didn’t steal anything, financial institutions all over the world are “voluntarily” giving us everything. Just a crazy thought … don’t anyone panic … much.
Em, probably the NSA can’t access the banking data directly, only electronic communications about such data. But considering how many do electronic banking these days, NSA probably gets a lot of that. Still, I doubt that NSA is willing to share such information with Treasury or the IRS.
I think FATCA is as much about asserting US control over international banking information as it is about getting the actual information. If the information were obtained secretly, they wouldn’t gain the cooperation from other countries and banks that will give them control.
@ AnonAnon
Good point. It is all about control and forcing obeisance to the USA. I don’t pretend to know how the banks’ computers work but I imagine at some point everything is electronically transferred somewhere (therefore vulnerable to intercept) and even though banks use encryption technology the NSA doesn’t consider that an obstacle, simply a challenge. If the IRS can share with the NSA (and all manner of 3 letter agencies) then who’s to say the NSA doesn’t share with the IRS? Some police departments in the USA were getting “hints” from the NSA about suspects, even though the NSA was not legally allowed to do this. These police departments then had to create a cover for how they became clued into the suspects’ misdeeds, in order to protect their source, the NSA.
@Petros, A broken man on a Halifax pier, yes it’s a strange situation re the tax side. That’s why broken man, I’m not convinced that just sending a registered letter to the consul is the same as notifying the State Department with the correct paperwork as far as the IRS is concerned. As hodgen.com points out:
“The effective date of this act for tax purposes is the date on which the individual submits documentation to the United States Department of State. 26 U.S.C. Section 877A(g)(4). In other words, the Internal Revenue Code is unconcerned with the effective date on which U.S. citizenship was lost by such a person, in the eyes of the Department of State. For tax purposes, the Internal Revenue Code looks for an objective date, easy to determine: when the individual submitted the paperwork to the Department of State.”
http://hodgen.com/relinquishing-u-s-citizenship-and-expatriation/
For me the documentation/paperwork they’ll be looking for is the DS-4079 and supporting evidence which has been processed via a US embassy through a personal interview with the applicant and sent to the State Department.
http://www.state.gov/documents/organization/97025.pdf
There is also this from the IRS website:
“A citizen will be treated as relinquishing his or her U.S. citizenship on the earliest of four possible dates:
(2) the date the individual furnishes to the U.S. Department of State a signed statement of voluntary relinquishment of U.S. nationality confirming the performance of an act of expatriation specified in paragraph (1), (2), (3), or (4) of section 349(a) of the Immigration and Nationality Act (8 U.S.C. 1481(a)(1)-(4)), provided the voluntary relinquishment is subsequently approved by the issuance to the individual of a certificate of loss of nationality by the U.S. Department of State;”
http://www.irs.gov/Individuals/International-Taxpayers/Expatriation-Tax
So if your mother doesn’t get the proper paperwork done and doesn’t receive a CLN from the State Department she will still be considered a US citizen for tax purposes.
Relinquishments can be refused as pointed out here. Note it also mentions the DS-4079 and the personal interview at the embassy for relinquishers.
http://www.lewrockwell.com/2013/12/mark-nestmann/how-to-give-up-your-us-cilizenship/
I’d get that appointment made asap if I were her.
http://www.procopio.com/userfiles/file/assets/files1/docs-1738595-v2-accidental-americans-and-the-push-to-renounce-us-citizenship-2448.pdf
‘“Accidental Americans” – Rush
to Renounce U.S. Citizenship to
Avoid the Ugly U.S. Tax Web
By: Patrick W. Martin
Recent information that might be of use.
Pingback: Canadian Protections from IRS | Maple Sandbox
@pukekonz
That sounds like part of the auto exchange GATCA (TIEA) test that is also being done in South Africa and other countries. Do you have a link to that comment?
A shameless plug for a expatriation Seminar that Phil Hodgens is again advertising via an email distribution. I think some readers may have participated back in November, and they can provide a review if they think it was worth the fee.
Seminar is for those who are NOT Covered Expats, or don’t think they are. Below are the details.
This is NOT a paid recommendation or endorsement, but there might be some information that those would like to have from an attorney who specializes in this are, and without experiencing a Large Fee, or don’t want to read through all the comments here to learn a lot of the same thing…
Important Note to those readers here who have not yet moved to start the process to obtain a Canadian or other non-US citizenship in order to renounce/relinquish US citizenship (without becoming stateless first). The wait in Canada for processing the citizenship applications of qualified Permanent Residents is exceeding 2 years now – even for long time PRs in Canada, who have ‘routine’ applications http://www.cbc.ca/news/politics/citizenship-backlog-stark-contrast-to-fast-tracked-olympic-skater-1.2470634 .
thanks to @northernstar for reminder on another IBS thread that obtaining the Canadian grant of citizenship is about to become more complex. And, the wait for processing the citizenship of Canadian PRs is growing :
ex.
http://rabble.ca/news/2014/01/harper-government-plans-to-make-it-harder-to-become-canadian-citizen
http://news.nationalpost.com/2013/12/27/as-canadian-citizenship-rules-face-an-overhaul-by-the-harper-government-in-2014-heres-what-to-expect/
See graph of how applications have increased http://www.cbc.ca/news/politics/citizenship-backlog-stark-contrast-to-fast-tracked-olympic-skater-1.2470634 (unless you have a way to be fast tracked due to “..thanks to a provision in the law that allows the government to fast-track citizenship claims in “exceptional cases, in order to reward services of an exceptional value to Canada.”..” Like being an Olympic skater – see http://www.cbc.ca/news/politics/citizenship-backlog-stark-contrast-to-fast-tracked-olympic-skater-1.2470634).
The more difficult citizenship test also has a higher failure rate for those in the family class who have lower literacy levels; “….The failure rates have increased significantly since Citizenship and Immigration Canada introduced new and harder tests last year on March 28 and July 23.
According to statistics obtained through the Access to Information Act and released to CBC News Network’s Power & Politics, the hardest hit are individuals in the “family class” who, according to the department’s analysis, typically have lower levels of education…..” …. “family class members — mothers, fathers, children and grandparents of recent immigrants — are not required to have as much education. They’re mainly coming to Canada to join families, not to help stimulate the economy”….
See ‘More people failing revamped citizenship tests
Minister says department shortening waiting time for rewrites’ By David McKie , CBC News Posted: Jun 14, 2013h ttp://www.cbc.ca/news/politics/more-people-failing-revamped-citizenship-tests-1.1413674
(Side note, the federal government has also cut ESL funding and thus services – which is counter productive – making it harder for immigrants and new Canadians to progress to proficiency and self sufficiency http://globalnews.ca/news/1022817/minister-says-b-c-to-lose-esl-funding/ http://www.vicnews.com/opinion/235637581.html )
This is about a year old, but I see that Osgood just tweeted it. I have not reviewed for accuracy of information, but it might be helpful for some asking the “How to?” questions here. It is a PDF download.
“Accidental Americans” – Rush to Renounce U.S. Citizenship to Avoid the Ugly U.S. Tax Web
Badger posted a link to: “Accidental Americans” – Rush to Renounce U.S. Citizenship to Avoid the Ugly U.S. Tax Web” by: Patrick W. Martin
One of his more curious comments on renunciation is:
“If the value of the assets is less than about US$3 to US$5M+/-, then particular thought should be given to the lack of future access to the U.S. without a U.S. passport? Will it really be worth renouncing U.S. citizenship (cost-benefit analysis)?”
This appears to fly in the face of a common view on IBS that it is more worthwhile (or at least more cost-effective) to renounce if the USC isn’t worth a lot and won’t be a covered expat so as to save money and reduce tax filing risk. I’ve pondered this statement today and think that it could be directed at dual citizens of lesser developed countries, such as Mexicans, who might stand to lose more if they could not work or settle in the US than USCs in developed countries such as Canada, W. Europe, Australia, etc. who don’t plan to live or work in the US again. Otherwise, I fail to understand his logic.
http://www.procopio.com/userfiles/file/assets/files1/docs-1738595-v2-accidental-americans-and-the-push-to-renounce-us-citizenship-2448.pdf