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 am still confused re: 877(A) statute replacing 7701(n). If one relinquished before 2004, applies for CLN at Consul, does one need to inform the IRS of such CLN? So basically, comply and out yourself to the IRS.
I have a question too. I have been approached by an older retired US expat going through that OMG reaction on learning about FATCA. He is very upset but has formulated a sensible plan to take out citizenship here in Australia asap and then try to relinquish his toxic US citizenship immediately after. He has asked for my advice with form DS-4079, but I’m not experienced with it as I wasn’t required to fill it in when renouncing.
In particular, he wants to know how on earth he should answer question 13 (e) “Do you file U.S. income or other tax returns”? He’s lived here since age two and never heard about the ongoing tax filing requirements for US expats. He’s afraid a “no” answer could land him in a lot of trouble. This looks like a confusing form to me and this question possibly a trap. Can anyone offer an opinion on the best way to respond to that trickily question for someone who will be trying to relinquish?
Gosh Rose it would be so nice to be able to give your friend a definitive answer as to what to do about that tricky question, except definitely do not lie. Consulate staff have their own experience or lack of experience “guiding” them, depending where in the world they are. My husband who relinquished in February (soonest appointment he could get after becoming a Canadian last September) filled out YES on that question because yes, he has been filing US taxes; because yes, he had to. The vice council was so used to having “accidental” American relinquishments that he got confused by my husband’s YES answer but it only took a minute for him to get it straight. I believe IF my husband had been an “accidental” American (which he was not), a NO answer would have been just fine with the vice council, as long as he’d not done anything else to acknowledge his American citizenship like voting, getting a passport (unless it was under duress), etc. Therefore, he would still have been granted a relinquishment in that case. There now, you are as confused as we are about this whole process. Right?
HI,
I seem to have lost the thread from an earlier question.
Has anyone asked for/been able to get a “temporary CLN” document either at their renunciation meeting at a consulate or in the mail afterwards (before their State Dept CLN is issued) ?
I think Em said her husband was able to get one (but then lost the thread) but it would be good to get the proper “diplomatic-wording” that the consulate might accept. I’m hoping to write up such a document and take to my renunciation apt in April – – a doc that hopefully they will be willing to notarize for me (in case I need to travel to the US (step-mom is almost 94) or show it to my FFI).
Thanks for all the good (and not-so-pleasant) info.
@ LM
My husband simply explained that he had a dear uncle in the USA in failing health (actually his uncle had passed away the day before but we didn’t know that) who he might want to visit before his CLN arrived and then he asked if they could provide him with something to present at the border because he would then be travelling on a Canadian passport with a US birthplace. The consulate staff (Calgary) e-mailed him an interim letter right away and later sent him a hard copy. Here is the wording of that interim letter that they kindly prepared and sent to him:
This is to confirm that you, [name], born [date], in [place], personally appeared at the U.S. Consulate General today. You signed a Statement of Voluntary Relinquishment before a Consular Officer of the United States to relinquish your U.S. citizenship under Section 349(a)(1) of the Immigration and Nationality Act.
The loss of nationality documents will be sent to the Department of State in Washington, DC for final approval and you will receive a Certificate of Loss of Nationality if your relinquishment is approved. The Certificate of Loss of Nationality is the sole legal document establishing your loss of nationality. Pending approval of the certificate, you remain a U.S. citizen.
Your valid U.S. passport number [number], issued on [date], at the National Passport Center has been retained by the U.S. Consulate General.
We will not issue a replacement passport.
@ Rose,
I knew that a lot of people have been answering No to question 13(e), but I got a kick out of Em’s reply that the vice consul was so used to seeing that question answered “No” that he got confused by a “Yes.” 🙂 To some extent, that situation says it all — it’s not a problem.
Here’s some more information regarding this that your friend may find of use.
(1)
Dept of State deals only with the citizenship itself; and citizenship, or loss of it, is not dependent on one’s tax status. DoS doesn’t concern itself with IRS matters, basically doesn’t care, not their department. They don’t harass, or even ask, you about it at the consulate. Dept of State’s only involvement/connection with tax is the following:
(a) At the consulate the person signs DS-4081, the Statement of Understanding of Consequences. One of the 12 items in this Statement is Item 10, which refers to tax consequences.
http://www.state.gov/documents/organization/81607.pdf
(b) Dept of State is to provide IRS with a copy of each CLN they issue, as per DoS Interagency Coordination and Reporting Requirements. I have no clue if IRS follows up on this or if they just gather dust.
http://www.state.gov/documents/organization/113465.pdf
(2)
I don’t know if he is planning to file taxes or not. If he is, here’s some info about the IRS aspect of expatriation.
A person can renounce or relinquish their citizenship although they have not filed US taxes. Quite a few Brockers have done that. One must file the required tax forms by June 15th of the year following the renunciation (or, in this case, the day he notifies the consulate of his relinquishing act).
He will be relinquishing after 2004, so it is clear that IRS will consider his loss of citizenship, for IRS purposes, to be the day he signs the CLN application at the consulate.
You have until June 15th of the year following your expatriation to certify that you have been tax compliant for the five years prior to your expatriation.
This certification is a yes/no question on the exit tax form (8854), which reads: “ Do you certify under penalties of perjury that you have complied with all of your tax obligations for the 5 preceding tax years?”
So, to wrap things up with IRS, if you expatriated on, say, 23 January 2014, you’d have to have filed the following with IRS by June 15th, 2015 (when I write 1040s, I mean any other forms required with it as well):
(1) 1040s for 2009-2013,
(2) a partial year 1040 for all income to 1 Jan – 22 Jan 2014;
(3) for your US source income, a partial year 1040-NR for 23 Jan – 31 Dec 2014, declaring only your US source income.
(4) 8854.
If a person doesn’t file, it causes “covered expatriate” status with IRS http://www.irs.gov/pub/irs-pdf/i8854.pdf. However, the citizenship itself remains terminated as of expatriation day and the CLN remains valid.
@ LM
I should add that it was simply a case of he asked nicely and he received the proof he needed. (He asked because I prodded him to do it.) It can be such a worry to have a elderly parent in the USA, knowing you may need to go there on very short notice and, of course, when you relinquish you do not get a receipt for $450 to show you are expecting a CLN. I hope all goes well for you.
Thank you so much @Em and @Pacifica777 for your comments and information. At the moment this chap is saying very unpleasant things (unprintable here) about the US government and IRS and said he has no intention of sending any forms to the IRS. That’s not to say he couldn’t change his mind once he calms down. He’s feeling quite raw at the moment.
@ Rose
We EMpathize with him and have probably used the same words he’s using. Wish him well!
@ Rose,
I can sure relate to “saying very unpleasant things (unprintable here).” He’s in an outrageous situation It’s so unbelievable and ugly. One positive thing he’s not alone – he has you, which is great, and the rest of us muddling through this together and getting through it are here for him too. I hope I didn’t spook him by posting too much information, eg the second part of my comment. It’s worth knowing about the IRS aspect of it, but he has plenty of time to decide what to do, or not do, with IRS, and either way he would remain a non-citizen. Sending him my best wishes too!
Rose. Your friend doesn’t really need to do anything. You read it right- he doesn’t need to do anything. I gather he’s been in Australia from age 2 and is now retired and has no intention of sending anything to the IRS. Well and good. I would think obtaining Australian citizenship would be a good idea in any case. After that he could do nothing- the US doesn’t know he exists OR he could get a CLN on the basis of his relinquishment when he obtained citizenship in OZ.
With CLN in hand there is no real need to contact the IRS. They might send him a nasty letter but so what?
@pacifica777 & @Em
Thank you Re: answering 13(e) and rest of your post for ‘Rose’. My husband is going for relinquishment, and is filling out 4079 today. It’s a tedious process to answer carefully. He will write up report on what happens when he goes to Calgary- they are booking into April, he was informed.
@ always something
Make sure your husband asks (politely of course) for an interim letter. We have no idea how long a CLN will take to arrive (they wouldn’t even guess when my husband asked) so it’s a good thing to have, just in case it’s needed. I think it’s actually better than the renunciation fee receipt. The Calgary consulate obviously knows how to make one now. Good luck! 🙂
Interesting tidbit – more than one US media outlet have been asking Treasury about the continuing rise in expatriations, and of course, Treasury is prevaricating (fancy word for “speak or act in an evasive way.” “he seemed to prevaricate when journalists asked pointed questions” synonyms: be evasive, beat around the bush, hedge, fence, shilly-shally, dodge (the issue), sidestep (the issue), equivocate, waffle; (source, Google).
Instead of saying that the US doesn’t collect stats on the reasons for expatriation, Treasury is now saying (of course with no robust basis);
“.. on a conference call with reporters. “While people have drawn a relationship between the two, I don’t think you can point to this as the causal reason for expatriation.”””
http://www.politico.com/morningtax/0214/morningtax13083.html
“TREASURY: FATCA ISN’T CAUSING EXPATRIATION. Opponents of the anti-tax evasion law known as FATCA have seized on 2013’s record-high number of U.S. expatriates to claim in recent weeks that the new law is driving Americans to ditch their citizenship. But a senior Treasury official on Thursday fought back against that narrative, saying Americans give up their citizenship for a whole host of reason: “There are a number of reasons why US citizens may seek to renounce their citizenship and expatriate,” the official said on a conference call with reporters. “While people have drawn a relationship between the two, I don’t think you can point to this as the causal reason for expatriation.””
Surprised the Treasury official isn’t using the ‘myth’ propaganda promulgated by Robert Stack (see “Myth No. 3: Some claim that Americans living abroad will give up their U.S. citizenship because of liabilities and burdens created by FATCA.” http://www.treasury.gov/connect/blog/pages/myth-vs-fatca.aspx. , and http://americansabroad.org/files/2413/8231/0234/Stack_letter_no_testimonials.pdf )
Curious that according to NPR: “…Officials from the Treasury Department, the State Department, the IRS and Congress spoke on background for this story. None would talk on tape.
They all generally agree on the facts of the situation. Even so, there is very little pressure to change it. As one Senate staffer pointed out, nobody in Congress represents overseas Americans. And government officials think this law is succeeding at catching the tax cheats. That may be worth the side effect of losing a few thousand American citizens every year.” http://www.npr.org/blogs/parallels/2014/02/20/275937138/why-more-americans-are-renouncing-u-s-citizenship
So interesting that those brave anonymous spokespersons from the Treasury Department, the State Department, the IRS and Congress that NPR interviewed, didn’t employ Stack’s ‘myth’ propaganda – points, and are so cowardly as to speak only anonymously and unofficially. If they have the courage of their convictions, then why didn’t they just roll out some more of their BS about tax evaders and the ‘fair share’ we’re supposed to be owing the US from Canada and the rest of the globe?
I talked to a realtor today who said his wife was born in the US and lived there for a year before her Canadian parents brought her to Canada to live. He told me she has accountants on both sides of the border and said that the IRS wants 20 years of tax returns! I don’t know how much of this is real because he said he isn’t really involved in the situation and I didn’t want to pry too much. I would have liked for her to go to the session tomorrow, but she had other plans. Too bad. You can’t save everyone!
@ Em
Many thanks for the quick reply and especially for the wording; this may be useful for lots of us renouncing soon and hitting July 1 before getting our CLN.
“TREASURY: FATCA ISN’T CAUSING EXPATRIATION. Opponents of the anti-tax evasion law known as FATCA have seized on 2013’s record-high number of U.S. expatriates to claim in recent weeks that the new law is driving Americans to ditch their citizenship. But a senior Treasury official on Thursday fought back against that narrative, saying Americans give up their citizenship for a whole host of reason: “There are a number of reasons why US citizens may seek to renounce their citizenship and expatriate,” the official said on a conference call with reporters. “While people have drawn a relationship between the two, I don’t think you can point to this as the causal reason for expatriation.””
http://www.politico.com/morningtax/0214/morningtax13083.html
There are people who deny that the Holocaust took place, there have been scientists who claimed that cigarette smoking did not cause lung cancer and there is at least one deluded senior Treasury official who denies that FATCA is causing Americans to renounce their US citizenship.
FATCA is making people aware of the prison of citizenship based taxation.
@2013’s record-high number of U.S. expatriates
The number would be even higher if those who renounced/relinquisted in 2013 but have no yet received a CLN were counted. I am still waiting for a CLN more than 6 months after renouncing. There seems to be a big difference depending on where one renounces – maybe there is some sort of (tacit) agreement to delay issueing CLNs so the number of ex-UP persons does not exceed a certain number per quarter/per year? Perhaps there is a quota – like maybe a maximum number of issued CLNs per month?
2.999 for 2013 does seem a rather strange count. Just a thought.
FATCA is not the cause of expatriation?
My God, they are just shameless in their lies.
@calgary411 or pacifica777,
Could I trouble you to send my email address to Prairie Girl? I’d like to ask her a question, if she doesn’t mind.
I’ll do that WhatAmI.
This is a practical question. I will be going to the consulate to renounce my US citizenship and believe I must arrived with a pre-paid envelope so that my CLN and cancelled passport can be mailed to me. Is this correct? What size envelope should I be bringing? And must it be prepaid for Canada or with US postage?
thanks.
Claire,
Check on details beforehand at the Consulate you are dealing with. I did not have to provide anything at the Calgary US Consulate. My CLN was mailed to me in due course. Unfortunately, the process varies from consulate to consulate.
@All, I relinquished in Sept.2013, it has now been 5 months and CLN has NOT arrived. What if it does not arrive by filing dead line, should I file for a extension?? or just file by June regardless whether it arrives or not??