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
@ Wren,
Thanks for picking up on the relinquishment! Of course that’s an option!
@ Orange56,
As Wren pointed out, there’s a $450 fee for renouncing, but not for the other methods of relinquishing citizenship. Your wife will be able to relinquish her citizenship under s. (1).
Here’s an excerpt from the Immigration and Nationality Act.
(a) A person who is a national of the United States whether by birth or naturalization, shall lose his nationality by voluntarily performing any of the following acts with the intention of relinquishing United States nationality—
(1) obtaining naturalization in a foreign state upon his own application or upon an application filed by a duly authorized agent, after having attained the age of eighteen years; or
…
(5) making a formal renunciation of nationality before a diplomatic or consular officer of the United States in a foreign state, in such form as may be prescribed by the Secretary of State;
… .
@pacifica777,
I bookmarked your helpful links regarding renunciation, so I am thanking you right back. 🙂
By the way, I noticed that a few people put a space between the username and the ‘@’. Is that for search purposes? Wondering if I need to be doing that, too.
@orange56,
Just wanted to add…
From the perspective of someone who is also not yet a Canadian citizen, I just wanted to point out that going the Streamlined route has the advantage of bringing your wife into compliance sooner, should she decide to wait for her Canadian citizenship papers to relinquish. She may also be able to renounce now and then file the requisite Form 8854 + 5 years of returns, but then of course she would be stateless for the time being (there is some debate here over whether this is even permitted).
Orange56 –
Exercise caution as you assess your situation. In the famous words of Just Me, you have to do the drudgery for yourself. Nobody else can do it for you. Nobody. Some Brock zealots like to push a line about magical approaches, mostly untested, and heap scorn on less bold creatures who dare to criticize their radicalism.
To toss only two specific bits into the cauldron. (1) To charge ahead with shedding US citizenship and mop up the taxes after or never could cause way more problems than it solves, depending on circumstances. Phil Hodgen counsels more than once against doing this. He says: Get smart before you make that appointment to terminate your citizenship. (2) Funny how the pushers didn’t bother either to tell you about Renunciation Guide. They’d rather concoct their own special cocktail for you.
Drink wisely. Know your bartender. Sauve qui peut.
Privacy:
So if you have exited by some means already. (relinquished or renounced).. Great!
But your account details are *still* going to be provided to the US, by your financial institution if they hold details of your birthplace/old-citizenship (and you may not even be aware of that).
So surely everyone should be advised before this information is provided – to give you a chance to refute the claim of continuing US connections – but I don’t see anywhere where that problem has been addressed.
@PrivacyAfter8854
You are making a presumption…I was targeted by TD Waterhouse with my accounts being frozen…Once I provided a CLN they authorized my accounts and have no reason to report anything to the US let alone the CRA under the pending IGA (since they are already operating under FATCA rules, they would currently require me to sign off on a disclosure agreement. That was no longer an issue. I wasn’t required to sign the agreement as they were no longer required to report.)
@PrivacyAfter8854, Benedict is quite correct and it’s the main reason for getting a CLN, even if you relinquished your citizenship many, many years ago. If you have an American birth place on file then sooner or later your bank is going to want proof that you’re not a US citizen. The only way to provide that is by getting a CLN showing you’ve either relinquished or renounced. I renounced just before my Swiss bank sent me a W-9 form to sign. Having informed them of my renunciation they gave me a few more months to wait for the CLN to be delivered. When I received it I sent off a copy to them and haven’t heard anything about it since. Nor do I expect to. They now have proof that of March 2013 I’m no longer a US citizen and they don’t need to report my details.
@Orange56, as others have said you can do it either way.
Renounce now and then do the necessary back filing via Streamlined, simply adding on the 2 extra years needed to make it up to 5 years for filing 8854. But be aware that although it isn’t illegal to make yourself stateless, some embassies/consulates will still refuse to allow you to renounce if you don’t have another citizenship.
To relinquish apply for Canadian citizenship and at the same time start becoming compliant using the Streamlined system. Then once your wife has her new citizenship she can relinquish and hopefully save $450 – assuming they don’t change the fee rules in the interim.
@usxcanada, yes the Renunciation Guide site is very useful although a bit dated these days. It’s info is easy to read and understand for the most part. For the tax info though I’d always go direct to the IRS website and simply search for americans abroad.
@Orange56
Note that renunciation is not a “type” of relinquishment; the two are distinct.
Renunciation costs $450, but in most cases it cannot be refused by the DOS. You don’t have to file 4079, which contains lots of intrusive questions. (If you are asked to, you can and should refuse.). You can be stateless.
Relinquishment is without a fee, but the DOS has to decide whether to grant it, and you won’t get any kind of receipt proving that you’ve applied. It may take longer than renouncing, it may be refused, and you will have to file 4079. If you’ve done anything which confirms your US person status (voting, filing taxes, using a US passport, etc.), DOS may refuse the relinquishment request.
Just a few points which come to mind.
Renunciation is a “type” of relinquishment in that the law lists it as one of the 7 relinquishing acts set out Immigration and Nationality Act, s. 349(a)(1). It’s unique in that it is the only relinquishing act which takes place at a US consulate.
Immigration and Nationality Act:
The Dept of State, on its website describes it as:
Many consulates require renunciants to fill out the 4079. Department of States rules, 7 FAM 1264, do not require the 4079 for renunciation but nor do they forbid it.
Can anyone tell me if I should attach a copy of my CLN to both my 8854 in my final tax return to Austen, Texas, and again when I send another copy of the 8854 to the Philadelphia address? I have heard conflicting answers. It would seem the safer solution as it would prove why I was filing 8854, plus clarify my full name. I have everything just about to go but am dragging my feet till I can get this answered…Many thanks if anyone can clarify, please!! 🙂
monalisa,
I didn’t attach a copy of my CLN to any US tax or reporting form filed. Do people do that?
Hi @Calgary, I’m not sure. I gather that it’s one of those things that probably doesn’t really matter because they can check this via our social security numbers. It’s just that I was reading on the Serbinski forum that someone who’d renounced had rung the IRS International Information line to ask this same question; they were told that a CLN should ideally be attached to one’s 8854 in the final tax return.
I’d guess that it’s a grey area but had thought it might be a safer bet, as my maiden name which I’ve used in all my filings is different from my full married name on my passport and CLN.
Thank you for being helpful. 🙂
@Calgary, I’ll also hasten to add that I tried the IRS number at the US Embassy which only had an answering machine, then tried their number for internationals in Philadelphia but that turns out to no longer be in service!!! It’s almost as though they’re being obstructionist in their difficulty in getting hold of them for help, as though they deliberately want to be obtuse.
I’m at the point of saying, ‘the heck with it’ and just going ahead and filing them as prepared by my accountant. I probably will send them Monday.
Good luck. Perhaps we all have to wake up as we’re having a common nightmare and none of this is happening!
@usxcanada and Orange56
The “Renunciation Guide” is not necessarily error free. The glaring error I found is that it appears to state that dual-from-birth status relieves you of the exit tax. This is not correct. Dual-from-birth (assuming residency conditions are met) gets you out of 2 of the 3 tests used to determine whether you’re subject to the exit tax; you still need to be compliant for the previous 5 tax years in order to not be subject to the exit tax.
As always, a person should do their own drudgery.
Gregorio I’m surprised no one else responded. Your wife is no longer a US Cit. All she has to do is tell the consulate that she gave up her US personhood deliberately when she became Canadian. They will eventually send her a CLN. That’s it. Nothing further required Read this post which appears under ‘our resources’ in the right hand panel.
http://isaacbrocksociety.ca/2012/06/19/if-your-expatriation-date-is-before-2004-the-rules-are-different/
I’m in the process of applying for a CLN. My ex-patriating date will be in 2001 (the date I took Canadian citizenship). Once I receive my CLN with the 2001 expatriation date, do I have to file anything with the IRS? I’m thinking if anything, it would be the pre-2004 form 8854:
http://www.unclefed.com/IRS-Forms/2001/f8854.pdf
http://www.formsend.com/a/i8854%5B0202%5D.pdf
I was born in the US and came to Canada in the early 90s as a student. The year I left the US was the final year I filed a tax return in the US. My income was low leading up to 2001 (in grad school) and my net worth was negative. I’m thinking if anything, I file the old form 8854, certify low income, nothing owed, no net worth for exit tax, and then I’m done. Could any Brockers in the know (ie relinquished with a pre-2004 expatriation date) provide some info? Thanks!
Sorry, second link doesn’t seem to be pasting properly. Link is to the IRS instructions for the pre-2004 form. Interestingly, the form I posted is a February 2002 form. I haven’t found anything earlier. I suspect once I receive my 2001 CLN I’m done for paperwork.
@Duke of Devon, both Wren and Pacifica777 responded to Georgio’s query pointing out the various links.
@tdott, yes I’ve pointed out that error a couple of times, but no correction to the info has been made yet. I think Renunciation Guide itself was working on the premise that people were already tax compliant so didn’t really see the need to point 3) out properly. It certainly needs correcting though because I made that mistake initially too.
@BCDoc, did you read this link:
http://isaacbrocksociety.ca/2012/06/19/if-your-expatriation-date-is-before-2004-the-rules-are-different/
@ BC Doc
I realize you are dealing with a the difficulties of your own situation.
However, as an MD, would you consider lobbying the Canadian Medical Association regarding the FATCA IGA and its possible impact on their members and supporting legal action if such an action moves forward? As you have probably read, the initial fundraising for a legal opinion was successful.
If the action moved forward and the CMA reached out to its members simply with information and a donation channel…
If ONLY 1% of CMA members contributed $250 each to a FATCA Charter Challenge it could raise $192,500 !
(77,000 x 1% x $250)
I posted earlier:
“Finally, reach out to everyone you know, with a focus on how this affects them personally.
It’s time to contact every well-known Canadian who could be considered a US person or who’s spouse or children could be. Journalists, professionals, academics and their unions and professional associations. People with established networks of influence. For example, the wife of one of Canada’s leading neurosurgeons was born in the US. I doubt this high profile person is amused by the destruction of his family’s banking privacy. The Canadian Medical Association must be brought into this: is anyone here a member?”
March 7, 2014 at 10:57 am
@MediaFleacestealer: Yes, I have read the tread. Thanks. I posted to the comments two days ago but didn’t get any response. Having read through just about everything, due to the changes in US tax and immigration laws over the decades as well as various U.S. court decisions, the phrase “clear as mud” applies. After reading throught that section and the many comments, I believe I can receive apply for my CLN with the 2001 expratriation date and then consider myself done. Another option seems to be do nothing and consider my US citizenship relinquished by the act of obtaining my Canadian citizenship (as apparently nothing in US legislation at the time requiring me to formally nofify the Department of State. As I say, it all seems muddy.
@Wonderingsays: From the Maple Sandbox website, the CMA appears to have taken an interest:
http://maplesandbox.ca/wp-content/uploads/2012/09/CMA-letter-Flaherty-Nov21.pdf
Not only will the FATCA IGA affect its members, it will also impact the CMA as “MD Management”, a financial planning firm, is operated by the CMA for its members. Under the FATCA IGA, the CMA via MD Management will be placed in the uncomfortable position of maintaining “compliance” with the agreement. As a member, I would be happy to make an inquiry to the CMA to ask what its latest action is on the issue and to inform them of the IBS plans for a Charter suit. While I am not a lawyer, I suspect that the IGA must first be enacted (passed by Parliament) before any suit can be filed– i.e. harm must first be done to an individual or group of individuals.
@BCDoc, the problem with doing nothing is that if/when your bank queries your status as a US person you’ll have no CLN to show them otherwise. Having a certificate of Canadian citizenship along won’t be enough I don’t think as you could be a dual national. Yes, you could quote old laws at your bank, but if they freeze your account/s until you can prove your non-US status it could make life difficult. In my view you have nothing to lose by applying for your CLN and much to gain by having it.
@ Benedict Arnold be me
Hi, we’ve been in Florida for a few months and will be going home to Canada in a couple weeks. We do all our banking at TD.
We have been trying to get info from and to our TD Bank RE FATCA but our local branch doesn’t seem to know anything. Thus, we had not been too worried, thinking we could deal with this when we got back (hubby has a CLN, I have an appt to renounce in mid-April).
But you say that for TD Waterhouse, “they are already operating under FATCA rules…”
Do you (or anyone els) know if this Is the case in the bank as well? Both hubby and i have US birthplaces. I anticipated that TD (and other banks) would not start their data-gathering until July 1. Anyone know anything about this? Thanks in advance
My bank (HSBC) told me in the autumn that they were finalising their procedures etc. and they intended to send letters to customers after the first of the year, so now. And I was not to provide anything unless and until they contacted me. You could talk to your bank about opening a brokerage account of some sort, and as a routine matter, file a W8-BEN to show that you are not an American person for withholding purposes, in case you wanted to buy American stocks. They would then have that as your proof on file. Just a thought.
@LM
My experience (Nov.2012) was with the TD Waterhouse because they also operate out of the US and are registered in the US…I also bank at the TD Canada Trust, and confronted my personal banker as well regarding this and she had no reason to do anything, though she was aware this was a looming issue…
So as far as I can tell….TD Waterhouse already operates under FATCA whereas TD Canada Trust is operating like most other Canadian Banks and will be subject to the pending IGA on July 1st, 2014…
@LM
I should also mention , that when I brought this issue to my accountant, he kindly informed me that his firm (whom I have done my taxes with for 35 years) would not be able to do my taxes in the future as they had made a company wide risk assessment that it was not practical for them to do US Tax related filings and would refer me to another firm if I was deemed a US Citizen…I provided them with the CLN as well so that life can carry on as usual…