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
Rosie, I presume if your friend has been filing US tax returns, she has also filed 3520 and 3520A forms for the RESPs, as the US considers them a ‘foreign trust’. These must be reported on her yearly FBARs and new Form 8938 depending on requirements for that. Tax filing will be for the year that she claimed relinquishment (filed in the following year) – up to that date. For any remaining US tax liability for that year, she will have to file the 1040NR.
As you filed before 2004 (see side-bar on home page), your tax filing requirements may be different than your friend’s. Do you have your Certificate of Loss of Nationality to show your ‘foreign financial institution’ when the time comes? Are there “accidental American” children for either you or your friend? There is a lot to understand and to take into consideration and you’ve come to a good (if scattered) source to research and then ask any questions you have.
Final form filed for her will be 8854 as an attachment to her 1040 (also a copy to be sent to separate Treasury address), certifying that she is US tax compliant for the requisite number of years so not to be deemed a “covered expatriate” by Net Worth or not filing Form 885. How will she claim her relinquishment — has she just become or will become a Canadian citizen and that will be her claim for relinquishment? After that date, there must be nothing done for the US to consider her still a US citizen — or she will have to renounce instead.
Look at the Consulate Directory Report (also on the side-bar) for good information on forms required for expatriations — and also reports of experiences for both renunciations and claims of relinquishment at various US consulates (as reported to Isaac Brock).
@ Rosie,
There’s some links on the Links page of the Consulate Report Directory. This one might be of use to your friend. It’s to Phil Hodgen’s “Exit Tax Book,” which is a series of 9 posts he wrote on his blog about exit tax paperwork and procedure.
My US wife became a Cda citizen in 1999 with intent to relinquish. She did not cancel her US passport at that time. She used it once subsequently and received a stamp in it when my father booked a quick trip to a non-US destination. Is that likely to raise a red flag that may cause her to be rejected from the relinquishing route? She obtained a Cda passport when the US one expired. Thanks.
@Georgio, no it shouldn’t. Having/using a US passport once since relinquishing shouldn’t be a problem unless an embassy/consulate is going to be really pedantic about it which is unusual, but not entirely unheard of. I don’t think any Canadian embassy/consulate has used a one time US passport use as a reason for rejection though. She’ll need to fill in this questionnaire which helps the consular staff decide how “American” or otherwise she’s been since relinquishing.
http://www.state.gov/documents/organization/97025.pdf
The staff should decide on a balance of all the questions, not just the one about passport usage, so the more she can show she hasn’t continued to act as an American citizen (by voting in US elections, filing US tax returns, etc,) and has acted as a Canadian citizen (by voting, filing Canadian taxes, etc,) the stronger her case for relinquishment is.
@ AtticusinCanada
You wrote:
“I relinquished Sept. 26th and am still waiting on my CLN. I wrote to State this week and was told … in an email that I was to ‘act in every way as if I was still U.S. citizen until the lawyers at State were done looking at my case.'”
I am confused by the Dept of State’s comments. When you notified them of your relinquishing act, you would probably have been asked to turn in any expired US passport you still possessed.
Since you have sworn to the facts of your past relinquishing act, it would be unlawful for you to apply for a current US passport; it would be fraudulent. Also, it is unlikely that one would be issued to you, for the same reasons.
Therefore, how can you “…act as if still a US citizen” since you cannot apply for or travel on a US passport? Nor can you vote in US elections; that would also be fraudulent.
Re: 8854. I am also Canadian-born to two U.S. parents. I have never lived or worked in the U.S. At a seminar for ‘Renouncing your U.S. citizenship’ the tax lawyer conducting the seminar told me I did not have to complete Part V. I just had to complete Part 1, and question 1 in Part IV: “Enter your U.S.income tax liability…..” Of course, I would sign it and send it with my final U.S. tax return. Is this not correct? Please recommend someone to help me complete my 8854 correctly! Thanks.
Bodhi the guy at the seminar was very close. You are supposed to complete part I and all 6 questions in part IV section A. For no 3 you answer yes and for no 4 you answer yes. ( note the tricky negative ‘not more than’)
I don’t know how old you are but if over 18 1/2 you answer no for 5 and yes for 6. The problem is , in order to answer 6 correctly, you are supposed to have filed 5 yrs. of tax returns assuming you had enough income to meet the requirement.
@ Rev Susi said <>
That’s interesting, I read that UK banks would be getting in touch – hats off to them for ‘getting it’ and for all the exclusions they arranged – good old Blighty! (and OK I am presuming Rev Susi is in the UK)
To be clear, I HAVE a CLN – but I have not yet been contacted by any financial institution – and given they are starting to collate this information – I would feel more comfortable if someone made a show of getting in touch.
@MedeaFleecestealer My point is that I am hoping they ARE going to ask me – but I don’t KNOW they are going to.
@Benedict Arnold be me
I think you may be making the presumption – based on your (single bank?) experience which may not be reflected by other financial institution nor other countries.
I will be doubtful until I see official legislation in every country that assures their ex-US citizens that the policy IS to ask customers before providing private information which maybe in no longer pertinent. I’m not hearing that where I am — so are we just relying on the whim of a particular financial institution?
@bodhi, it says quite clearly in both the instructions and on the 8854 form itself that those who renounced/relinquished in 2013 must complete Parts IV and V.
I’m just doing mine now in draft form to send to my tax preparer for any corrections. In Part IV Section A it’s as Duke of Devon says (nice catch on line 4 DoD – I almost made the mistake of saying no until I read your post), Section B nothing and Section C line 11 is “No” and lines 12 through 15 have zeros.
In Part V Schedule A for the cash I’ve given the figure for my bank accounts and also our house purchase (line 16) and mortgage (line 22). Schedule B is full of zeros.
Still working out which of the figures in Part V line 25 gets carried over for my net worth though.
@DoD, actually looking at it again I’m not sure I shouldn’t tick “No” to line 4 in Part IV Section A. If you take the confusing “not more than” bit out the question reads as “… have you been a resident of the US for 10 of the last 15 tax years?” To which my answer is clearly no.
Another double check question for my tax preparer I think.
@wondering
Re:”how can you “…act as if still a US citizen” since you cannot apply for or travel on a US passport? Nor can you vote in US elections; that would also be fraudulent.”
Same thoughts here. When I renounced (summer 2013) I handed over my US passport. At the time I asked the consulate what I should do if I travelled to the US before I received the CLN. The answer was: you will have to use your non-US passport and apply for a visa like any other foreigner. In the autumn I visited the US on my EU passport and there were absolutely no problems.
I am still waiting for the CLN and hope it arrives before I file the final IRS and Treasury forms, however I have to file within the next few months, and I must consider myself booked out of US personhood whether or not the CLN has arrived. There must be a huge backup. I have phoned and emailed the consulate I renounced at, never received any aknowledgement, auto-reply, nothing.
allou,
Consider the exemptions on time to file:
U.S. Citizens and Resident Aliens Abroad – Extensions of Time to File
PLUS
When to file Form 8854
Medea. Don’t confuse people. You don’t arbitrarily change the wording by taking out ‘not more than ten’. Think of the question as ‘less than eleven’. The correct answer for duals at birth is yes. The exception applies and the only reason to use the balance sheet is to arrive at a net worth number. The mark to market calculation is not needed.
Follow-up on the issue of paper documentation that the banks may keep a copy of on their customers. I first raised this on the comments page 90.
I just heard from my bank. They have paper copies of my driver’s license and my medicare card from when I first opened my chequing/ savings accounts in 1987. I don’t believe my place of birth ever appeared on those.
So beware, if you are US born and provided your passport or other document that contains your place of birth, you could be spotted if they end up doing a paper review. I don’t know if Canadian banks will be going that far. Perhaps other commentators have information on that.
Thanks for the update on what your bank has provided regarding documentation they keep on customers, Breaking Sad.
I don’t believe anyone here has any insight into what or not the banks will do or even if they will looking for specific dollar amounts for accounts of US Persons or even if they decide to send all information on all account holders — which, in reality, is the only way it would not be discrimination by national origin for ‘US Persons’. How would ALL Canadians like that? It’s all a crap shoot.
@Dukeof Devon, well putting it that way does make it easier to understand, but I still struggle to get my head around it. Why can’t they write these things in PLAIN ENGLISH! Aargh!
I am getting closer to making my appt for asking for a CLN dated in the late ’70s. DS-4079 is clear but do I need to fill out the DS-4081? Questions 4-10 are quite disconcerting. Should I make an accompanying statement about what I am wanting to get from them? I don’t want to promise to contact the IRS about all this, as mentioned in the DS-4081.
@Garm, well you can do it beforehand and take it with you or they’ll do it at their end ready for your appointment. If you’re asking for a CLN backdated to the 70’s none of those statements really apply anyway as you long ago stopped being subject to them. That form’s mostly scare tactics to make sure you understand how “serious” giving up your American citizenship will (sorry won’t) be. Make no statement, simply read and swear/affirm that you understand the consequences when the Consul asks you, then sign the copies.
Thanks. It’s just that I don’t want to answer 6-10 on that 4081. Agreeing to let them extradite me? Not comfortable!
@ Garm,
It’s a standard form, so don’t let it spook you. I found the 4081 a little odd, being written in the present tense, since I’d actually terminated the citizenship long ago. Sorta like I thought this all happened already …
Specifically regarding the line you refer to in question. 10 of the 4081 : “… With regard to US taxation consequences, I understand that I must contact the US Internal Revenue Service. …”
Does that mean “I must contact the IRS to ask them what the tax consequences are?” Or “If I have questions about tax consequences, I have to contact the IRS? Or exactly what?”
I read it as I would contact the IRS if I have questions regarding tax. The 4079 shows that the person knows what the consequences of relinquishing/renouncing are – and also shows that the consulate official did his job to be sure the person knows the consequences. The consulate makes sure you know there could be tax consequences, but it’s not their mandate (or field of knowledge) to explain the consequences. So, they tell you contact the IRS if you need info on that. I think it means, go to IRS’ website and if you can’t figure it out, “phone them, not us.”
That’s my take. Someone else might feel differently. At any rate, there’s certainly no need for a person to inform IRS that they’ve renounced or relinquished as Dept of State does that 7 FAM 1243(a).
@ Garm,
You probably haven’t done anything extraditable 🙂 But you’re not giving permission to be extradited in the 4081 anyway, just saying that you understand that relinquishment does not, of itself, prevent the possibility.
The 4081 really is a pretty standard form, and since you relinquished in the 70s, I see it as formalising a situation which already existed. I feel that having my relinquishment officially recognised by the US provides me with more protection against the US in general terms, as the CLN makes it clearly unambiguous that I am not a US citizen.
I guess the “extraditable” offence could be interpreted by them to be that even though I wasn’t a USP I should have filed US taxes…their law.
@ Garm,
They don’t extradite for civil offenses, which is what it would be. And they haven’t even been hassling the old relinquishers, let alone taking legal action — I think their plate is full with much much lower-hanging, and more profitable, fruit than run-of-the-mill people in foreign countries who believed they were weren’t and actually weren’t citizens at the time they didn’t file taxes.
@Swisspinoy, wow, somehow I never saw until today about your horrid treatment by your step-mother and her children. You certainly seem to have a strong head on your shoulders concerning the seemingly capricious disinheritance but suppose that’s all you can do, especially as it appears beyond your control. At least you have the recent arrival of your second child to enliven things up a bit!
@Watcher, I probably went overboard but decided in the end to include both my maiden and full married passport names as an alternative on my 8854, plus I attached a photocopy of my CLN to both 8854s; I also wrote an explanatory letter explaining about both names with the.copies of the 8854 and CLN to Philadelphia.
Of course this could backfire but thought it better to make it completely clear to whomever is reading my final paperwork and tax returns at the IRS that I have indeed expatriated.
@Calgary, you may think my reticence is cowardly but would have been more willing to speak out openly had I no longer any family ties or need to ever him back to visit the US. Hopefully I will feel more willing to come out into the open after my statutes of limitations have run in mid 2017.
This whole process seems fraught with perils but at least I am making it as clear as possible to the IRS that I am going for real.
monalisa,
You cut me off at the pass — LOL! Hope it’s all in the mail and you don’t have to lose any more sleep over it. I, too, have family in the US — I can NOT travel there with my son, notorious as I am.
I predict you will be just fine — more so than my family. Good luck, monalisa. You’ve come a long way! I wouldn’t call you a coward — but I do think you worry way too much, even more than I do.