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
@MedeaFleecestealer
Maybe, but personally I’d want to rely on what the instructions actually state, rather than on assumptions and hearsay. It’s a matter of risk tolerance, I suppose.
@all,
Thanks for everyone’s comments on this. I am inclined to agree with notamused’s comment, to rely on what the instructions actually say. I’m not sure you can claim to be a U.S. citizen or resident alien after you’ve renounced, even if you are filing a partial year 1040. As for officially asking for an extension of time to file, here is what form 4868 has to say:
“ Purpose of the Form
Use Form 4868 to apply for 6 more months (4 if “out of the country” (defined on page 2) and a U.S. citizen or resident) to file Form 1040, 1040A, 1040EZ, 1040NR, 1040NR-EZ, 1040-PR, or 1040-SS.”
“When to File Form 4868
File Form 4868 by April 15, 2014.
Taxpayers who are out of the country. If, on the regular due date of your return, you are out of the country and a U.S. citizen or resident, you are allowed 2 extra months to file your return and pay any amount due without requesting an extension. For a calendar year return, this is June 16, 2014. File this form and be sure to check the box on line 8 if you need an additional 4 months to file your return.”
So, I’m not sure we do have the additional 2 months to file and I’m really not sure how to fill out the 4868
to officially request an extension. Ordinarily I would have said you check the box on line 8 but I’m really
not sure that is applicable after you’ve renounced. I don’t think I’ll have all the info I need to be able to
file by April 15th so I want to be sure that I’m not LATE in filing the 1040/1040NR and 8854 if I file after
April 15th. That’s why I’d really appreciate having a knowledgeable answer to this from a tax professional (which I don’t have access to). So Medeafleecer, Calgary411, MonaLisa and others that do/have had a tax professional, could you please verify this and reply. With all the others on this forum who are still waiting to get their CLNs before filing the expatriation tax work, I’d imagine this is
or should be a concern for many here.
Phil Hodgen does this for a living – see http://hodgen.com/when-to-file-form-8854/, where he says:
@moonstruck
You may be over-thinking form 4868. I pre-emptively file one of these every year, even if I think I’ll make the deadline, just to take the pressure off (and as a happy side effect to throw a little more sand in the IRS gears!). It is of course arguable as to how ‘automatic’ this extension is if you have to request it, but… well, this is the IRS after all.
Just answer the questions according to the instructions. That would be, don’t tick box 8 or 9 (unless you really had wages from the US), make your best guess at US tax owed, and $0 would be a good guess if you have nothing else to go on, mail it, and you can relax until at least October. Note that you don’t sign this form at all, never mind ‘under penalty of perjury’.
Finally, more from Phil Hodgen on 1040nr filing deadlines here. Proof that the IRS can complexificate even the simplest issue to the point of unintelligibility.
My friend renounced 3 months ago in Europe. No CLN yet.
@LM
On Mar 31, you outlined in detail how to calculate the Present Value of a pension. I have these questions:
(1) Is the procedure you gave written up in any IRS document or is it based on basic actuarial procedures? If the former, could you pls give the link – I was unable to find it on my own.
(2) You say, “The relevant interest rate comes from Rev. Rul. 2014-12 Table 1. It is 120% of the Applicable Federal Rate for April 2014. This is 2.17%. The appropriate rate to capitalize your annual pension benefit is 2.17%.” How did you choose this particular figure of 2.17? The relevant table ! has many figures and I am puzzled as to why this particular one was chosen.
Thnak you.
@Leroy
I don’t know how it works. I know somebody who renounced in Germany in January 2014 and got everything ( including being on the list of expatriates) by March 2014. Go figure. Nobody knows what how why or what.
@dt804a:
For the Form 8854 balance sheet, the IRS needs fair market values (FMV). An IRS publication that might assist you is: IRS Publication 561, “Determining the Value of Donated Property”. There is a section on annuities and life insurance contracts.
Practically speaking, if you are below the $2 million asset threshold, precise calculations and appraisals may not be as necessary as they might be if you are over $2 million (or under but close to the threshold), although the values still need to be supported. A year ago it was discussed that an estimate of the value of a defined benefit pension could be determined by obtaining an on-line quote for an insurance company annuity which would make the same periodic payment as the pension plan. There obviously would be a profit element in the quote but, again, if you are (far under) the $2 million asset threshold, it would have no impact on the outcome of your being an “uncovered” expatriate.
For “uncovered” expatriates, we also discussed inexpensive ways of obtaining supportable values, e.g.:
1) House: consider using the insured or tax value if one approximates FMV
2) Car: value in a “blue book” or asking price for same model and similar condition on internet
3) Household: insured value, if it approximates FMV
For unrecognized Gauguin paintings hanging in the kitchen, the historical purchase price or garage sale price may be used:
http://www.theguardian.com/artanddesign/2014/apr/02/stolen-paintings-italian-works-wall-40-years-gaugain-bonnard
@Poly Thanks for the info. he does not understand either .. Wil ljust wait and maybe contact the embassy in an other 2 to 3 months!
@ dt804a –
I am just a lowly psychologist – – only hubby understands these higher-level mathematical tax things (LOL).
I will forward your question to him and get back when he replies (he’s pretty prompt).
🙂
@LM
Thank you. I appreciate your help very much.
@ dt804a
Hubby’s answer to your questions are:
Tell dt804a that procedure that you described was the procedure followed by PricewaterhouseCoopers when they computed the present value of (hubby’s) private pension. The rate of 2.17% was taken from the April 2014 version of the table that was used by the PwC accountants.
The note that (hubby) sent earlier was incomplete. The paragraph referring to this rate should have said:
“The relevant interest rate comes from Rev. Rul. 2014-12 Table 1. It is 120% of the Applicable Federal Mid-Term Rate for April 2014. This is 2.17%. The appropriate rate to capitalize your annual pension benefit is 2.17%.”
The words “Mid-Term” was missing from the original instructions. Sorry,
LM adds: Hope this helps!
@LM
Thank you again. The addendum in your last email does, indeed, solve the conundrum, because
with the words “mid term”, the selection of 2.17 is crystal clear.
Please convey my heartfelt gratitude for providing the info. I sincerely hope that other renouncers will benefit from your post in the future.
Happy renunciation to all.
@ dt804a
Your welcome; this is VERY complex stuff and you are courageous even trying to work this all through. How did life get so complicated?
I have received a reply to my enquiry about renunciation and have been told I need to send back scans of the items below. I have my UK birth certificate for the day in 1953 that I was born in the UK, to parents of US citizenship. I have my current US and UK current passports as proofs of citizenship. However, I do not have anything fitting item 4 below. Is this necessary? Or may I regard it as not applicable, seeing as I have passports? Perhaps someone who has been through this can kindly advise me.
Step 2. To request an appointment to renounce your U.S. citizenship, complete and scan all the documents listed below and attach them in an email to londonrenunciations@state.gov.
1. Copy of your U.S. or foreign birth certificate. I HAVE
2. Copies of the Bio-pages of the most recent U.S. passport and all current foreign passports. I HAVE
3. Copies of all Certificates of Naturalization or Certificates of Citizenship for any country, including the United States (if applicable). NOT APPLICABLE
4. Copy of U.S. Birth Certificate or U.S. Consular Report of Birth Abroad (if applicable).
I DON’T HAVE.
Copies of all marriage certificates, divorce decrees or other change of name documents (if applicable). NOT APPLICABLE
@ ricard –
If your US-born parents did not go to the embassy/consulate when you were a baby or toddler and register your birth, you can’t be held responsible for this “error”. If they did register your birth, perhaps they have this document tucked away in some safety deposit box but if they didn’t, then they didn’t – – not your fault.
While not asked for, you may want to bring info RE their birth names, dates of birth, dates & place of marriage, place of birth, info on when they came to England, etc. I certainly wouldn’t immediately provide this directly – – or before-hand – – but if you were not registered at or early after birth then they may want those details when you go to renounce.
I’m renouncing in a week and I too was concerned about making sure I brought everything; the staff here (Toronto consulate) has been ++++ helpful and professional in this regard; hopefully the staff at your embassy/consulate is similarly oriented. Good luck. 🙂
In regard to my question above, I have now had a reply from the consulate to say that as long as I have my foreign birth certificate that is sufficient. I am impressed by the helpfulness and speed with which I have received replies from the consulate.
http://www.pbwt.com/files/Uploads/Documents/Who%20is%20a%20U.S.%20Tax%20Person_Bloomberg%20BNA.pdf?utm_source=Mondaq&utm_medium=syndication&utm_campaign=inter-article-link
Have not had time to read through this, but it appears to be useful:
‘Who is a U.S. Person? Disparities between U.S.tax and immigration law’
Henry P. Bubel, Jenny Longman, Lisa M. Koenig, Nikki Dryden,and Michelle Muñoz-Machen
Patterson Belknap Webb & Tyler LLP, Fragomen, Del Rey, Bernsen & Loewy LLP
“This article is intended to provide an overview of the intersection
of U.S. tax and immigration law in defining who is a U.S. person,
and some of the pitfalls that result from the differing and often
competing definitions under the two codes of law.”
Mea Mark who wrote “Republicans flirting with tax evasion’ responds to one of my comments: “I think the government may be slow at processing the numbers (renunciations) and just don’t have current figures. I really don’t think they are covering that up.”
Can someone please link me to some articles to prove otherwise, so I can respond intelligently.
@WhiteKat: Wikipedia has an overview of the relevant issues, with onward links to real sources (government documents, Patrick Cain’s articles, etc.):
https://en.wikipedia.org/wiki/Quarterly_Publication_of_Individuals_Who_Have_Chosen_to_Expatriate#Inclusion_of_non-citizen_former_permanent_residents
And one other thing worth pointing out is that USCIS isn’t admitting to the real green card abandonment numbers either. Compare the numbers they gave to Shadow Raider by FOIA:
https://docs.google.com/file/d/0B7VqDyDIAgW2YTQyQmZ3QjZyT2s/edit?pli=1
vs. their estimate of future abandonments in the Federal Register:
https://www.federalregister.gov/articles/2014/01/24/2014-01379/agency-information-collection-activities-record-of-abandonment-of-lawful-permanent-resident-status
I requested a new canadian citizenship certificate a few months ago. I received it recently and was surprised to see that the effective data was my date of birth. I was born in the usa..one of my parents was canadian. I moved back to canada when I was a year old and have always lived in canada since..worked here..never had a us passport..never had anything to do with the usa..no family there anymore. I had applied for canadian citizenship when I was 16 and received it then however now it seems that I am a canadian citizen from birth. Does this help me in anyway or am I still considered a us person?
@cabina
Changes to Canada’s Citizenship Act in 2008 allow certain children of Canadian born citizens to become Canadians at birth, eliminating the need to have these children born abroad registered before the age of 2. I am also one such person. My Canadian born mother never registered me as a birth abroad, so when I moved to Canada with her at the age of 12, I was required to attain permanent resident status. I then became a Canadian citizen in 1996. As far as I know, unless you’ve performed a relinquishing act that would cause you to lose your US citizenship, like me, you are still on the hook for US taxes. The great thing about being a dual from birth is that it exempts you from the US exit tax, if you meet the net worth thresholds.
Pardon me, the changes to Canada’s Citizenship Act were made in 2009. Here’s the link if anyone’s interested:
http://www.cic.gc.ca/english/citizenship/rules_2009.asp
@cabina
Your comments are a bit vague as to timing, but similar as to birthplace and split parents/naturalizing as a minor ( you may find my postings helpful – start with the consulate report)
I started posting June 18th on this thread:
http://isaacbrocksociety.ca/renunciation/comment-page-22/#comments
I hope it helps to bring you up to speed…
Also look at the Consulate Report:
Here’s a link to the Consulate Report Directory. Benedict Arnold’s report is on pages 17-18.
http://isaacbrocksociety.ca/wp-content/uploads/2014/01/Consulate-Report-Directory-2013.01.25.pdf