Just Saying No: Not Renouncing/Relinquishing Nor Complying
Some people cannot afford to renounce (or relinquish and get a CLN) and some people will not renounce or relinquish because they do not consider themselves to be US citizens.
This thread is a place for people in this situation to share information and experiences. Thanks for sharing — your stories will be very helpful to others!
(For info and discussion on relinquishing and not obtaining a CLN, please go to the Self-Documented Relinquishment thread.)
If clicking on a link brings you to the wrong place on the thread, click on this sentence to arrive on the current page of the thread.
@ Robin: Blatant, greed-driven, reprehensible scare-mongering and I am cleaning up my language here. I second everything Heidi wrote. Was not asked a reason but was prepared to say I was now at the point where I knew I was never moving back to US.
First of all, this is a great community and I’m glad to have found it!
My situation is: I’ve never reported, nor lived in US nor gotten a passport – got citizenship from parent who renounced soon after (because of FATCA, haha). Have never registered dual to any bank.
However, I’m hoping to make some internet income soon (via YouTube, Patreon) and I’m worried that, since these companies are based in the USA, they’ll somehow figure out my dual. Is this possible, at all?
Part of me wants to just report and get it done with, especially since my net worth is still /relatively/ small (only 150k), but I’ve got TFSAs (Canada, would owe tax to US). Plus, logic is if I never report they’ll never know.
On the other hand – if I ever move to the USA for work and actually use my citizenship, then they *will* know and I’ll owe for the TFSAs anyways.
I would renounce but I’m still in my 20s so who knows if the citizenship will be handy down the road. From what I’ve heard immigration to the US is increasingly difficult these days, so seems worth hanging on.
1) Is there any way for internet income to reveal my status?
2) Should I drain my TFSAs now and hope I don’t have them in time for a move?
!. Not unless you tell them. I.E. Only if YouTube asks for your S.S. number and you give it to rhem.. Remember everything is done by computer matching and they cant match without a number.
2. They wont know you have a TFSA unless you tell them.
Your two questions/problems are completely separate.
1. If you were born outside the US and your only bureaucratic connection is a parent having registered your birth with a consulate to document your citizenship, then you are well and truly off the radar. Should you wish to stay off the radar, this will be very easy for you to do. Deal with YouTube and everything else as Canadian-only. Conceal your US citizenship from financial institutions in Canada. Yes, you will be lying, but so what? Your US citizenship is essentially undetectable.
2. If you wish to move to the US in the future, you can come into compliance beforehand. Keep your TFSAs for now and stay out of the US tax system. If you think you’re serious about moving, liquidate the TFSAs before you begin filing. The IRS won’t know about them if you don’t tell them, since (1) you’re not currently subject to FATCA reporting if you haven’t disclosed US citizenship to any banks, and (2) TFSA, RRSP and other tax-protected accounts are all excluded from reporting anyway.
On a related note. If you are a US citizen, and had been in the tax system there. Then left the country for many years without any contact with the IRS. If you then went back to the US and back on their proverbial radar, would they automatically start asking ‘hey were you working overseas, where are those tax returns?’
In theory, if they had access to your passport info, they could potentially see where you had been.
@InternetIncome I completely concur with Ron. The only documentation you would have identifying you as a US person is a Report of Consular Birth Abroad and perhaps a Social Security number. Regarding the TFSAs, the US would never know about them unless you foolishly identified yourself as a US citizen to a Canadian bank, which you should not do. In any event, the TSFAs are excluded from FATCA reporting pursuant to the FATCA IGA between the USA and Canada. Please view page 45 for the reference https://www.canada.ca/content/dam/fin/migration/treaties-conventions/pdf/FATCA-eng.pdf. This does not apply to you, but the Swiss equivalent to the TSFAs are also excluded from reporting.
In my case, I spent 24 years of my life in the US and I have not complied with my previous business in the US etc. I am in the renunciation queue. The negligible outcome of income that I receive from Kindle appears under my non-US person spouse’s name. However, Amazon does not cross reference data. As long as you provide the identifying information from Canada, you have nothing to worry about. I will be renouncing in the next few months once our third child arrives in the world. We plan to register her with the US and just keeping the old passport and Consular Report of Birth Abroad in case a study or work opportunity takes them to the US.
The IRS is not that sophisticated, nor does it have the resources to make that sort of investigation unless it potentially stands to gain many millions in return.
Given the relatively high filing threshold ($12k earned income for a single person) it’s perfectly common for people not to file, or to stop filing when they go back to school or have a child. There are many reasons why a person might not file for a decade or two. The IRS isn’t going to think “hey, maybe they were living and working abroad” and begin investigating. This would be a waste of their time, given that most of the folks working abroad would owe nothing anyway due to FEIE or FTC. (Thus the reason why the IRS makes no attempt to find non-residents who do not file.)
I think your timing is wise. For a few years I regretted having registered my child’s birth at a US consulate, but now I think it’s a good thing. Should they ever need it, there’s a baby passport and CRBA tucked away in a drawer (no SSN to the best of my knowledge). Otherwise they are fully off the radar.
If your third child did not have the same hidden secret passport as their siblings, they might one day be very angry with you!
Just to add to what Ron Henderson wrote, I will mention my conversation this week with a US tax liar who formerly worked as an IRS prosecutor. He says almost all the IRS civil and criminal cases involve people turned in by their ex-spouse, competitor, archenemy, etc. Furthermore, he says the IRS simply does not have the resources to chase people except for extremely egregious tax offenders who go out of their way to draw attention to themselves. According to him and my research, the IRS simply lacks the resources to do its job effectively. What the IRS does do well is to target and destroy the lives of certain people, especially high profile people, to persuade everyone else that it is preferable to pay one’s taxes rather than to run the risk of having the IRS destroy one’s life.
As for the kid, we want to treat all our children the same and give them access to the same opportunities. From my standpoint, I was not US tax compliant and my net worth exceeds the $2 million threshold. I simply do not feel American and I feel increasingly foreign every time I travel to the US. The hassle is not worth it. I know many people cannot afford to pay the extortionate $2,350 renunciation fee, but I want my peace of mind and to sever my connections to the US.
Amazing, thanks so much everyone!
Really seems like so much of this system relies on fear tactics. So reassuring to get some facts on the matter. 🙂
It’s commonly believed that the IRS is both omniscient and omnipotent. This belief is false.
I am a u.s. citizen expat with little ties to the U.S anymore. I have a 100% disabled child who is in his teens and for whom I have not yet done a CRBA for…as the law says it should be done before he is 18. However, I have done so for his siblings recently and got scolded for waiting so long. The reason I am waiting? I’m hoping the law to change! Actually it is because he will under the law never be allowed to renounce his citizenship due to his lack of understanding. I don’t want him to have to do tax returns etc… he will never be able to do them himself and I don’t want to have to always do it for him. Besides, I won’t live forever. So what am I to do? Do I go ahead and do his CRBA and not his passport or SS number or tell the bank here? Will that be enough to stay off the radar? Should I not do his CRBA at all? Or is that really gonna cause problems later? Will he be able to fly for a visit to the U.S., get a visitors visa (I dont know the questions asked), and use his non US passport…. but travel with his US mom???
Our advice is DO NOT do the CRBA. I assume your son was born outside the USA
If you don’t, the US government (IRS, Border services and so on ) will not know anything about your son.
There is disagreement on this site as to whether birth abroad automatically grants citizenship or merely a claim to citizenship. The US website is ambiguous. They do say that in general CRBAs are not issued after age 18.
Canadians don’t need a visa to enter the US for tourism, for up to six months. The only possible issue your son would have is if he tried to enter the US accompanied by you – it’s possible that the border folks might ask if he was a US citizen, and would then advise you to obtain a US passport for him – advice which you can choose to ignore.
As for taxes, the law won’t change in anyone’s lifetime, but in this case who cares? All your Canadian-born children can safely ignore their US tax filing obligations if they so choose. As long as they know not to disclose US citizenship to banks or other financial institutions, they will not be subject to FATCA reporting. (Even better, Canadian banks accept a drivers’ license as ID when opening accounts, which does not show place of birth, so children born in the US can easily conceal their US citizenship.)
Hey everyone, I just found out that my bank does in fact have my SSN, after years of thinking otherwise. I must have stupidly gave it to them when I set up the account, way back when I didn’t realize this was an issue… or maybe it wasn’t back then. I was born in Canada, to an American mom and got US citizenship at 16. I’ve never lived or worked there, nor filed taxes with them.
I’m not sure what to do at this point. I had assumed that the bank didn’t know and that I was safe but now it appears that isn’t the case. My Canadian wife has a buisness that’s doing moderately well and I make a pretty good salary so I’m really concerned we’ll get screwed at some point by the US and be forced to pay them.
Any advice? I had really hoped to just hide under the radar, but my bare butt appears to have been in full view for years now!
As it stands and is unlikely to change, you have nothing to fear. The US are not even processing the FATCA data because they do not have the budget (this after causing mayhem around the world and hundreds of billions in costs) and even if they did have all your personal data as required under FATCA, they have no real power or incentive to try and get to you. Canada won’t help them if they tried.
Do NOT go running to the US tax compliance industry for advice, they have a vested interest in scaring you into voluntary and potentially very damaging compliance, for it is they who are the real enforcers of the US tax system abroad. Most people ignore it and are usually quite right to do so, especially dual citizens.
No need to be concerned, forget about it and get on with your life.
Just my opinion.
“I had assumed that the bank didn’t know and that I was safe but now it appears that isn’t the case.”
So now after many years you have discovered that the bank does know. So what? If something bad was going to happen, it would have happened long ago. If it really bothers you, you could switch banks, open new accounts, and lie a little bit (failing to mention the SSN), but it probably isn’t worth the hassle.
My advice? Continue living your totally Canadian life in Canada and don’t worry about it. The IRS can’t touch you.
You can stop worrying about this, you’re at no risk.
The one proactive thing you can do is to change banks. Open new accounts somewhere and – oops – fail to declare your US citizenship. You can even use your passport as ID, since you were born in Canada. Then close all your accounts at the bank that supposedly knows your SSN. The IRS might have a few years of your FATCA data gathering dust on a CD-ROM somewhere, but that will never hurt you.
Thanks so much everyone! This crap rears it’s ugly head every couple years and I get all freaked out! One of these day maybe I’ll just renounce without filing… but until then I’ll stay put.
Honestly you’re better off not bothering to renounce. First, you’ll save money. Second, you are completely unknown to the IRS at present; if you renounce, they will eventually receive your name from the State Department (they won’t do anything with it, but they’ll at least know that you renounced).
I highly recommend that you change banks though. It’s a minor inconvenience and it will assure no FATCA reporting in future.