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.
First of all thanks for this enlightening forum and to all the interesting contributions thereto:
My case: I am a double French (French father) and Swiss national (Swiss Mother; naturalization at the age of 17 and a couple of month) born in the USA while my parents were working a couple of month in the US towards the end of the 1960ies, “living” there for 7-8 months after my parents got and took me back to Switzerland (from where they came to the US in the first place) as a toddler, where I have lived ever since. I grew up, done all the schools, have ever worked in Switzerland, naturalized at the age of 17 1/2 in the expedited procedure for French Nationals with a Swiss mother, did my military service in Switzerland thereafter and later on (after finishing mit studies) worked as a court clerk in a Swiss court in Switzerland. I speak (Swiss-)German and French since I am a child (I have only learned English in School). I vote here on the numerous elections and votes on different subjects on the federal, cantonal and municipal level. I travel on my (current) Swiss passport or ID-Card and have ever used to travel on such documents (or on my French passport and ID-Cards of which I have currently no current ones). All my social, economic, family and any ties whatsoever are in Switzerland only (I have some family in France though)
I have no and never had any ties whatsoever to the United States of America, neither family, social, economic or otherwise (apart from being accidentally born and having lived there as a baby before I returned to Zurich as a few months old toddler together with my parents) and will not have any in the future, in particular I had no and have no income stemming from or assets located in the USA and will not have any in the future. I have never returned nor have ever contemplated or planned to return to the United States (after my parents’ relocating back to and my arriving in Switzerland), not even as a tourist, and do not contemplate or plan to do so in the future. I also never had any US-passport for my entire life. I have never felt american at all, but solely Swiss and European. I have never enjoyed any US benefits or privileges nor have I ever contemplated or planned to do so (nor will I do so in the future of course).
I have learnt that I might be considered a US national when I wanted to open a new bank account, respectively the expenses bank account of the partnership I have joined was set to be redocumented by the bank thereafter, and I inserted my US birthplace in the appropriate field (at the bottom of the bank form: a perhaps somewhat questionable threat was noted: that false information on the form would qualify as a criminal offence of document forgery) a couple of years ago and the bank was threatening to shut down all bank accounts, when I would not provide them with a SSN (thus, in light of that threat) I went through all the hassle of getting a birth certificate and then a Social Security Card (SSN), which I just received in time after 1 1/2 year to avoid that all accounts where closed; recently I got a copy of bank account information transferred under Fatca to the IRS (relating to the bank account of my former partnerhship which I, however, left years before). My alternatives seem to be following: (1) comply and stay (nominal) US national (2) do nothing (3) ditch (nominal (US national) status) (and comply) a) renouncing (as of now) or (b) relinquishing (retroactively). My goal tend to go in the direction of rather quickly getting a CLN, yet I would glad to get such CLN with a retroactive date, ideally when i turned 18, did my military service or my court clerkship (all way before 2004). However, having studied the materials and the INA, I feel despite my having any ties to the USA my request to that effect could be turned down by the consulate or the departement of state (arguing no expatriating act pursuant to the INA was given (naturalization with 17 1/2 not 18, even if the CH-naturalization was valid under Swiss law and a 17 1/2 year old is perfectible capable of validly making such decision; military service was not as a officer, working as court clerk with a Swiss court would not constitute work for a goverment (wheres former INA and expatriation common law talked of working for a foreign state …), although I feel that my case is pretty much straightforward taking into account the former expatriation common law, my no us ties and (if) the INA would not be exhaustive in listing the possible expatriating acts or a total absence of ties couple with the will to (retroactively expatriate) could also do the trick instead (after all nobody asked me, if I want that US Citizenship and nobody told me at what a hefty price it would come along; which would ideally allow me to ditch this presumable citizenship retroactively at my becoming 18 :-). My fear is a bit, that if I go down this route, there could be substantial delay …. why it could be better to avoid it and just renounce to get this done quickly (and save those arguments for a later point in time … asking for an revised CLN, if this turns out to be necessary), opening new bank accounts, transferring funds slowly, handing in the CLN to the tainted bank or closing it right away. I contemplate not filing with the IRS, given that I firmly believe that a court of law would upheld that the taxing of (and the subjecting to any filing/reporting obligations) of an accidental/nominal “deemed” US-National under the overbroad IRC/Fatca/Fincen is fair, reasonable, constitutional or admissible at all in my particular case (and the case of other fellow accidentals all over the world), but that such laws need reasonably construed filled with an exception readily exempting such persons from any reporting/filing/taxation obligations altogehter (without any burden and cost). Glad to hear of what you are thinking ? (So far I could resist the compliance condor fearmaking-industry who appears to have already produced countless victims in Switzerland and Europe… ). Many thanks and have a great day out there,
I think you’ve covered all the possibilities here. The only virtue of documenting past relinquishment (pre-2004) as opposed to renouncing is that doing so formally excuses you from having to go through the tax expatriation process. Otherwise the fee is the same, $2,350. It’s probably easier to renounce, you’ll get your CLN more quickly, but still might be worth trying to argue the relinquishment case. You’re in no particular hurry unless banks are denying you needed services, such as certain types of investment accounts. If you think you want to attempt relinquishment, do not file any US tax returns, as that would be evidence of ties to the US. If you renounce, you can decide whether or not to file anything after. At this point in time it’s completely safe to renounce then ignore all tax compliance – you won’t hear from the IRS.
Many thanks Ron, your thoughts and opinion are very much appreciated and helpful.
I think I will go down the renouncing route mainly to avoid any further delay in obtaining a CLN.
In an ideal world, however, I would want to present both cases at once and request a present day CLN (renouncing) and a CLN with a retroactive effect/date (relinquishment), which would then replace the former
1) renouncing for the sake of good order and ending it formally as soon as possible with a CLN (for regaining liberty in banking, stopping the bank mailings to the IRS and thereby reducing the FBAR/FINCEN fine exposure and associated headache; and (thereafter)
2) relinquishment/expatriative act case (based on:
A) naturalisation in a foreign state, albeit at 17 1/2 years – maybe I find out that there had to be a (silent) confirmation past 18 of age under applicable Swiss laws, which would perhaps help me based on the case law relating to this section of the INA; maybe capacity will be sufficient in deviation from the age fixed at 18 on the grounds that i) under applicable law I could validly naturalise capacity being sufficient for a minor in Switzerland ii) under former US statutory language there appears to be no age limit iii) under the INA (and the Manual) minors can renounce but have to confirm renouncing until 18 1/2 (and treating renouncing by a minor and relinquishing by way of an expatriating act seems inconsistent and – instead of a confirmation requirement with the consular services – subsequent actions consistent with the relinquishment/intent to expatriate set thereafter would replace „confirmation) (such as e.g. joining Swiss military service 14 months later and continuing not to use any US rights and privileges)
B) joining the Swiss military (albeit not serving as an officer) and
C) serving in the Swiss judiciary as a court clerk (this is an act perfectly covered in the case at hand by INA sec. 349 (a) (4) (A) after rereading „accepting, serving in, or performing the duties of any office, post, or employment under the government of a foreign state or a political subdivision thereof, after attaining the age of eighteen years if he has the nationality of such foreign state; „ and based on Kahane v. Shultz, 653 F. Supp. 1486 (E.D.N.Y. 1987; quotes „The parties agree that Kahane has committed an expatriating act, because he accepted a seat in the parliament of a foreign state, the Israeli Knesset. See 8 U.S.C. § 1481(a) (4) (A) Upon election in 1984, he took a seat in the Knesset, the supreme authority in the Israeli governmental structure: concluendo: under the government of a foreign state means office, employment etc in any of the executive, legislative or judicative (judiciary) branch of a foreign state) and/or
D) arguing that the expatriating act set forth in INA 349 is not exhaustive but only ennumerative, at least insofar a „citizenside“ expatriation and not a stateside expatriation is concerned, meaning that any other ties sufficiently strong alone or taken together with other connecting factors to a foreign state may be taken together justifiy voluntary abandonment/relinquishment of citizenship by a citizen based on any such factor at the earliest possible date (e.g.: returning to a foreign country after birth and residing there after birth, naturalisation even as a minor, military service (even not serving as an officer), voting etc coupled with no US-citizenship compatible behaviour) in view of every (forced) citizens fundamental right to expatriate).
However, because relinquishments will take much longer than renouncments and I fear there is a risk that – at least administratively – either one can not go down both routes simultaneously, i.e. consular services forcing you to choose or that if you give hints to potentially expatriating acts they might themselves go down that route baring you from renuncation until the relinquishment case is decided;
therefore I guess, I will first just go down the renouncing route with a generic statement of my only Swiss, french ties and no US ties use of privileges rights and no US income, property, business as a hidden message to the IRS (without any reference to expatriating acts), albeit a reasonable reading of form of 479 (relinquishment form) seems not to preclude one to conclude that one can in a two step approach go first for the renouncing and thereafter for the relinquishment by the expatriating acts (both routes are mentionned);
Thus, I will secure the renouncing CLN as soon as possible and
upon receipt (or at a later point in time, if any (such as the IRS knocking on my door for whatever reason, which I am confident will never happen, because I am certainly not the targeted species (High net worth homeland tax evader and similar chaps) albeit within the reach of this very poorly crafted overbroad legislation) should this be the case I will just lodge a demand for review of my CLN and issuance of a new one with an earlier loss of nationality date (at the earliest 1987, the latest 2001 (January 8)) or just hold that I lost nationality ever since vis-à-vis the IRS and that I will engage proceedings to get this confirmed formally by the department of state (cost wise; it should be covered by the hefty 2‘350 USD paid, as it does boil down only to CLN cosmetics (change of date (I am not confident that the reduction to 450 USD will come so quickly to benefit me, given that in the past this took a couple of months if not years in 2010/2015) – IRS-Knocking on my door for whatever reasons (income tax, exit tax, Fatca, FBAR or anything else if I have missed something). In any event I will stay out the system and file nothing and give no sign whatsoever. In case of knocking I am prepared with a couple of good arguments (besides my not being US citizen since 1987 or at least 2001) not covering accidentals like me based on a rational and constitutional construction of the relevant laws (missing exemption in line with the purpose of these laws) to share with them with or without appropriate threats of legal actions (alongside with befriended organisations or peers) in case reasonable behaviour is not be forthcoming immediately (the one bank account confirmation that went out to the IRS went out erroneously given that I left the partnership much before the period covered therein).
With the renouncing and CLN my life will again be normal here and I will be out of Fatca and Fincen (and associated banking pains) at least as this is tied to (nominal) citizen status (and not „covered expatriate“ status under the exit tax (after a glance at the CH-FATCA-Agreement and the CH-IGA) – which again does not bother me given the foregoing (with a CLN dated 1987 I could even state full compliance with my previous 5 tax years 1982-1987 as I was surely under the reporting threshold)).
I will certainly open a new bank account with another bank with the new CLN (and if they behave dumbish and giving me a hard time I will not proceed and to the next one (and maybe, just filing in that I am born at my place of residence (arguing that I have overread and I thought they have meant „hometown“ or municipal citizenship (after all putting something wrong that is not relevant is nothing that could consitute an offense, better it serves everybody ressources )
and thereafter and after having put in place everything hand in the CLN to my current bank reduce my balances (and maybe ultimately closing accounts altogehter after a year or so, if at all – there appears to be no freezing risk based on extraterritorital US legislation).
Many thanks for all your and Brockers invaluable guidance and warnings that assisted me greatly in navigating my way through and ending this nightmare of overbroad awkward and extraterritorial legislation, frivolous fiscal and reporting tyranny, push back- and risk averse foreign governments, international organisations and most importantly banks and the scaremongering by the compliance condors aiming at increasing their turnover to the very detriment of accidentals (yet also non resident expats).
I will keep you posted on further developments from my side and keep track on developments in this area anyhow. Thanks for your valuable guidance and comments (and feel free to share your further thougths (if any)).
Very best regards from Switzerland. AN
Seeing you mention penalties, I just thought I would mention that these are pretty much unenforceable on people like you are are generally self inflicted by reporting to the US government. Try not to overthink the whole thing, get the CLN via renunciation and forget about it.
Many thanks for your thoughts an aussrances, Mike, very much appreciated. That’s what I will do
And yoou’re perfectly right of course. Yet, after all: Overthinking just as fear, sleepless nights, headaches etc. forms part of the tremendous hidden cost and damage put on deemed americans, duals and expats by this incredible system and/or the alliance of IRS, Tax & Compliance Condors & foreign Banks and governments enforcing it)
Best regards from Switzerland, AN