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.
There are tax lawyers who offer client privacy advice. I used one who worked in the US and Canada who was very helpful but expensive.
I travel to US a couple of times a year for my job. Last time I flew in US border agent asked for my US passport, of course I did not have one as I moved back to Canada at 6 months of age, born to Canadian parents and never lived there since. The border agent at Toronto AP, then WROTE in my Canadian passport that I have been notified to get a US passport, and quoted some law.
What can happen if I attempt to enter again without a US passport?
Can I renounce without filing back tax returns?
If I renounce, will I have trouble reentering the US for work related visit?
If I start filing, can I just start filing from this this year onward?
I have even considered quitting my job and finding one where I don’t have to travel to the US over this. I am in sales.
It’s not unlikely my combined savings/networth could hit over 2 million by retirement age. Nothing special, just have always been a good saver in RRSP’s TFSA’s and Non registered accounts. Half of this is in wife’s name (non US person)
I removed what looked like it might be your last name on your post (I’m a moderator) for anonymity due to the nature of your question. If you’d like me to restore it, just let me know.
Re: “Can I renounce without filing back tax returns?” Yes. There’s no requirement to be tax compliant in order to renounce; and even if one never files tax, the termination of citizenship and the CLN attesting to it, remain valid. More details, with source links, at Renunciation/Relinquishment: Interactions between Department of State and the Internal Revenue Service.
Dorian. What the agent did is most unusual. You have clearly crossed many times before without hassle. There are several options open to you . In order of preference; 1) Renounce ASAP and don’t file a thing. You don’t have to in order to renounce and obtain a CLN. 2) There is a new program for those in your situation. https://americanexpatfinance.com/opinion/item/258-is-the-new-irs-relief-procedures-initiative-really-better
This is a poor second choice in my opinion. It would probably require a tax specialist. Figure 5 K for that.
3). File going forward. This is a viable option but not as clean as no.2
4)Do nothing. You would be fearful every time you go south that you would be turned back. There are no grounds for doing so but some border guys are on a power trip .
If you renounce, you will then be treated as as you were before. I’m assuming you live in Canada. Therefore no visa required. I’m sure you are aware that some agents refuse entry if you say you are going for ‘work’. You need to understand their rules. Don’t panic. Don’t start filing until you have made a plan.
We renounced a few years ago. It was a 6 year project as we needed to reduce income for 5 years.
We did back file but only because we have grandchildren in the USA
CBP writing in your passport is weird. Never heard that before.
I am in a similar demographic. On one business trip I got into a debate at the airport – the usual was it “meetings” or “working” BS – and the officer noticed my birthplace and asked if I was a US citizen. I pulled a long-expired US passport out of my bag and said yes, let me in. He typed many notes into the terminal but I still made my flight. Anyway, because I am stubborn, I have continued using my Canadian passport ever since, at least half a dozen times, and nobody has said another word. Of course they didn’t write in my passport, so there’s that.
I have no idea what would happen if you tried to enter again and they asked, but if it’s relatively soon you could at least apologize and tell them that you’re working on getting a passport but it hasn’t arrived yet.
In your case, if you renounce (with or without any tax filing) you will in theory have the same access to the US as any other Canadian. No evidence that CBP is revenging itself upon renunciants, but that could change in the future.
The other option is to simply get a US passport, and use that for work travel. You do not need to obtain a Social Security Number first – you can enter all zeroes on the application form – and doing so will not put you at any risk on the tax front. Yes, it means that the US government has your name on a list of citizens somewhere, but the IRS is a big overwhelmed bureaucracy that does not go looking through the passport rolls to see who has or has not been filing.
My advice, if you don’t want to change jobs, is to apply for a US passport. If later you decide to renounce, you can still do so. But under no circumstances should you even consider any form of tax compliance.
That’s disgusting that a US border guard decided to “deface” your Canadian passport. I’ve had the odd discussion over the years but never heard of that happening.
One way to fix that might be to “lose” your Canadian passport and apply for a replacement. Not sure how involved the procedure is for lost passports or how long it takes but I’m sure it can all be researched online.
While personally I would never apply for a new US passport (I did have one years ago) R.H.’s suggestion would eliminate any potential problems related to traveling to the US for work purposes. That could be an issue when traveling as a Canadian.
I had also thought that the OP could obtain a clean Canadian passport, but presumably the Federales type notes into their fancy computers. Not that they ever seem read those notes again, in my experience.
A US passport would also solve any possible “working vs. meetings” nonsense when crossing the border.
I don’t personally think that obtaining a US passport – particularly without an SSN – is going to create future tax compliance problems. Just ignore that curious aspect of US law.
God only knows what they type into those computers, but I’ve got a hunch that they suffer from the same thing as all the rest of us; a massive barrage of too much information so for a regular border crosser they probably can’t sift through it all in the short time available. I agree that obtaining a US passport is unlikely to cause compliance problems. The most likely thing to cause compliance problems is actually trying to comply.
I had an odd border crossing experience a while back. The woman in the booth, obviously a trainee, was instructed to subject me to an enhanced interrogation. Lucky me. After sitting there (behind the wheel of my car) for ten or fifteen minutes while she asked me dozens of questions about all manner of things, she finally sent me on my way. But not one word about the most obvious thing; my Canadian passport with US birthplace. For some reason airports seem to be where one is most likely to be hassled about that.
If you decide to obtain a new US passport, your name will be given to the revenoors. Goodness only knows what they do with the information.
I believe that when they scan your Canadian passport into their system they have access to your whole life.
I’ve renewed my US passport several times* and the IRS hasn’t found me yet.
There are no reports here or elsewhere of non-compliant US persons being contacted by the IRS after obtaining or renewing passports. Which isn’t to say that it can’t happen one day in the future.
Not sure what data they see when they scan a Canadian passport at the US border, but I doubt it’s anyone’s “whole life” – they consistently fail to notice that I was born in the US, am still a US citizen, and was once told to use a US passport on entry!
*Admittedly some minor subterfuge to cover my tracks on the last renewal, as by that point I was aware of CBT and FATCA.
“If you decide to obtain a new US passport, your name will be given to the revenoors. Goodness only knows what they do with the information.”
My guess is nothing, particularly if you don’t have a SSN. Even with FATCA, CBT is unenforceable; we know it and they know it. Our sacred duty here at Brock is to make sure everyone who visits this site also knows it.
This is the official word on SS# and US passport application.
Ron Henderson wrote:
“I don’t personally think that obtaining a US passport – particularly without an SSN – is going to create future tax compliance problems.”
I agree with that.
Okay, it now says NONE on the passport application. It used to say all zeroes.
Point being, if you don’t have one, don’t get one. And if you do have one, it’s very difficult to remember those long numbers without mixing up a digit or two! I rather doubt that they routinely check passport applications for missing or incorrect SSNs.
@ Ron Henderson
Mixing up a digit or two could affect an innocent person who happens to have the SS# created by doing so. I would not recommend that.
Let’s just say that a certain person I know might possibly have accidentally transposed a few digits from their SSN when applying for a US passport renewal, and funnily enough they received the passport very punctually.
Appreciate all the info everyone, lots to think about.
Take your time, do your research. The one thing you absolutely do not want to do is suddenly start filing US tax returns.
Hey guys, I’m an unofficial relinquisher. Was born in Canada and got US citizenship when I was 16, thanks mom 🙁 … Anyways, I had some stock in the US from my employer, which I sold last year. I filled out the W8Ben form and stated I wasn’t American. The company sent through a tax form to me and the IRS with my name, DOB and address. Just a typical withholding doc, normal etc but this is the first time anything regarding myself has been sent to the IRS.
I haven’t lived or worked down there.. so is this something that should concern me at all?
Nope. No reason to be concerned. You did the right thing – acted like any other Canadian without US citizenship. Stick to that plan and all will be well.
There’s no chance the IRS will try to match up some random W8 against naturalization records.
Presumably when you travel to the US – a thing of the past for who knows how much longer – you use a Canadian passport and say nothing about US citizenship? Continue doing that as well.
I found this post on Quora to be interesting, never came across this approach before but seems to have worked.
“”My bank send me a FATCA letter.
I send them a copy of my naturalization papers and then a link to the US Secretary of State website which stated that a person who get naturalized by a foreign nation with the intent of losing their citizenship, would lose their citizenship…I simply told my bank that I intended to lose it and no longer considered myself American. I have heard nothing else from them””
The principle here is well-known: You don’t need to fool the US government, you only need to fool your bank.
Banks are FATCA’s gatekeepers; convince the bank that you are not a US person, and you will have no further issues with the IRS or anyone else, even if you really are a US person.
In some cases this is very easy: simply check “no” on the appropriate form and continue. In other cases it’s more difficult thanks to US indicia, particularly if the bank is aware of a US birthplace: claiming to have relinquished upon acquiring another citizenship may have worked in the case you cite; similarly, claiming to have had a parent with diplomatic status has worked (I did hear of one case where the claim was true and could ultimately be supported with documentation).
In Canada, the CRA guidance recognizes that financial institutions are not expected to make decisions on matters of US nationality law, and it’s up to them to accept reasonable explanations for non-US-person status. With a little effort and cleverness it shouldn’t be too difficult to bullshit your way past FATCA rules.
I have not posted on here in a long time, so pardon me if this has been answered (I did search, but didn’t see anything).
On Facebook I have seen ads from an expat tax company (maybe Moody’s ? ) The ad implies that you must renounce the ‘right’ way and that if you do it wrong… they imply you could be banned from the USA, or words to that effect.
So, is this is just scare-mongering to try to sell their services? Is there actually some ‘wrong’ way to renounce or relinquish that would have such negative consequences?
Almost certainly scaremongering. Especially if it’s Moody’s.
Renouncing is a straightforward do-it-yourself process. Renouncing and filing or not filing tax information are not dependent upon each other.
It’s probably Moody’s, that has been one of their standard sales pitches. They are the worst.
There is a wrong way to renounce that may get you barred from entering the US. To achieve this, you make a written statement along the lines of “I am renouncing my US citizenship to evade and avoid any US taxes, past and future. Please invoke the as yet unenforced Reed Amendment to keep me out of the US.” Repeat this message verbally to the consular official during the interview. If you are very, very (un)lucky, you might be put on a list and turned away at the border.
Otherwise, it’s not a concern.
Failing to come into US tax compliance before or after renunciation does not currently lead to problems at the border. Have a look at this thread from late last year:
The IRS admits that 40 percent of those who renounce do not file their tax exit paperwork. The IRS also admits that it does not follow up with any of these people. So if you’re concerned that renouncing without any tax filing may lead to problems, don’t be.
Renouncing is easy , the consulate just wants to make sure you are doing it of your own free will , you are not being coerced in any way and understand the ramifications of losing US citizenship.
You are not required to give a reason but some consulates do ask. If so, it is best to say something non controversial, like I just want to simplify my life, or I feel allegiance to the country where I live and work. Do not mention avoiding US taxes. The Reed amendment (banning) has never been implemented but you want to avoid any trouble .
Moodys and many other tax preparation companies are out to make money, you do not need them to renounce.
You do not need to be tax compliant either.