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
Five countries have mutual collection agreements with the US: Canada, France, Denmark, Sweden, The Netherlands.
https://www.irs.gov/irm/part11/irm_11-003-025.html
It’s not so simple as country x has a mutual collection agreement. If some one has never been in the IRS system and renounces and then files bugger all, the IRS has nothing to go on.
@Duke of Devon – indeed.
@iota The embassy in Amsterdam is requesting that I email them detailed info about myself before they will give me an appointment. Fortunately, they don’t ask for DS4079 as you helpfully observed so that is a win. But first (and foremost?) they ask for “current address, telephone number”. I’m afraid that they will refuse me if I list a very distant current address in, say in Asia. Since you travelled from London, am wondering if this ever came up? Would you say it’s wiser to list a local temporary Dutch address rather than a more distant one to be granted an appointment?
If anyone else can offer opinions/experience, thanks in advance!
Dana
@Dana – That is a long way to travel! I don’t know if they’d refuse, but I think they’d question you closely. They questioned me about why I was renouncing in Amsterdam rather than London. They accepted my chatter about museums, frequent visitor, love Amsterdam, etc, but they might be more sceptical in your case. I don’t think a temporary address would work unless your second citizenship is Dutch. It would probably just lead to more questions, and no appointment.
I’m so sorry if this discussion about DS-4079 has given the impression that it’s essential to avoid it. It’s not. Most renunciants probably do complete it, and doing so doesn’t cause them any problems.
My advice would be to just try nearby consulates, and pick the one that suits you best. Don’t worry, renunciations nearly always go through with nontrouble. And renouncing brings a wonderful sense of freedom!
@Dana
We were refused an appointment in Auckland. We live in Brisbane Australia. The nearest consulate is in Sydney. We figured that we needed to fly anyway, so might as well fly to Auckland, but they disagreed and insisted that we get an appointment in Australia.
@Dana
Why not email your info and see what they say?.If you tell them you are temporarily in Europe there may be no problems. When Bern was busy some Swiss residents went to Luxembourg and Paris with no problems from not living there. It all depends on the Consulate.
You could try Phillipines, Malaysia, Thailand, etc, and see if they’d make an appointment for you. It really depends on the country. Iirc some time ago the US embassy in Germany said it would limit applications only to German residents, presumably because there were so many Americans applying to relinquish/renounce. Or it could be a directive from the State Department that they can only process each particular country’s residents these days. So try the other US places in Oz as well.
No reason not to try — all they can do is say no. We ended up in Sydney and they were polite and professional – no complaints there. Plus, they did NOT require DS-4079.
But doesn’t it strike you odd that such a monumental is left, ‘up for grabs”?
Thanks again, iota, for your helpful insights.
On a related note, I’ve been reading in forums that ‘renunciants who do not state a reason for renouncing are presumed to do so for tax reasons’… especially if they are ‘covered’ expatriats. Is this true?
I imagine many renunciants have multiple reasons. I imagine many are also private people who prefer to keep their reasons private. But is it wiser to state a benign reason so that the US will offer more humane treatment for US visa applications?
@Dana, whether they state a reason or not all renunciants are assumed by the IRS/US government to have done so for tax reasons. You do not have to state a reason for renoucing if you don’t want to. I certainly didn’t when I renounced, but if you want an excuse you can say you simply want to make your life simpler and less complicated or you feel you’re more (insert country nationality) than you do American. And I recently applied for an ESTA (visa free travel to the US) for an upcoming trip and had absolutely no problem in getting approval.
You are only a covered expat if you don’t file the necessary US returns to enable you to file the 8854 form to clear your US tax obligations and exit the system cleanly, assuming you are under the financial requirements of a covered expat.
@Dana – When I renounced I didn’t submit a written explanation, but I had a benign reason ready in my mind in case I was asked. They did ask, and listened to the answer quite carefully. (I said I wanted to simplify my life, and at my age I didn’t need two citizenships.). So I was glad I had an answer ready.
Another person was renouncing at the same time as me. He said something similar – said he wanted to die as a Dutchman in his native land, which I thought was quite good.
I really don’t think the question about reason for renouncing is anything to do with tax. The consular officer is supposed to be assessing you to decide whether to recommend to Washington that the renunciation should be approved. They’re looking for possible signs that you’ve been coerced into renouncing (as if!), or expressions of hostility towards the US, or signs that you may not understand what you’re doing. That kind of thing. So low-key, coherent, normally pleasant, not frivolous and definitely not angry. That’s what I aimed for, and it worked – he told me at the end that he would be recommending that the renunciation be approved. And said the same to the other renunciant.
I haven’t been back to America, but wouldn’t expect to have any problem getting a visa and being allowed in, based on what Medea and others have said. Be sure to carry your CLN to show the border guard.
Dana, whether or not a renunciant is doing it for tax reasons was too subjective so they created an objective test.
If you meet the criteria for covered expatriate, you did it for tax reasons in their eyes and pay the penalty.
Otherwise, you don’t need to give e reason.
Great point, Duke.
It’s assumed that if it costs you to leave you must be renouncing for tax reasons.
If you don’t have to pay to leave, then it’s assumed you’re doing it for other reasons – therefore no need for further punishment.
Blatant discrimination.
@Duke I understand that as a covered expat, I will bear more tax consequences. However, must I also bear worse immigration treatment? Seems counterintuitive that by giving more financial support to them, I should be treated more harshly in terms of visa priveleges.
When you say immigration treatment, I assume you mean as a visitor. In that case it makes absolutely no difference how you expatriate. You are supposed to be treated exactly the same way as any other compatriot
@Dana
As far as I know you can go anywhere to renounce. Because my consulate was booked out for weeks I went to another country. I just had to make the appointment. Nobody asked any questions. Maybe you are more paranoid than need be? But sure- never say you are doing this for tax reasons.That is a question you might get while renouncing. Personally, I have lived abroad since I was a child- thats about 50 years ago. I think it suffices if one has no intention of living or working in America again.
@Dana
Some people are covered because they have a net worth of over 2 million, but they will pay no exit tax as long as their unrealized gains are below $690,000 (aprox). Then you pay 15% on gains above this figure.
At present a covered expat, will have the same rights to enter the US as any other visitor
If you are a dual from birth and you have lived in your other country for long enough, there is no exit tax.
Providing you file an 8854 form. If you don’t you’ll still be a covered expat.
@Dana
Also you need to certify 5 full yrs of tax compliance plus a partial for the yr you renounce Take a look at the 8854 to see the latest figures and get a feel for what is needed.
@heidi
Don’t forget that covered expats must also include the balance of all their retirement accounts as taxable income in the year of renunciation. This is not sheltered by the $690k exclusion. As a result, even if you have nowhere near that much in unrecognized gains you may still owe a substantial exit tax penalty, perhaps 30% to 40% of your — possibly inaccessible — retirement savings.
@watcher
Yes, this can be seen when reading the 8854.
Just too much to explain here…..long day.
@Dana
while you can never predict what Congress or the IRS will do in the future, at the moment covered expatriate status does not automatically exclude you from visiting the US (with the appropriate visa or waiver). You might want to see these posts:
https://isaacbrocksociety.ca/2016/03/23/homeland-security-enforced-reed-amendment-twice-in-14-years-banished-two-ex-citizens-who-mentioned-tax-motivations/
https://isaacbrocksociety.ca/2016/06/02/stop-enough-already-the-reed-amendment-is-a-myth/
Polly said “Because my consulate was booked out for weeks I went to another country. I just had to make the appointment.”
What I would like to know is how you found out the consulate was booked out for weeks and how you were able to make an appointment elsewhere. When I applied for my appointment the reply (from CanadaCLNAppointments@state.gov) which acknowledged my application included the note “The CLN Processing Center will not reply to follow-up emails asking for wait times. It may take several weeks to process your request. In Canada as far as I know an appointment for LON cannot be requested directly by phone or online, only by sending an email that includes images of all completed forms and relevant documents. One is allowed to request an appointment in OTTAWA, TORONTO, MONTREAL, QUEBEC CITY, HALIFAX, CALGARY, VANCOUVER or ANY. There is no estimate of waits; to get the earliest it might work to choose ANY, if you are prepared to travel up to 10000 km round trip across the country.
From BC, It would be quicker to go to Tijuana Mexico than to Halifax, and my guess is that Mexico has fewer wannabee expats than Canada so waits might be shorter. But the only relevant option on Tijuana’s appointment system is “Notary and other”, we don’t know if “other” includes renunciation, their calendar shows only two open days in June 2016 and none at all in July or any later months. Tijuana is still a few thousand km round trip, and they might require more than one appointment, or tell us to apply in Canada. So i think, like most others in Canada, I just have to wait to find out what the the wait will be.
Polly – I’d still like to know how you found out what the expected wait time was in your country and the other country.