# Accidental American - renouncing citizenship questions



## meredithpl (Sep 27, 2018)

Hello all, 
I was born in the US, after my parents divorced I moved to Germany with my mother, I was 15. I have never lived in the US after that. I later moved to the U.K. and have lived happily without knowing I needed to file tax returns in the US. I have a UK bank account and never had any issues. I recently moved back to Germany and opened a joint bank account with my husband, again with no issues. My father, who lives in the US recently passed away and I have inherited the contents of his bank accounts and now I am ecountering some problems. 

My fathers bank refuses to electronically transfer the funds to my german bank account 
They have sent a cheque, my german bank does not accept cheques in foreign currency so I found another bank that does, when I tried to open an account, as my place of birth is noted in my passport as USA, I was given a W9 form and was asked for my us tax ID or social security number. I declined to open the account and have paid the cheque into my U.K. bank account. So, now I am worried about the IRS. I earned under $90 000 per year in the U.K. so I believe I am not lliable to pay any taxes and I am currently not working in Germany. I dont want to enter the US tax system though and would prefer to renounce my citizenship as I do not want any tax issues cropping up further down the line. So to come to my question, if I apply to renounce my citizenship will they want to see evidence of tax returns and what happens if I tell them I never filed taxes? Also will the issuing of the US bankers cheques ring any bells at the IRS? Does the US bank have to report whom they paid the cheque out to? I am trying to basically figure out if I should file tax returns under the streamlined offshore procedure and then renounce citizenship or go straight to renouncing citizenship?
Many thanks in advance for any advice!


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## Bevdeforges (Nov 16, 2007)

Based on the experience of a friend of mine who recently renounced, you should be able to go straight to the renunciation part and simply not worry about the tax stuff. (I take it you have German nationality from birth, so no issues there.)

The one aggravating issue is that renouncing costs $2350 and will require a trip to the US Consulate in Frankfurt (though when my friend went there, she was one of about 30 people with their appointment at the same time, so getting lost in the crowd is pretty simple). She hadn't filed US taxes for several years even though she receives a small US social security pension (which is only taxable in Germany anyhow). 

I believe the only question she got about taxes was whether she was "up to date" on her taxes - to which she responded "yes." Never heard anything further about the matter. As long as your check from the inheritance has cleared, it shouldn't be a problem. Even if the bank had your US SSN for the check, there shouldn't be an issue. Any taxes should have been taken out of the estate before the proceeds were remitted to you. There are some peculiarities about inheritances paid out to a foreign national - but at the time the inheritance was paid to you, you were still a US citizen.

Oh yeah, just a note - my friend said that the staff at the Frankfurt consulate were really nice and helpful to her throughout the process. No need to fear getting grilled or harassed or anything like that. They're mainly just overworked, underpaid civil servants like everywhere else.
Cheers,
Bev


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## meredithpl (Sep 27, 2018)

Bevdeforges said:


> Based on the experience of a friend of mine who recently renounced, you should be able to go straight to the renunciation part and simply not worry about the tax stuff. (I take it you have German nationality from birth, so no issues there


Thank you for the info, that sounds encouraging. I don't know if it will make a difference, but i actually only got my German passport a few years ago. As i was born before 1975, German citizenship was only granted along the fathers line and not the mothers. I had permanent residence for germany and used my US passport for travel and Identification. Eventually this law was lifted for a while and everyone in my situation had a window of opportunity to apply for German citizenship. I had no idea about the window period and by the time i found out, the window had firmly shut again. Germany finally changed the law in 2010 and people with a german mother born before 1975 are finally allowed to apply for citizenship. 

So if i renounce my US citizenship the authorities will see that i havent had a German passport since birth. Could this potentially be an issue?


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## Nononymous (Jul 12, 2011)

First off, you are in no danger of having appeared on the IRS radar. You declined to open an account rather than sign a W9 - very wise of you - and I expect the cheque being sent to you at a foreign address will have no consequences.

When you say you've had "no issues" with your banks in the UK and Germany, is that because they are unaware of and have never asked about US citizenship? If so, keep it that way.

You can renounce without ever being tax compliant - believing otherwise is a common misunderstanding. There should be no questions about tax status during renunciation, though the consulate might remind about tax obligations, in which case you can simply smile and nod. If you can do it cheaply and simply, you might wish to file 5 years worth of FBARs and returns and the 8854 form to fully exit the system. Or you can ignore the whole mess.

Your not having a German passport until recently will not have any impact on renunciation. Being dual from birth is slightly advantageous in avoiding exit taxes, but this is only an issue if one is both fairly wealthy and in compliance. 

I personally take the view that there's no need to renounce as long as you have no trouble with bank access, but it's possible that in Germany the US birthplace may cause you difficulties in future, for which the only cure is to spend $2350 (at today's price) on a CLN.


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## Bevdeforges (Nov 16, 2007)

As Nononymous says, the lack of a German passport will have no bearing on your renunciation. The consulate is not supposed to process a renunciation that would leave you stateless (or at least to explain in great detail the ramifications of so doing). But you already have German nationality so no big deal. 

My friend had to renounce and receive her CLN (Certificate of Loss of Nationality) before she could take German nationality by naturalization, so technically was WAS stateless for nearly six months. As long as you're not planning any international travel in the interim it's not a big problem.
Cheers,
Bev


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## meredithpl (Sep 27, 2018)

Thank you for the helpful info. I feel much better now. &#55357;&#56842;


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