# Confused what to do about US taxes



## Captain Over

Hello, I was wondering if anyone could have some advice regarding first time filing for US taxes. Essentially I don't know what to do, ie whether I'm required to submit 1040s and if so, whether I should do this as part of a Streamlining procedure. 

- I'm a dual US / Belgian citizen. Born in USA to Belgian parents, left USA when I was 6 weeks old and have since never lived in the US and do not have assets, accounts etc in the US. I do not really identify as an American, but since I have it as my place of birth I guess I am one after all. However, never in my life I have filed a US return. 

- I have been in paid employment till 2011 and in that year I lost my job. However, becuase I had an inheritence as well as some savings from having worked over 15 years, I perhaps foolish decided there was no need to immediately find employment because I was fortunate enough to have around 400k euros in my accounts at the time.

- worse, throughout 2012, 2013, 2014 I thought I was smart enough to make money on the stockmarkets only to end up losing over a 100k in that period. Probably even more but I need a strong Belgian beer in order to be brave and add it all up, but it could easily be 125k too. 

Although I still do not have work and therefore zero income, and thus living of these funds, I wonder about my US filing obligations. Because essentially if I have to file a return all I would submit is a whole list of capital losses and not gains. 

What I find confusing is that if you have zero income (not even paltry interest) the IRS Website seems to suggest no (1040) tax return is required. But then I read about schedule A, B, C & D and other forms and then get confused.

Since I'm pretty sure I don't owe any taxes to the IRS, should I still go through the streamlining procedure for example ? It seems like a lot of work and there may be considerable expense involved if I have an accountant do all that.

I do get the impression I would have to file FBARs in any case, is that correct ?

Any thoughts would be much appreciated as my mind is all over the place at the moment ! And english isn't actually my first language either, so I am not always sure what to make of all this ! Thanks so much for reading.


----------



## Bevdeforges

The first thing to realize is that, with US tax forms, there is no single "right" or "wrong" answer. There always seem to be choices and options and elections. In part that's what makes tax filing so difficult.

First of all, let's just clarify the filing requirement. In any year that your gross income (that is before any and all deductions for social insurance or anything else) exceeds the filing threshold, you are "supposed" to file - even if the tax liability winds up being $0. But, for any year where your income is less than your filing threshold (around $10,000 for single folks) you do not need to file anything (except possibly FBARs - but that's a separate matter). 

Secondly, there are those who will swear that, in a case such as yours, where you left the US as an infant and have no assets or financial interests of any kind there, it may actually be best to stay below the radar and just keep on as you have been doing until and unless something changes or you are contacted by the IRS. Quite honestly, it's very unlikely to happen (unless you become a "celebrity" like Boris Johnson and then sell your fabulous home for millions of euros and garner much publicity surrounding the sale). There is very little to indicate that the IRS has the time or the ambition to pursue "accidental Americans" who have never filed and who, in most cases, would owe $0 or very little in back taxes. 

OK, if after all that you decide (now or at some point in the future) that you need or want to get straight with the IRS, there is the Streamlined Compliance program - for which you would file the current year plus 3 years back taxes plus six years back FBARs (i.e. declaration of your "foreign" bank accounts). You will need to dig up your US Social Security Number (usually you get one of these along with your birth certificate in the US ), which may be an argument for doing nothing until you can find your SSN. OTOH, one argument for getting caught up with the IRS is that, should you wish to visit the US, you'll run into problems should an Immigration agent note your US birthplace on a foreign passport. (Though it is possible to get a US passport without a US SSN, should you need one.)

The choice is really up to you at this point.
Cheers,
Bev


----------



## Captain Over

Hi Bev,
Thank you so much for taking out the time for the quick response, I really appreciate that. 

Very interesting what you wrote about Boris Johnson. Because I also had read that story last year or so and was wondering how the IRS got to learn about, but now it makes a lot more sense.

I'm glad you confirmed what I also thought to be the case with regards to the filing requirement ie if you make less then the threshold then no filing is required as I should certainly meet that requirement with $0 income. 

But there is still something that concerns me and I was wondering if you or someone else might have some thoughts on this.

I live in a rental studio at the moment and by the end of the year, the lease will expire and will move somewhere else in the city.

The investment account I have allows me to change my address on-line. But here it gets interesting, because when you put in your 'change of details' request, at the bottom of the form it now includes a generic sentence which reads (in dutch) 'please confirm you are a US Person ; Yes / NO'.

Now I do not want to lie really and say I'm NOT a US person. So, say, I confirm I'm a US Person, then my bank will send me a W9 form to fill out and I believe this form will stay with the bank (and not be send to the IRS) to confirm to them I'm US tax compliant.

But I also understand that from that moment onwards my bank will then start reporting my year-end balances to the IRS.

So, that's why I think sooner or later I would have to do something about this tax situation. 

I'm more than happy to submit my account details to the FBAR factory as that seems pretty straightforward to do. 

But as I understand the Treasury / FinCen is different from the IRS, so then my mind starts to wonder that although I officially am not required to file a 1040 because of no income, the IRS will probably get to hear from my bank that I have x-amount in my accounts.

Is it then not likely they will try to get in contact with me and start inquiring where are your income details / forms ? I'm wondering if I can claim US tax compliance having just submitted the FBARs.

Never realised this to be so complicated, but any thoughts would again be so appreciated.


----------



## Bevdeforges

Basically, yes, everything you say is correct. The banks are now pretty scrupulous about asking if you are a "US person" and getting a W-9 or some statement about it if you are. (Mainly to get your US social security number to report your bank accounts and balances against.)

So, yes, you may very well want to consider filing your FBARs if the total balance of your non-US accounts exceeds the threshold (i.e. $10,000). The FBARs are basically just a listing of your bank accounts (with bank addresses and account numbers, plus the "high balance" however determined).

But it is entirely possible to have rather substantial bank accounts without having enough income to have to file income tax returns. If that is your case, then you should probably file the FBARs and be done with it. There are plenty of folks who fall into this category - often retirees who are living on their savings. With interest rates as pathetic as they have been these last few years, you can easily have $500,000 in the bank and be receiving less than $5,000 in interest income - thus exempt from filing if you're single. I know of a couple folks in this situation and so far, none of them has gotten any sort of inquiry from either the IRS or the Treasury. And, in fact, my Dad continued to file his tax returns, even when he got to the point that his income fell below the filing thresholds. He actually got a letter from the IRS telling me please NOT to file any more unless his situation changed so that his income increased. (He was living off his savings in retirement.)

So perhaps the solution is to go ahead and file your FBARs (six years' back if you want to come up to date) and if and when you reach the point where your gross income exceeds the filing threshold, you just start filing then. (In the meantime, you can research a bit about how the US tax system works.)
Cheers,
Bev


----------



## Nononymous

I would do absolutely nothing until there is a clear problem. If you need to check a box on a bank form, answer "no" - you didn't understand the question, you don't know what "US person" means, you don't have a US passport or SSN, etc.


----------



## iota2014

> Very interesting what you wrote about Boris Johnson. Because I also had read that story last year or so and was wondering how the IRS got to learn about, but now it makes a lot more sense.


I think there's actually a very simple likely explanation.

I think it's likely that Boris Johnson's accountants had been preparing his taxes for years, both US and UK, and no US tax was ever due. Consequently Johnson never gave his US tax obligations a thought until he sold his house and subsequently was informed by his accountants that he now owed $xxx,xxx in US capital gains tax.

I don't think there's any reason to suppose that the IRS ever "came after him.". They certainly took no noticeable action against him during the period when he was insisting publicly that it was outrageous and he wouldn't pay. I don't think the IRS makes much effort to pursue anyone who's not US-resident.


----------



## Bevdeforges

Nononymous said:


> I would do absolutely nothing until there is a clear problem. If you need to check a box on a bank form, answer "no" - you didn't understand the question, you don't know what "US person" means, you don't have a US passport or SSN, etc.


Small caveat here - some banks are doing their "due diligence" about now and running their customer base for those with US birthplaces. (In many European countries, your birthplace is part of your i.d. so the banks may have that in their files.) If you do decide to check "no" and then the bank comes back to you wanting to see your "CLN" that's when you use the line that you "misunderstood the question."

But again, it's up to you how far you want to test it. Good luck! (And no, I don't mean that facetiously. For various reasons I don't have the option of trying to deny things first. I wish I did.)
Cheers,
Bev


----------



## iota2014

Nononymous said:


> I would do absolutely nothing until there is a clear problem. If you need to check a box on a bank form, answer "no" - you didn't understand the question, you don't know what "US person" means, you don't have a US passport or SSN, etc.


Or you could renounce and be done with it. It costs $2350, but it solves the problem, avoids having to lie, and is very easy.


----------



## Nononymous

Yes, I should add that if the bank has place of birth on record, then sooner or later one might be identified and reported under FATCA. 

Whether one needs to do anything at that point is another matter. The US government is likely neither willing nor able to come after a Belgian citizen with only Belgian bank accounts who left the US at the age of six weeks and never returned.

It might still be safest to simply ignore any and all reporting, particularly if one has no plans for travel to the US. One definitely hears of US-born Europeans or Canadians believing that they should become compliant then discovering that they owe money for one thing or another - let's hope those savings don't include mutual funds - though why they would then pay the bill is an utter mystery to me.


----------



## Nononymous

First step: do nothing, check "no" to the US person question.

Outcome 1 - nothing happens, the bank believes you, the problem goes away.

Outcome 2a - if the bank checks against place of birth and threatens to report account balances via FATCA, then either come into compliance (might be as simple as just filing FinCEN forms in your case, with no tax returns needed) or ignore compliance requirements because the US can't easily collect penalties so would likely never pursue the matter, or consider renouncing.

Outcome 2b - if the bank checks against place of birth and threatens to close account or otherwise deny service to a US citizen then find a better bank, or renounce. Note that renouncing doesn't necessarily mean you need to do all the tax filings to exit, particularly if you have no US ties - basically you're just buying a CLN for $2350 so that you don't lose access to banking.


----------



## iota2014

Nononymous said:


> First step: do nothing, check "no" to the US person question.
> 
> Outcome 1 - nothing happens, the bank believes you, the problem goes away.


This is unlikely to work in the UK and I doubt if it would work in any EU country. If you say you're not a US citizen, then if you have a US birthplace or other US indicia the FI will want proof to cover their backs.



> Note that renouncing doesn't necessarily mean you need to do all the tax filings to exit, particularly if you have no US ties - basically you're just buying a CLN for $2350 so that you don't lose access to banking.


Absolutely.


----------



## Captain Over

Thank you all very much for your responses. Yes, renouncing is something that has defnitely crossed my mind as I think it will be highly unlikely I would ever live in the USA !

Friends and family are all here in Belgium, so to me it wouldn't be really a big decision to renounce.

But then I read, one cannot renounce if you haven't filed at least 5 years of tax returns. I suppose 5 years of FBARs wouldn't do the trick. Or can I renounce without ever filing anything ? That would be ideal, but is that possible ? 

If I may pick you guys brains on one other matter that I was wondering about : say, that at some point in 2017 or 2018 (or whenever) I start making either income or a capital gain above the threshold, then I would be required to file officially.

Now would it not cause any issues if for instance I send an out of the blue 1040 to the IRS say in 2018 ? My fear is, is that they could respond to me by inquiring where I've been all these years !

With regards to my 'place of birth' on the accounts, that's an interesting one, because I have my accounts (by the way for a long time and one is in the UK actually), but the old forms were much easier ie they just asked for your nationality and I always filled out Belgian and used my Belgian passport to identify as the banks main concern was always whether one is legally alllowed to be/work in the country and of course a US passport without any visa or stamps wouldn't pass that test.


----------



## Captain Over

Oh I just saw noticed the last responses to one of my questions. So it does seem possible to renounce without filing - I'll start reading some more about this as I am not up to scratch with that procedure


----------



## Bevdeforges

Don't sweat over the "suddenly" filing in 2018 or whatever. There are lots of legitimate reasons not to file - primarily (but not exclusively) that your income is less than the filing threshold for your filing status. I have not filed for the last couple of years (because my income was less than the threshold amount for my status), but then had to start filing again this year (i.e. for 2016) because of US source income - that is reported to the IRS. But I still don't owe any taxes. (That will start next year...)

Unless you come to the attention of the IRS for something pretty flagrant (like Boris Johnson selling his house for millions of dollars/pounds) AND the attendant publicity mentions your US nationality. In order to look into your situation, the IRS has to be assured that there is some minimum amount of taxes to be "recovered." 
Cheers,
Bev


----------



## Nononymous

It sounds as though you've had your bank accounts for a long time and that you only reported Belgian nationality when you opened them. This is good news. If the bank did not record your place of birth, you will have no US indicia and the bank will have no reason to contact you about citizenship. 

When you change apartments and update your address, my advice would be to check "no" for the question about US person status. If you ever hear back from the bank, you "misunderstood" the question, or you weren't wearing your glasses when you squinted at those tiny little boxes on the screen, or something like that. (You won't get in trouble for lying, you could say something like "Yes I was born in the US but we moved back when I was a baby and my parents never obtained a US passport for me so how could I be a US citizen?" That is of course wrong but you're not an immigration lawyer so why would you believe otherwise?)

Currently, the US does not know that you exist. The bank is the gatekeeper of FATCA information. As long as your bank happily believes that you are not a US person, you will have no issues with US tax and reporting requirements. Protect your anonymity, you will be far better served by remaining off the radar than by coming into compliance, even if the filing requirements might be simple in your case. (If some of your savings are mutual funds, however, compliance might not be simple, or free.) Once you're in the system, you're stuck in the system unless you renounce.

Finally, renouncing and tax filing are separate processes. You don't need to be tax-compliant to renounce. If you ignore the tax paperwork your file will be "open" forever - no statute of limitations - but with no US ties there's not much they can do about it. However, in addition to costing money, renouncing does put you on the radar, so it's not a step I would take if my bank was not aware of US citizenship and causing me problems.


----------



## iota2014

Captain Over said:


> Oh I just saw noticed the last responses to one of my questions. So it does seem possible to renounce without filing - I'll start reading some more about this as I am not up to scratch with that procedure


You contact the US consulate or Embassy, and request an appointment to renounce. They respond, telling you what forms you need to fill in and what documentation you need to bring. You fill in the forms and attend the appointment, taking the forms and the documentation. You pay the money upfront, and the Consular Officer gets you to swear an oath of renunciation. You're then no longer a US citizen. 

Some time later (five months, for me), you receive the Certificate of Lost Nationality.

That's how it worked for me (in Amsterdam). Some Consulates require two interviews, I believe. I can recommend Amsterdam as a renunciation venue; they were sweetie pies.


----------



## iota2014

> However, in addition to costing money, renouncing does put you on the radar, so it's not a step I would take if my bank was not aware of US citizenship and causing me problems.


I don't think renouncing puts you on any radar you're not already on. The State Department sends the IRS a copy of the CLN but that doesn't tell them much beyond your name and address. I think the CLNs are just used to prepare the Quarterly List.


----------



## iota2014

iota2014 said:


> I think there's actually a very simple likely explanation.
> 
> I think it's likely that Boris Johnson's accountants had been preparing his taxes for years, both US and UK, and no US tax was ever due. Consequently Johnson never gave his US tax obligations a thought until he sold his house and subsequently was informed by his accountants that he now owed $xxx,xxx in US capital gains tax.
> 
> I don't think there's any reason to suppose that the IRS ever "came after him.". They certainly took no noticeable action against him during the period when he was insisting publicly that it was outrageous and he wouldn't pay. I don't think the IRS makes much effort to pursue anyone who's not US-resident.


This seems to be confirmed by the timing of the sale (2009) and the first mention in the media of the US tax demand (NPR interview with Johnson, Nov 2014; ). It was Johnson himself who, entirely characteristically, brought the subject into the public domain - in New York, five years after the sale had been completed.

Once Johnson had publicised the matter, it was quickly picked up by his chum Matthew Barzun, at that time the US Ambassador to London, and used as payback (Dec 2014, American citizens like Boris must pay taxes, but Google and Amazon are fine | Daily Mail Online) in their ongoing squabble over the US Embassy's refusal to pay outstanding London congestion charges of $9 million (April 2014, Matthew Barzun battles Boris Johnson over a cool £9 million | London Evening Standard)

No sign of any IRS sleuthing or threats of action, at any point in the saga. Johnson is *not* an example of IRS extraterritorial enforcement of CBT.


----------



## Captain Over

Thank you all again so much for your responses. I cannot say enough how valuable it is to read some experiences of the people here who also had to deal with the US tax system. Something by the way I wish I never had to learn about  

I think I'm going to have let the information sink in a little bit. I initially got all worked up because a few monts ago there was this article in a Belgian paper how dual citizens of the USA and 'Accidental Americans' abroad would still have US tax obligations. In hindsight and rereading the article there was actually a lot of scaremongering in it. But it also resulted in a lot of stress and many hours spend on getting some understanding of all this. 

My natural instincts would lean towards what Nononymous mentioned about staying off the system if possible. Here in Belgium I find the authorities and departments already intrusive enough and having to deal with another 'system' is probably not going to add more happiness in life.

But of course, I don't want to be storing up issues for later, which leads me to something I was wondering about : has it always been the case that the USA taxes its citizens worldwide or is this something of more recent years ie did it become effective when the FBAR system came in place ?

If it has always been the case I guess - technically - I would also have to file from 1998 till 2011 when I was in employment ? I know there is the Foreign Exclusion, so for those years I know I still wouldn't own the IRS anything, but having to file those returns would be a nightmare in itself !?


----------



## iota2014

Captain Over said:


> My natural instincts would lean towards what Nononymous mentioned about staying off the system if possible.


Maybe you could test the practicality of that approach by ticking the "No, not a USP" box and see what happens next. 



> ...has it always been the case that the USA taxes its citizens worldwide or is this something of more recent years ie did it become effective when the FBAR system came in place ?


It's not a specific law; they just never excluded non-residents from taxation. The constitutionality of extraterritorial taxation was upheld in Cook v. Tait, 1924. However, it seems there was never much effort put into trying to enforce it. I left the US in 1965 but never heard anything about being expected to file taxes until a couple of years ago.



> If it has always been the case I guess - technically - I would also have to file from 1998 till 2011 when I was in employment ? I know there is the Foreign Exclusion, so for those years I know I still wouldn't own the IRS anything, but having to file those returns would be a nightmare in itself !?


Very unlikely they would know or care that you might possibly have been earning over the filing threshold in earlier years. They certainly didn't ask any questions of me, when I popped up with six FBARs after 50 years of not filing.

But I only filed the FBARs because I was already known, having worked in the US long ago, and I wanted to get off their books by finalizing my renunciation. Since you're not on their books, you don't need to put yourself on there, unless you decide you want to keep the US citizenship, and might acquire US assets.


----------



## Nononymous

I would definitely not take action (come into compliance or renounce) unless you had reason to, and at present you do not, nor will you if the bank has no record of US birthplace and you do not tell them that you are a US citizen.

Some months ago I saw a couple of links to pieces on Dutch TV, stories about Dutch citizens born in the US but who, like you, left as very young children. It detailed their efforts to come into compliance, and the costs. I think the two individuals profiled owed amounts of approximately 40k and 80k euro, and that was only the tax bill, not legal and accounting fees. (I don't remember exactly, but I suspect this was due to investment income from tax-protected retirement funds in the Netherlands that are not recognized as tax-exempt by the US - that's usually where US citizens abroad find themselves owing the IRS.) What shocked me was that these people voluntarily paid the tax bill, even though they had no tie to the US, no assets or income as far as I can tell, so the US would have had no means of collecting. But even worse was their attitude of polite resignation, as if this was just an unfortunate experience akin to losing money on a bad investment decision. Very law-abiding folks, these bourgeois Dutch taxpayers.


----------



## Nononymous

PS There is a lot of scaremongering out there, either in the media or from professionals whose business it is to encourage compliance. Your best weapon is to educate yourself and to not act in haste, to protect your anonymity as long as possible. If you keep the bank happily ignorant of your US person status, the problem stops there. Remember that there are 8 or 9 million US citizens abroad, of whom only about 1 million file tax returns.


----------



## Captain Over

I was always under the impression that tax offices worldwide, at least in the West, mutually assist each other with regards to tax collections ? I'm pretty sure there is a directive in the EU for that.

These Dutch people perhaps were afraid that the IRS would pass the bill to the Dutch Tax office who would collect it on behalf of the IRS ?

I am actually not even sure if European countries have this arrangement with the IRS, but this has absolutely crossed my mind too that the Belgian Tax Authority would come knocking on my door on behalf of IRS....

Still, I think it is actually sad that these people had to pay such high amounts - but probably wanted it out of their conscients.


----------



## Captain Over

I agree with the scaremongering, that article I read in the Belgian paper also had an example like the Dutch people you mentioned, but in this case it had to do with houses sold at a profit where they had to pay capital gains in the US for.


----------



## Nononymous

Captain Over said:


> Thank you all again so much for your responses. I cannot say enough how valuable it is to read some experiences of the people here who also had to deal with the US tax system.


You're more than welcome. All we ask in return is that if you feel so inclined, please comment on Belgian/Dutch media articles to reduce the scaremongering. Let people know that even with FATCA, the US does very little to pursue "Accidental American" taxpayers, and that staying off the radar or remaining non-compliant are viable options, and paying tax bills that the IRS has little or no ability to collect is like making a voluntary donation to the US treasury.


----------



## Nononymous

I find it hugely ironic that media accounts rarely mention the fact that the US authorities have very limited ability to collect outside their own borders. I believe there are only five countries for which there are collection provisions in the tax treaty: Canada, Denmark, and three others I can't remember. In the Canadian case, the treaty explicitly states that Canada will not assist the US in collecting tax debts incurred by a dual citizen if that person were a Canadian citizen at the time the debt was incurred - in other words, the US could never collect a tax debt owed by an Accidental American in Canada. As for FBAR fines, they are not considered tax debts but rather "administrative penalties" so the Canadian government provides zero assistance with collection. The only recourse for the US government, assuming of course the taxpayer had no US income or assets to seize, would be to sue in a Canadian court, and for various reasons of international law - plenty of scholarship on this available, none of which I understand as I'm not a lawyer - this would never be successful, so they have never tried.

That is at least the current situation for Canada. I would research the precise details for Belgium, but I expect that it's essentially impossible for the US to collect any money from a Belgian national. The tragedy in many cases is that people are sending their money to the US when really they could just ignore the situation. (There's a good American Expats Facebook group worth joining, though of course you can't hide behind a pseudonym if you post anything.)

Houses sold at a profit, like Boris Johnson, could be a huge issue in Canada soon. There are literally millions of properties in Vancouver and Toronto that have seen massive increases in value over the last decades, and any of them owned by dual citizens would be subject to potentially huge US taxation. (Like many other countries, Canada does not tax any capital gains on the sale of a primary residence.) However, anyone in this situation who voluntarily pays such tax is, in my view, an utter fool. 

Boris I think was in a difficult situation both because he's a public figure and politician, but also because he had US income from book sales and speaking fees, so it was probably very much in his interest to settle his debt with the IRS.


----------



## Bevdeforges

First of all, the US income tax laws have "always" included all US citizens (and residents) - though don't forget, the US didn't get an income tax until something like 1919 or so. (Related to the implementation of Prohibition - and we all know how that worked out! <g>)

But another thing to remember is that the IRS has pretty much always used scaremongering to "enforce" the tax laws. Way back when I was in business school and studying taxes, our prof pointed out how the IRS issues press releases about all their big tax prosecution "victories" right before the tax filing deadline each year - to "inspire" compliance. This is because they really and truly don't have the resources to check every single tax return they receive.

For those with no assets or other financial ties with the US, "blissful ignorance" is probably the way to go. Even with FATCA, there are limits on what information the banks report about their US customers. (And it's not the banks directly in most cases - the banks report to the national bank/treasury which then provides the information to the IRS. Thank goodness for European privacy laws, because most national banks are pretty wary of sharing any more information than necessary with the US.)

And yes, while national tax authorities co-operate with each other, they do so only when the other government provides either a warrant or specifics about what the taxpayer is suspected of doing wrong. There are lots of legitimate reasons why an overseas "US person" could have rather large bank balances, yet still not have sufficient income to have to file. (Especially at current interest rates!) They won't approach a foreign tax authority until they have some pretty solid evidence of wrong doing. They don't do random fishing expeditions. Too expensive, given the significant budget cuts the IRS has suffered in the last decade or so.
Cheers,
Bev


----------



## Captain Over

Nononymous, if it is at all possible, then I would certainly attempt to comment on Dutch/French articles that reek of scaremongering regarding the IRS chasing thier tax base worldwide, but may be it is different in Canada, so many news sites here have cancelled the opportunity for readers to actually comment on articles !

This used to be very different by the way, when the more 'serious' publications DID allow commentary, but what usually happened is that the comments often made more sense and sounded 'right' than the article itself, and then here in Belgium, but also France and the Netherlands, publications all of a sudden seemed to switch off all the comment sections at once. 

Bev, a big thank you from me for providing some much needed perspective on these matters, for a moment I literally thought I was doomed ;-)


----------



## Pacifica

Captain Over said:


> Oh I just saw noticed the last responses to one of my questions. So it does seem possible to renounce without filing - I'll start reading some more about this as I am not up to scratch with that procedure


Yes, that’s correct. It sounds like staying under the radar may be the good option for you, but as you’re considering several options including renunciation, here’s some info on the relation between DoS and IRS in the context of renunciation.

Definitely good that you're looking into and mulling over your various options in this situation. Then when one option starts to feel right for you, whether it's taking a particular action or not taking any action, you'll be doing it with knowledge and confidence.


(1) *Dept of State*

Dept of State basically doesn’t care about one’s tax status as the citizenship itself (and the issuance of the CLN) is not dependent on one being tax compliant.

DoS’s involvement/connection with tax is the following:

(a) At the consulate the person signs DS-4081, Statement of Understanding of Consequences; one of the 12 items on it is Item 10, that renouncing “… may not exempt me from US tax income taxation [etc] …” 

(b) The questionnaire, DS-4079, at q. 13 (e) asks “Do you file US income or other tax returns?” The tax question on the DS-4079 is there as an indicator of your ties and connections to the US, which is important if you’re claiming to have relinquished some years ago (in which case you’re trying to illustrate your lack of ties/connections/citizenship behaviour). For renunciations, it’s irrelevant if you have ties/connections/citizenship behaviour or not. (Note: Not all consulates require the DS-4079 for renunciations – it’s never been required, but they can use it if they want to -- less and less seem to be using it. Your local consulate will let you know what they want.) 

(c) Dept of State is to provide IRS with a copy of each CLN they issue as per DoS Interagency Coordination and Reporting Requirements, 7 FAM 1243(a). 

(2) *IRS*

To log out of IRS and avoid covered expatriate status, IRS requires that the person file their exit tax form (8854), their final year form, and the five-years-previous-to-final-year forms, by June 15th of the year following the renunciation.

If a person does not file, the citizenship itself remains terminated and the CLN remains valid.

(3) *General Info*

_Immigration and Nationality Act_, s. 349(a)

Foreign Affairs Manual on Renunciation, Department of State.


----------



## Captain Over

Thank you very much Pacifica. The excerpt you copied there is a lot more clear cut then what I managed to find so far this weekend. I will be studying it very soon as renouncing is for me a serious consideration. Someone had already posted on here earlier that the consulate in Amsterdam seem a friendly and efficient outlet and it's only a 3 r train ride for me, so I may well do it there instead if that proves possible.


----------



## iota2014

Johnson painted himself into a corner when NPR dangled the bait and he bit. It's one thing for ordinary expat minnows to ignore IRS demands. It's a different kettle of fish when you're an aspiring though incompetent politician, wanting to preserve what's left of your social reputation and keep chumming around with the inner circle, not to mention keep flying in and out of America on that convenient American passport. He really had no alternative.

The FT described the situation pretty accurately in an article published after Johnson's NPR pratfall:


> Mr Johnson’s refusal to pay his tax demand was discussed by US embassy officials in London on Friday, where the affair is likely to have brought a wry smile to the lips of the ambassador, Matthew Barzun.
> 
> Mr Barzun, a close acquaintance of the mayor, is refusing to pay an estimated £7m bill demanded by City Hall in London over the embassy’s refusal to pay the capital’s congestion charge on its vehicles.
> 
> During a visit to Britain by Barack Obama in 2011, Mr Johnson reportedly tried to persuade the US president to write a cheque to clear the bill. Now he might face similar requests from the IRS *when he next visits the US after Christmas.*
> 
> The IRS is prohibited from discussing specific cases, but in general it charges a gradually increasing interest rate for late payment of taxes, while there are bigger financial penalties for negligence or disregard of tax rules.
> 
> *Individuals can also face criminal prosecution for “wilful failure to file a return, supply information, or pay any tax due”, according to IRS rules. But in practice, that punishment is usually invoked only in major tax fraud or other extreme cases.
> 
> While Mr Johnson might hope to avoid detention when he next arrives at JFK, the tax demand has obviously touched a nerve with the ebullient mayor who was refusing to comment on Friday.*
> 
> He revealed the affair in an interview with National Public Radio in the US where he has been promoting his new biography of Churchill. “The US comes after me, would you believe it, for capital gains tax on the sale of your first residence which is not taxable in Britain,” he said.
> 
> As the US tax net tightens, sweeping new information powers will force banks outside the US to hand over information about their US clients, increasing the chances of an unexpected tax demand.


https://www.ft.com/content/711d76d8-719d-11e4-b178-00144feabdc0


----------



## Pacifica

You're welcome. Another good resource on renunciation is the Consulate Report Directory on the Isaac Brock Society site. It currently has about 250 pages of people's experiences renouncing/relinquishing, arranged by consulate location. (I'm having trouble getting the link here to work, but you can get to it by googling.)


----------



## iota2014

> (Note: Not all consulates require the DS-4079 for renunciations – it’s never been required, but they can use it if they want to -- less and less seem to be using it. Your local consulate will let you know what they want.)





Captain Over said:


> Someone had already posted on here earlier that the consulate in Amsterdam seem a friendly and efficient outlet and it's only a 3 r train ride for me, so I may well do it there instead if that proves possible.


Amsterdam doesn't require DS-4079. That was my reason for choosing it.


----------



## Captain Over

Iota, if I may ask, since you list 'United Kingdom' as your location, it was possible for you to renounce in Amsterdam instead ? I am only wondering, in case I get in contact with the consulate Amsterdam may be they'll tell me to go to Brussels instead since I actually live here (well a little bit outside, but that's just details).

May be it is all just as straightforward in Brussels, but I don't know that yet, and now at least I know that Amsterdam seems 'renounciation-friendly' ;-)


----------



## iota2014

Captain Over said:


> Iota, if I may ask, since you list 'United Kingdom' as your location, it was possible for you to renounce in Amsterdam instead ? I am only wondering, in case I get in contact with the consulate Amsterdam may be they'll tell me to go to Brussels instead since I actually live here (well a little bit outside, but that's just details).
> 
> May be it is all just as straightforward in Brussels, but I don't know that yet, and now at least I know that Amsterdam seems 'renounciation-friendly' ;-)


At the time I requested the appointment (in September 2015), they didn't object. They did ask me, during the renunciation interview, why I hadn't renounced in London (which is where I live.) I felt they were puzzled rather than suspicious. I told them it seemed a good opportunity to visit the newly remodelled Rijksmuseum - which indeed it was, and very worth seeing.

Things could have changed since then, of course.


----------



## celticweb

Captain Over I also was an accidental American like you, dual UK / US citizen.
Also born in USA to UK parents and left the USA when I was very young and have since never lived in the US, worked in the US or have assets and also don't identify as an American and also since last year never filed a US tax return.

Like you, i found out about this mess however I renounced. There were circumstances around my life that made renouncing safer in regards to protecting a non US citizen spouse and gaining a directorship at my place of employment. 

I did the required filings and renounced last year. I didn't owe tax but it cost quite a bit in accountancy fees. However I have never regretted the decision. I had one bank breathing down my neck to prove I wasn't a US citizen and even if I lied, ever time i would have opened a new bank account, i would have been asked again. 

Others here have said for you to stay under the radar and yes that looks like sound advise and is a viable option except from what you describe above, that you had no employment or income since 2011 and therefore didn't need to file. renouncing your US citizenship now might be a very good option and maybe the most straightforward time for you that it will ever be. In other words before you find employment again or other factors in your life complicate matters.

You could renounce now without having to file anything. it's 5 years and the current year for back filing so (2012, 2013, 2014, 2015, 2016 and then the partial year 2017) from what you describe without income, you don't need to file anything except possibly fbars. Renounce now and then just submit a form 8854 next year. 

If your assets are under 2 million dollars it is worth filing out the form next year even though you could get away with just renouncing and forgetting about it. by filing the form, you exit cleanly no matter what laws they may make in future. you just add up your assets on the form 8854. keep it simple, just value of bank accounts and a house if you have it.
For fbar only if the aggravate value of all accounts is over $10,000. Maybe you aren't even required to do fbars and can just do the form 8854 next year. I ordered 6 years back statements from my bank. The renunciation fee is well worth it in these circumstances.

The only complication I can see is if you don't have a social security number, you will need one for the form 8854 and Fbar it's not easy getting one from overseas. I don't know if others on here have renounced without one.

The point I am trying to make is that you may never have as an ideal time to renounce in future as you do right now. 

Good luck in whatever decision you make.


----------



## celticweb

also forget to mention that if you were born a dual citizen at birth and are now resident in the country of the other citizenship, you aren't going to be subject to the Exit tax as long as you certify compliance for the last 5 years. this was my case.

again by the look of things it appears you are dual Belgium/US citizenship possibly at birth and live in Belgium now. so another reason to renounce now before moving anywhere else. the 5 years compliance you can certify on the form 8854.


----------



## iota2014

> The only complication I can see is if you don't have a social security number, you will need one for the form 8854 and Fbar it's not easy getting one from overseas.


Good point. 

SSN is required for filing but not for renouncing. If the OP decides to renounce, there would then be no need to struggle with trying to get one. 

Should the OP decide to file FBARs or Form 8854 post-renunciation, that can be done with an ITIN, which is easier to obtain.


----------



## iota2014

celticweb said:


> also forget to mention that if you were born a dual citizen at birth and are now resident in the country of the other citizenship, you aren't going to be subject to the Exit tax as long as you certify compliance for the last 5 years. this was my case.


It seems to me that although the US describes this as a "concession", in reality it's just a recognition of the real-life facts. The US hasn't got the power to confiscate a gigantic chunk of the assets belonging to a person who does not live in the US, does not have US assets, has not committed tax fraud or any other serious crime, and has renounced US citizenship.

The US has tried rather desperately to make tax compliance a condition of renunciation, but they haven't succeeded. IGAs require a CLN (or reasonable explanation of lack of one); they do *not* require proof of tax compliance. Once a person has renounced, they're no longer a US citizen. Q.E.D.


----------



## Captain Over

celticweb, 
I really appreciate your comment as that is very helpful to me, because now I think the pieces of the (my own) puzzel start falling into place a bit more. I was constantly thinking of how I can minimize effort, hassle, liability regarding US Taxes, whilst on the other hand I don't want to fall foul of laws or storing up issues for later. 

And I think you're right that is probably now the best to time renounce. I didn't know yet that this form 8854 asks about the last 5 years compliance, but if that is the case then once filing for tax year 2016 ends, I could truthfully submit that over the past 5 years I had no income and as I understand from Bev - no requirement to file if you have zero income. I would have to do the FBARs, but I don't really mind doing that because that seems pretty easy to do as opposed to all these forms which really confuse me.

The SSN is something I should be able to get as I still have my birth certificate somewhere under a pile of dust, and think that is the main document one would need if requesting a SSN.

I do have one more question on the renounciation process please. I read that an interview is required as part of the process. May be I'm thinking too far ahead, but I can imagine they ask ;''well, why would you like to give up your US Citizenship ?''....is it then ok to just say, well I really don't like to file for US Taxes for the rest of my life if I never have any plans to start living there...or would it be advisable to just be a bit more diplomatic about that ? I wonder what to expect, whether the interview is a friendly formality or an interrogation ?

Iota, just seen your post actually. It would defintely make life easier to renounce without a SSN - but from what I've read it shouldn't be too difficult to get one send to Belgium although it could of course take a few weeks or months before it's received.


----------



## iota2014

Captain Over said:


> And I think you're right that is probably now the best to time renounce. I didn't know yet that this form 8854 asks about the last 5 years compliance, but if that is the case then once filing for tax year 2016 ends, I could truthfully submit that over the past 5 years I had no income and as I understand from Bev - no requirement to file if you have zero income. I would have to do the FBARs, but I don't really mind doing that because that seems pretty easy to do as opposed to all these forms which really confuse me.


FBARs are easy, and to me were not all that annoying because nowadays exchange of bank information is a fact of life. 

Form 8854 is not so easy, and hugely annoying, because it asks questions the US really has no business asking a non-US-person. For instance, it will ask you to list all your Belgian income and assets, and as with all IRS forms it requires you to sign under penalty of perjury (an extraditable offence). Of course there's no genuine risk that you could ever be accused of perjury and extradited, but personally I resented the hell out of being bullied and threatened into effectively waiving my right to privacy. I wouldn't do it, if I were renouncing today, but at the time I was still a little scared, so I did.



> The SSN is something I should be able to get as I still have my birth certificate somewhere under a pile of dust, and think that is the main document one would need if requesting a SSN.


I understand it's easy if you apply within the US, but difficult if you apply from overseas. I already had one, so have no experience applying from overseas.



> I do have one more question on the renounciation process please. I read that an interview is required as part of the process. May be I'm thinking too far ahead, but I can imagine they ask ;''well, why would you like to give up your US Citizenship ?''....is it then ok to just say, well I really don't like to file for US Taxes for the rest of my life if I never have any plans to start living there...or would it be advisable to just be a bit more diplomatic about that ? I wonder what to expect, whether the interview is a friendly formality or an interrogation ?


Yes they will ask, and you can give a written statement if you choose, but you don't have to. You can just give an innocuous answer such as "My life is lived entirely in Belgium so I don't need dual citizenship." I told them I wanted to simplify my life, which was certainly true. 

I would say the interview was a bit on the interrogation side, but there's only a very limited range of questions they can ask. They're supposed to make a judgment as to whether you're renouncing of your own free will, and whether you have the mental capacity to do so. They'll decide on that basis whether to recommend to the DoS that renunciation be approved or rejected. Very very rare for it to be rejected. You can assume it will be approved. They'll tell you on the day whether they're going to recommend approval, and once they do, it's a rubber-stamp matter.



> Iota, just seen your post actually. It would defintely make life easier to renounce without a SSN - but from what I've read it shouldn't be too difficult to get one send to Belgium although it could of course take a few weeks or months before it's received.


It could take a lot longer than that, from what I've heard. But I've no experience on this.


----------



## iota2014

FYI, here is Phil Hodgen's advice about whether to apply for SSN before renouncing, or renounce and then apply for ITIN to do final filings. It is part of his "Expatriation Chronicles of an Accidental American". (Phil Hodgen is a US tax lawyer who runs a blog where he offers expatriation advice which many of us have found extremely helpful.)



> ...here is how the analysis ends up for someone who has no Social Security Number and wants to renounce U.S. citizenship. A is fortunate — she discovered that she does, in fact, have a Social Security Number that was presumably issued to her at birth. But for the rest of you, make your strategy decision as follows:
> 
> If you need a Certificate of Loss of Nationality for “real life” reasons (A will have problems with enrolling in University if she has a U.S. passport; you might have problems with your bank as an American citizen), the preference is expatriate now, get an Individual Taxpayer Identification Number later.
> 
> If you have no risk of being a covered expatriate by failing the certification test (e.g., your income was so low that you were not required to file tax returns or pay income tax), then you are safe from unpleasant tax blow-back. Preference: expatriate now, get an Individual Taxpayer Identification Number later.
> 
> If you will be a covered expatriate (by failing the certification test because you should have — but did not — file U.S. tax returns for the previous five years), look to see the real cost of this. If your exit tax will be zero or close to it, and if you are unlikely to ever have to worry about the taxation of gifts or bequests to U.S. persons by a covered epatriate, then no harm can befall you, taxwise. Preference: expatriate now, get an Individual Taxpayer Identification Number later.
> 
> Unless the Embassy is stunningly inept (and it does happen!), you will have a Certificate of Loss of Nationality in two or three months, maximum. If that is enough time for you to return to the Embassy and get your (real) passport certified and file a Form W-7 on or before 15 June 2016, then the tax filings will be on time. Preference: expatriate now, get an Individual Taxpayer Identification Number later.
> 
> In conclusion, people with no Social Security Number issued can sometimes renounce their U.S. citizenship in a fairly expedited process. They can deal with the U.S. tax mess (including getting an Individual Taxpayer Identification Number) later.


https://hodgen.com/expatriation-chronicles-episode-3/


----------



## Bevdeforges

Further to the SSN issue - if you don't already have one, I would do what you can to avoid having to get one simply to renounce in a little while.

Depending on your year of birth, there will be a big deal made over why you didn't get an SSN at birth. It became standard operating practice sometime in the 1980s for all children born in the US. If you were born since then, you very likely actually HAVE a social security number and part of the process of applying for one now will consist of them trying to find the number you were given at birth.

You will need an in-person appointment. (See https://be.usembassy.gov/u-s-citizen-services/social-security/) And, if you indeed did NOT get a US SSN at birth, you'll have to prove that you've been living outside the US all these years so that they don't "accidentally" issue you a second SSN.

Seems an awful lot to go through if you're just going to renounce in a few months.
Cheers,
Bev


----------



## Captain Over

Thanks Iota, haven't looked at the 8854 form yet, but hope it will be a small price to pay for getting out of the situation.

And thanks for the interview comments, it seems some preperation is necessary. I like your suggestion, I try and think of some others too. Just to be sure 

I have just bookmarked Hodgens' site for some evening reading later on. Very useful and the simpler the better. Just now need get it all a bit itemized in my own brain and understand the necessary steps in the right order. 

Am I right in thinking by the way, if I were to do these FBARs, that the best option to choose from the dropdown is 'Didn't know I had to file' ? Or if another option is recommended I would appreciate learning about it.


----------



## iota2014

Captain Over said:


> Thanks Iota, haven't looked at the 8854 form yet, but hope it will be a small price to pay for getting out of the situation.
> 
> And thanks for the interview comments, it seems some preperation is necessary. I like your suggestion, I try and think of some others too. Just to be sure
> 
> I have just bookmarked Hodgens' site for some evening reading later on. Very useful and the simpler the better. Just now need get it all a bit itemized in my own brain and understand the necessary steps in the right order.
> 
> Am I right in thinking by the way, if I were to do these FBARs, that the best option to choose from the dropdown is 'Didn't know I had to file' ? Or if another option is recommended I would appreciate learning about it.


That's the one I chose.

PS If you do the FBARs, I would say, always describe accounts as something innocuous like "savings account" if possible. That should maximize the likelihood that the filings will slide easily through automated processing and never get diverted to be scrutinized by humans.


----------



## Captain Over

I was actually born mid 70s, but having quickly looked at the link from the embassy, that whole procedure seems, well I don't know the word for it actually ! Not easy, that's for sure


----------



## Nononymous

My one word of caution, worth checking now - in what form are your savings? If they are mutual funds, rather than simply savings accounts, then you need to be a bit careful, as it can complicate the paperwork, or in some cases the US will claim you owe it tax on investment income within otherwise tax-protected retirement funds.


----------



## iota2014

Nononymous said:


> My one word of caution, worth checking now - in what form are your savings? If they are mutual funds, rather than simply savings accounts, then you need to be a bit careful, as it can complicate the paperwork, or in some cases the US will claim you owe it tax on investment income within otherwise tax-protected retirement funds.


It appears to me the OP won't have to worry about that particular can of wormy worms. There should be no need to identify savings as mutual funds on the 8854. I could be wrong.

Form 8854 is a peculiar beast. Because they try to make the same form serve for all renunciants, and even for LPRs, there are places where information is statutorily required, but never used and not legally usable (such as in Part V Schedule B, asking non-covered expatriates to give information on non-US income and assets); and places where information is *not* statutorily required but a box is helpfully provided in case the renunciant feels they would like to share (such as in Part V Schedule A).


----------



## Pacifica

@ Captain Over

Re: renunciation meeting and questions

Procedure varies a bit from place to place, but it seems that now most all consulates are requiring you to send in your documents and forms prior to the meeting. Then the consul or vice consul will have looked through this prior to meeting with you. 

Generally your documents and forms speak for themselves, so often they have very little or nothing to ask, except are you sure you understand the consequences. And as Iota2016 pointed out, they may ask why you’re renouncing – and her advice on how to reply is perfect. Some places ask this, some don’t. Always good to have a prepared short answer to that question, even if the consulate you’re using does not have a history of asking it, because you never know . . .

It’s generally quite straightforward and the procedure/interview/meeting itself is pretty quick and non-confrontational. Overall, the general pattern is about 5 or 10 minutes with a clerk at a counter, then a wait (may be short or long, really varies) in the waiting area, and then about 10 or 15 minutes with a consul or vice consul at a counter. You can get a pretty good idea of what to expect from the reports I mentioned upthread, bearing in mind that things can vary a bit from place to place and/or change over time.


----------



## celticweb

They did not ask me any questions at my renunciation appointment. and if fact the embassy were super nice and helpful. This was in London. It could have just been the day i went and maybe another day might have been different.

Also because of the fact we aren't subject to the Exit tax, the form 8854 asset list doesn't make any difference what we put on there or what it is going to add it up providing you certify except for an intrusion of privacy of course. Good faith estimates are OK. I won't get too worried about it. I found it to be one of the easier forms to do. By the time I got to year 4 tax filing, I was able to file myself by using past tax returns as models. I paid an accountant for 3 years and have done two myself. 

The form 8854 was straight forward in a way for me compared to that. of course you have to write facts to the best of your knowledge. bank accounts are easy, you can look them up on the day before you renounce. the values have to be calculated the day before you renounce.

I looked up everything that was possible to look up online the day before I renounced and made a print screen. for the value of my house, i got a few estimates online from property value websites, looked at some previous sales in my neighborhood around the same time. and came up with a rough estimate that I believed was acceptable (divided by half since jointly owned with my spouse)

then for liabilities, the same. it's a balance sheet so liabilities count. you can look everything up. and remember convert everything to dollars on the exchange rate on the day before renouncing which you can get online. IRS website gives you some websites to use for the exchange rate.

I can 100% recommend renouncing if you aren't going to live in the US. It has been such a relief to me and i feel a thousand times better since.


----------



## iota2014

The OP does not need to be so thorough. An Accidental with no filing requirement really only needs to enter the bare minimum on the 8854. Only one copy is sent to the IRS. Since there's no other paperwork, and nothing to be gained from looking at the 8854 of a person who can't be "covered", taxed or penalized, it no doubt goes straight to filing, there to rest in peace. 

Good faith estimates are good enough, IMO.


----------



## Captain Over

Thank you again for all your thoughts on this matter. It is really helpful.

I was reading a bit more of the renunciation process online and found a comment section where a lady responded on how she dealt with the consuls' question of 'why do you want to renounce' and she said to him 'Because it is my right'...it actually made me chuckle reading that, saves other explanations, but not sure I'm going to say that myself.

I was going through the 8854 form and it does actually ask for a value of pensions. Now I don't have a private pension, but would have a state pension based on about at least 16 years of work. Would I have to include a state pension you think ? Or would it only apply to private pensions.

Thankfully I don't have mutual funds, only an investment account I never made a cent on, more like plenty of losses.


----------



## iota2014

Captain Over said:


> I was going through the 8854 form and it does actually ask for a value of pensions. Now I don't have a private pension, but would have a state pension based on about at least 16 years of work. Would I have to include a state pension you think ? Or would it only apply to private pensions.


You don't need to list it, for numerous reasons:
a) A quick look at the treaty confirms it's exempt from US taxation (17.2, not subject to the Saving Clause)
b) Presumably you can't sell it or give it away, so it's FMV is zero
c) 8854 Part V Schedule A is _not_ required for calculating Net Worth
d) As an Accidental, you don't have to pass the Net Worth test anyway.

So you can leave it off.



> Thankfully I don't have mutual funds, only an investment account I never made a cent on, more like plenty of losses.


In that case, it's not an asset, it's a liability.  
If you mention it anywhere when filing FBARs or 8854, take care to call it your savings account. Rule of thumb - never mention the word "investment" to the IRS. It sends them a little crazy.


----------



## celticweb

I was told by my accountant that if I was asked why I was renouncing to simply say that I want to simplify my life. and nothing else. So Iota's answer was the advise given to me.

In the end I was not asked. They just made me read the acknowledgement list again. I got the impression that the person who dealt with my paperwork at the London embassy knew why most people were renouncing. He gave me a letter to give to my bank while I was waiting for the CLN. He told me to make several copies of the letter too. I got my CLN very quickly within two months.


----------



## iota2014

A man who was renouncing at the same time as me told them he wanted to die a Dutchman in the land where he was born. I thought that was rather fine.


----------



## Bevdeforges

Net-net, there is no love lost between the State Department (i.e. consulates) and the IRS. I've gotten the impression over the years that the State Department pretty much resents being stuck into the middle for IRS "enforcement" and, at least here at the Paris consulate, the State Department folks are generally pretty sympathetic to those renouncing. (OTOH, when there was an IRS office here in Paris, the staff there were actually very helpful - more like State Department employees than IRS!)
Cheers,
Bev


----------



## Captain Over

Thank you once again for your answers, I cannot express how valuable it has been for me over the past few days to learn from other people who have been in a similar situation.

Good to know actually Bev that the DoS and IRS are not necessarily 'partners' as my sometimes suspicious mind wondered whether the consul would actually send also an 'internal report' to the DoS along with my planned renunciation. 

Although I would need some statements first from my bank in order to do an FBAR, I did have a quick look at the FinCen site.

When you select the option 'Didn't know I had to file' from the drop menu, another box comes up with asking the filer for a reasons (for filing late), max 750 characters.

Do you think it will then be recommended to be to the point , concise and explain reason for previously not filing (ie wasn't aware of obligation, no tax liability, never lived in America really) OR am I supposed to write down my whole life story ?

I'm just wondering how best to approach this box (eventually.)


----------



## iota2014

Captain Over said:


> When you select the option 'Didn't know I had to file' from the drop menu, another box comes up with asking the filer for a reasons (for filing late), max 750 characters.
> 
> Do you think it will then be recommended to be to the point , concise and explain reason for previously not filing (ie wasn't aware of obligation, no tax liability, never lived in America really) OR am I supposed to write down my whole life story


I always think the less one says to the IRS, the better. Something like "wasn't aware of the obligation" would be perfect, IMO.


----------



## Moulard

Captain Over said:


> I'm just wondering how best to approach this box (eventually.)


From the filing instructions....

_If one of the provided selections does not explain the reason, select “other” and provide a written explanation in the text box provided._

So in other words, if you select 'didn't know..' from the drop down list leave it blank.


----------



## Captain Over

Thanks Iota, Moulard !


----------



## iota2014

Captain Over said:


> Good to know actually Bev that the DoS and IRS are not necessarily 'partners' as my sometimes suspicious mind wondered whether the consul would actually send also an 'internal report' to the DoS along with my planned renunciation.


The consular officer does have to refer each renunciation to the DoS for approval. I doubt if it constitutes a "report" - maybe just emailed copies of the forms plus the C.O.'s confirmation that the person swore the oath and the C.O. recommends approval. 

Once the CLN is stamped, copies go to the renunciant and the IRS. The IRS uses the copies to prepare the Quarterly List (https://www.federalregister.gov/quarterly-publication-of-individuals-who-have-chosen-to-expatriate). 

The FBI also is informed of renunciations, and incorporates the count into the NICS system. (Renunciants are among the few who are banned from purchasing handguns in America - no, there's no logic to it, that's just the way they think.). The FBI count is never the same as the IRS count - why, is not clear, or at least it's not clear to me. Maybe they have a sleeper in the DoS ha ha.


----------



## Bevdeforges

Just a quick note: the consulates (and embassies) are offices of the Department of State in the US. So no one is sending a "report" - they're just reporting their normal activity to their bosses. When the State Department's budgets are cut (as they seem to be doing lately), the embassies and consulates are normally the first to feel the effects.
Cheers,
Bev


----------



## Pacifica

iota2014 said:


> The consular officer does have to refer each renunciation to the DoS for approval. I doubt if it constitutes a "report" - maybe just emailed copies of the forms plus the C.O.'s confirmation that the person swore the oath and the C.O. recommends approval.


Yes, that sums it up well, they don’t send much. Specific details of what the consular officer sends to DoS HQ in DC are here, Foreign Affairs Manual, Renunciation. The sample consulate officer’s report (as Bev put it “they’re just reporting their normal activity to their bosses” and it reads that way) is in there at 7 FAM 1269 with the enclosures listed at the bottom (just the standard renunciation forms). 

As Iota also mentioned, DoS will send a copy of the CLN to IRS, FBI and DHS/USCIS but those depts don’t get any other documents. Details of that are here, Foreign Affairs Manual, Inter-Agency Coordination and Reporting Requirements.


----------



## Moulard

> When the State Department's budgets are cut (as they seem to be doing lately), the embassies and consulates are normally the first to feel the effects.


Actually... being a tad facetious here... but we are the first to feel the effect. 

US Citizen Services is almost entirely funded through revenue generated by consular fees. If they don't up the fees in those circumstances, they have no option but to lower the quality of service.


----------



## Bevdeforges

I'll leave you to arm wrestle the consulate staff folks over who gets affected "first" but yeah, the consulates do have to make their "citizen services" pay for themselves - so the circle goes on and on.
Cheers,
Bev


----------



## iota2014

Bevdeforges said:


> I'll leave you to arm wrestle the consulate staff folks over who gets affected "first" but yeah, the consulates do have to make their "citizen services" pay for themselves - so the circle goes on and on.
> Cheers,
> Bev


Except renunciation services, which are apparently treated as a luxury add-on and charged accordingly.


----------

