# Help with FATCA problems and Streamlined filing



## SukiPuki (Mar 25, 2021)

I was born in the United States and have dual US/U.K. citizenship, i left the United States when I was a child. I’ve never filed US tax returns and was only made aware that I had to do so about two years ago. Upon investigating I came to the conclusion that I don’t need to file as I have no income of my own as due to health reasons I have been a homemaker for the past few years. Now recently i tried to open a new bank account and was given a form asking for my US tax number. At the same time a local bank where I have an account also sent me a form to fill out. As I have no funds in that account and never use it I just closed it. However, I assume my current bank will also eventually send a CRS & FATCA form. What would happen if I cannot supply the bank with a tax number? Would they be forced to close the account and report me to the irs? I doubt I would be liable to pay anything as I don’t earn anything but I am uncomfortable with the idea of the irs becoming aware of me and suddenly having to deal with their questions, required paperwork, fines or whatever. Also the account I have is a joint account with my British husband however all income in that account comes from him. How would FATCA affect us should our bank send us the dreaded form? I am also worried going forward that I won’t be able to open another bank a count due to FATCA. I also have power of attorney for my mothers bank account which might also cause problems in future as she has a substantial amount in this account so I am worried what issues this might cause. 

As I have no interest in filing tax returns in the US for the rest of my life and my husband certainly has no interest in having his finances get involved with the irs, nor my does my mother, I have been exploring renouncing citizenship but it seems in order to do that I need to certify that i have been tax compliant for the prior five years. And so I stumbled on the streamlined offshore procedure, this seems like it could be the best way forward to become compliant and then renounce citizenship, however upon looking at the IRS website I cannot for the life of me figure out what forms to fill out or how to even proceed, it looks complicated as i haven’t understood many of the questions on the the forms that I looked at. There seem to be plenty of tax consultancies for expats offering the service however it’s quite a lot to pay $1400 just for someone to back-file 3 years of zeros. Does anyone have any advice on how I could proceed with this? Am I better advised to bite the bullet and pay a professional to deal with it?


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## Bevdeforges (Nov 16, 2007)

OK, there are several bits of what should be "good news" for you.

First of all, if you have no income of your own, you aren't required to file anything for US taxes. OK, there are specifics to meet, but chances are you don't have to declare anything. If that is the case, then you are fully "tax compliant" for the last five years (and beyond). There is no need to file anything. And in any event, no one I know of who has renounced has actually been asked about their state of compliance. The consulate people will simply remind you that renunciation does not relieve you of any tax obligations from the time before you renounce. A friend of mine who renounced still receives her (very small) US SS benefit though she hasn't filed US taxes for decades. If your income is below the threshold, you are note required to file, so you are compliant.

Basically, the "FATCA form" the banks ask for is usually a W9 (or the bank's version of that form used for both the IRS and the CRS. Those forms are held strictly by the banks or other financial institutions that send them out as a form of CYA policy. They only need to show that they have asked for such a form from their customers (or at least those with US "indicia" - like birthplace in the US). But the form itself never leaves the bank premises.

If you should decide to try to comply (for any reason) you should first check to see if you have a US Social Security number. Starting somewhere in the 1980s or so, they pretty much started issuing SS numbers along with birth certificates for most or all children born in the US. It can be a real hassle to obtain a US SS as an adult, so you may want to just let sleeping dogs lie. And if you insist - do make sure that you really don't have a SSN from birth.

You say you have power of attorney for your mother's accounts - but are those accounts in banks in the US or in the UK? A UK bank shouldn't have need for you to have a US SSN. A US bank should already have your mother's information and as far as I know, that's all they need. I controlled my father's bank account after he went into a nursing home - but we did that by putting me on the account as a signer, which did require them to have my SSN. If you're exercising a power of attorney I'm not so sure they're likely to need or want that information.

Basically, you have lots of time to consider what you want to do (or not do). Don't rush into anything and above all, don't worry that the IRS is going to come to get you. The IRS is a vastly underfunded, understaffed agency with creaky computer systems. They have no reason to come after you unless it is somehow painfully obvious to them (and the rest of the world) that you are a US citizen and are flashing great gobs of money around. It doesn't sound to me like that is the case. <g>


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## Nononymous (Jul 12, 2011)

The last thing you should is contact a tax professional - that would be a complete waste of money. There are three separate issues here: tax, banking, and renunciation.

*Tax*
You are currently up to date on US tax returns, by virtue of having no income. It's possible that you should have filed FBAR forms for any year in which your joint account held a balance more than $10,000. Don't worry about that for the moment. If you filed a tax return this year you'd earn $3200 in stimulus benefits, so that's something to consider. Filling out a 1040 with nothing but zeroes shouldn't be too difficult. You'll need a US bank account to receive direct deposit instead of a check, but it's easy to set up an online account with Wise that gives you a US routing number. Do you have a Social Security Number? It's not clear from your post. If you do, easy. If not, you'd need one first to collect the stimulus benefit - with one possible exception, which I'll describe below.

*Banking*
Under the FATCA law, banks the world over are required to check for US person customers, and if found, record their Social Security Numbers. If an account is then reported, the IRS receives information about year-end balance and any interest/dividend income. Unfortunately joint accounts are included. Don't worry, though, the IRS does nothing with this information. FATCA doesn't create a tax filing obligation for you, unless you're earning vast sums from savings and investments, on which you'd presumably be paying UK tax first. The immediate concern for you is providing a Social Security Number. If you don't have one, it's a bit of an undertaking to obtain one as an adult living abroad, during the pandemic. Do you happen to know why the bank contacted you? Do they specifically know that you are American, or is it just a general "fishing expedition" sort of enquiry? Two approaches you can take here: first, if possible, simply lie to your bank and deny being a US citizen. Don't worry, it's quite common in some countries, though more difficult in others. It's an option to consider. Otherwise, if you can't avoid it, you'll need that SSN - so stall the bank by losing the letter for as long as possible. If you don't want your husband's personal information sent to Uncle Sam you'll need to either get out of the joint account or restrict it to something modest for household expenses that maintains a relatively low balance - if it's always under $10,000 you'll avoid any FBAR reporting obligations, should you care about that. The thing to avoid is saying yes to the citizenship question but not being able to easily obtain an SSN - that puts both you and the bank into a bit of a tough spot.

*Renunciation*
It is not necessary to be tax compliant in order to renounce. This is a common misunderstanding. The whole five years' returns plus exit tax form (8854) thing is basically optional, and according to the IRS around 40 percent don't bother. For someone in your position it's no big deal as you are compliant already, all you would need to do to formally exit the US tax system (if you so chose) is to file Form 8854 with a bunch of zeroes on it. Renunciation is stupidly expensive but you can easily offset the $2350 fee with the stimulus benefit if you file this year. There is also a special program now for people to file without an SSN if they are renouncing - why anyone would bother is another question entirely - but I don't know whether you'd still get the stimulus benefit then.

Honestly in your case I wouldn't worry about any of this, if you aren't planning to work you'll have no future tax filing obligations, and if you can arrange your bank affairs to shield your husband's assets from FATCA then you've solved that problem as well. Your biggest issue going forward might simply be obtaining an SSN if you can't manage to conceal your US citizenship from the bank.


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## SukiPuki (Mar 25, 2021)

Thanks for the good news! 
Yes, I do have an SSN number. When I last renewed my US passport at the embassy in London they asked me if I had one and I didn’t know so they sent me to another department who checked and gave me my SSN. It seems that will make some things easier. And it is great news to learn that i can renounce without the complications of the streamlined process. The issue of the exit tax form and some big scare tactics on expat tax consultant websites was what led me to believe I need to jump into the Streamlined procedure Immediately! So all I really need to do is apply for renunciation and upon questions of tax compliance I can in good conscience confirm that I have been compliant as I had no income during the past 5 years. I do intend to return to working life so I would be happy to get the renunciation of citizenship under way before the end of the year. 



Nononymous said:


> Do you happen to know why the bank contacted you? Do they specifically know that you are American, or is it just a general "fishing expedition" sort of enquiry?


The email from the bank contained a link to an online form that I was only able to access once I received a code sent to my phone. It was a generic form that had to be filled out and submitted online. They ask that you fill in personal details with address etc and ask to tick a box if you are a “US Person” the form goes on to ask in which countries one is a tax resident and to supply a tax identification number (TIN) for each. There is a seperate line for US Persons to fill out and give the US TIN number. If you are unable to provide one they ask to explain why. They did not ask for a SSN. The bank I recently tried to open an account with also asked to supply a US tax identification number rather than an SSN. Would those be the same thing?



Bevdeforges said:


> Basically, the "FATCA form" the banks ask for is usually a W9 (or the bank's version of that form used for both the IRS and the CRS. Those forms are held strictly by the banks or other financial institutions that send them out as a form of CYA policy. They only need to show that they have asked for such a form from their customers (or at least those with US "indicia" - like birthplace in the US). But the form itself never leaves the bank premises.


 I was given the impression that the bank would not let me open an account if I could not supply them with a US tax identification number. Hence I am worried that I may not be able to open another account. However if a bank asks for my US info and I could just give my SSN number and that would be the end of it, that would make life easier. 



Bevdeforges said:


> You say you have power of attorney for your mother's accounts - but are those accounts in banks in the US or in the UK? A UK bank shouldn't have need for you to have a US SSN. A US bank should already have your mother's information and as far as I know, that's all they need.


My mothers account is not in the US. When I signed the power of attorney the bank asked me to fill out a form, which asked to confirm whether I am a US citizen. They then also wanted my US tax number but once I told them I didn’t have one they were a bit concerned but then decided it would not be necessary for a POA. However I am worried it could cause an issue sometime in future.



Nononymous said:


> Filling out a 1040 with nothing but zeroes shouldn't be too difficult.


No it It shouldn’t, however my problem is identifying which forms i need. So a 1040 is the one If I do decide to file and I just file for 2020 and post the form off to the irs? I wouldn’t get any questions as to why I haven’t filed before? if I do i guess my answer would be that I had no income, however might they not want to know why I never filed a single tax return during my 60 yrs on this planet?



Nononymous said:


> all you would need to do to formally exit the US tax system (if you so chose) is to file Form 8854 with a bunch of zeroes on it.


Thanks for mentioning the form number, I couldn’t find it, but now have seen it online and indeed it seems all I would need to do is fill out a bunch of zeros. It almost seems too easy....


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## Bevdeforges (Nov 16, 2007)

The US SSN IS a TIN (taxpayer identification number) so just give them that. It sounds like the reason they asked you for the paperwork to open an account is that you have some form of "US indicia" - like your place of birth or something like that.

If your mother's account is not in the US, then don't worry about it. 

If you go ahead and renounce, you should send a copy of your CLN (Certificate of Loss of Nationality) to each of the banks that have asked you for your US SSN or other confirmation of your "US person" status. But once you have the CLN in hand, you're done. 

But no, there is no reason to worry about not having filed a tax return before this. It is perfectly valid that you haven't been earning any income all this time - and therefore had no reason to file. Lots of dependent spouses are in that situation - and they really don't have any information about income from outside the US anyhow. In any event, I wouldn't bother with the form 8854 unless you have US bank accounts or other property located in the US.


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## Nononymous (Jul 12, 2011)

SukiPuki said:


> I do intend to return to working life so I would be happy to get the renunciation of citizenship under way before the end of the year.


Put your request in now, there's going to be a huge backlog after the consulates closed a year ago for the pandemic.



SukiPuki said:


> They ask that you fill in personal details with address etc and ask to tick a box if you are a “US Person” the form goes on to ask in which countries one is a tax resident and to supply a tax identification number (TIN) for each.


It's sounds like this is the standard FATCA/CRS compliance piece being sent out to all customers. You have two options here. You can either fail to check the US person box and get on with your life - yes that would be lying - or check the box, supply your SSN, and subject yourself to FATCA reporting until such time as you renounce US citizenship and obtain a CLN. Up to you. Where it gets tricky for some people is opening accounts in countries where place of birth is on the national ID card - they don't have the option of lying. The UK is apparently not so strict. Another thing to be aware of is that banks in some countries may deny investment services to US person customers because they refuse to deal with the perceived compliance risk.



SukiPuki said:


> They then also wanted my US tax number but once I told them I didn’t have one they were a bit concerned but then decided it would not be necessary for a POA. However I am worried it could cause an issue sometime in future.


You do have a US tax number, as you now know - it's your SSN. If they are cool with not needing it for POA then all is well, but this bank is now aware of your US citizenship, so you may at some future date be subject to FATCA reporting if the account were in your name.



SukiPuki said:


> So a 1040 is the one If I do decide to file and I just file for 2020 and post the form off to the irs? I wouldn’t get any questions as to why I haven’t filed before? if I do i guess my answer would be that I had no income, however might they not want to know why I never filed a single tax return during my 60 yrs on this planet?


They won't care. The only reason you would do this is to collect your $3200 stimulus benefit. If you don't want the money, don't bother filing - if you have no income, you are not required to file.

After you renounce you can file Form 8854 to formally exit the US tax system - it won't be difficult - or you can just forget about it and not bother. The IRS won't come looking for you.


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## Jca1 (Aug 7, 2019)

Nononymous said:


> Put your request in now, there's going to be a huge backlog after the consulates closed a year ago for the pandemic.
> 
> 
> 
> . Where it gets tricky for some people is opening accounts in countries where place of birth is on the national ID card - they don't have the option of lying. The UK is apparently not so strict.


Not sure about this. UK doesn't have a national ID, but UK driving licenses and (of course) UK passports have a place of birth. I've had applications denied or flagged as having US indicia based on this. You can, however, submit your birthplace as a city name with no mention of state or country, which can avoid US indicia if you were born in a city that isn't very obviously in the US, e.g. Peterborough or San Antonio. The stringency does vary a lot between banks.


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## Nononymous (Jul 12, 2011)

Jca1 said:


> You can, however, submit your birthplace as a city name with no mention of state or country, which can avoid US indicia if you were born in a city that isn't very obviously in the US


"No, there's a Springfield in Yorkshire, I swear."


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## SukiPuki (Mar 25, 2021)

What a relief, i was starting to panic with this whole FATCA business and the expat tax services advertising online really contribute toward putting people in a flat spin. Thank you Bev and Nononymous for your level headed and informative posts.



Nononymous said:


> Put your request in now, there's going to be a huge backlog after the consulates closed a year ago for the pandemic.


“Under guidance from the U.S. Department of State, we are currently unable to process Loss of Nationality applications and cannot provide a timeframe for when this service will resume” Oh dear, this might take awhile.


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## Nononymous (Jul 12, 2011)

You're not in any particular rush to renounce. Re-reading your original post, it sounds like your current bank - where you keep your joint account - has not asked you about US citizenship. Keep your head down, lay low, and they might not get around to it. You should be able to stall any FATCA reckoning for a few more years.

Otherwise, as mentioned earlier, you don't actually need to file any US tax returns unless you want to claim the $3200 stimulus benefit. In that case, file a 2020 return only, using a Wise (formerly Transferwise) US dollar account for direct deposit, and call it a day.


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