# Post-renunciation filing, but no past requirement to file?



## CdnAllTheWay

Hi, I'm an accidental. More than two decades ago, US Dept. of State told me I was not American. Someone waved a magic wand at the border, and lo and behold, I'm American again...or was. I renounced this spring. All of my life in Canada, Canadian spouse, kids, whole shebang, no ties or finances involving the US.

So...I'm really confused. Next year I must complete the 8854. As a dual, I understand I am not a covered expat, and I don't meet any residency requirements. What I can't figure out is why I must still complete Part IV and V financial information, if I'm not subject to an exit tax?

Also, by the income reporting thresholds for each year, I am not required to file returns, except for 2012. That tax year just barely had me over the threshold for married filing separately. I had planned to file under Streamlined, but am not required to file for two of the three years. I also have nothing to report on FBARs for at least three of the six required years.

What to do?

Additionally, my husband does not want me to include the account number for our joint chequing, and my brother does not want the account number included for my elderly father's account that we have signing authority on to pay his bills, and his nursing home.

Sign me lost. As a stay at home mother, I can't afford an accountant.


----------



## maz57

I'd ignore the whole nightmare. Really, what can they do to you?


----------



## CdnAllTheWay

They can keep me from crossing the border, and I live in a border city. Life on both sides of the border is intertwined. And then there's FATCA coming up. My reason for renouncing was not just to show I'm solely Canadian in my heart, but also to clean up the mess I find myself in due to US misinformation given to me in the past. I'm finally at a stage of my life where I can take the occasional winter vacation, and the US is our first choice. I don't want to live like a prisoner in my own country, afraid my flight will be diverted to a US airport, etc. Besides, I know I owe nothing in tax, having not had much, or any, income each year, over the last 18 years.


----------



## Nononymous

So I think you can't really ignore this, once you renounced you started that ball rolling and you have to see it through. It sounds like your taxes would be very simple, one 1040 for the year you're required to file, and then do you whatever you need to do for that other form (8854). Ballpark it, good-faith estimates, whatever is easiest. You won't owe anything, obviously. 

I'm not sure what to do about the FBAR reporting. I believe that you are required to report joint accounts whether the other signatories like it or not. That is a dilemma. My personal inclination in this situation would be to file the forms without reporting the joint accounts and feign ignorance in the highly unlikely event you were ever asked. Alternatively, open new accounts for which you are temporarily not a signatory, move all the money over, report the old account numbers, and then become a signatory of the new accounts as soon as the paperwork is filed. Bit of a hassle but it protects your family members from having their information disclosed (which is probably harmless but as a Canadian I can understand why it would make a person outrageously angry). Odds are that piece of paper will never be looked at, just checked off as part of the renunciation process.


----------



## graubart

You have no obligation to file returns for those years you are below the filing threshold. Your 2012 return isn't due until June 15 since you live outside the US so you aren't even behind. Just file for 2012, you have no reason to consider an amnesty.

Send a reasonable cause letter with your FBARS and you're done.


----------



## BBCWatcher

The 2012 FBAR is not due to the U.S. Treasury Department until June 30, 2013. Note that's the date by which the form must be received in Detroit.

However, the suggested "shuffle accounts" method doesn't work for that year because 2012 is all the in the past, and it's a "high water mark" report anyway. Any applicable account open for even one minute in 2012 has to go into the report. Sorry, there's simply no legal way to avoid that reporting requirement. Anybody who wanted to avoid one party's reporting, one party's possible liens to settle debts, etc. shouldn't have opened a joint account with that party in the first place.

What could be done for the paranoid-at-heart is to report the accounts, close them, then reopen them elsewhere under new account numbers after all reporting requirements have passed. A slight variation on that is to open a new account at a different institution and drain most of the funds from the reported accounts. Does it really matter if somebody knows about an account with a $10 balance? And, if you're _super_ paranoid, you'd transfer the money via periodic uneven cash withdrawals followed by non-matching (in date and amount) cash deposits in the other account.

Yes, this is as silly as it sounds unless you've got a reason for such behavior, such as drug trafficking, financing of international terrorism, tax evasion, and/or fraud. Absent that, nobody will care.


----------



## CdnAllTheWay

Thanks, everyone.

So... I do the following, correct?

- file 1040 for 2012 only, via Streamlined, even though Streamlined wants 3 years
- file FBARS (with all account numbers), via Streamlined, only for each of the last 6 years where the aggregate balance of all accounts was over $10,000

In 2014, I would:

- file 1040 and FBAR for 2013, up to date of renunciation
- file 8854, showing tax liability for 2008 - 2012 as $0


----------



## graubart

My suggestion was that, since you aren't behind in your taxes, you don't need to use the Streamlined amnesty.

With your FBARs, attach a letter with a reasonable cause as to why you didn't file earlier. Not knowing you were an American is a reasonable cause.

Otherwise you are correct as to what you have to do.


----------



## Nononymous

Ditto - ignore streamlined, you just need to file the one return. FBARs are a separate thing.

Regarding FBARs, joint accounts and paranoia, I think the OP's point isn't about concealing information from the US, it's about respecting a spouse's wishes. For a single person, file away and basta, done. However, if it's important to family that they not be informed upon, then some shuffling may be required. As I said, sending off a couple of account numbers to the US government is probably quite harmless, but the very idea tends to upset non-US nationals - funny how that happens. 

I am fairly sympathetic to this dilemma - when told of the FBAR requirement and its implications for her, my Canadian wife not-so-politely suggested that both I and the IRS could go to hell. She at least knew that I was a dual citizen when she married me; apparently the OP's husband did not, which would make it worse.


----------



## CdnAllTheWay

Thanks, graubart. My thinking was that going through Streamlined gives me the opportunity to submit tax returns, FBARS, reasonable cause letter, and apply for a tax number, all in the same package. My fear is sending each in separately would cause more questions. This situation, coupled with the time and money to renounce, has already sapped my emotional strength.

I just checked my father's statements. It looks like my brother and I are joint on my dad's account, not just on for signing. As it is a credit union, they have us listed as joint owners on my dad's shares required to have accounts at the credit union. Will this require reporting in the two years I have no income?


----------



## graubart

You have signing authority but the income is his, not yours.


----------



## Nononymous

I wouldn't worry about filing streamlined: first, you've renounced so you're a special case that may get a closer look anyway; second, you're not actually non-compliant on taxes (just FBARs). 

No idea about credit union shares etc. As said before, your issue is less what you're required to do by the US (fairly clear - report everything) and more what you can negotiate with family.


----------



## maz57

Sounds as if you want to go the less defiant route. If you wish, you could file 2008- 2011 with a bunch of zeroes just to show you were under the threshold and had no filing obligation. The threshold means you don't have to file but it doesn't mean you can't file. 

For 2012 you file by this June 15 showing zero balance owing. You can get an extension 'til October 15 just by asking for it if you wish. Next year (2014) you file for 2013 (again zero balance owing) plus 8854. Then you can truthfully answer a row of zeroes for 2008-2012 tax liability on 8854 plus zero for the 2013 tax year. 

So that gives you your five years plus current year plus 8854. So you're good on the tax return front.

On the FBAR side, I'd send one for 2012 (and next year for 2013 of course). If they want more, they'll ask for more. (They won't.) The others are already late, that can't be fixed, and really, no one cares anyway, not even US Treasury. For all they know you were under the 10k threshold for prior years. They are buried under a blizzard of FBARs and after a quick look to see that everything is quite mundane will move on to something that matters.

Note that none of this involves the "streamlined procedure". As I understand your situation you are not out of compliance so you don't need to get compliant. You would only be out of compliance if you fail to file for 2012. 

Just for the record I did just what I'm describing a couple of years ago. So far I've heard nothing from either Treasury or IRS. I was in a somewhat less advantageous position because I was not yet a Canadian citizen and felt I had to take action. If I had had Canadian citizenship at the time I would have ignored them. You are in a much stronger position but you have to do what you are personally comfortable with. 

The Canadian government is not going to let those bullies rob ordinary Canadians. That's why the IGA is stalled in Parliament and won't get signed until fall and probably not even then. Relax, file minimal paperwork if it makes you feel better, and try to resume normal life. Carry that CLN along with your Canadian passport when you cross the border and tell 'em you are a proud Canadian, period!


----------



## CdnAllTheWay

Thanks, Nononymous.

Graubart, thanks. It's a no interest chequing account. I'll have to check the shares, but I don't gelieve they pay out. He has a RIF, but of course, that's individually owned by him.


----------



## graubart

Don't worry about the shares, they are considered part of the account balance. You would only have to report the income from the account to the IRS if you report it to Revenue Canada as your income.

I know what you are saying about lacking energy but just keep moving ahead. Soon enough it will all be behind you.


----------



## CdnAllTheWay

Thanks, maz57. I think I used up all my defiance at the consulate where they refused me relinquishment, despite having sworn the oath of citizenship to Canada. My husband is PO'd because of the amount of energy he used up talking to Jason Kenney's office, and Citizenship and Immigration, regarding allowing me to swear the oath, which State ignored, anyway.


----------



## Nononymous

It will change nothing, but take some small personal satisfaction in knowing that you've caused a consulate to record yet another instance of an outraged (unwilling) citizen demanding to renounce.

Really, your paperwork sounds relatively simple at this point, just file-and-forget with nothing owed. The only sticky bit is doing FBARs on your joint accounts. If I were in your husband's shoes I'd agree to file, simply to get this over with, then - on principle - close the accounts once your CLN comes through.


----------



## maz57

@ CdnAllTheWay: Sounds to me like you've been dealing with the Vancouver consulate. They've been stonewalling me by refusing to even allow me to book an appointment, by insisting on the renunciation procedure even though in my case it is a clear cut case of relinquishment, by refusing to allow me to turn in my US passport and by their "we're so busy we can't even spare ten minutes of our time in the next six months" attitude.

I'm vacillating between (1) sending my passport by registered mail to Dept. of State in Washington along with a scathing letter (2) seeing if I can get the Consul General for Canada in Ottawa to kick Vancouver's butt to (3) just going through Calgary and getting it over with. One thing is for sure; I'm sending in my last FBAR (for 2012), my last 1040 (also 2012) and 8854. This is going to happen with or without a CLN. Then that's it--I'm done for good and I'm not going to be too fussy about all the numbers. I've wasted enough of my life on all this crap and I'm not going to take it anymore. If you're running low on defiance I'll dedicate some of mine to you, OK? In the beginning when I found out about all this I was scared; now I'm just mad as hell!


----------



## CdnAllTheWay

My experience was with the Toronto consulate. The law says one thing, but the Dept. of State "interprets" it as something totally different. They offered to send the papers I'd prepared to Washington, but told me they would not be approved. I couldn't afford another trip to Toronto, if they rejected the relinquishment, and I couldn't stand to be considered American by them for one more day, so I choked and paid the $450 US. I wish I could hire a lawyer, and take their government behinds to court for 1. Lying to me several decades ago, and 2. Discrimination. Instead I'll let them spend time and money on my paperwork for no financial gain.


----------



## maz57

Yeah, any country that treats good, honest, ordinary people like this doesn't deserve to have them as citizens. They talk the talk about freedom, but it's really just that--talk. The whole US attitude that they own us wherever in the world we chose to live our lives is disgusting. They've drunk so much of their own Kool-aid that they have lost touch with reality. That $450.00 that they forced you to pay is extortion pure and simple.

You and I (and countless others) are close to real freedom. I wish you the best of luck as you navigate the paperwork maze. The thought that some border goon could have such a devastating effect on your life just shows how pathetic the US has become.


----------

