# Dual UK/USA national working abroad for American company



## lookingfor answers (Jan 27, 2018)

I'm a dual national UK/USA citizen. I was born in the USA but left at about 5 years old and have never lived or worked there since. I currently hold a British passport and an (expired) US passport. As far as I know I have no US social security number. I currently live in Hong Kong. I have been self employed for the last 25 years and have never filed US taxes. Nor has my taxable income ever been high enough to make me liable to pay income tax in the US.

At the start of this year I took a job in Hong Kong with a US-based company. My salary is over US$105,000, so I understand I am now over the tax-exempt threshold in the US. However, I have noticed that I am being paid by a Hong Kong registered company called "[employer company name] Service Company Ltd", which appears to be a Hong Kong-registered shelf company.

I'd be interested to know in the circumstances whether this is likely to mean I will not be visible to the IRS, given that I am technically employed by what appears to be a Hong Kong subsidiary. 

In addition, what is my best course now? I am in principle willing to disclose to the IRS and file three years returns etc if that would be advisable (I owe nothing anyway). If so, when would be the best timing to do so? I could of course do it now, but then if for some reason the IRS turns hostile that would be bad timing for me. Given that I am not due to file my first tax return relating to my current job until sometime next year, should I wait until then to disclose given that I will by then have a fair amount stashed away, making the current exercise worthwhile?

I have no assets in the US, nor do I have any plans to return to the US to live.


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## Bevdeforges (Nov 16, 2007)

You're in a somewhat interesting, though possible tricky, situation.

Technically speaking, you are still supposed to file US taxes, even if you don't owe any taxes (due to the FEIE or whatever other options you're eligible for) - as long as your gross income (actually gross revenue) exceeds the threshold amounts, which for most filing statuses is around $10,000.

You've got the option to just let sleeping dogs lie. There's no particular reason for your employer to report your salary income to the IRS based solely on your US birthplace. Your employer is the Hong Kong subsidiary and your primary tax obligation is to Hong Kong. 

You probably do have a US SS number, at least if you were born in the US in the 1980s or later. Getting a US SSN as an adult can be a major hassle, as can be the matter of tracing your original SSN if you have one. 

The one outstanding risk would be if any of your banks or financial companies notices your US birthplace and requests FATCA information from you. But if that hasn't happened so far, again I'd say let sleeping dogs lie.
Cheers,
Bev


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## lookingfor answers (Jan 27, 2018)

I was born in 1962, so not sure what that would mean re: SSN. 

Also, my employer doesnt know of my US birthplace or citizenship. On the various forms I have filled out I've stated I am a UK citizen. I didnt want to open a can of worms by saying I'm a dual national and as I have an English accent, theres no reason they would think otherwise.

Another issue is that I will probably have to visit the US at some point to press the flesh at head office, which means I will probably have to renew my US passport. That opens up other issues about the SSN as I'm supposed to declare what it is if I have one. Not sure what to do about that at this point.


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## Bevdeforges (Nov 16, 2007)

If you were born in 1962, you probably don't have a US SSN. I think it was the late 70s or early 80s before they started systematically issuing SSNs to new borns along with their birth certificates.

Visiting the US is "one of those things." IF a sharp eyed Immigration official spots your US birthplace in your UK passport, you will be "questioned" at some length, given a certain amount of hassle over the "rules" that require a US citizen to enter the US only with a US passport, but ultimately will be allowed to run along with a "stern warning." I know folks in your situation who have entered the US on their "home country" passport with no problems, and others who were stopped and "interrogated" at some length.

Do check the website for the US consulate where you would have to apply for your US passport (if the expired one was issued more than 15 years ago, you can't just "renew" it - you have to apply from the start). The SSN isn't a State Department requirement for a passport. It's really only an accommodation with the "other" department (though whether the Social Security Administration or the IRS, they have never made real clear). For many years, the instructions for renewal of a passport through the Consulate stated that, if you don't have a SSN, to just fill in that space on the application form with all 0's. Not sure how they handle it for getting a new passport altogether - but there should be something on the Consulate website.
Cheers,
Bev


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## Nononymous (Jul 12, 2011)

Some advice from a cheerfully non-compliant dual US/Canadian citizen with US birthplace. 

Executive summary: do nothing.

Taxes

As Bev said, the fact that your income was under the FEIE limit and you wouldn't have owed any tax doesn't mean you weren't supposed to have been filing all these years. Which is of course ridiculous, as we know. The fact that you're suddenly earning more than the FEIE limit doesn't mean that you'd necessarily owe any US tax (since you'd get a credit for tax paid elsewhere) and certainly doesn't mean that you should consider coming into compliance.

You are not currently visible to the IRS. This is a good position to be in, and not something I would give up lightly, without careful consideration.

Passport

It's possible to apply for a US passport without having an SSN. You simply enter all zeroes. Whether you need the US passport is another question. Though technically illegal, it's still quite easy to enter the US on a foreign passport with US birthplace. I did so last week - no questions asked, they happily stamped the Canadian passport and on I went. It may be easier for Canadians, we don't need to do ESTA waivers or anything like that before turning up at the airport. But in your case, I would just try it the first time and see. Either they don't notice or you get a polite lecture and you promise to get a US passport next time you travel. (I had the lecture once and continued using the Canadian passport afterwards - apparently they don't review their notes on subsequent visits.)

If you do renew the passport, you need not come into tax compliance, nor should you expect to hear from the IRS. Particularly if you have no SSN and aren't in the tax system, they aren't exactly going to track you down. If you are in Hong Kong temporarily, even better, the mailing address you use for the passport will eventually not be valid. (Though I do have an SSN from living in the US a few years, I used a temporary address in Europe to renew my US passport, which ensured that all future correspondence would disappear into the void.)

FATCA and other risks

Probably your biggest concern is that if you are banking locally in Hong Kong, someone will notice your US birthplace and either refuse you an account or demand that you sign a W-9 and provide an SSN (that you don't have) and disclose your existence to the IRS, and potentially begin FATCA reporting if balances are high enough. Your options then are to (1) not bank locally, if possible; (2) convince them on some spurious grounds that you are not a US citizen - "my father was a diplomat" is a popular lie - and possibly sign a W-8; (3) just sign the W-9 with no SSN and see what happens - probably not much.

Also note that if you come into tax compliance, you're not just filing tax returns, you're also submitting FBAR (a.k.a. FinCEN) reports for all your savings and investments back in the UK. So a certain amount of hassle and risk there.

Conclusion

In your case, I would do nothing. You don't exist as far as the US government is concerned. That is a status you should not give up, if possible. Forget the fact that you once had a US passport, claim ignorance of any possible US citizenship, say nothing about it to your employer or your bank. Travel on your UK passport and see how that goes.


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## lookingfor answers (Jan 27, 2018)

Nononymous said:


> Executive summary: do nothing.


I would like to do exactly this, but I'm not sure just how high the risk is. I suppose it depends most of all on the practices of the US company in their relationship with the IRS. Would it be normal, for example, for US companies to share with the IRS details of the new employees they hire abroad? I'm going to ignore at this point that I'm receiving my salary from a locally-registered subsidiary, which the US head office may regard as just a technicality. If they do share this information, together with the fact that I am a UK citizen, what steps, if any, would the IRS normally take? Would they be likely to contact me to check up? Anyone have any insights on this?

Passport. 
I've seen the instructions on the passport application form about filling in this section with zeros if you dont have a SSN. That seems a sensible approach for me. I've also seen a suggestion on one forum that they now require a written confirmation from you that you have no SSN. 
I'm also considering just using the UK passport to enter the US, as suggested. I've heard, though, that visa free entry to the US for UK passport holders applies only if they have arrived from the UK itself, which I would not be doing as I am coming from Hong Kong. I suppose I could carry with me my expired US passport just in case, but I'm inclined at this point probably to apply for a new US passport. I've read in various forums that there is in practice little if any coordination between the tax authorities and the State Department, at least unless you don't already owe the IRS a significant amount of money. 

FACTA
I'm actually not too concerned about FACTA. I already have several accounts with local banks that have been in existence for many years and as far as the banks are aware I am a UK citizen and thats enough for them. They dont seem too concerned about dual nationality. I think their view is that if they had to check every person with a foreign passport just in case they might hold dual nationality that would be a nightmare scenario, so as long as you dont rock up with a US document theyre satisfied they've done their DD.


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## Nononymous (Jul 12, 2011)

lookingfor answers said:


> I would like to do exactly this, but I'm not sure just how high the risk is. I suppose it depends most of all on the practices of the US company in their relationship with the IRS. Would it be normal, for example, for US companies to share with the IRS details of the new employees they hire abroad? I'm going to ignore at this point that I'm receiving my salary from a locally-registered subsidiary, which the US head office may regard as just a technicality. If they do share this information, together with the fact that I am a UK citizen, what steps, if any, would the IRS normally take? Would they be likely to contact me to check up? Anyone have any insights on this?


I'm not 100 percent certain of this, of course, but common sense tells me that if the HK subsidiary of a US company hires a UK national in HK, the IRS is not going to know about it. What would be the point of their knowing? You wouldn't be subject to any US taxation, nor be paying into US Social Security. There's no reasons for the employer to send the IRS any details, and even if for some perverse reason they did, so what, you're not subject to US taxation anyway, as a non-citizen working outside the US.

That being said, I would also not say a word to the employer about US citizenship. If you were in a position where you had signing authority over large accounts, then you need to proceed more cautiously, but otherwise it shouldn't be an issue unless you start spending large amounts of time working in the US, rather than the odd visit.



> Passport.
> I'm also considering just using the UK passport to enter the US, as suggested. I've heard, though, that visa free entry to the US for UK passport holders applies only if they have arrived from the UK itself, which I would not be doing as I am coming from Hong Kong. I suppose I could carry with me my expired US passport just in case, but I'm inclined at this point probably to apply for a new US passport. I've read in various forums that there is in practice little if any coordination between the tax authorities and the State Department, at least unless you don't already owe the IRS a significant amount of money.


I expect you're quite safe either way. Personally I would try the UK passport once before deciding to get a new US version.



> I'm actually not too concerned about FACTA. I already have several accounts with local banks that have been in existence for many years and as far as the banks are aware I am a UK citizen and thats enough for them. They dont seem too concerned about dual nationality. I think their view is that if they had to check every person with a foreign passport just in case they might hold dual nationality that would be a nightmare scenario, so as long as you dont rock up with a US document theyre satisfied they've done their DD.


That is good, so keep it that way. Just be careful to never mention US birthplace, passport, citizenship or anything else American in the presence of a banker. If at some point you are asked to sign a form (W8-BEN or similar) be prepared to lie.


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## Nononymous (Jul 12, 2011)

Nononymous said:


> I'm not 100 percent certain of this, of course, but common sense tells me that if the HK subsidiary of a US company hires a UK national in HK, the IRS is not going to know about it. What would be the point of their knowing? You wouldn't be subject to any US taxation, nor be paying into US Social Security. There's no reasons for the employer to send the IRS any details, and even if for some perverse reason they did, so what, you're not subject to US taxation anyway, as a non-citizen working outside the US.


I'm going to update this. Even if the HK subsidiary of a US company hired a *US* citizen living in HK, there would surely be no reason for them to notify the IRS. The US citizen is living and working in HK and paying HK taxes. There would be no US tax withholding or Social Security or anything like that (unless the US citizen were actually working for the US company on a temporary assignment in HK) so no need for any reporting. The US citizen would still be required to file US taxes, but that would be their personal responsibility, and presumably little or nothing would be owed.


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## lookingfor answers (Jan 27, 2018)

Nononymous said:


> I'm not 100 percent certain of this, of course, but common sense tells me that if the HK subsidiary of a US company hires a UK national in HK, the IRS is not going to know about it. What would be the point of their knowing? You wouldn't be subject to any US taxation, nor be paying into US Social Security. There's no reasons for the employer to send the IRS any details, and even if for some perverse reason they did, so what, you're not subject to US taxation anyway, as a non-citizen working outside the US.


While the Hong Kong branch must have been established as a local entity if only to satisfy local business registration requirements, I'm going to assume in this case - just to be conservative - that this isnt so in this case or at least if it is that this distinction isnt recognised in the US head office, if only because it is a very America-centric organisation which has many hundreds of US employees but fewer than 10 in Asia and maybe 5 in Hong Kong. The contract I signed with them isn't clear as to who exactly is the employer, though it is signed by the head of HR in the US. The company is also in the growth stage, meaning that it is supported financially by the US parent. The only reason I think that I am employed by the local branch is that my salary comes from what appears to be a locally established service company set up for this purpose.

So in a scenario where a US company hires or thinks it has hired a foreign citizen resident abroad is there any precedent for how HR in that company would handle this vis-a-vis the IRS? Would it likely report this fact? What steps would the IRS then be likely to take, if any? I think this is probably a question only someone with direct knowledge is likely to know, but I throw it out there in the hope that someone reading this may have some experience of standard practice either on the corporate or the IRS side.


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## lookingfor answers (Jan 27, 2018)

As the company itself is not registered on the Hong Kong's companies register (I've checked), I'm going to assume it is established here as a branch office of a foreign company. Only the service company (which pays me) is set up as a Hong Kong LLC. That tends to suggest I am actually employed by the US entity.


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## Nononymous (Jul 12, 2011)

I still can't think of any reason why the IRS would be notified. You are being paid locally, with local taxes withheld. Regardless of your citizenship.


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## Bevdeforges (Nov 16, 2007)

Let me just offer up my experience here.

I worked in the UK on secondment for my US employer and there was no notification to the IRS. Usually in those circumstances, the employer works out a deal whereby the employee remains on their home country social insurance system, so may continue to pay US social security, but there is no W-2 notification to the IRS. (It's kind of a long, roundabout process.) 

I have also worked in Germany for the German branch of a US based company. There, I was working as an individual, with no "transfer" to or from the US parent company. There was no HR notification of wages or anything else to the IRS because I was on what is referred to as the "local payroll" - i.e. was hired by and working for the foreign subsidiary with no connection to the US parent.

The only exception to this that I'm aware of is if you are working for a US government agency (like the Consulate or the US military), where being a US citizen means you pay US taxes rather than local taxes.
Cheers,
Bev


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## lookingfor answers (Jan 27, 2018)

OK, thanks for all these insights. What would happen if the US company were audited, for example, would that likely lead to further enquiries? 

Just trying to cover all the bases...


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## Bevdeforges (Nov 16, 2007)

There is no particular reason for an audit (tax or regular) to go looking for US employees of a foreign subsidiary - in large part because there is no law, incentive, or other obligation for a private company to report US citizens on their payroll outside the US. 
Cheers,
Bev


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## lookingfor answers (Jan 27, 2018)

Update - having just applied to renew my US passport, I'm told I cannot do so (as of last year) unless I provide a SS number, and if I claim to have no SS number it is necessary to get confirmation of this from the SSA Federal Benefits Unit in the Philippines. 

Does anyone know if this can be taken as an indication that the State Dept is now adopting a more activist stance in passing SS numbers for passport renewals to the IRS? My understanding was that in the past they either did not actively do so or if they did the IRS did not actively follow up.


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## Bevdeforges (Nov 16, 2007)

It sounds like this SSN issue is being handled on a consulate by consulate basis. I just checked the Paris consulate, and they want you to fill out an affidavit stating that you have never been issued a US SSN. In the past, they've been pretty blasé about the issue - basically just said to fill the fields on the passport renewal form with 000-00-0000 

It may or may not portend a stricter adherence to the idea of passing the numbers on to the IRS. But remember that there are many reasons why a US citizen (with a US SSN) might not need to file a return - such as insufficient income (income less than the filing threshold). The IRS budgets are still pretty low and I haven't heard any moves to increase them.
Cheers,
Bev


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