# US passport renewal w/out IRS?



## Nononymous

So I finally had the passport chat with US customs on a business trip this week.

Background: US-Canada dual, born in US, lived most of my life in Canada, studied and worked in the US in the early 90s, last filed US taxes for 1995, have been off the radar ever since, and would prefer to stay that way. Had a US passport until 2009 but now travel on a Canadian passport.

US Customs noticed my place of birth, and politely informed me that I need a valid US passport to enter the country. (I knew this, of course.) Luckily I had the expired US passport with me, otherwise I might not have made the flight. Many notes were entered into the computer.

So in all likelihood I need to renew my US passport if I want to continue crossing the border. It would buy me ten years while I decide if and when to renounce. However, I really don't want to get back on the IRS radar. Options are: (1) Enter zeroes for my SSN on the passport form - I had one when I worked in the US, but to be honest I'm not sure I still have the card, so I may not actually know the number. (2) Use a friend's US address for the passport, thus bypassing the whole expat and IRS silliness. 

Any thoughts on whether (1) and/or (2) would be good strategies? Both mildly fraudulent, of course, but I'm fine with that.

If the $500 IRS fine for not supplying that information on the passport application were a one-shot penalty, with no further consequences, I'd happily pay it - seems a fair price for a ten-year passport without having to deal with tax paperwork. But I suspect that would only be the beginning.

I highly doubt that I would owe the IRS any money - I don't make that much, and I pay Canadian taxes on it - but there's enough uncertainty and silliness that I'd rather they not know about me. Plus strong philosophical objections to expatriate taxation, FBAR, and the FATCA stupidity, which I have no interest in complying with (luckily, the Canadian government and banks feel the same way).

Thanks.


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## Bevdeforges

Easier approach might be to just give them the stupid SS number (assuming you can find it). Unless someone in Canada rats you out, there is no proof whatsoever that you actually had enough income to have to file income tax returns in the last years.
Cheers,
Bev


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## Nononymous

Bevdeforges said:


> Easier approach might be to just give them the stupid SS number (assuming you can find it). Unless someone in Canada rats you out, there is no proof whatsoever that you actually had enough income to have to file income tax returns in the last years.
> Cheers,
> Bev


There's a point. Odds are pretty low that the IRS would send me a letter asking for a bunch of missing tax returns. And given what I've read about relations between the State Department and the IRS, there's no guarantee the information will be passed along anytime this century. I still hate the idea of letting them know where I am, but c'est la vie.

Last time I looked at the out-of-country passport form, about 18 months ago, I swear I saw this little box where you had to sign a declaration that your taxes were up to date, on penalty of a $500 perjury fine if they weren't. But now I think Canadian residents can use the regular DS-82 renewal-by-mail application, which has no such box. No mention of tax obligations, only that the State Department "must" provide SSN and country of residence information to the Treasury Department, and a note that you can be fined $500 for not submitting an SSN.

So that's actually gotten better.


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## Bevdeforges

At the US Consulate in Paris, they tell you specifically that the stuff on the back of the form (probably the DS-82, but I'm not sure) doesn't apply if you're applying for renewal from outside the US. There was a fairly long statement that you were supposed to amend as needed that included a statement that you had not taken on any other nationality (which I have done). But the consulate said just to ignore what was on the second page, so by God, I did!
Cheers,
Bev


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## Nononymous

Bevdeforges said:


> At the US Consulate in Paris, they tell you specifically that the stuff on the back of the form (probably the DS-82, but I'm not sure) doesn't apply if you're applying for renewal from outside the US. There was a fairly long statement that you were supposed to amend as needed that included a statement that you had not taken on any other nationality (which I have done). But the consulate said just to ignore what was on the second page, so by God, I did!
> Cheers,
> Bev


From Canada, you may apply by mail with the regular form, same as a regular garden-variety US resident.

I have this optimistic sense that I could renew the passport without much chance of hearing from the IRS.

Either that or I use my Canadian social insurance number and, if asked, claim it was an honest mistake!


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## Vangrrl

WHAT??? The tick box and blurb about worldwide taxes is gone???

It was definitely there in late 2011 when I applied for my son's passport. In fact I was specifically asked to read it by the consulate officer. That's what clued me in to this whole tax debacle. And now I don't see it on either application or renewal forms.

Anyways, the SSN rule seems to specifically apply to US citizens living abroad. So I don't think I'd apply from home with no SSN unless you are ok with not getting a passport. So I'd go with option (2). Unless.... is your address info stored in "the chip"? In which case you may set yourself up for more questions at the border.

Good luck and report back with your results. I'll be applying for renewal in another year or so. I'm surprised you got away without a US passport for so long.


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## Nononymous

I guess I should be feel fairly lucky, having made maybe ten trips to the US on a Canadian passport, and this was the first time they said anything. 

But now I'm thinking I can just renew, since the "I swear I'm good on my taxes" box is gone. I might still explore using a US address. I'm sure that is encoded on the chip, but people can move around a lot in ten years, I'm sure I could concoct a story.


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## Bevdeforges

I really wouldn't worry about using a US address if I were you. US passports have long been understood to carry no "home address" (unlike passports issued by other countries) and have caused all sorts of confusion when used outside the US for identification purposes. I don't think they use your address for much more than to send you back your new passport (along with the old expired one), cause there is certainly no requirement to notify them if you move while you're on a current passport (as there is, for example, here in France).
Cheers,
Bev


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## Nononymous

The only issue with using a US address is the remote, theoretical possibility of being busted for lying about your country of residence on the application form. (On that note, I will be in Germany for the second half of 2013 - I could quite legitimately renew my passport at the embassy, showing my German residency permit, and there would be no connection to Canada. Perhaps a good plan, if I can wait that long.)


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## BBCWatcher

You could also go through the "front door." The IRS recently announced a new streamlined option for "low risk" U.S. expatriates to get compliant with their filings without penalties. You would have to file tax returns for the past 3 years and FBARs for the past 6. Look for the IRS article "Instructions for New Streamlined Filing Compliance Procedures for Non-Resident, Non-Filer U.S. Taxpayers."


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## Nononymous

I'm familiar with that, but I still have sufficient concerns that I would prefer to remain off the IRS radar altogether. If I can renew my US passport without alerting the tax authorities, all the better.


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## BBCWatcher

I wouldn't think that Canada is such a great place to try to hide from the U.S. IRS, but good luck with that.

If you're only going to be crossing into the U.S. over land, you could get a U.S. passport card. The form is the same, but maybe the IRS will be less excited about a passport card.

I would act quickly, and it may be the last time you can renew without paying what you owe. Congress is at least considering legislation to deny passports to any individuals suspected of owing $50,000 or more unpaid taxes to the IRS.


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## BBCWatcher

As a follow up, the Senate overwhelmingly passed a transportation bill in 2012 which included the passport restriction (which would prohibit the State Department from issuing passports to individuals with significant unresolved tax obligations). The House's version of the bill did not include that provision, and the conference committee resolved the difference in the House's favor before the bill became law.

That said, I would expect the same provision to be brought up again this year in some form. This GAO report has spurred some interest in that idea.


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## Nononymous

I owe nothing, will have no tax obligation. I just object in principle to the idea that I should give them any information about my life in Canada. I'd renounce tomorrow if it wasn't such a can of worms, in terms of tax paperwork and hassle.


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## BBCWatcher

One (temporary?) "solution" is not visiting the U.S.

Otherwise, isn't your desire a bit like visiting another family's house but wanting to smoke in front of their baby despite their rules otherwise? Don't they get to set their rules, and then you can decide whether or not you want to visit -- and whether to then smoke anyway, risk getting caught, and suffer whatever penalties there are, if any?

I don't know what else to recommend. Getting a U.S. passport may or may not arouse the IRS's curiosity, and ditto entry into the U.S. For that matter, staying in Canada and doing ordinary things (such as depositing a paycheck in a bank account or paying tuition) may or may not arouse the IRS's curiosity. Governments are increasingly cooperating on tax compliance matters because it's in their mutual interest to do so, much like they cooperate on drug enforcement, child support collection, child abduction prevention and remediation, and combatting human trafficking. Cooperation, data sharing, and data mining are increasing over time and as technology allows. The U.S. is certainly not alone in that trend.

Plenty of governments have reporting requirements, not just the U.S. To pick an example, Italy requires its citizens to notify the local consulate (or municipality if resident in Italy) whenever they change residences, even if it's across the hall to another apartment, if they have the intention of staying at least 12 months. (There are other civil reporting obligations as well.)

To pick another example, Japan requires its citizens (and often also former residents) to notify Japanese tax authorities any time they receive more than 1,100,000 yen from a single giver in a year at any time within 5 years of departing Japan. That's for gift tax purposes, and those taxes will be billed. (It's a common myth that the U.S. is alone or nearly alone in citizenship-based taxation. Japan is another country that has some citizenship-based taxation.) Could the Japanese government cooperate with, say, the Canadian government to recover taxes and penalties -- even sharing some of the recoveries with the other government? Could Japan refuse to renew passports, deny entry to people who aren't paying gift tax, or even cart someone off to jail if they arrive in Japan? Of course they could. Do they? In egregious cases, probably, and over time probably more frequently.

So what do you want to do? If you want to follow America's rules then do so. (If you want to try to change America's rules then get involved/more involved in its political process.) If you don't want to follow America's rules then deal with the consequences if they arise. The odds of consequences are probably low at this point in time, but they are increasing over time. As many Americans with Swiss bank accounts discovered.


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## Nononymous

This is all a discussion for another day, really. It will be interesting to see how this plays out in Canada, where I'm impressed by the degree of official resistance, and where there will soon be a million pissed-off dual citizens once word of FATCA spreads. My sense is, the longer one waits, the less onerous it becomes - certainly that's been the case since the story first broke 18 months ago, with all the talk of FBAR penalties and OVDI. So the risk of consequences may be less over time, once the tidal wave of outrage hits.

Personally I don't want to follow America's rules. I don't want to be American either. But most of all, I really don't want to deal with the paperwork and hassle involved. Unfortunately I can't completely avoid travel to the US, so I'll just have to figure out the sneakiest possible way to renew my passport - probably by using a US mailing address.


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## BBCWatcher

FATCA taxpayer reporting has already begun. Several governments have already agreed to cooperate with the U.S. IRS, and the Canadian government is busy negotiating an agreement, not debating whether there will be one.

That ship has sailed, the buffet is open, and Barry Manilow is performing on the Lido deck.


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## maz57

Interesting discussion. Personally, I have no confidence that the US wiil change it's policy or tax system anytime soon. It would require an act of Congress which, as we know, is a rare event these days. It would also require a bunch of expat-hating congresscritters to change their opinion on this subject which is highly unlikely. The US has a different notion of citizenship compared to other countries, regarding it's people as property to be controlled rather than members of a "club". 

The fact that many US expats are being hurt by US government policy is of no consequence when it comes to changing that policy. After all, this is the same government that ruined the lives of a whole generation of young men during the Vietnam era and to this day still doesn't get it. I think that the US government has become so bloated that it is basically dysfunctional; the chances of you applying for and receiving a new passport without complication are probably pretty good but there's no denying the risk involved if you are not current on your taxes. 

I notice that you are somewhere in Alberta. The Calgary US Consulate has a good record of one appointment, no hassle renunciations so if that is the route you choose you are in a good position to do so. Once you have begun that process you could legitimately claim that you are no longer a US citizen and attempt to travel on your Canadian passport even though you have not yet received your CLN. If challenged, you could then produce your expired US passport under protest. 

I note that you have stated that you do not want want to follow American rules or be an American. (I'm with you on that.) If you are certain about that now is the time to make it official because it will only become even more complicated in the future. While being Canadian will provide some measure of protection, this FATCA business will undoubtedly go through in some form and cause difficulties in our financial lives.


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## Nononymous

I actually marched off to the Calgary consulate and started renunciation just after over a year ago, but allowed myself to be talked out of it by a very earnest consul, and also didn't love the idea of having to do all the tax paperwork. But that remains an option.

I realize that nothing will change in terms of US legislation, but the reality is more about what they bother to enforce, and how different bureaucracies fight each other rather than cooperate (to whit, does State really forward your SSN to Treasury when you renew a passport? - not clear that it does). I'm oddly sanguine about FATCA because (i) the current rumour around the negotiations is that the Canadian government will collect the information, and only supply it to the IRS on an as-needed basis, and (ii) Canadian financial institutions have no record of birthplace or citizenship, so that information will have to be supplied voluntarily by customers, and my guess is, many hundreds of thousands will simply refuse or lie.

Yes I know I could probably do the tax forms in less time than I spend complaining about it, but I'm stubborn on principle.

Scott


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## maz57

"Yes I know I could probably do the tax forms in less time than I spend complaining about it, but I'm stubborn on principle."

I'm with you on that as well. I especially resent being bullied (you will do this if you were born in the US), threatened (massive fines for benign mistakes), lied to (Ambassador Jacobson), and the annual waste of time preparing a return with invasive forms (F8938 and it's ilk). It's not about the money; it's about the gross overreach of the US government. 

I'm mad as hell and I'm not going to take it any more! When it finally becomes apparent that tens of thousands of US citizens have renounced maybe they will start to get it. Probably not.


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## Vangrrl

Well, like I said upthread, do keep us posted on how it works out for you! I for one am very interested to see the tax requirement checkbox was removed. To me this indicates movement in the opposite direction - towards maintaining the separation of passport and tax issues.

I'm up to date with tax reporting now (I think - can anyone really know?). And honestly, if you have no difficulties with passport renewal, I might go back "underground" again or maybe just file an FBAR every year (to show I'm not hiding millions) and not bother filing a tax return. I've never owed any taxes to the US. I'm really not seeing any indication that FATCA is actually moving forward or is any less of an unforceable boondoggle than I was before (other than a lot of bluster from cross border accountants and lawyers).


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## BBCWatcher

Vangrrl said:


> I'm up to date with tax reporting now (I think - can anyone really know?).


U.S. tax _reporting_? Sure, you can know. You can order a tax transcript for free. The transcript details your current IRS tax position -- including when filings were received, processed, and outstanding taxes/penalties/interest owed (if any) -- going back a few years. Note that sending your request via fax or postal mail tends to work better if you live outside the U.S.

The IRS can always conduct investigations, correct mistakes, etc. going back a few years -- there is a limit. Your tax situation can change, particularly if you did something wrong that the IRS eventually catches. But the transcript is current when issued.

You can also verify all FBAR (TD F 90-22.1) filings if you allow at least 90 days after they are received by the U.S. Treasury. To do that telephone +1 866-270-0733 during normal U.S. business hours and choose option 1. (That's free via Skype and via many other voice over IP services.) You can request verification of up to 5 FBAR filings per call.


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## Nononymous

All the more reason to find a sneaky way to renew soon - it'll buy me ten years of peace.

Incidentally, I had to pop down to the US for work again last week. Sailed across with my Canadian passport, the customs officer didn't bat an eye. Weird. I thought I'd have to talk my way through again. (Was actually hoping the threat of being turned around would deter the client from wasting money on an unnecessary trip, but that's a whole different story.)


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## BBCWatcher

LesFant said:


> When it comes to renewing U.S. passports in the future, this is what's on the horizon: ... the prospect of renewals occurring only while physically in the U.S....


There are some things I worry about. That's not one of them. (Hint: How does a U.S. citizen enter the United States?)

Unless by "physically in the U.S." you mean "on the property of a U.S. embassy or consulate." But there's nothing "on the horizon" about that: it's already true if you want to renew a U.S. passport outside the United States. Or for that matter if you want to renew (Country X's) passport outside (Country X) -- most countries have that requirement.

What I could realistically _imagine_ happening at some point in the future -- though Congress took a pass the last time around -- is that U.S. citizens with tax compliance problems could only receive limited term one-way travel documents valid only for travel to the United States. That is, unless you're in good graces with the IRS your "wings would be clipped." You could stay where you are (if the foreign government tolerates an American without a valid passport), or you could return to the U.S. (i.e. you could receive only an "Emergency Travel Document"). That's a _possibility_ one could imagine Congress enacting and the President signing, but the prerequisite would be a tax (or tax filing) compliance problem. It would not be unprecedented: there are many U.S. federal government programs unavailable if you have unresolved tax compliance problems, if you haven't registered with U.S. Selective Service (and you're required to), if you have an outstanding arrest warrant, etc. Many governments already do that: if you have an unfulfilled obligation to a particular government -- you abducted children and brought them to another country, as another example -- you probably aren't going to be able to renew a passport unless and until you resolve that obligation.


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