# US dual citizens / UK bank account, possible account closing issues, Dec deadline



## pjdy70

Firstly, apologies, as I don’t use the site much, so not sure I have posted this article in the right thread..

Spotted this article regarding a 31 Dec 2019 deadline from the ‘grace period’ for disclosing tax information numbers for US citizens, by UK banks.

Full article in the link below, but first couple of paragraphs here:

A Paris-based organization representing so-called “accidental Americans” is calling on Britain’s banks to say how many of their U.S. citizen clients are believed not to have “Tax Information Numbers”, and therefore may be asked to give up their U.K. bank accounts as a grace period on the need for these banks to report these TINs to the U.S. ends at the end of this year.
The Tax Information Numbers of Americans who hold “foreign” (non-U.S.) bank accounts are among the key pieces of information about their U.S. account-holding clients that banks around the world are required to report to the U.S. under FATCA, the tax evasion law signed by President Obama in 2010 and brought into force in 2014.

Full article: https://americanexpatfinance.com/ne...kz6YXXsjz24asCaec0q2ZgvI9ripQ1rcltmmzDV1qNebk

Has anyone been contacted by their UK banks and asked to provide these details? I am slightly ‘freaked out’ by this, as am literally moving back next week to UK from US!!! As we have been ‘back and forth’ during the summer, I happened to already change my UK bank account back to my UK address. However, the account record will show my previous US address for a good number of years. 
With online banking, in the past I have had a 'prompt' to update my details, but managed to ignore it, as I didn't want to have to tick the box I was a US citizen, for fear of triggering account closure!! My account is with Lloyds, has anyone declared online information and not had the account closed? I can't decide whether this is done for compliance (maybe it did have a TINS field in it???), or to 'weed out' US account holders and close.

What do others think – potential serious issue? ‘Pot stirring’ due to Brexit? Will the UK banks want to close accounts and lose funds with the potential wobbles around the world/recession talk? Or, is the threat of the IRS greater? Ugh


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## underation

pjdy70 said:


> Firstly, apologies, as I don’t use the site much, so not sure I have posted this article in the right thread..
> 
> Spotted this article regarding a 31 Dec 2019 deadline from the ‘grace period’ for disclosing tax information numbers for US citizens, by UK banks.
> 
> Full article in the link below, but first couple of paragraphs here:
> 
> A Paris-based organization representing so-called “accidental Americans” is calling on Britain’s banks to say how many of their U.S. citizen clients are believed not to have “Tax Information Numbers”, and therefore may be asked to give up their U.K. bank accounts as a grace period on the need for these banks to report these TINs to the U.S. ends at the end of this year.
> The Tax Information Numbers of Americans who hold “foreign” (non-U.S.) bank accounts are among the key pieces of information about their U.S. account-holding clients that banks around the world are required to report to the U.S. under FATCA, the tax evasion law signed by President Obama in 2010 and brought into force in 2014.
> 
> Full article: https://americanexpatfinance.com/ne...kz6YXXsjz24asCaec0q2ZgvI9ripQ1rcltmmzDV1qNebk
> 
> Has anyone been contacted by their UK banks and asked to provide these details? I am slightly ‘freaked out’ by this, as am literally moving back next week to UK from US!!! As we have been ‘back and forth’ during the summer, I happened to already change my UK bank account back to my UK address. However, the account record will show my previous US address for a good number of years.
> With online banking, in the past I have had a 'prompt' to update my details, but managed to ignore it, as I didn't want to have to tick the box I was a US citizen, for fear of triggering account closure!! My account is with Lloyds, has anyone declared online information and not had the account closed? I can't decide whether this is done for compliance (maybe it did have a TINS field in it???), or to 'weed out' US account holders and close.
> 
> What do others think – potential serious issue? ‘Pot stirring’ due to Brexit? Will the UK banks want to close accounts and lose funds with the potential wobbles around the world/recession talk? Or, is the threat of the IRS greater? Ugh


Lloyds aren’t “weeding out” UK-resident US citizen accountholders. But they do need to know what countries you’re tax-resident in. Not only for FATCA but also for CRS. 

If you have US indicia such as US birthplace or address, they’ll want you to sign a W-9, and give them your SS number. And they’ll report the account to HMRC who will report it to the IRS.

If the account is an investment account, they might have to close it. It depends what type of product it is.


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## Bevdeforges

It seems to depend on the individual bank and its policies.

Several years ago, as this FATCA stuff was just ramping up, I was contacted by HSBC saying that they were going to close all savings accounts for non-residents (of the UK) at the end of the year. But they were just going to transfer the balance in my savings account with them to my checking account with them. OK, no skin off my nose.

Two years later, when nothing had happened, I decided to stop waiting for the other shoe to drop and I simply closed both accounts and transferred the balances here to my French bank. Unfortunately, I managed to delay the actual transfer until something like the 7th of January - so technically should have reported the full balance in the HSBC accounts for the new year as well as the balance in my French accounts, thus double reporting the amount. (Conveniently decided to simply "forget" about reporting the HSBC accounts that year.)

Anyhow, it all has nothing to do with Brexit. And, as underation says, if you have any indice at all (including that prior US address) they'll probably report the account to the IRS anyhow. OTOH, there is every reason to believe that the IRS does little or nothing with the bank balance information unless they note something "bizarre" on one or more of your US tax returns.

Give them the W9 they want - just requires giving them your US SSN and then filing the stupid FBAR things (online - no postage costs!). Even if you have $500,000 in a bank account outside the US doesn't necessarily mean that you would even be required to file a US tax return (checking the filing thresholds). But it's a fairly simple and easy requirement to fulfill.

I don't know about the UK, but there are some banks elsewhere in Europe who are trying to force out "US persons" as customers or deny them bank accounts from the get go. You'll have to determine what your UK banks' policy is on that.


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## underation

Bevdeforges said:


> I don't know about the UK, but there are some banks elsewhere in Europe who are trying to force out "US persons" as customers or deny them bank accounts from the get go. You'll have to determine what your UK banks' policy is on that.


In the UK, a bank has no obligation to allow a customer to open an account; they can just say no. (Lloyds doesn’t, though, as long as the customer is UK-resident and certifies their tax-residences for FATCA and CRS.)

If the account is already open, and the customer turns out to be a USC, the bank is supposed to report it, not close it. (Provided it’s not a type of investment account that’s a no-no for US citizens; or a stocks-and-shares ISA.)


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## underation

Regarding the blog piece linked to - this doesn’t seem to be correct:



> The problem for European banks in particular – which for now includes those in the U.K., although this is expected to change if and when Britain leaves the European Union – is that under an EU law known as the Payment Accounts Directive (2014), European banks are required to provide basic banking services to their citizens.


AIUI, The Payment Accounts Directive requires EU Member States to ensure that basic bank accounts are available. It doesn’t, and couldn’t, oblige banks to provide them. That’s for the Member State to regulate. Here in the UK, some banks offer them and some don’t.

It appears to me that a UK bank with USC basic banking customers would just report them to HMRC, along with other USC accounts. 

After all, a basic bank account (money in, money out - not so much as a debit card) can hardly be regarded as a tax evasion / money-laundering / terrorist financing risk.


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## Nononymous

pjdy70 said:


> What do others think – potential serious issue? ‘Pot stirring’ due to Brexit? Will the UK banks want to close accounts and lose funds with the potential wobbles around the world/recession talk? Or, is the threat of the IRS greater? Ugh


It has nothing to do with Brexit, of that you can be sure.

What is happening is this: Since FATCA came into effect in 2014, there has been an extended grace period for US person account-holders who were unwilling or unable to provide an SSN. (It's not an easy thing for an accidental American who doesn't speak English to obtain one.) That grace period ends in 2020.

The customers who are at risk of having their accounts closed are those who have identified themselves as being US persons (citizens or green card holders, basically) but who have not provided an SSN. 

US-person customers who have provided an SSN are not at risk for this particular reason, though of course there are many reports from different countries of US persons being denied certain types of banking or investment services because financial institutions do not wish to deal with the compliance risks.

Any US persons who have failed to (i.e. chosen not to) disclose US person status to their bank are not at risk of having their account closed for failing to provide an SSN because, by definition, as far as the bank is aware they are not US persons.

I take it from your comments that you have given US addresses to the bank in the past (i.e. you will have "US indicia" on file) but you have not acknowledged being a US citizen? In your case, given that you are moving back to the UK, I would continue to pretend that you are not a US citizen. Continue to answer "no" when asked, even if this is not true, and the bank will have no reason to request an SSN, and no reason to close your account for failing to provide one. If the bank asks about past addresses in the US, simply state that you were living there with some other status than citizen, or that you gave up your green card, or whatever. If you were born in the US and that birthplace is on your ID, life might be trickier. 

This is of course a lie, so you should be comfortable with any potential moral or legal consequences of lying. But you've already started down that road successfully, by the sounds of it. 

Presumably if you settle permanently in the UK you will cease filing US tax returns? That is an entirely different discussion.


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## underation

HMRC says:


> In view of the IRS Notice and the fact that UK Financial Institutions may find it difficult to obtain TINs for all U.S. account holders, HMRC will not regard a failure by a UK Financial Institution to provide U.S. TINs in respect of preexisting accounts during 2017, 2018 and 2019 as a failure to comply with the UK regulations provided that the requirements of the IRS Notice are met.


So it appears the missing TINs issue will continue to be a non-issue, until/unless the HMRC guidance is revised.


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## Nononymous

underation said:


> So it appears the missing TINs issue will continue to be a non-issue, until/unless the HMRC guidance is revised.


Presumably the guidance will be revised for 2020, when the IRS grace period ends; the guidance you quote appears to apply only through 2019. But until such time as the guidance is revised, missing TINs will go unpunished.


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## underation

Nononymous said:


> Presumably the guidance will be revised for 2020, when the IRS grace period ends; the guidance you quote appears to apply only through 2019.


I assume the guidance will be revised if/when the IRS issues a notice extending the non-enforcement or making it permanent.

This is just a hoo-ha being stirred up by the EBF to try to bounce the IRS into action IMO. I might believe there was an impending expat-bank-account-closure armageddon if it was coming from HMRC. The whole point (well - one of the points) of IGA1 is to make it impossible for the accountholder to sue.


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## pjdy70

Thanks all for the great information and advice!

Given that HMRC are involved in a lot of updating of regulations, I guess I won't fret too much until the 'wheels are in motion.' 

I have straightforward accounts with Lloyds, so it seems as if it won't be too bothersome anyway, which is great to know!


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## Nononymous

pjdy70 said:


> Thanks all for the great information and advice!
> 
> Given that HMRC are involved in a lot of updating of regulations, I guess I won't fret too much until the 'wheels are in motion.'
> 
> I have straightforward accounts with Lloyds, so it seems as if it won't be too bothersome anyway, which is great to know!


If the bank doesn't know that you're a US citizen, all the HMRC regulations in the world won't matter a fig.

Keep on doing what you're (not) doing - deny US citizenship if and when the bank asks, and you won't be expected to provide an SSN.


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## underation

pjdy70 said:


> Thanks all for the great information and advice!
> 
> Given that HMRC are involved in a lot of updating of regulations, I guess I won't fret too much until the 'wheels are in motion.'
> 
> I have straightforward accounts with Lloyds, so it seems as if it won't be too bothersome anyway, which is great to know!


Yes - there are restrictions, for US citizens, but of course there are also advantages to having US citizenship. If you find the banking restrictions and the reporting onerous, it’s easy (though expensive) to renounce. No need to lie or hide - the banks don’t care whether you have US citizenship or not, as long as they get your self-certification. 

I don’t agree with Nononymous. IMO, lying to banks is pretty stupid. But I’d keep on ignoring Lloyds’ annoying online prompts to update your details. If they write to you, write back, or go into a branch to sort it out. (The online prompting didn’t start happening until CRS came into effect. And it still happens to me even though I’ve renounced.  )


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## NickZ

HSBC has quizzed me on hearing a North American accent. In spite of having my ID on file. Admittedly HSBC has had enough trouble with the US legal system that maybe they're overly cautious but they do seem to care.


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## underation

NickZ said:


> HSBC has quizzed me on hearing a North American accent. In spite of having my ID on file. Admittedly HSBC has had enough trouble with the US legal system that maybe they're overly cautious but they do seem to care.


That’s interesting.

As you say, HSBC have good reason to be jumpy but it still seems odd, when they could just send a FATCA letter. Did you complain?


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## NickZ

No. I was just calling the telephone to clear some things up. Nothing serious but I could hear a bit of worry from the other end -) They asked if I was American. If I was sure I wasn't. That was the end of it.


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## underation

NickZ said:


> No. I was just calling the telephone to clear some things up. Nothing serious but I could hear a bit of worry from the other end -) They asked if I was American. If I was sure I wasn't. That was the end of it.


Yes - difficult to complain if it was just due to the anxieties of a particular employee.

I did complain, when I first ran into FATCA (never having heard of being still tax-resident in the US). The bank employee who was demanding my SS number wasn’t even able to explain why he was asking for it. Nothing came of it, other than an anodyne letter of apology, but I do think it’s a good idea for US citizens to make a formal complaint about FATCA if they feel they’ve been treated offensively. Gets it on the record.


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## Bevdeforges

Let me just add one note of "caution" here. Many banks consider themselves obligated to report on accounts held by customers with "US indicia" - i.e. US birthplace, US addresses or phone numbers on record, etc.

Even if you have renounced or have some other mitigating factor (say, you were born in the US while your diplomat parents were stationed there), some banks will report your accounts anyhow. Obviously, if you are not subject to US taxation, this shouldn't be a problem and you certainly wouldn't need to file FBARs or anything else in this kind of a situation.

But simply renouncing or hiding your US affiliation may not keep the banks from reporting your accounts to the US Treasury. (It's easier from their side and that's really all they're concerned about - not losing their rights to do banking business in the US.)


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## underation

Bevdeforges said:


> Let me just add one note of "caution" here. Many banks consider themselves obligated to report on accounts held by customers with "US indicia" - i.e. US birthplace, US addresses or phone numbers on record, etc.


They consider correctly, as that’s what UK law requires.



> Even if you have renounced or have some other mitigating factor (say, you were born in the US while your diplomat parents were stationed there)...


I wouldn’t call either of those facts a “mitigating factor.” What’s to mitigate? The banks need to know the accountholder’s correct status in order to keep it on file for audit (and, theoretically, for withholding purposes). And to be able to allow non-USC applicants to open investment accounts without the restrictions that apply for USCs. Which is the main reason I renounced, and I’m sure I’m not alone.

“...some banks will report your accounts anyhow.”

Indeed. In the same way they report low-value accounts as well as high. Insane numbers of accounts are being unnecessarily reported. 



> ...if you are not subject to US taxation, this shouldn't be a problem.


Surely it _is_ a problem, for privacy and data protection reasons.

For now, it’s the law; but laws can change. Personally I hope individuals will eventually gain a right to regain “non-reportable” status, under both FATCA and CRS. CRS must be affecting many more people than FATCA, in Europe; and European FATCA due diligence laws seem unlikely to change unless CRS changes first. There’s a lawsuit coming up some time soon.

https://www.mishcon.com/news/legal-...ard-crs-and-beneficial-ownership-bo-registers


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## underation

Long and short of it, IMO:

a) for US-UK duals, FATCA may be a pain in the neck but livable with if you’re willing to sign the W9 and accept the reporting and the restrictions..

b) for US-born former citizens and non-citizens, showing your proof of non-citizenship (e.g. CLN or proof of diplomat parentage) should free you from the account restrictions, but doesn’t necessarily free you from being reported.


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## pjdy70

underation said:


> Yes - there are restrictions, for US citizens, but of course there are also advantages to having US citizenship. If you find the banking restrictions and the reporting onerous, it’s easy (though expensive) to renounce. No need to lie or hide - the banks don’t care whether you have US citizenship or not, as long as they get your self-certification.
> 
> I don’t agree with Nononymous. IMO, lying to banks is pretty stupid. But I’d keep on ignoring Lloyds’ annoying online prompts to update your details. If they write to you, write back, or go into a branch to sort it out. (The online prompting didn’t start happening until CRS came into effect. And it still happens to me even though I’ve renounced.  )



That's interesting that 'everyone' seems to get the online prompting, even with renouncing! There is obviously 'no sifting' with who gets sent it.....


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## pjdy70

NickZ said:


> HSBC has quizzed me on hearing a North American accent. In spite of having my ID on file. Admittedly HSBC has had enough trouble with the US legal system that maybe they're overly cautious but they do seem to care.


My friend who moved back to the UK last year was told not to take her 'American accent' children into the bank!!! Guess mine are getting the same treatment !!!


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## underation

pjdy70 said:


> That's interesting that 'everyone' seems to get the online prompting, even with renouncing! There is obviously 'no sifting' with who gets sent it.....


No. I think CRS requires the banks to get tax-residence details from all customers - not sure though.


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## underation

pjdy70 said:


> My friend who moved back to the UK last year was told not to take her 'American accent' children into the bank!!! Guess mine are getting the same treatment !!!


How rude! I hope she complained.

I still have a US accent. I’ve had accounts with many UK banks and have never encountered any rudeness related to my accent, before or since FATCA. Never had occasion to apply for an account with HSBC or Barclays. Lloyds, Santander, NS&I, Smile (Co-up), NatWest, various building societies - no problem with rudeness, though for a while after the FATCA IGA legislation came into force there was considerable uncertainty, and some anxiety, on both sides of the counter.


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## Bevdeforges

underation said:


> No. I think CRS requires the banks to get tax-residence details from all customers - not sure though.


I believe you're right on this one. (Though whether CRS actually requires it, or whether it's a common CYA move on the part of the banks, I'm not sure.)

Opening (or attempting to open) an online bank account (i.e. one of those banks that only exists online) you are asked for "all" tax residences. In some cases, admitting to US "personhood" gets you tossed out of the sign up process right away. Others will take your information (including your US SS number and potentially a W9) then drag their heels for a few weeks before telling you your application was rejected (and that they don't have to give you a reason for so doing). 

The CRS stuff doesn't particularly bother me, since it is only reporting on those who have "non-resident" accounts (which always have certain restrictions) and only reporting back to the customer's government of residence. OK, a cross border version of what most domestic banks do for all their resident customers.


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## underation

> The CRS stuff doesn't particularly bother me, since it is only reporting on those who have "non-resident" accounts (which always have certain restrictions) and only reporting back to the customer's government of residence. OK, a cross border version of what most domestic banks do for all their resident customers.


That’s not necessarily the case though, and isn’t the case in Britain. If the UK withdrew from the IGA (not that that’s likely), Wider Approach CRS would allow the banks to carry right on treating USC accounts as reportable; though HMRC presumably wouldn’t pass the information to the IRS unless (equally unlikely) the US signed up for it.

To me, CRS demonstrates on a massive scale the problem with the FATCA approach of hanging transparency on the “mutual assistance” tax treaty article. Way too much information being shipped around without the consent of the owner. They need to narrow the criteria - for example, by requiring banks to exclude low-value accounts from the reporting. That would make the information more useful as well as reducing the amount of unnecessary hassle for customers with cross-border (or deemed cross-border) accounts.


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## NickZ

underation said:


> by requiring banks to exclude low-value accounts from the reporting. That would make the information more useful as well as reducing the amount of unnecessary hassle for customers with cross-border (or deemed cross-border) accounts.


That would just lead to people having a whole bunch of low value accounts. More likely to go the other way.


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## Nononymous

Bevdeforges said:


> Let me just add one note of "caution" here. Many banks consider themselves obligated to report on accounts held by customers with "US indicia" - i.e. US birthplace, US addresses or phone numbers on record, etc)


Do we have evidence of that? There's a big difference between US birthplace (which with a few exceptions is generally indicative of US citizenship) and merely US addresses and phone numbers. What I've read of the Canada-US IGA guidance suggests that US addresses do not make one subject to reporting, but to further investigation from the bank. (I now suspect that it was old grad school mailing address that caused my investment firm to ask some awkward questions about needing an SSN; I stalled them for a bit then ultimately denied being a US citizen, which solved the problem.)

It's possible that banks just report everyone with any US indicia to be "safe" - we don't get much information about what they are up to - but I could also see them getting in a fair bit of trouble for incorrectly over-reporting. If I were legitimately not a US person and had my account info sent to the IRS because I had an old US address on file from a few years on a student visa, I'd be right pissed off and talking to a lawyer.


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## underation

Nononymous said:


> It's possible that banks just report everyone with any US indicia to be "safe" - we don't get much information about what they are up to - but I could also see them getting in a fair bit of trouble for incorrectly over-reporting. If I were legitimately not a US person and had my account info sent to the IRS because I had an old US address on file from a few years on a student visa, I'd be right pissed off and talking to a lawyer.


I suspect this may vary according to the legislation and the guidance issued by the national tax agency. The HMRC guidance doesn’t require banks to “cure” indicia - it merely allows them to do so. Same way the guidance doesn’t require banks to apply the threshold to exclude low-value accounts; it merely allows them to do so.


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## underation

NickZ said:


> That would just lead to people having a whole bunch of low value accounts. More likely to go the other way.


It’s what’s in FATCA though, despite the IRS obsession with structuring. And I suggest European governments aren’t necessarily entitled to treat all as guilty in case some are. Maybe the lawsuit will settle that point, in the AEOI context.


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## Bevdeforges

Nononymous said:


> What I've read of the Canada-US IGA guidance suggests that US addresses do not make one subject to reporting, but to further investigation from the bank. (I now suspect that it was old grad school mailing address that caused my investment firm to ask some awkward questions about needing an SSN; I stalled them for a bit then ultimately denied being a US citizen, which solved the problem.)


From what I read of the France-US IGA, there was something in there about customers having a US telephone number contact or some such "indicia" though it's not at all clear how far they are supposed to go with that.



> It's possible that banks just report everyone with any US indicia to be "safe" - we don't get much information about what they are up to - but I could also see them getting in a fair bit of trouble for incorrectly over-reporting.


I don't think there's any penalty for "over-reporting." I know I always bump up the "high balance" figure I estimate for my FBAR filings by a few thousand dollars - to avoid any later "discussions" on the subject.

A couple of years ago, the bank I was dealing with sent out something a good year after the tax filing deadlines, indicating what accounts they had reported and the year-end balance they had reported. Not sure if they sent it out by "accident" or what, but hey, it would be a lovely gesture if they'd do that on a current basis (and send it out sometime BEFORE FBARs are due) so you'd know what they reported "for" you. (Same principle as the banks sending you a 1099 - so you know what they've reported to the IRS.)



> If I were legitimately not a US person and had my account info sent to the IRS because I had an old US address on file from a few years on a student visa, I'd be right pissed off and talking to a lawyer.


Except that under the current system, you would have no idea whether they had sent anything in on you or not. They seriously do not have the time or the manpower to "check you out" unless some sort of discrepancy comes up on your tax returns. And if you're not filing tax returns there isn't much they can do.

It's all part of the "shock and awe" stuff the IRS has always pulled. They want to scare people into filing because they don't have the budget nor the manpower to look into anything but the most potentially "high yield" cases.


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## Nononymous

Bevdeforges said:


> Except that under the current system, you would have no idea whether they had sent anything in on you or not. They seriously do not have the time or the manpower to "check you out" unless some sort of discrepancy comes up on your tax returns. And if you're not filing tax returns there isn't much they can do.
> 
> It's all part of the "shock and awe" stuff the IRS has always pulled. They want to scare people into filing because they don't have the budget nor the manpower to look into anything but the most potentially "high yield" cases.


If I were legitimately not a US person I wouldn't be worried about the IRS attempting to tax me - because I'd not be taxable even under US law - but I'd be right pissed at the bank for sharing my information without doing enough due diligence to determine that an old US mailing address is most definitely NOT evidence of US person status.


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## pjdy70

Ahh, I should clarify - she was told by her tax adviser not to take her children into the bank, to avoid drawing attention to the fact of the 'American' connection! Bank would have probably just given them some lollipops!!!


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## Nononymous

pjdy70 said:


> Ahh, I should clarify - she was told by her tax adviser not to take her children into the bank, to avoid drawing attention to the fact of the 'American' connection! Bank would have probably just given them some lollipops!!!


It's not bad advice.


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## underation

Nononymous said:


> It's not bad advice.


It’s terrible advice. Telling parents they must hide their children because of their national origin? It’s probably not even legal.

Find a different tax adviser, would be my advice. Or mention it to a few banks, helpfully providing the adviser’s name and business address.


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## Nononymous

underation said:


> It’s terrible advice. Telling parents they must hide their children because of their national origin? It’s probably not even legal.
> 
> Find a different tax adviser, would be my advice. Or mention it to a few banks, helpfully providing the adviser’s name and business address.


Au contraire. It's perfectly sensible advice. Hats off to the tax advisor.

We don't really know the full context in which the remark was made, but in general, if a person's intent is to evade FATCA reporting, then hiding one's national origin is entirely the point. It's what I do when I answer "no" to any questions about US citizenship on bank forms. Avoiding FATCA is a worthy goal for any non-compliant US person - the less information available to the IRS the better, is the rule.

A common scenario: when parents open accounts for dual-citizen children born outside the US, the non-US parent handles the paperwork and the US parent stays well out of sight to ensure that the bank has no reason to suspect that the children have US citizenship. Why risk awkward questions if the bank clerk hears an accent or sees a US passport?


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## underation

A good example of the unnecessary anxiety being generated about this supposed imminent account-closure threat:



> ...a 74-year-old living in Cambridge has been sent increasingly urgent letters from Barclays demanding her American tax identification number, even though she left the US on the RMS Queen Elizabeth in 1947 when she was just 18 months old. She had assumed that her US citizenship had lapsed.


The writer implies that said customer’s account is in danger of being closed because she doesn’t have a SSN; but a few paragraphs later it turns out that the individual’s problem is not imminent bank account closure but having been badly advised and grossly overcharged by a tax adviser, who charged her £11,300 several years ago for unnecessarily putting her into an IRS disclosure programme, “helping” her to get a SSN, and “helping” her to renounce.



> The Cambridge pensioner in Cambridge told the Guardian she spent £11,300 of her retirement funds to cover the cost of a specialist accountant who helped her obtain a social security number, file five years of back taxes and declare all her assets. The bill also included the cost of her renouncing her citizenship.


https://www.theguardian.com/busines...orn-in-us-risk-having-uk-bank-accounts-frozen

Pretty outrageous - both the ripping off of the taxpayer by the tax adviser, and the distortion of the story by the journalist. Plus the cowardice of both governments in not requiring banks to provide proper information and support to their customers instead of just dropping a FATCA letter on them.


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## underation

The Guardian article also quotes a UK accountholder whose ISA investment account was frozen for four months by an online brokerage service, leading him to renounce his US citizenship.

As with the Cambridgeshire taxpayer, this isn’t current news, and doesn’t herald an imminent account-closure blitz in the UK. The accountholder has appeared on a BBC News magazine programme this morning, being interviewed about his experience, and the letter he wrote to Boris Johnson about it.

Should be available on iPlayer later today (Victoria Derbyshire, 10a.m. 27 Aug.)


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## Nononymous

I believe the account closure "panic" is not originating from bank activities, but rather the imminent expiry of the IRS grace period is being rather cleverly exploited by the French accidental American group - seeding French, Belgian and now UK media with stories. The stories are not always perfectly accurate, unfortunately. Certainly the Cambridge pensioner who wasted a lot of money on compliance is an old tale being repurposed, the point of which has been missed.


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## underation

Nononymous said:


> I believe the account closure "panic" is not originating from bank activities, but rather the imminent expiry of the IRS grace period is being rather cleverly exploited by the French accidental American group - seeding French, Belgian and now UK media with stories.


I agree.

Thomas Carpenter 

- got a FATCA letter;

- wrote a letter to Boris Johnson (back in 2018);

- realised he needed to renounce if he wanted to be free of US banking restrictions;

- renounced.


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## Nononymous

Ditto the Cambridge pensioner, who was spent 11k quid not to obtain an SSN to prevent account closure, but because she rather unfortunately sought professional advice and was roped into the whole compliance-renunciation circus. She could've either ignored the bank (until possibly 2020) or spent some postage and possibly a rail fare to obtain the SSN and make the letters go away, and done nothing further.


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## underation

As for who’s ultimately the motive force behind the stories, and what the aim is - I think it would be interesting to know. 

Could be more about EU politics than about FATCA.


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## underation

Nononymous said:


> Ditto the Cambridge pensioner, who was spent 11k quid not to obtain an SSN to prevent account closure, but because she rather unfortunately sought professional advice and was roped into the whole compliance-renunciation circus. She could've either ignored the bank (until possibly 2020) or spent some postage and possibly a rail fare to obtain the SSN and make the letters go away, and done nothing further.


If it was 11K. The earlier stories give a lesser figure.

Worth noting that Thomas Carpenter apparently didn’t fall into the back-filing trap but just renounced.


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## Nononymous

underation said:


> As for who’s ultimately the motive force behind the stories, and what the aim is - I think it would be interesting to know.
> 
> Could be more about EU politics than about FATCA.


Per Keith Redmond, it's Fabien Lehaigre's work. Which is all good, except that the reporters do tend to bungle a lot of the nuance.


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## underation

Nononymous said:


> Per Keith Redmond, it's Fabien Lehaigre's work. Which is all good, except that the reporters do tend to bungle a lot of the nuance.


These resurrected tales aren’t at all helpful to US-UK duals, IMO.


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## underation

underation said:


> If it was 11K. The earlier stories give a lesser figure.
> 
> Worth noting that Thomas Carpenter apparently didn’t fall into the back-filing trap but just renounced.


But then, Thomas Carpenter knew he was a US citizen, yet didn’t respond to the FI’s letters until the account was suspended. Opting to sign the W9 to keep the account wouldn’t have been a sensible option, given the PFIC complications; so he renounced without filing.

While the Cambridgeshire taxpayer reportedly didn’t know, and didn’t have a SSN. She had to get one in order to renounce. It’s hardly surprising she fell among tax advisers.

The moral of the recycled tales seems to be the same as before the current scare-frenzy began: 

- if a USC, self-certify to banks as USC, supplying SSN and signing the W9; 

- or renounce in order to be able to self-certify as non-USC and sign the W8 (or equivalent).


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## underation

You could say that the Cambridgeshire taxpayer was a genuine “accidental” American. She didn’t know, and started trying to stop being American as fast as she could.

The same can’t be said of those who are claiming to be “accidentally” American yet don’t renounce. No doubt they became Americans accidentally (as all of us did if we didn’t nationalise), but they’ve deliberately remained American. They should find a new name for their campaign.


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## Nononymous

underation said:


> The moral of the recycled tales seems to be the same as before the current scare-frenzy began:
> 
> - if a USC, self-certify to banks as USC, supplying SSN and signing the W9;
> 
> - or renounce in order to be able to self-certify as non-USC and sign the W8 (or equivalent).


Don't forget:

- if a USC, self-certify to banks as non-USC if birthplace ID not required, and sign the W8 (or equivalent) 

It's a popular option.


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## Nononymous

underation said:


> The same can’t be said of those who are claiming to be “accidentally” American yet don’t renounce. No doubt they became Americans accidentally (as all of us did if we didn’t nationalise), but they’ve deliberately remained American. They should find a new name for their campaign.


It's possible that some of them lack the economic means to pay the renunciation fee.


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## Nononymous

underation said:


> While the Cambridgeshire taxpayer reportedly didn’t know, and didn’t have a SSN. She had to get one in order to renounce. It’s hardly surprising she fell among tax advisers.


She of course did not need an SSN to renounce. The tax advisers told her she needed one to become tax compliant in order to renounce. Which is not true. 

What she could have done for far less than 11 thousand pounds was either renounce and obtain a CLN to shut the bank up (cost: $2350) but do nothing further, or obtain an SSN to shut the bank up (cost: minimal) but do nothing further.


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## underation

Nononymous said:


> She of course did not need an SSN to renounce.


Could be.


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## underation

Nononymous said:


> It's possible that some of them lack the economic means to pay the renunciation fee.


Cheaper to renounce than go to court, generally. If you’re paying the court costs yourself, that is.


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## Nononymous

underation said:


> Cheaper to renounce than go to court, generally. If you’re paying the court costs yourself, that is.


Which doesn't help someone who lacks the means to pay either cost.

A related point: as a matter of principle, I would rather lie to my bank than fork over any amount of money to the US government for the privilege of not having it believe that I am a citizen.


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## Bevdeforges

underation said:


> The same can’t be said of those who are claiming to be “accidentally” American yet don’t renounce. No doubt they became Americans accidentally (as all of us did if we didn’t nationalise), but they’ve deliberately remained American. They should find a new name for their campaign.


There are those who choose not to renounce based on "other" issues - ties (financial or otherwise) to the US or the desire to keep certain "citizenship options" open for oneself or one's offspring.


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## Nononymous

Bevdeforges said:


> There are those who choose not to renounce based on "other" issues - ties (financial or otherwise) to the US or the desire to keep certain "citizenship options" open for oneself or one's offspring.


There really are two campaigns and two categories of US persons, related and sometimes overlapping, with a certain amount of confusion the inevitable result:

1. a campaign for saner tax policies for Americans abroad who wish to retain US citizenship; relief from banking discrimination due to FATCA would be part of this

2. a campaign to end banking discrimination and against Accidental Americans; cheap renunciation and/or exemption from FATCA reporting and (unenforcable) tax filing would also help


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## underation

Nononymous said:


> Which doesn't help someone who lacks the means to pay either cost.


That doesn’t seem to apply for LeHagre’s group, who are complaining about being required to sign a W9 in order to open certain kinds of investment accounts.

The renunciation fee is an excellent investment for a non-US-residemt


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## underation

Bevdeforges said:


> There are those who choose not to renounce based on "other" issues - ties (financial or otherwise) to the US or the desire to keep certain "citizenship options" open for oneself or one's offspring.


Sure. They’re not accidentally American.


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## underation

Nononymous said:


> There really are two campaigns and two categories of US persons, related and sometimes overlapping, with a certain amount of confusion the inevitable result:
> 
> 1. a campaign for saner tax policies for Americans abroad who wish to retain US citizenship; relief from banking discrimination due to FATCA would be part of this
> 
> 2. a campaign to end banking discrimination and against Accidental Americans; cheap renunciation and/or exemption from FATCA reporting and (unenforcable) tax filing would also help


I agree there’s at least two different interest groups. I’d suggest there are those who want to keep the citizenship, who might want to campaign for the US to change its laws.

And there are those who aren’t interested in the citizenship, who if they don’t have US income can either sign a W9, or renounce and sign a W8.

No need for either group to perpetrate fake scare stories.


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## Nononymous

underation said:


> And there are those who aren’t interested in the citizenship, who if they don’t have US income can either sign a W9, or renounce and sign a W8.


They can also not renounce, not admit to US citizenship, and sign a W8 or equivalent, and suffer no restrictions on the types of accounts they are allowed to open.

This works in countries like Canada where banks do not ask for ID showing place of birth. Recommended also for dual-citizen children born outside the US (but with one US parent, and registered as US citizens) who can use their non-US passports to open bank accounts, thus avoiding FATCA nonsense.


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## underation

Anyone with no US indicia and no US income isn’t a risk to a bank’s FATCA-compliant status and can truthfully certify under CRS as being tax-resident only in the residence country.


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## Nononymous

underation said:


> Anyone with no US indicia and no US income isn’t a risk to a bank’s FATCA-compliant status and can truthfully certify under CRS as being tax-resident only in the residence country.


Country of birth is not recorded anywhere when opening an account at a Canadian bank. Therefore I have no US indicia on file despite being a dual citizen born in the US. Does this mean I'm free to truthfully certify that I am not tax-resident in the US on any FATCA/CRS form?


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## underation

Nononymous said:


> Country of birth is not recorded anywhere when opening an account at a Canadian bank. Therefore I have no US indicia on file despite being a dual citizen born in the US. Does this mean I'm free to truthfully certify that I am not tax-resident in the US on any FATCA/CRS form?


I think you may be asking the wrong question. If you don’t have any US income and don’t pay any tax in the US, what makes you think you might be tax-resident in America?


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## Nononymous

underation said:


> I think you may be asking the wrong question. If you don’t have any US income and don’t pay any tax in the US, what makes you think you might be tax-resident in America?


Well, at least one of my banks asked if I was a US citizen, not if I had US income or owed US tax. How should I answer then?


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## underation

Nononymous said:


> Well, at least one of my banks asked if I was a US citizen, not if I had US income or owed US tax. How should I answer then?


Sticking to the UK context, it clearly does matter what question you’re referring to. The due-diligence questions aren’t the point of the legislation; the point of the due diligence is to identify accountholders’ tax-residence - not to identify US-born residents, or US citizens.

An accountholder who answered the due diligence questions untruthfully would be committing a deception, but it would be a deception with no consequences if it didn’t make any difference to the question of tax-residency (and consequent reportability).

IMO.

I don’t know about Canada.


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## underation

Wikipedia on tax-residence under international law:



> Double taxation treaties generally follow the OECD Model Convention.[1] Other relevant models are the UN Model Convention,[2] in the case of treaties with developing countries and the US Model Convention,[3] in the case of treaties negotiated by the United States...
> 
> *OECD and UN Model Convention*
> The OECD Model Convention and the UN Model Convention are identical. They first provide for a definition of "resident of a Contracting State":
> 
> 1. For the purposes of this Convention, the term "resident of a Contracting State" means any person who, under the laws of that State, is liable to tax therein by reason of his domicile, residence, place of management or any other criterion of a similar nature, and also includes that State and any political subdivision or local authority thereof. *This term, however, does not include any person who is liable to tax in that State in respect only of income from sources in that State or capital situated therein.*
> 
> The definition is followed by "tie-breaker" rules for individuals and non-individuals, which result in the person being considered resident in only one of the countries...
> 
> *US Model Convention*
> The US Model Convention is similar to the OECD and UN Model Convention with respect to residency of individuals.


https://en.m.wikipedia.org/wiki/Tax_residence

Emphasis added by me.


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## underation

Article 4 of the US-UK DTA says:


> 1. Except as provided in paragraphs 2 and 3 of this Article, the term "resident of a Contracting State" means, for the purposes of this Convention, any person who, under the laws of that State, is liable to tax therein by reason of his domicile, residence, citizenship, place of management, place of incorporation, or any other criterion of a similar nature. This term, however, does not include any person who is liable to tax in that State in respect only of income from sources in that State or of profits attributable to a permanent establishment in that State.
> 
> 2. An individual who is a United States citizen or an alien admitted to the United States for permanent residence (a “green card” holder) is a resident of the United States only if the individual has a substantial presence, permanent home or habitual abode in the United States and if that individual is not a resident of a State other than the United Kingdom for the purposes of a double taxation convention between that State and the United Kingdom.


(Paragraph 3 is about non-individuals.)

In short, under the UK-US DTA, as under UK law, a US-UK dual who satisfies UK residence criteria is resident in the UK for tax purposes.

That doesn’t mean the banks can’t treat them as reportable under FATCA; but it does mean they can truthfully certify as tax-resident only in the UK.

Unfortunately, UK banks may just treat the account as reportable regardless of the tax-residence self-certification, if the bank knows/suspects that they were born in the US or knows /suspects they have US citizenship.

Renounce and open brand new accounts, if you want to make sure your accounts aren’t reported.


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## Nononymous

underation said:


> An accountholder who answered the due diligence questions untruthfully would be committing a deception, but it would be a deception with no consequences if it didn’t make any difference to the question of tax-residency (and consequent reportability).


Excellent, you've justified lying. Took me a while to get you there.


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## underation

Nononymous said:


> Excellent, you've justified lying. Took me a while to get you there.


Interesting. Why do you feel the need for justification?

What’s of interest to me is adhering to UK law. I always do.


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## underation

underation said:


> Sticking to the UK context, it clearly does matter what question you’re referring to. The due-diligence questions aren’t the point of the legislation; the point of the due diligence is to identify accountholders’ tax-residence - not to identify US-born residents, or US citizens.
> 
> An accountholder who answered the due diligence questions untruthfully would be committing a deception, but it would be a deception with no consequences if it didn’t make any difference to the question of tax-residency (and consequent reportability).


On the other hand, an accountholder who answered the due diligence questions untruthfully, with the aim of profiting from the deception by concealing information relevant to an IRS investigation, would be committing a deception which if detected might _not_ be free of consequences.

See the difference?


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## underation

underation said:


> The Guardian article also quotes a UK accountholder whose ISA investment account was frozen for four months by an online brokerage service, leading him to renounce his US citizenship.
> 
> As with the Cambridgeshire taxpayer, this isn’t current news, and doesn’t herald an imminent account-closure blitz in the UK.


The Guardian article has made its misleading way to the STEP website, where it’s cited in this piece on the SSN issue:

https://www.step.org/news/expat-americans-face-account-freeze-irs-fatca-grace-period-approaches-end

The STEP writer, like the Dutch Banking Association, indicates that the risk of account closures applies not to every USC with no SSN, but only to those who don’t supply their SSN or a “reasonable explanation” for why they haven’t got one.


> Clients who don't provide their US TIN, including hundreds of thousands of 'accidental Americans' who have lived abroad all their adult lives, risk having their bank accounts frozen unless they have a 'reasonable explanation' of why they have not obtained a US TIN.


This seems logical, as it mirrors the requirements for “curing” a US birthplace (show CLN or a reasonable explanation for not having one).


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## underation

Nononymous said:


> There's a big difference between US birthplace (which with a few exceptions is generally indicative of US citizenship) and merely US addresses and phone numbers. What I've read of the Canada-US IGA guidance suggests that US addresses do not make one subject to reporting, but to further investigation from the bank.


It’s *US tax-residence* the FIs are required to identify and report. The reason birthplace is different from the other from the other indicia is because it’s an immutable characteristic — not because it turns a non-reportable accountholder into a reportable accountholder. 

AIUI, under the Model 1 IGA, all accounts with US indicia are subject to reporting. 

However, each of the indicators of possible US tax-residence is potentially “curable” by a specific procedure. (US birthplace can be “cured” by obtaining a copy of the accountholder’s CLN (or the accountholder’s “reasonable explanation” for not being able to produce it); proof of the accountholder’s present citizenship; and the accountholder’s self-certification that they’re not a US citizen.)

Under the UK implementation of the US-UK IGA, FIs can if they wish treat the accounts as non-reportable, if all indicia are “cured.” But a US-born renunciant continues to have a US whatchamacallit (indicium?), and therefore continues to be subject to reporting unless the FI chooses not to report them.



> It's possible that banks just report everyone with any US indicia


Yep.



> If I were legitimately not a US person and had my account info sent to the IRS because I had an old US address on file from a few years on a student visa, I'd be right pissed off and talking to a lawyer.


Interesting. What specific phrasing in the Canadian implementing legislation would you rely on as grounds for challenging the reporting?


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