# Completed Streamlined and now another question



## celticweb

Hello everyone
Just an update on my situation.

I completed the streamlined process last week, everything has been filed and delivery confirmed. I winded up owing no tax. and we are still not done, we are doing 2015 now but unlikely to owe tax that year either.

However this has been so time consuming and I was actually a dream client because I had all the paperwork needed (my first post was in March so taken months!) and to get to this point has really made me consider if I want to keep US citizenship. 

But I think I am missing one year for the 5 years to renounce this year. 2012-2015 would be 4 years. But the accountant said if I renounce later this year, i don't have to file the paperwork for form 8854 until next year and I will have 5 years counting 2016 and they aren't generally too bothered. But I don't really want to just take that advise and inadvertently become a covered expat.

So if I renounce this year, do i need to send a separate 2011 tax? I am unlikely to owe tax that year as well, do i send it with an explanation that I am renouncing and need another year? or do I do what the accountant said and count 2016 as the 5th year?

If any of the lovely people on the forum have information on this, maybe let me know. 

thank you!


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## Bevdeforges

If you really don't owe anything on 2011, you can just file it (late) and there you go!

Just don't forget that renouncing will set you back $2350. You just spent lots of time and money to get your streamlined backfilings done, but chances are, unless you have (or develop) some form of elaborate investments, your single year tax returns going forward should take far less time. I have it down to 20 minutes (doing it myself without a tax filing program) - that's when I was still employed and was filing FEIE. Haven't had to file for the last two years (insufficient income), Probably will have to file for 2016 but since I'll be drawing funds from my IRA my forms should be even simpler - one more line to fill in (vs. the 2555 form) - and still $0 due.

Granted, if you have no financial interests left back in the US, it might be just as well to bite the bullet, pay the fee and be shed of the whole thing. You have to decide what's right for you in your specific situation.
Cheers,
Bev


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## Bevdeforges

If you really don't owe anything on 2011, you can just file it (late) and there you go!

Just don't forget that renouncing will set you back $2350. You just spent lots of time and money to get your streamlined backfilings done, but chances are, unless you have (or develop) some form of elaborate investments, your single year tax returns going forward should take far less time. I have it down to 20 minutes (doing it myself without a tax filing program) - that's when I was still employed and was filing FEIE. Haven't had to file for the last two years (insufficient income), Probably will have to file for 2016 but since I'll be drawing funds from my IRA my forms should be even simpler - one more line to fill in (vs. the 2555 form) - and still $0 due.

Granted, if you have no financial interests left back in the US, it might be just as well to bite the bullet, pay the fee and be shed of the whole thing. You have to decide what's right for you in your specific situation.
Cheers,
Bev


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## JustLurking

Bevdeforges said:


> Just don't forget that renouncing will set you back $2350. You just spent lots of time and money to get your streamlined backfilings done, but chances are, unless you have (or develop) some form of elaborate investments, your single year tax returns going forward should take far less time. ... Granted, if you have no financial interests left back in the US, it might be just as well to bite the bullet, pay the fee and be shed of the whole thing.


Quite true, but when considering, it's worth contemplating what may happen in future as well as the current situation.

In the brief time I have been watching it, US expat tax law has neither stood still nor improved, only worsened. In just the past few years we've seen -- off the top of my head -- the 'stacking rule', multiple increases in the cost of renunciation from $0 to $2350, FATCA, the introduction of an exit tax (one with unfortunate resonances with the old Soviet Union) and the potential for double-taxation cause by the NIIT. The FBAR is long-standing but failure to up-rate its start point for inflation means that it too has worsened considerably, taking in many more folk than when it started out. My final US tax return in 2008 was a weighty 60-odd pages (and I'm a plain salary drone!) -- I shudder to think what it might look like now. As for the future, there are regular efforts in congress to pass things like the 'expatriot act', and continued demonization of all things abroad, foreign, or 'offshore'.

In addition, US persons now face difficulties with even vanilla investments, never mind elaborate ones. A UK ISA is as completely vanilla as a Roth IRA, yet many of its benefits are now off-limits to US citizens living in the UK. Likewise simple things like UK or EU mutual funds. And nobody seems to know fully how the US will treat vanilla UK pensions. Until FATCA, US citizenship-based taxation was probably best described as 'aspirational'. Today it may be better described as 'discriminatory and obstructive'.

If one has plans to live in the US then yes, retaining citizenship has purpose. Otherwise, spending $2350 to rid oneself of it might be considered a bargain in the long run.


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## Bevdeforges

How on earth did you rack up 60 pages as a "plain salary drone?" In my 20 years here in France, I've never had more than 4 or 5 pages (and that's when I used the "long form" 2555). I agree with you on the ISA things, but I know of those with "low-level" assurance vie accounts, who simply report them as financial accounts, eschewing the fancy PFIC stuff and who have had no come-back from the IRS to date. 

I admit to having had my first run-in with my US bank over "having a foreign address" - though the problem is with their service provider for web services, not with the bank itself. Remains to be see how this will resolve itself. I do note, however, that the Bill Payment service online specifically states that they will not make payments to "tax authorities" - hm, what do they know that we don't? <g>

Renunciation is an option that each person has to work through for his or herself. Even if someone has no intention of ever returning to the US, there can be valid reasons not to want to renounce.
Cheers,
Bev


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## celticweb

Thank you for the comments so far. 

Definitely not going to owe tax in 2011, 2011 is almost identical to 2012 except I paid a bit more UK tax even. well under $100,000 earning in general.

the only thing is i will be entitled to tax credit carry over that won't be on the work sheets for 2012-2014. i accumulated 4800 tax credits by 2014 on passive income (not including 2015) what does this mean exactly? so i imagine that 2011 will also have carry over. can i just add them to 2016 my final return? I mean add 2011-2015 all together for 2016? I suppose it would make no difference if I am renouncing. 

or i could wait until 2017 to decide for sure. 2016 is half over now and really no rush. 

But the experience has not been good and it has been too stressful even with a zero tax liability. My background is art and doing tax returns is too complicated for me. the renunciation fee doesn't bother me. paying years and years cf compliance costs on tax returns to be told i owe no tax is more of a hardship.

The real beneficiaries of this citizenship tax US policy are the army of tax advisers and accountants that will charge you thousands of pounds to prepare these impossibly complicated forms.


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## JustLurking

Bevdeforges said:


> How on earth did you rack up 60 pages as a "plain salary drone?"


A 'final year return' is a special kind of hell. Ordinarily I'd only file a 20 or so page return. You asking has prompted me to grab a copy and dissect it.

1040NR is 5 pages, 1040 'dual status' statement is 2 pages, schedule A&B is 2 pages, schedule D and D-1 (for a whopping $200 in capital gains) is 5 pages, schedule E (rented home in the UK while living in the US) is 2 pages, plus 2 pages of explanatory worksheets, form 1116 is 2 pages, plus another 2 pages for AMT purposes, form 6251 for AMT is 2 pages, form 8606 for IRAs is 2 pages, form 4562 depreciation on rental is 2 pages, form 8582 is 3 pages, plus another 3 pages for AMT purposes, termination statement is 1 page, and then 17 sheets of 'explanatory statements' added by accountants. 52 so far. Then 6 pages of 8854, for 58 total. Add 5 pages of FBAR -- yeah, I know, not really a tax return -- and that's 63 pages. Not including any state return (California, if you must know, so worse even than federal!).

Of course, it was impossible to file all of this electronically, so it had to be printed and mailed. Even getting a staple through it all was tricky...

Mere 'salary drone' might be a slight understatement, but not by much. The main complication was renting out a property in the old home country while living in the US. Huge amounts of complication and paperwork there for, honestly, very little in actual return. Foreign rental properties create a mass of 'special treatment'. Multiply that by doing stuff twice for AMT -- living in California means you pay high state tax, and this hugely increases your chance of hitting AMT thresholds -- and the paperwork soon mounts up. Aside from that, I only held normal investments. A few US mutual funds, nothing PFIC or even remotely exotic. Basically, just a normal expat whose salaried work happened to take him to the US for a few years.


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## celticweb

That;s a scary return for sure. isn't it time the US tax code was made simpler, not just for ex-pats but for all US citizens. 

i am a normal salary person too with rental income, some bank interest and my return looked very complicated and i counted one and it was 16 pages long just to be told i owe no tax. 

also i more or less had the same salary all the years yet due to exchange rate fluctuations, it shows at different US rates. It looks like i had a pay rise when i didn't. It's really time to reform this in my view but I know it won't happen.


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## maz57

celticweb said:


> isn't it time the US tax code was made simpler, not just for ex-pats but for all US citizens.


They were talking about reforming that tax code back in the eighties; they are still talking about it. One major problem (and a reason it is so complicated) is that it is a hodge-podge of special breaks for special interest groups. These are the same special interest groups who make the big donations to the re-election campaigns of sitting Congressmen. The system works so well in its present form (for some, anyway) that there is no real appetite to halt the gravy train.


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## maz57

Re: spending the US$2350 to renounce. Lawyer Phil Hodgen said a few years ago, "Get out now, while the getting is semi-good". Things have continued to get worse since he offered that gem of wisdom.


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## BBCWatcher

maz57 said:


> They were talking about reforming that tax code back in the eighties; they are still talking about it.


Congress and the President did. It was called the Tax Reform Act of 1986.


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## iota2014

maz57 said:


> They were talking about reforming that tax code back in the eighties; they are still talking about it. One major problem (and a reason it is so complicated) is that it is a hodge-podge of special breaks for special interest groups. These are the same special interest groups who make the big donations to the re-election campaigns of sitting Congressmen. The system works so well in its present form (for some, anyway) that there is no real appetite to halt the gravy train.


Asset stripping, basically.


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## JustLurking

BBCWatcher said:


> Congress and the President did. It was called the Tax Reform Act of 1986.


...since when congress has persistently bloated the US tax code, from under 30,000 pages to well over double that at more than 74,000. It is _far overdue_ for another reform.


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## iota2014

BBCWatcher said:


> Congress and the President did. It was called the Tax Reform Act of 1986.


Actually, Reagan and Co were late to the tax-cuts-for-the-rich party. Consensus seems to be that it was Gerald Ford's 1976 Tax Reform Act that kicked off the shift in tax policy towards capital accumulation.


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## celticweb

In my view overall the US tax code needs be simplified so that individuals and families are able to spend less time and/or money on compliance. The complex tax code must be costing the US economy billions of dollars every year. Both Americans and expats must be spending long hours complying with all the complicated tax laws. For overseas, we should be doing it online on a form answering a series of questions (like UK self-assessment) and you submit and get your due balance. No more paper and wasting the environment.

Regarding my situation, just realised again I am not subject to the exit tax so don't know if a missing year really affects me. Being a dual citizen does have some perks and in general US citizenship is an asset or used to be. It's the complex tax code that's the problem, not the citizenship itself. There's rules and red tape everywhere but the US takes it to another level.

I feel I have lost some freedoms which isn't a good thing because the US is supposed to be the land of the free. All my tax-deferred savings set-ups that the UK government allows for retirement planning will be taxed by the IRS making them useless for their intended purpose. The loss of freedom with investment opportunities and jobs. if your boss wants to give you signing rights on a bank account, you are going to have to tell them what it means from a reporting perspective. The interference in your daily life. so have to weight it all up.


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## maz57

You've summed it up nicely. I found I had to permanently leave the "land of the free" to actually be free. And I had to ditch US citizenship to be able to take advantage of Canada's tax-deferred vehicles to save for retirement.

If you do go the renunciation route, be sure you totally understand the exit tax rules. Even though you shouldn't be subject to it if you are dual-from-birth, my understanding is that failing to properly fill out all the paperwork will negate that advantage and will put you squarely back into covered expat territory.


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## BBCWatcher

iota2014 said:


> Consensus seems to be that it was Gerald Ford's 1976 Tax Reform Act that kicked off the shift in tax policy towards capital accumulation.


In the "modern" era, I'd nominate Kennedy's capital gains tax cut. And that is a problem -- perhaps an unpopular one to point out in this forum -- that tax codes around the world (and individual behaviors) have tended to favor wealth accumulation and passive income versus labor participation and earned income. The world is _awash_ in the former and struggling with the latter, so one would think tax codes ought to be adjusted.

I would have to take a look at the total revenue impact, but in principle I think that (a) earned and passive income should be taxed at the same progressive income tax rates (inclusive of social insurance taxes); (b) the calculation of long-term capital gains ought to include inflation; (c) the taxable portion of interest and dividends ought to be the portion above the inflation rate; and (d) some sort of wealth tax (e.g. a financial transaction tax) might make sense.


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## iota2014

Get a grip, BBCWatcher, Kennedy's the one that sent the money to the moon. Not to mention Southeast Asia.


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## Bevdeforges

BBCWatcher said:


> I would have to take a look at the total revenue impact, but in principle I think that (a) earned and passive income should be taxed at the same progressive income tax rates (inclusive of social insurance taxes); (b) the calculation of long-term capital gains ought to include inflation; (c) the taxable portion of interest and dividends ought to be the portion above the inflation rate; and (d) some sort of wealth tax (e.g. a financial transaction tax) might make sense.


But, the fact of the matter is that it's not about you and what you think. And the chances of any significant changes in the US tax code are somewhere in the "slim to nothing" category given the current comatose state of Congress.

At present, only the US and Eritrea attempt to tax all citizens everywhere in the world and their success rate is questionable since there is always the element of "they only know about what gets reported to them." If someone doesn't file for a number of years, the IRS doesn't have a clue whether the person simply doesn't have enough income to have to file, or has died, or simply decided not to bother any more for whatever reason (including having moved outside the US and not being aware of the filing obligation). Chances are, they won't look into a "missing" tax return or three until and unless they get some inkling that there are big (taxable) bucks involved.

But in any event, what you or I think about how Americans are taxed doesn't really matter. We have to work the system as it exists, understanding the risks and the controls that are in place.
Cheers,
Bev


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## ersterhernd

Celticweb, my tax situation mirrors yours except I reside on Canadian soil. I have also filed streamlined 2012-2014 and completed a regular filing for 2015 this spring.

With the finish line in sight now as the next filing in Feb 2017 will satisfy the 5 year requirement, I have elected to simply wait for a fully compliant exit. Entertaining the idea of back-filing 2011 to obtain compliance passed my mind, but for the additional 9 months ahead I will simply wait it out and finish it off next spring.

Another point worth mentioning, Phil Hodgen's office graciously answered one of my pressing questions by email free of charge. I asked if I should wait until I had actually filed (and the IRS recieved) my 2016 return before I renounce. They advised YES that waiting until AFTER filing was their recommended path, to remove all doubt of 5 year compliance. I have chosen to follow their advice. For your Information I have copied the email response below...


--------------------------

Hello XXXXXX,

Thank you for contacting HodgenLaw, and I apologize for the delayed response! It has been a surprisingly busy month at the firm.

Regarding your questions, I asked our attorneys to take a look, and they provided the following answer:

Wait until you have filed the 2016 return. The rules are not entirely clear on whether you need 5 years of compliance by the date of expatriation or by the date 8854 needs to be filed. If you want to be safe, then wait until you have filed your 2016 return.

As always, please remember that this is not legal advice, but an observation based on the information provided and past projects we have completed.

If you have any other questions, please let me know!

Kind regards,
Kirsten

Kirsten Frank
HodgenLaw PC
80 S. Lake Avenue, Suite 680
Pasadena, CA 91101

--------------------------------



In the meantime I will book a renouncement appointment perhaps a year in advance if I can. Likely some 3-4 months after filing 2016 and obtaining my fifth and final tax transcript from the IRS. I'll have all 5 transcripts in hand before I renounce.

Good Luck in your decision.


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## celticweb

Hello ersterhernd

Thank you so much for the advise. and yes this does seem a sensible course of action. I have actually asked my accountant this information over the weekend so will wait to see his response. 

but my intention was to either back file 2011 now and then wait until the end of July to book the renunciation appointment for the autumn this year. I can request a transcript. Also I sent my streamlined returns by DHL so I can prove they were sent to the correct address and received. 

or renounce in 2017 at the very earliest opportunity. try to file 2016 beginning of the year so as not to delay. i would rather try to get the appointment in this year if I can because of the long wait to receive the CLN in general. But pre-booking it seems to be good idea.

So this post with the email is very helpful for sure. 

Good luck as well with your renunciation plans.


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## celticweb

Hello ersterhernd 

You kindly provided me some advise about your situation mirroring mine and I have actually decided to try to renounce this year if I can. My accountant works with some legal counsel for the form 8854 not that I particularly need legal counsel but i want to make sure the form 8854 is done correctly. I don't want to risk being a covered expatriate.

We are going to back file the 2011. The worst that can happen is I get a late filing penalty. The numbers show no tax owing. 

Then I am going to have a little break and renounce in the autumn.

I contemplated it but don't think I can put up with the burden every year of compliance costs and compliance in general. Also it might get harder to get out in future so if there is any thought to getting out, best to get out now. I just want to get back to financial freedom.

I will keep you updated if anything comes up.


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## maz57

Just a reminder that once the oath of renunciation is actually administered, the process of filing the final tax paperwork can begin. It can take an unpredictable (and sometimes considerable) length of time to receive the CLN, but eventually it will arrive. No need to wait for a piece of paper. The last day of US citizenship will be the day before the "ceremony", not when the CLN is finally in hand.


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## celticweb

Hi Maz57

Yes the legal counsel explained it all. First we file the 2011. then book the renunciation appointment for the autumn. The legal counsel will actually fill out all the renunciation forms. I'm capable of doing it myself but since they are doing the 8854 I might as well have them do the forms as well to ensure I don't mess those up. 

I don't think the department of state will question my reasons that much. My last US passport expired in 2004 and hasn't been renewed since. I haven't been back to the US due to work commitments and other plans with my partner for holidays.

It's a hard decision to make but the only practical one. I want to live a normal life and I need to protect my non- US citizen spouse. If penalties were ever assessed for any mistakes in future on fbar or filing, it's not fair that our assets can be threatened by the IRS penalties even though he's not a citizen. He earns most of the money in our household. 

Also I am looking to start a business next year and I found out about consequences for that too and my business partner won't want to deal with the IRS. It's something that I've been planning for a while and change of work circumstances makes it possible now.

and form 8854 will be filed in 2016 before June 2017 filing deadline.

Of course I could still change my mind but it's unlikely. The whole US filing thing came as a shock to me and in some ways I am suffering from post traumatic stress disorder. I have nightmares at night about tax. and I resent being made to feel like a tax evader when I have done nothing morally wrong. I truly believe expat law is going to worsen. The original concept behind CBT doesn't work anymore in the 21st century (not trying to start a debate about that again though!)

I will keep people updated.


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## celticweb

also interesting fact that the legal counsel told me is that to be exempt from the exit tax not only do you need to be born a dual citizen but also be a tax resident of that other country. so I need clarification on what that means exactly. Today was just a phone call, the meeting in person won't happen until end of June or beginning of July.

so all the more reason to terminate my US citizenship now. Our assets are creeping closer and closer to the 2 million mark every year. London properties are over priced now.


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## celticweb

basically i don't know if he meant born a dual citizen and a tax resident of that country at birth as well or born a dual citizen and be a tax resident of that country now. so will get clarity.


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## Pacifica

@ celticweb,

Looks like they mean a tax resident at this point in time, not at birth, because although they use "continue to be" for the citizenship, they use the present tense "are taxed as a resident" in the 8854 instructions, page 3, column 1.

“You became at birth a U.S. citizen and a citizen of another country and you continue to be a citizen of, and are taxed as a resident of, that other country.”

Also you can't have been resident of the US for more than 10 of the 15 years prior to renunciation, but if I recall correctly you haven't been, so no worries there.


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## celticweb

I hope you're right. It was only when I hung up I started considering the implications of what was said.

I thought maybe he meant dual citizens that are born overseas outside the US and become a dual citizen at birth. Not those automatically becoming dual citizens born in the USA. for example, a US person having a child in the UK with a British citizen husband, their children with be automatic duals and their children would be UK tax residents at birth.

But in my case, being born over in the USA, yes I am automatically a dual citizen at birth but wasn't a UK tax resident at birth. see what I mean!

I like your definition better.

When I find out, I will let the forum know. This is a top well known UK firm that mainly deal with high net worth individuals and individuals in the financial industry but limited to that so I know whatever I am being told is correct.


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## BBCWatcher

celticweb said:


> Our assets are creeping closer and closer to the 2 million mark every year.


That doesn't matter. _Your_ assets matter for these purposes. So, for example, if all assets are marital(*), and if your total household global net worth is $2.5 million (let's suppose), then your total global net worth is $1.25 million....

....But even if your personal total global net worth reaches $2 million that still often doesn't matter thanks to the two major Expatriation Tax exemptions.

(*) They don't have to be. For example, if your name is not on the deed to the home you live in -- and your spouse's is -- it's (ordinarily) not your asset.

There are a variety of views on "protecting your spouse." There are those who argue that a diversity of citizenships within a marriage is a potent, useful way to protect spouses. If one spouse for some reason needs to leave his/her country, the other spouse's other citizenship then becomes very useful indeed. But in terms of asset protection from the IRS, you are perhaps touchable (maybe), but your foreign spouse's assets in his/her name (and not yours) certainly are not. With due respect, I think you've got a little more work to do to understand how this stuff actually works. I have no objection to whatever decision you make, but it is important to understand the facts involved as accurately as possible.


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## celticweb

Hi
I get what you're saying but our main principle house is owned jointly. and the IRS does not care about joint ownership. it's a house in the middle of London and completely over priced now but that's the cost of houses now.

The rental property is mine, it was my flat before I got married and I started renting it after my spouse and I bought our house jointly.

Other assets, some are joint, some are mine, some are his. also if something happens to me, i don't want him having to deal with US inheritance laws. If we are both UK citizens only, an estate is exempt from Inheritance Tax if the deceased left everything to their husband or wife. It's better if we are either both be UK citizens only or both US citizens only and the first option is more feasible.

I worry about suddenly starting to transfer assets. I don't want it to look like I am trying to hide anything. 

Of course I will check everything with the counsel. As I said, they deal specifically with cross border estate planning, US/UK integrated estate planning and deal a lot with high net worth individuals. Not that we need so much legal council. It just happens that my accountant works with them on expatriation cases with the form 8854 so might as well take advantage of the experienced professional advise.


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## BBCWatcher

celticweb said:


> I get what you're saying but our main principle house is owned jointly. and the IRS does not care about joint ownership.


The IRS does. Your assets are your assets. Form 8854 is an individual form, not your spouse's. So if you own a home jointly together then your net worth calculated for Form 8854 is 50% of that home, not 100%.

It's important to understand the facts of how this stuff works, and the facts are as I describe them.



> The rental property is mine, it was my flat before I got married and I started renting it after my spouse and I bought our house jointly.


That's fine. That particular property (it sounds like) would get reported at 100% yours on IRS Form 8854...unless the U.K. is a "community property" country, in which case it became only 50% yours when you married. What matters is what the actual ownership share is. For a married couple it's generally 100-0, 0-100, or 50-50, and at least to some extent it depends on the property ownership-related laws in that country (the U.K. in this case).

Did I/anybody mention there is no Expatriation Tax whatsoever if you have held the non-U.S. citizenship of the country where you live since birth, if you are a tax resident there, and if you haven't been physically present in the U.S. much in recent years?



> Other assets, some are joint, some are mine, some are his. also if something happens to me, i don't want him having to deal with US inheritance laws.


He wouldn't unless you predecease him and your assets at death are above $5.45 million (2016 figure, increased annually for inflation).



> I worry about suddenly starting to transfer assets. I don't want it to look like I am trying to hide anything.


You can transfer $148,000 per year (2016 limit, increased annually for inflation) every year to your spouse without any U.S. tax implications, perfectly legally. Your payment of any/all reasonable household expenses, medical expenses, and educational expenses for your spouse are not counted in that figure. Buying your spouse a hamburger, even one prepared by Heston Blumenthal or Jamie Oliver for his personal consumption? Not counted -- that's a reasonable household expense. (Lots of stuff is.)



> Of course I will check everything with the counsel.


And for yourself. This information (and much more) is publicly available. Every single individual is capable of errors.

By the way, I certainly cannot promise that U.K. tax laws won't change. They probably will. But in that event your tax optimization options narrow with only one citizenship in your household. I live in a multiple citizenship household, and it works quite well for us. We have some optimization possibilities and some risk reducing advantages within our household as a consequence of that arrangement. My non-U.S. spouse has the more onerous tax rules in certain respects -- your mention of the estate tax reminded me of that -- so there you go.


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## Bevdeforges

Just a small clarification:



> .unless the U.K. is a "community property" country, in which case it became only 50% yours when you married. What matters is what the actual ownership share is. For a married couple it's generally 100-0, 0-100, or 50-50, and at least to some extent it depends on the property ownership-related laws in that country (the U.K. in this case).


No idea if the UK is a "community property" country or not, but what matters is how the local laws work. In France, for example, even with the default "community property" arrangement, assets brought into a marriage (i.e. things that were owned by one spouse or the other immediately prior to the marriage) remain the sole property of the individual in the marriage, not part of the community property. And there are alternative marital regimes that allocate ownership of assets purchased during the marriage in ways other than 50-50.

A trivial point, but one that does tend to complicate the situation a bit. In any event, you have to make the decision that best fits your circumstances and it sounds like you're well on your way.
Cheers,
Bev


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## celticweb

UK is not a community property country , in other words England and Wales do not have a matrimonial property regime

for the purposes of fbar, the IRS doesn't care about joint ownership and you have to report the full account value, i just assumed it was the same with the house.

i will be happy if that's not the case. 

As i said i didn't get that far with the legal counsel just had a quick discussion of how it was going to happen. i had some questions about a C corp in the states that my sister is a share holder. 

so as usual very knowledgeable responses from the lovely forum members.


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## JustLurking

celticweb said:


> basically i don't know if he meant born a dual citizen and a tax resident of that country at birth as well or born a dual citizen and be a tax resident of that country now. so will get clarity.


Today's blog posting from Phil Hodgen looks like it could have been written especially with you in mind: _The Dual Citizen Exception to Covered Expatriate Status_


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## celticweb

Thanks so much and it's just such a coincidence that this was written today and it is answering exactly the questions I am asking. Looks like I don't have to worry about the exit tax but still need to ensure my filing is right.


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## BBCWatcher

celticweb said:


> for the purposes of fbar, the IRS doesn't care about joint ownership and you have to report the full account value, i just assumed it was the same with the house.


FinCEN Form 114 is not an IRS form. It's a U.S. Treasury form.

Different questions asked (and from different agencies) sometimes have different answers. The highest account balance is one question, and your personal assets are another....

....And it would appear you're not even subject to the Expatriation Tax. You're still on a journey of discovery about your obligations and responsibilities, and all your new discoveries in this thread are favorable to you, personally. Is it time yet to make an irrevocable decision, while you're still figuring out the facts of your situation? I would suggest not. Take your time, and figure out what all the facts are.


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## celticweb

BBCWatcher, yes it's true I am still learning and it is a big relief not to be subject to the exit tax but if only I could not be subject to other things as well like Fbar. 

What you said about taking the whole package of citizenship is true and I am not keen to have this whole package that includes filing Fbars and returns, paying large accountancy bills, being left with a fast diminishing range of financial options, paying tax on imaginary gain due to fluctuating currency exchanges, loss of privacy, and US tax code making it impossible for me to figure out a favorable way to pay for retirement to name a few things.

Sure I could hold off and try and solve these problems but the quicker solution is to rid myself of the citizenship especially as I haven't used it as an adult. Maybe it looks like a cop out to some but to me it's a decision for survival and living a normal life. I think America is a great place and this decision is not a reflection on America as a country just the tax laws.

One of the first accountancy firms I spoke to actually was very surprised that I hadn’t already renounced. My situation was a no-brainer for them. And this was before I fully understood the situation but now I know why they felt this. 

All this has taught me that there comes a time where I am ultimately on my own with my problems and have to stand on my own two feet and make a decision based on logic not emotion.


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## BBCWatcher

You're making certain assumptions that might not have factual basis. Calm down, take your time (you have plenty of time -- it's only May), and study this stuff more fully and carefully, that's all. For example, you can _certainly_ wait to see how the United Kingdom votes in next month's referendum. That referendum's outcome is something that _could_ matter in your daily life, and sooner.


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## celticweb

That's true but if I renounce, it won't be now. it will be at the end of the year probably November.

The appointment with the counsel to do the paper work for renunciation is not until August. and there's about a three month wait to get a renunciation appointment so not until November.

I could very well decide to wait until next year too.

It's the laws forcing me into this decision. If the tax code was not so complex and the rules weren't designed with a 1980s world in mind then i probably would not even do it. Also the rules aren't really designed for accidental Americans either.


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## celticweb

also yes i've received some favorable news however my full picture is not all favorable. I am holding some toxic assets, classed under PFIC rules, one of which is an Isa. In my view the closest definition for an Isa is "Roth IRA" . I know it's not a pension as such but the UK/USA treaty doesn't protect everything. Even the IRS don't rule and can't rule on every single financial product overseas. I sometimes think the accountants decide what things are to be classified as. Once an account decides something is a PFIC and files like that and other accountants follows suit, then the IRS expects to see it being treated as a PFIC.

The rules are designed to make all Americans equal so no American gets an advantage over another by investing in things like this. I actually get it for American living in the USA, fair enough make things equal for them. But for dual citizens like myself the Isa is a normal financial vehicle and as a UK citizen, I shouldn't be stopped having their advantages because of my birth place. No one warned me when I started investing in these either.

And there are other factors to do with having a non US citizen spouse, a defined contribution pension plan that I will be cashing out in 10 years time and so forth. So yes some favorable news for sure but the whole picture looks bleak and full of pitfalls.


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## celticweb

My UK personal pension fund is a perfect example of the chaos, one accountant said we need to file forms 5320 and 3520-A. Another accountant said, we will evoke the treaty. Another one said, don't even bother reporting that, you can deal with it when it becomes income. anyone said it depends if it's insurance based or not in how we will treat it and so on


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## Bevdeforges

celticweb said:


> My UK personal pension fund is a perfect example of the chaos, one accountant said we need to file forms 5320 and 3520-A. Another accountant said, we will evoke the treaty. Another one said, don't even bother reporting that, you can deal with it when it becomes income. anyone said it depends if it's insurance based or not in how we will treat it and so on


Welcome to US tax law. (Or actually any type of US law...) Ask three or four different tax advisers and you'll most likely get 4 or 5 different opinions and interpretations.

Basically, the way it works (or is supposed to work) is that you take a stance and file your returns accordingly. If and when the IRS notices and/or takes objection to what you've filed, they'll let you know and you can discuss it at that point. Don't hide anything, but don't be afraid to take a "reasonable" position and see how and if it flies. There is no one single "right" or "wrong" answer to most tax questions - just a variety of opinions.
Cheers,
Bev


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## ForeignBody

celticweb said:


> My UK personal pension fund is a perfect example of the chaos, one accountant said we need to file forms 5320 and 3520-A. Another accountant said, we will evoke the treaty. Another one said, don't even bother reporting that, you can deal with it when it becomes income. anyone said it depends if it's insurance based or not in how we will treat it and so on


This is where those of us brought up on the UK system struggle, so you are not alone. I think that we are far more familiar with having *the correct* answer to most of our tax issues. After many years in the USA system I still feel uncomfortable with the multi-answer, do what seems right to you approach.


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## celticweb

The best stance I can take is to learn to do this filing myself. I actually tried to figure out the system by studying one of my streamlined copy returns and tried to do an imaginary return to see if I could complete it. I got as far as the second page and then it got too complicated. Maybe there is a course I can take for this.

The stance some accountants seem to take appears to be the most expensive stance. One of the first accountants I spoke to wanted to write a waiver of penalty letters for all the fbars which isn't even necessary for streamlined. You just need the certification. then I realised they wanted me to make a quiet disclosure and were going to write a book. I got worried because they talked about it taking two or three attempts before the waiver was accepted. And I owe no tax!

It's all a learning experience for sure.


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## maz57

Because of US tax and reporting rules, FATCA, and the lack of clarity from the IRS as to how foreign accounts should even be treated under the US code, the era of the permanent US expat is now drawing to a close. 

Sure, there will always be students who study overseas for a few years (no income), and Americans who are sent abroad for short periods on job postings (tax matters taken care of by their employer), but living permanently as a tax resident of another country is quickly becoming next to impossible. Americans overseas are quickly falling into one of 3 categories: those who don't file anything (works fine if you are a low income young person with no assets or like taking a gamble), those who file, do the best they can and think they are compliant (the US code is so complex and vague re: foreign accounts no one can really say with certainty), and those who have renounced or are contemplating renouncing and file a few years only so they can exit the US tax system forever.


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## Nononymous

Don't forget dual citizens with "secondary" US citizenship living all their adult lives outside the US. Depending on the diligence of financial institutions with respect to FATCA enforcement, and the degree of cooperation between their and the US governments, it's quite possible to live a normal life with a healthy income and a variety of assets and simply pay no attention to US tax requirements (assuming one is even aware of them). Low to zero risk of detection and collection.


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## iota2014

maz57 said:


> Because of US tax and reporting rules, FATCA, and the lack of clarity from the IRS as to how foreign accounts should even be treated under the US code, the era of the permanent US expat is now drawing to a close.


I've always considered myself an immigrant. Not an expat.



> Americans overseas are quickly falling into one of 3 categories: those who don't file anything (works fine if you are a low income young person with no assets or like taking a gamble), those who file, do the best they can and think they are compliant (the US code is so complex and vague re: foreign accounts no one can really say with certainty), and those who have renounced or are contemplating renouncing and file a few years only so they can exit the US tax system forever.


Those of us who have renounced aren't Americans, and aren't overseas.


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## maz57

iota2014 said:


> Those of us who have renounced aren't Americans, and aren't overseas.


Yup, I agree 100%. I'm a Canadian living at home in Canada...period.


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## celticweb

As far as diligence of the foreign banks, I received the Fatca letter and this is how I found out about Fbars but the bank has not followed up. They followed up once but then I called and gave them my national insurance number over the phone and said I didn't know my social security number (back then I didn't). My sister looked it up. I haven't heard back from them since.

The rest of my banks don't have my birth place recorded. However it doesn't mean that the first bank won't follow up. I don't think I would have felt comfortable just ignoring the letter and just carrying on. I would always be worried and if new enforcement laws came out in future that made it easier to track more of us down, things could get very tricky if you knew before and didn't act. 

The legal counsel says that he gets calls from US citizens abroad with tricky financial situations and they wonder if they can realistically remain under the radar. He says once you receive a fatca letter, the clock starts ticking. it could take a while but it's ticking down.

and I consider myself British (not American).


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## Nononymous

Canadian banks have never recorded citizenship or place of birth data so they can't do much with existing accounts, though I expect they will gradually begin vetting customers with consistently high savings or investment balances (on the order of $1 million). For new accounts there's simply a "US citizen?" checkbox on applications - no idea whether they do anything to validate the truthfulness of the answer, probably nothing for ordinary chequing accounts.

I had one e-mail exchange with an investment broker who handles my parents and I, who as far as I know had suspicions of my US birthplace because my parents probably told him. I lied and said I wasn't a US citizen, he seemed comfortable with the obvious untruth and the problem went away. (I first refused to answer because the accounts were tax-protected savings vehicles not reportable under FATCA, so why did they need this information? They pushed back and demanded a response; I gave them one.)

It's a different situation in the UK I'm sure. But even if your name is reported to the US under FATCA, that doesn't mean the US has any ability to successfully impose a penalty. Certainly in Canada the US is quite powerless in this respect. Detection does not equal collection.

Of course things could be worse in the future. I think that is the most powerful argument for getting one's affairs in order, one way or the other. I don't think we're remotely close to that point yet, at least for a Canadian living in Canada.


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## celticweb

There's no collection facility between the US and the UK as far as I am aware. that doesn't mean that I wouldn't be getting letters from the IRS depending payments whether they could collect it or not. I wouldn't like the thought of receiving letters like that.

The bank I got the letter from is sending Fatca letters to people with the equivalent of $50,000 or more in their accounts where they think there might be a US tie. I didn't even state on the phone that I was a US citizen. I simply said yes I was born in the US but I am British and don't have a social security number or don't know it. They seem to have accepted this for now. But I got my affairs in order for peace of mind and to be in the position to renounce in future.

I felt like a deer caught in the headlights at the time with the uncertainty of it all. I also thought naively that the US tax code would be easy like the UK filing. I never filed before. Little did I know.


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## Nononymous

Birth (almost always) equals citizenship as far as the US is concerned, so it's a reasonable assumption on the bank's part.


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## maz57

Nononymous said:


> I had one e-mail exchange with an investment broker who handles my parents and I, who as far as I know had suspicions of my US birthplace because my parents probably told him. I lied and said I wasn't a US citizen, he seemed comfortable with the obvious untruth and the problem went away. (I first refused to answer because the accounts were tax-protected savings vehicles not reportable under FATCA, so why did they need this information? They pushed back and demanded a response; I gave them one.)


Sounds like your guy merely wanted to cover his ass and he once did that he was happy to move on to something more productive, like earning some fees or commissions by doing business with you. Its not his problem if you lied; he's done his due diligence.

That's the sillyness of FATCA because it depends on everyone in the chain telling the truth. These financial institutions aren't really interested in playing detective hunting down US persons for the IRS. They only want to protect their own interests and continue to make money from their clients. (I'm sure BBC will soon drop by to point out how you could be thrown in jail but really, nobody outside the US cares about any of this.)


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## Nononymous

I'd be pretty poor ROI on an extraterritorial drone strike so not too worried every time I hop in the car.


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## celticweb

well i didn't exactly lie, i never filled out the form. i just didn't give them the whole picture. i said i'm British and don't know my social security number or don't have one because that was the truth at the time.

My sister who is married to a US citizen looked it up.

One thing that did come out of this is that I realised I was on my own and had to take responsibility for fixing the problem. My sister was giving me a very hard time about it, she was worried they might come after her assets. This would never happen but she still worried and pestered me to sort things out. She said I was irresponsible for not knowing. even she didn't know but because she's over there she gets a pass for not knowing. Then my UK spouse the same, he was worried that they going to seize our house, you better get your situation sorted out. You better renounce, what a ridiculous system etc etc.

None of this helped.


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## Nononymous

At first they were pushing for me to complete either a W-8 or W-9 form, depending my answer to the US citizenship question, but I told them to take a hike because (i) all I have are RRSP accounts that aren't FATCA-reportable anyway and (ii) write your own damn form, don't recycle something from the US government with a purgery warning attached to it. After much back and forth I won, and simply answered the question via e-mail; much later I noticed US citizenship not checked on a personal data form that was sent to me for confirmation.


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## Nononymous

celticweb said:


> One thing that did come out of this is that I realised I was on my own and had to take responsibility for fixing the problem. My sister was giving me a very hard time about it, she was worried they might come after her assets. This would never happen but she still worried and pestered me to sort things out. She said I was irresponsible for not knowing. even she didn't know but because she's over there she gets a pass for not knowing. Then my UK spouse the same, he was worried that they going to seize our house, you better get your situation sorted out. You better renounce, what a ridiculous system etc etc.


There can be all sorts of weird tension with family members, especially those in the US.

Your sister sounds utterly batty, I'm afraid, but fear of the IRS does get to people, no matter how unfounded. The first reaction is often "they'll take your life savings, your house, everything!" even if you live halfway round the world. It's really hard to convince them otherwise. 

Non-US spouses have every right to refuse to have their (joint) account information sent to the US government. I don't think it matters much in practice, but in principle it's deeply offensive to a great many. Certainly to mine.

My parents fuss and worry about any estate-planning implications. As far as I can tell there are none, but to play it safe I've asked not to be an executor or have any signing authority over their accounts - fortunately I can leave that to my sister. I may ultimately just lie to them as well and tell them I've renounced, so that they aren't troubled by it.


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## celticweb

well they haven't pestered me for the form to be completed after that first phone call. Even if they did now, I'm compliant and up to date and have the information to give them but I am not going to follow up unless ask again. I want to keep some freedom still. The freedom for privacy and the right to banking facilities. I feel like I have lost so much freedom as it is.

I think what helped in my situation is when they realised I had a UK address. They are after the accounts with US address and phone numbers more for reporting purposes. the questions i got asked on the phone were, do you have a US address or mailing address, do you have a US phone number. I just said no just born there. I asked what's this all about anyway. I am tax compliant (i thought they meant with HMRC) then they explained about the fbar and my life of blissful unawareness was over.


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## celticweb

Yes my UK spouse was extremely unhappy that joint accounts needed to be reported. This has caused so much tension and I certainly don't blame him for this. He wants my name now removed from our joint account. 

My sister's reaction didn't really surprise me, even I was panicking at first. Not about the filing but about the fbar. In her case it wasn't so much about her assets, it was to do with a C corp we are meant to be inheriting in future. I had to look into the implications of this now in case I renounce and I can still inherit. So she thought they would be looking for ways to collect and discover the C corp. We haven't even inherited yet!

But when you do searches for Fbar online you do find really scary stories so it's not surprising people get scared.


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## celticweb

at least your parents would be OK with you renouncing.

My sister thinks I am crazy to consider it. My UK husband thinks I'm crazy not to consider it. 

Family members in the US can't understand why someone would renounce or at least my family can't.


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## maz57

This crazy situation does seem unbelievable to anyone who hasn't experienced it firsthand by living outside the of the US. Once I sat down with my family members and explained what I was up against (not an easy thing to do because its complicated) they became very supportive. In the beginning they didn't even know the US had CBT but once I explained how that worked they immediately recognized how unjust and unworkable it was. Explaining some of the specific details just filled in the rest of the ugly picture in technicolor. In the end they told me they would do exactly the same if they were in my shoes.


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## celticweb

Maz57
I'm afraid that's not going to work for me. for a start I have an expired US passport and won't be renewing it in case I renounce this year so can't go in person to visit and sit her down and explain in person.

The problem is that my sister is really living the American dream over there in the USA, with a beautiful house in California and she's on her second marriage and her second husband is extremely wealthy with a house also in Florida. So life is good.

And a presidential election is coming up and voters are inundated with a wide variety of issues and CBT isn't one of them and whether its RBT system or a CBT system she will be taxed under both so has no affect on her. Plus she has been brain washed in the Fatca mentality of Americans living in the US that politicians preach that it is targeting tax evasion and terrorism. Not that she thinks I am a tax evader, it's just that she thinks it's just filing papers for me. It's hard to get them to understand. However she does say she can understand about the high accountancy bills. But her solution to that is find a US based accountant. Maybe even use hers.


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## BBCWatcher

Please note that renunciation does not change your place of birth. If a bank's "Know Your Customer" inquiries bother you now, they will continue to bother you no matter what your citizenship status. Doctor Who's time machine is not available here. (Well, as far as we know.)


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## maz57

Here's the really weird thing. Once I was no longer a US citizen and started entering the US on a Canadian passport, I found that I was treated with a lot more respect by US customs than I ever was when I was a US citizen. I guess now that they don't own me they are worried about creating an "international incident" if they don't play nice! 

I wish you the best of luck; its not an easy road.


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## BBCWatcher

No, it's rather the opposite. Foreigners visiting the United States are generally allowed a $100 duty free exemption. U.S. citizens visiting or returning to the United States are generally allowed a $800 duty free exemption. The U.S. Customs and Border Protection officer is very happy that you now get to pay him/her customs duty on that $700 gap. You're more profitable, quite simply, and thank you very much (with a smile).

....And, if you're foolish enough not to make a truthful declaration, the penalties trigger at a lower threshold and escalate faster.

So thanks for the extra revenue!


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## maz57

A total non-issue. They usually don't even ask, because Canadians generally bring stuff back from the US, not the other way around. And we get a nice $800 exemption from Canada Customs on the way back home. The current US/Canadian exchange rate has subdued the cross-border shopping somewhat. I don't recall ever paying anything to US Customs.

I declare truthfully going both ways because for the few dollars difference its not worth the risk. If its a big ticket item I assume I'll be paying duty and tax, do the math, and buy with that factored in. Often I'm pleasantly surprised when I'm waved on through even when over the limit. Certain US border towns would die an agonizing death if it weren't for the Canadian cross-border shoppers. US businesses even advertise their specials in the Canadian papers, including recently offering to accept Canadian cash at par, roughly a 24% discount. 

I have a hunch the guys at US customs are very much aware of how much their local businesses rely on the Canadian trade and treat Canadian visitors accordingly. If they started getting nasty that trade would dry up overnight and so would their towns.


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## Nononymous

BBCWatcher said:


> Please note that renunciation does not change your place of birth. If a bank's "Know Your Customer" inquiries bother you now, they will continue to bother you no matter what your citizenship status. Doctor Who's time machine is not available here. (Well, as far as we know.)


At which point you tell them you've renounced, and show them the paperwork to prove it. 

Even if they don't believe you, or screw up and put you on the FATCA list, so what, you're not a US taxpayer so it won't matter.


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## maz57

BBCWatcher said:


> Please note that renunciation does not change your place of birth. If a bank's "Know Your Customer" inquiries bother you now, they will continue to bother you no matter what your citizenship status. Doctor Who's time machine is not available here. (Well, as far as we know.)


Well if a bank bothers me enough (none of mine have bothered me at all, so far) I'll fire them and get another bank that's not so fussy. One thing is for sure; I won't be bothered by the US government or the IRS. 

I heard there was an app that could change your birthplace.


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## BBCWatcher

You can legally change your gender (in many countries), your name, your hair color, your marital status, and plenty of other personal attributes. Your birthplace you cannot change. If _questions_ based on your birthplace bother you then I'm afraid you'll be bothered, for life.

Canadian customs exemptions have nothing to do with the fact the United States collects more customs duty (and penalties if a lie is told) from a visiting foreigner than it does from an equally situated visiting/returning U.S. citizen. One of the privileges U.S. citizens enjoy is a higher U.S. customs exemption.

OK, so those are a couple facts. How you _weigh_ those facts (and others) is an entirely personal decision. But start with the facts as best and as carefully as you can determine them.


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## BBCWatcher

celticweb said:


> I am holding some toxic assets, classed under PFIC rules, one of which is an Isa.


So what does "toxic" actually mean in your situation? There are two numbers you'll want to determine:

(a) How much U.S. tax do you owe now on these assets? This part you cannot change in terms of your legal obligation no matter what you do.

(b) How much U.S. tax would you likely owe in the future on these assets? This part you might be able to change, for a price.


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## celticweb

Actually I am lucky with my Isa, it hasn't paid any dividends or interest and is sitting in the financial institute at under $25,000 so no paper work. If I had not been a dual UK/US citizen i would have cashed it out now and invested in something else. so if I renounce this year, i won't owe anything to the US on that. if I don't renounce, my accountant said we will make a decision what to do with it when we file next year, make the election or cash it out and cut my loses. We also invested in a lot of mutual funds but thank god that was invested under my husband's name only.

The private pension thing I still don't know what that all means because I still don't know what I am going to do when the time comes to choose. I have a couple of options. so for now that's reported on fbar. if I keep citizenship, i have to look into what's the best option. then there's my work pension so not sure what happens there and when I get state pension. That's what the legal counsel told me that if I don't renounce, I should do better financial planning going forward with a US/UK accountant that knows the ropes. of course I will have to be budgeting for all these extra costs with the accountants. 

My birth place has never bothered me and has only affected one bank. I'm not surprised it was that bank, that bank is where the majority of my money is. Once I knew about fbar, I had too much to lose not to become compliant. 25 years ago would have been different when I first started working, i had an overdraft for a number of years.

Also renunciation for me has nothing to do with my birthplace problems with that bank or filing some papers. It's about all the complex compliance issues arising from CBT, things I took for granted i have to think about now, normal every day things like starting a business, investing for retirement and so on. and then I have a non US citizen spouse that comes into the equation. and do i need all this headache every year. and the compliance costs. Then have to look at the other angle of course, will I ever want to go there to live? My UK spouse says absolutely not we won't go there. but you can never say never really. So not easy.


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## iota2014

BBCWatcher said:


> Please note that renunciation does not change your place of birth. If a bank's "Know Your Customer" inquiries bother you now, they will continue to bother you no matter what your citizenship status.


That's been a concern of mine but it hasn't happened. I've more or less concluded that the banks - and their lawyers - just aren't that stupid.


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## celticweb

also it's hard making anyone understand this, my UK relatives aren't affected by this. It was just me and my sister that were born in the USA while our parents were working there. My UK spouse just says why do you want to be under the thumb of the IRS, just renounce now. It's crazy, you pay tax here. Why are they trying to tax you when you don't live there? A logical question actually. Are you sure you got the facts right? It sounds ridiculous. UK relatives the same. they're just UK citizens, not aware of US CBT, most UK citizens aren't aware.

My sister, the opposite, why would you consider renouncing? We're lucky we have two citizenships. It's great here in the US.

Neither camp really knows what it's like, only other expats know. My sister would find out if she moved back here. And I am just finding out and feeling trapped by all the red tape and rules.


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## BBCWatcher

OK, so let's pick this apart a bit....



celticweb said:


> Actually I am lucky with my Isa, it hasn't paid any dividends or interest and is sitting in the financial institute at under $25,000 so no paper work.


OK, so the answer to question (a) is zero. (Actually a bit better than zero since it sounds like you're underwater, and so a capital loss would go on the U.S. books, something that can be occasionally useful.)

To attempt to answer question (b), let's suppose the assets amount to US$20,000. You put them in an improbably spectacular ISA that somehow manages to return 10% in interest/dividends every year, or $2,000/year. Let's suppose those are the "toxic" PFICs, even. So what's the U.S. tax owed? Answer: most probably zero. Yup, there's IRS Form 8621 to file, to make what are called mark-to-market elections, but $2,000/year tends to slide into your zero percentage U.S. tax bracket (similar to how the U.K. tax code works). _Provisionally_ the answer to question (b) is also zero, but that's something to check.



> Then have to look at the other angle of course, will I ever want to go there to live? My UK spouse says absolutely not we won't go there. but you can never say never really. So not easy.


Personally I wouldn't be making any decisions or even really thinking about it until after the referendum next month. The referendum could result in a significant constitutional change with material impact on the rights and privileges U.K. citizens enjoy.

After the referendum, I'd consider things like how often you like to visit the United States and how important that is, whether you have any friends or family there (who could use your company in the future for medical or other reasons), and the attractiveness of the United States as a retirement destination. (In the wake of "Obamacare" it is rather attractive, actually. It has lots of affordable, warm weather places, it's predominantly English speaking, and U.K. National Insurance benefits are still inflation adjusted there.)

At the moment, though, it seems like you're sticking at zero U.S. tax liability -- not a bad place to be financially. So that part is good at least.


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## celticweb

I think basically for people who renounce it's a case of making sure that you don't ever lose your CLN. that is the only piece of paper that proves you're not a citizen. Can someone even get a replacement CLN? If the rules start getting even stricter, banks and financial institutes will be looking more closely and the proof would be necessary. Not sure how it is now because I haven't open any new accounts recently.


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## Bevdeforges

OK - there is a middle road in this situation, too. Either you fly under the radar altogether (though now that you've filed streamline, that's probably not so much of an option) or you go for "nominal" compliance, which in your case might be just reporting the basics (i.e. those items the IRS would have knowledge of) and skip the rest. I know lots of folks over here who go that route (knowingly or not) and have had no inquiries from the IRS and only the request from their bank to fill out a W-9 form. I even know of a couple of people who duly report their assurance vie accounts on their FBAR forms every year but who don't mess with the PFIC and all the other nonsense attached. If the IRS or Treasury wants to know more, they'll ask but so far they haven't.

There is simply no indication that any sort of grand sweep of overseas taxpayers is in the works (or ever has been). Certainly, the IRS has to pounce on someone like Boris Johnson, who is highly visible and makes a big deal out of his US citizenship. Fine. 

If you've got millions stashed in offshore accounts for the purpose of avoiding taxation - in the US or anywhere else - then yeah, you need to do something to get the monkey off your back. But for the moment, the big hassle is that of the banks who won't open new accounts for US citizens. Try going through your current bank or find a small, local bank that isn't subject to FATCA rules (because they don't have US branches or ambitions). Remember that the US system is one of voluntary compliance - you decide what you report and you determine the "treatment" of various items according to your understanding of the rules and the instructions.

Besides, although I shudder at the thought, should the Republican candidate get elected in November, he doesn't have a sterling record of paying taxes himself, and has promised to further eviscerate the IRS, which kind of work in our favor when you think about it.
Cheers,
Bev


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## BBCWatcher

The U.S. State Department has a general "passport file" retrieval service, and I think that'd spit out a CLN if it's part of the file. It currently costs $50 (or $58 with a Hague Convention apostille) to obtain a certified copy of an individual's passport records.

I agree with Bev that the IRS is not highly motivated to pursue U.K. resident U.S. citizens who owe zero or trivial U.S. tax, which is the vast majority of U.K. resident U.S. citizens. (Statistically probably over 95%.)


----------



## iota2014

celticweb said:


> I think basically for people who renounce it's a case of making sure that you don't ever lose your CLN. that is the only piece of paper that proves you're not a citizen. Can someone even get a replacement CLN? If the rules start getting even stricter, banks and financial institutes will be looking more closely and the proof would be necessary. Not sure how it is now because I haven't open any new accounts recently.


The FATCA requirements, like the OECD Common Reporting Standard requirements, are administered by HMRC, not IRS. You're under the protection of UK law. America can't suddenly and arbitrarily change the FATCA rules. They'd have to negotiate any changes with each individual country which has signed an IGA. In practice, all the changes so far have been in the direction of moderating the requirements.

If you renounce and then lose your CLN (why would you?), just explain to your bank. It's not a crime, losing a flimsy bit of badly-typed much-photocopied paper. (Yes, folks, the hallowed CLN just gets typed on to a photocopy of a photocopy of a printout of a Word document. Should be extremely easy to forge, for anyone so inclined.)


----------



## celticweb

If I do renounce and get a CLN, I won't be losing it. I read somewhere else that a CLN, A Certificate of Loss of U.S. Nationality is becoming one of the most sought after documents in the world today (obviously they mean for US persons who have renounced). and for the banks, that's absolute proof. also i read somewhere that for Fatca, those with The U.S. “place of birth” is considered the most dangerous indicia. Those with a U.S. place of birth can rebut the accusation of U.S. citizenship with only the CLN or “Self Certification” (that must meet specific requirements) documenting why the person relinquished citizenship and doesn't have the CLN.

I filed because of Fbar. the penalties were just too severe if they ever found me first. Once I knew about fbar, i would have always had this anxiety. I didn't owe tax for any of the years so that really won't have been a problem to stay under the radar. Staying complaint going forward would be better if I could prepare the returns myself. This way I can make my own stance and it costs nothing. As said previously, accountants tend to make the most expensive stance.


----------



## celticweb

and yes I know, they might have no way of collecting the penalties, but they would still be sending letters and adding interest on it, demanding payment, making threats. i might even be refused to renew a US passport or even set foot in the US again and basically be made to feel like a tax evader when i'm not. Then if I wanted to get out of the mess and get a waiver of penalties, I might run into thousands of pounds of legal costs.


----------



## iota2014

Bevdeforges said:


> [..] the big hassle is that of the banks who won't open new accounts for US citizens. Try going through your current bank or find a small, local bank that isn't subject to FATCA rules (because they don't have US branches or ambitions).


Ironically enough, it's the FFIs who aren't registered for FATCA that might be most likely to turn away US citizens. Their "deemed-compliant" status is conditional on having no US citizens customers.

When FATCA was first implemented in the UK, two FFIs were reported to be closing US citizens' accounts and/or rejecting new applications from US citizens _for certain types of accounts_. One was NS&I, which changed the t&c on some accounts to exclude US citizens. The other was the Post Office, which panicked and started refusing to let US citizens open cash ISAs. The Post Office recovered from its panic attack and apologised. NS&I still excludes US citizens from some accounts, but not others. I've had no problems at all with NS&I, before or since renouncing. Nor with any of my other banks.

I think that if US citizens were being refused banking services in the UK, we'd hear about it. The journos like nothing better than a bad-bank story. Might be different in other countries.



> Remember that the US system is one of voluntary compliance - you decide what you report and you determine the "treatment" of various items according to your understanding of the rules and the instructions.


But remember also that it's only "voluntary" while you're beyond their reach, living in another country. "Voluntary" does _not_ apply in America. Americans have good reason for being terrified of the IRS.
IRS Returns Bakery's Money After 3 Years. Now It Wants To Put The Owners In Prison.
[/QUOTE]


----------



## iota2014

celticweb said:


> If I do renounce and get a CLN, I won't be losing it. I read somewhere else that a CLN, A Certificate of Loss of U.S. Nationality is becoming one of the most sought after documents in the world today (obviously they mean for US persons who have renounced). and for the banks, that's absolute proof. also i read somewhere that for Fatca, those with The U.S. “place of birth” is considered the most dangerous indicia. Those with a U.S. place of birth can rebut the accusation of U.S. citizenship with only the CLN or “Self Certification” (that must meet specific requirements) documenting why the person relinquished citizenship and doesn't have the CLN.


That's what the IRS would like, but it's not what's required. If you've renounced, and are no longer a US citizen, just tell the bank that fact, if they ask. If they ask you for a self-certification, show them your UK passport, show them your CLN if you've got one, and if you haven't got one, just explain why. Offer to sign a self-certification form, but _not_ a W8-BEN.

But if you're a longstanding UK citizen customer, my guess is that you'll never be asked, and if you are it won't be in writing and no "proof of innocence" will be required. The banks have no reason to want to annoy a customer unnecessarily, particularly as doing so could land them in court.


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## celticweb

I certainly didn't feel it was voluntary. Had it been 25 years ago I might have taken a more casual attitude about it, i didn't even meet Fatca reporting levels 25 years ago and definitely would not have owed any tax on wages. I basically just had wages nothing else. also regarding the Fbar $10,000 limit, apparently that amount hasn't been risen with inflation so it catches more people in the net now for reporting than it did in the past.

At least I am all set if I want to renounce and I know my returns are accurate. However something the legal counsel told me is that just because you renounce, don't expect to never hear from the IRS again. They can still audit you within the statue of limitations.


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## iota2014

BBCWatcher said:


> The referendum could result in a significant constitutional change with material impact on the rights and privileges U.K. citizens enjoy.


For instance?


----------



## celticweb

My husband listened to a radio show about it recently and some of the things mentioned were

We could be subject to trade & import tariffs to sell to the EU

We could need visas to travel within the EU

The EHIC health scheme would no longer apply to Brits on holiday in the EU

Without being in the EU we would no longer have a UK border force presence in France or British police at the French side of the Channel Tunnel. which would mean that the first vehicle checks for illegal migrants would be on UK soil.

And there was more, I can't remember it all.


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## iota2014

celticweb said:


> I certainly didn't feel it was voluntary. Had it been 25 years ago I might have taken a more casual attitude about it, i didn't even meet Fatca reporting levels 25 years ago and definitely would not have owed any tax on wages. I basically just had wages nothing else. also regarding the Fbar $10,000 limit, apparently that amount hasn't been risen with inflation so it catches more people in the net now for reporting than it did in the past.


FATCA's not voluntary, because the FATCA requirements have been incorporated into UK law, just as the OECD CRS requirements have been. It's the CBT form-filing that is "voluntary" in the sense that it's largely unenforceable.



> At least I am all set if I want to renounce and I know my returns are accurate. However something the legal counsel told me is that just because you renounce, don't expect to never hear from the IRS again. They can still audit you within the statue of limitations.


He's just covering his back. Once you renounce, you're free. You'll have certified truthfully that you've met filing requirements as stated for the 8854, and the IRS can't then go back and demand more from you. You'll have no need to rely on waiting for any statute of limitations to run out because none applies, or is relevant. Don't worry.


----------



## iota2014

celticweb said:


> My husband listened to a radio show about it recently and some of the things mentioned were
> 
> We could be subject to trade & import tariffs to sell to the EU
> 
> We could need visas to travel within the EU
> 
> The EHIC health scheme would no longer apply to Brits on holiday in the EU
> 
> Without being in the EU we would no longer have a UK border force presence in France or British police at the French side of the Channel Tunnel. which would mean that the first vehicle checks for illegal migrants would be on UK soil.
> 
> And there was more, I can't remember it all.


But how could any of that be relevant to your US citizenship?

If you want to renounce, you don't have to wait until after the referendum. Equally, if you want to keep your US citizenship, the result of the referendum can't affect your ability to do so.


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## celticweb

The whole thing appears to be based on scaremongering. The IRS rely on the fear factor to make people complaint in the first place.


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## BBCWatcher

Like I said, I wouldn't be making any decisions about citizenship status until after the referendum. I'm not predicting any particular vote outcome or aftermath, by the way, but there is some uncertainty at present. The uncertainty relates to the scope of the rights and privileges that U.K. citizens enjoy. When the rights and privileges of your other citizenship could materially change, then it's only prudent to figure that out first.

We're not getting many (any?) reports of the sort of letters in the mail described above. We only seem to be getting reports of paranoia.


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## celticweb

iota2014 said:


> But how could any of that be relevant to your US citizenship?
> 
> If you want to renounce, you don't have to wait until after the referendum. Equally, if you want to keep your US citizenship, the result of the referendum can't affect your ability to do so.


None of the things my husband heard on the radio show affects my citizenship. Even if he had heard something I doubt he would tell me. He really wants me to renounce. He's not happy at all that he's been dragged into the bank reporting.

I won't be waiting for the referendum. If I wait for anything it will be to see how gets elected in November.


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## iota2014

celticweb said:


> The whole thing appears to be based on scaremongering. The IRS rely on the fear factor to make people complaint in the first place.


I think a lot of the scaremongering comes from tax advisors etc., covering their backs in all directions. The more they scare people, the bigger the bill.

Plus US citizens who are here temporarily, and intend to go back, really do have good reason to be afraid of the IRS. Their fear can be contagious. But when you look at the nitty-gritty, UK citizens are generally well protected by UK law. It's only if you venture into America while still a US citizen, that you lose the protection of the UK.


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## Bevdeforges

celticweb said:


> My husband listened to a radio show about it recently and some of the things mentioned were
> 
> We could be subject to trade & import tariffs to sell to the EU
> 
> We could need visas to travel within the EU
> 
> The EHIC health scheme would no longer apply to Brits on holiday in the EU
> 
> Without being in the EU we would no longer have a UK border force presence in France or British police at the French side of the Channel Tunnel. which would mean that the first vehicle checks for illegal migrants would be on UK soil.
> 
> And there was more, I can't remember it all.


I think the "it" that the radio show was about was the Brexit stuff. None of that stuff has anything to do with US nationality or lack thereof.

And you're right - there's nothing "voluntary" about the US tax system itself. But the compliance aspect of the system is voluntary. You decide whether or not you meet the criteria to file. You decide what to report (based on what you know or believe the IRS has knowledge of) and you do your own calculation of taxes due and credits applicable. 

But audits of overseas residents are pretty rare these days - especially with all the budget cuts the IRS has been handed recently. It would be interesting to know if anyone here on the forum has ever been audited for a year in which they were overseas, and if so, for what and what the eventual outcome was. 
Cheers,
Bev


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## iota2014

BBCWatcher said:


> Like I said, I wouldn't be making any decisions about citizenship status until after the referendum. I'm not predicting any particular vote outcome or aftermath, by the way, but there is some uncertainty at present. The uncertainty relates to the scope of the rights and privileges that U.K. citizens enjoy.


For instance?


----------



## celticweb

Bevdeforges said:


> I think the "it" that the radio show was about was the Brexit stuff. None of that stuff has anything to do with US nationality or lack thereof.
> 
> And you're right - there's nothing "voluntary" about the US tax system itself. But the compliance aspect of the system is voluntary. You decide whether or not you meet the criteria to file. You decide what to report (based on what you know or believe the IRS has knowledge of) and you do your own calculation of taxes due and credits applicable.
> 
> But audits of overseas residents are pretty rare these days - especially with all the budget cuts the IRS has been handed recently. It would be interesting to know if anyone here on the forum has ever been audited for a year in which they were overseas, and if so, for what and what the eventual outcome was.
> Cheers,
> Bev


When of the accountants I spoke to in the beginning said he had done 250 streamlined foreign offshore returns this year and 4 were audited. so they do get audits. He said that after the audits of all four, they agreed with the original return anyway. I believed him. I would have gone with him and might still go with them in future if I stay a citizen, because they had an office here and in Philadelphia. and he was pleasant to talk too, no scaremongering. Another one I spoke to said one of his clients got kicked out of streamlined and audited. Not sure if this is true because they were more of the scaremongering type.


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## Bevdeforges

celticweb said:


> When of the accountants I spoke to in the beginning said he had done 250 streamlined foreign offshore returns this year and 4 were audited. so they do get audits. He said that after the audits of all four, they agreed with the original return anyway. I believed him. I would have gone with him and might still go with them in future if I stay a citizen, because they had an office here and in Philadelphia. and he was pleasant to talk too, no scaremongering. Another one I spoke to said one of his clients got kicked out of streamlined and audited. Not sure if this is true because they were more of the scaremongering type.


Again, though, an audit isn't always (in fact isn't usually) a matter of questioning everything on the return. Most audits involve a single item and how it was (or wasn't) reported, maybe taking in some of the directly related items on the return. This is where the subject of the audit is critical.

If a taxpayer has US source income, that's much more likely to draw an audit because the IRS receives information about income paid out of the US. If the people were audited for foreign source income, it would pretty much have to relate to how it was presented on the returns (i.e. to draw suspicion that it was incorrectly handled) or relate to some sort of foreign source income that the IRS would have reason to know about. It would also be interesting to know how large the items were that drew the audits (or the relative range of income of the taxpayer who was audited). 
Cheers,
Bev


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## celticweb

Actually the accountant said that. He said no one wants to get a letter from the IRS but audits are sometimes just clearing up questions with mismatched data and wanting clarifications on deductions and asking to see reference on statements for deductions and things of that nature. He said I shouldn't think they are going to turn up on my doorstep. Interesting he also said that the IRS has some sort of scoring system to determine which returns are worth auditing.


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## iota2014

Bevdeforges said:


> ...there's nothing "voluntary" about the US tax system itself. But the compliance aspect of the system is voluntary. You decide whether or not you meet the criteria to file. You decide what to report (based on what you know or believe the IRS has knowledge of) and you do your own calculation of taxes due and credits applicable.


That just seems like giving you rope to hang yourself. You can decide what to put on the form, but if you make the wrong decision, you pay the price for being wrong. They might as well claim the law against murder relies on voluntary compliance.

Intuit says:



> Although the U.S. tax system is voluntary, failure to comply carries stiff penalties. If you under-report your income or overstate your deductions, you'll face fines and interest charges. If you fail to file a tax return, the IRS will file a substitute return based only on the information it has -- meaning you likely won't receive the benefit of any deductions and will end up paying more tax than you should. The IRS also has the power to levy your bank accounts, garnish your wages and place a lien on your property if you don't voluntarily pay what you owe. In serious cases, you may even face criminal charges.


The US tax system is shot through with loopholes, where something is defined ambiguously or not at all. Some people like it that way. Claiming that "it's up to you to decide how you want to complete your tax form" just makes it possible for those who have the nous, or who can pay those who have the nous, to take full advantage of the loopholes to pay less tax, or claim more of that free cash.


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## iota2014

Interesting essay on this at http://scholarship.law.upenn.edu/cgi/viewcontent.cgi?article=1154&context=penn_law_review_online

The author suggests that:

'It would, perhaps, be more accurate to say that the US system is based on a “self-assessment-with-a-low-audit-rate” practice, but that somehow does not sound as attractive as voluntary compliance.'


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## Bevdeforges

celticweb said:


> Actually the accountant said that. He said no one wants to get a letter from the IRS but audits are sometimes just clearing up questions with mismatched data and wanting clarifications on deductions and asking to see reference on statements for deductions and things of that nature. He said I shouldn't think they are going to turn up on my doorstep. Interesting he also said that the IRS has some sort of scoring system to determine which returns are worth auditing.


That's all true. Especially the part about the scoring system. If you don't have too many "points" you can pretty much relax. Granted, filing from overseas probably adds a point or two to your score. But being in the lower income ranges also shields you from many of the potential "point scoring" options.
Cheers,
Bev


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## celticweb

iota2014 said:


> Interesting essay on this at http://scholarship.law.upenn.edu/cgi/viewcontent.cgi?article=1154&context=penn_law_review_online
> 
> The author suggests that:
> 
> 'It would, perhaps, be more accurate to say that the US system is based on a “self-assessment-with-a-low-audit-rate” practice, but that somehow does not sound as attractive as voluntary compliance.'


Yes this is very interesting article, and the last sentence would make sense, it's a cooperative compliance, the IRS rely on the tax payer to cooperate with tax laws and the tax payer relies on the IRS to (usually) leave them alone. Why not just adopt a system similar to the UK, only have to do self-assessment if you aren't having tax deducted at source in the first place. I only started to have to file tax returns once I started renting my flat. Before i was earning on PAYE so no returns. My husband has always filed self assessment because he's self employed.

Regarding the points system, the accountant also said it matches up facts that it expects to see about you and if your return also deviates too much from your peer group. not everyone with a high score gets audited though. only when they think they might get something back for the time. I can just imagine our returns being processed and a number coming out at the end that either triggers an investigation or not.


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## Bevdeforges

Ah, but the American public is a suspicious lot. A number of years ago (when I still lived there) they had a program where you could just fill in the informational lines of your tax return and then have the IRS figure your taxes for you. Very few people I heard of bothered with that system - suspecting that the IRS would pick the most "expensive" options to maximize their recovery.

Or, we have a system here in France where your return is pre-printed with all the information they have received from your employer, the banks and certain investment companies. You can add anything that isn't included, or if what they pre-print is all good and you have nothing else, just sign the form and send it it. The Fisc (the French tax service) is the one that calculates your tax anyhow - all you do is provide them with the information. This idea, too, was suggested in the US and rejected for various reasons.

I guess each tax service just has their own way of doing things.
Cheers,
Bev


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## iota2014

Bevdeforges said:


> Ah, but the American public is a suspicious lot. A number of years ago (when I still lived there) they had a program where you could just fill in the informational lines of your tax return and then have the IRS figure your taxes for you. Very few people I heard of bothered with that system - suspecting that the IRS would pick the most "expensive" options to maximize their recovery.


So that goes back to the incoherent Tax Code. I know UK tax law also has its inconsistencies and incoherences, in the more complex area of self-assessment, but for most of us, it's cut-and-dried, with very few options available. HMRC are welcome to do my tax returns. Slightly annoyingly, I now have to file a return, to report foreign income (SSA pension). It's easy though.



> Or, we have a system here in France where your return is pre-printed with all the information they have received from your employer, the banks and certain investment companies. You can add anything that isn't included, or if what they pre-print is all good and you have nothing else, just sign the form and send it it. The Fisc (the French tax service) is the one that calculates your tax anyhow - all you do is provide them with the information. This idea, too, was suggested in the US and rejected for various reasons.


Manhire, who is a former IRS person, is very enthusiastic about applying game theory to US tax collection. (Tax Compliance as a Wicked System by Jack Manhire :: SSRN

Beyond me, I'm afraid. And I daresay the American public would definitely not support a switch to a wicked system. 



> I guess each tax service just has their own way of doing things.


I think America takes the biscuit.


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## BBCWatcher

Bevdeforges said:


> None of that stuff has anything to do with US nationality or lack thereof.


I disagree, Bev.

The United Kingdom is about to decide on a major constitutional question. That decision might have substantial ramifications on the rights and privileges that U.K. citizens enjoy. For instance, today U.K. citizens can live and work in about 31 countries without visas. After the referendum (and in due course) that number might fall to one. (And even conceivably less than one if Scotland decides to take another whack at independence and rejoin the European Union.)

An individual (and by extension household) holding both U.K. and U.S. citizenships currently enjoys the ability to live and work in 32 countries. That number could fall to two after the referendum, but there's a big difference between 1 and 2.

I'm rather surprised I have to explain this basic issue, but I think Celticweb understood it.

I'm not predicting any particular outcome or even what will happen if "Leave" wins, but there are real, significant questions here that are deeply interwoven with the citizenship status(es) of U.K. households. Personally, if I were in Celticweb's position, I wouldn't even be thinking about citizenship-related decisions until after the referendum next month.


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## Bevdeforges

BBCWatcher said:


> I disagree, Bev.
> 
> An individual (and by extension household) holding both U.K. and U.S. citizenships currently enjoys the ability to live and work in 32 countries. That number could fall to two after the referendum, but there's a big difference between 1 and 2.
> .


And an individual (and by extension household) holding only UK citizenship currently enjoys the ability to live and work in 31 countries. That will fall to 1 after the referendum if things go the wrong way. It's a matter of how the UK goes, not whether or not the household's second nationality is that of the US. (Seriously, time to check into that Irish nationality if you're eligible!)
Cheers,
Bev


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## iota2014

BBCWatcher said:


> ...today U.K. citizens can live and work in about 31 countries without visas. After the referendum (and in due course) that number might fall to one. (And even conceivably less than one if Scotland decides to take another whack at independence and rejoin the European Union.)


Eh?


----------



## celticweb

Renouncing for me isn't going to take place until the very end of this year. The appointment to do the paperwork is in August. 
All my family are here in the UK except my sister who married an American and lives in California.

My UK family and spouse want me to renounce especially my spouse. The fact that we had to report one of our accounts that we use for household bills has really angered him. Most of the money in that account has been contributed by him. And he sees me as being disabled from normal financial and retirement planning and in future should I pass away first, he sees us subject to a complicated and expensive trust arrangement for him to inherit the assets as my spouse. if he passes away first, i will have problems too. Plus the lifelong involvement with the IRS and the financial cost that entails. When neither one of us has ever lived or worked in the USA as adults. The form 8834 is the last straw for him and added more cost to the filing. 

Whether we stay in the EU or not wouldn't change these things. Yes the visa thing did cross my mind but I doubt we will be looking to move there since all our family is here.


----------



## iota2014

Bevdeforges said:


> And an individual (and by extension household) holding only UK citizenship currently enjoys the ability to live and work in 31 countries. That will fall to 1 after the referendum if things go the wrong way. It's a matter of how the UK goes, not whether or not the household's second nationality is that of the US. (Seriously, time to check into that Irish nationality if you're eligible!)
> Cheers,
> Bev


UK citizens are automatically entitled to Irish citizenship.


----------



## BBCWatcher

celticweb said:


> All my family are here in the UK except my sister who married an American and lives in California.


A major exception worth considering very carefully, especially if you're the last/only family member with an unrestricted right to stay with her in the U.S.


----------



## maz57

Note that a discussion such as this would not even occur if celticweb and her sister were also Canadian and the sister had moved to Canada after marrying a Canadian (or substitute almost 200 other countries for Canada). 

The anomalous US tax system is the problem and is virtually the only reason somebody would unilaterally decide to renounce their US citizenship.


----------



## Bevdeforges

iota2014 said:


> UK citizens are automatically entitled to Irish citizenship.


Not so sure about that. I think they need at least an Irish ascendant - grandmother or grandfather. At least for citizenship for the Republic of Ireland. Northern Ireland is part of the UK as it is.
Irish Citizenship through birth, descent and by Naturalisation

Cheers,
Bev


----------



## iota2014

Bevdeforges said:


> Not so sure about that. I think they need at least an Irish ascendant - grandmother or grandfather. At least for citizenship for the Republic of Ireland. Northern Ireland is part of the UK as it is.
> Irish Citizenship through birth, descent and by Naturalisation


UK citizens have right to reside. Once they've fulfilled the 5-year residence requirement, they can get citizenship.


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## celticweb

BBCWatcher said:


> A major exception worth considering very carefully, especially if you're the last/only family member with an unrestricted right to stay with her in the U.S.


Believe me I have thought of this. My sister reminds me all the time of this. The whole situation is stressful. and the only reason there is still a little doubt in my mind. 

Also you can clearly see the difference in our situations. My sister also a dual is able to live in the USA without interference from the UK government and does not need to renounce her British citizenship to have a normal financial life and private life. Her husband would also be giving her a hard time if her British citizenship caused her problems. They have children so it would have been worse.

Where as I have the opposite problem here being dual citizen. My husband still thinks I have gotten the facts wrong because it's so absurd what is required of me by the US government. 

He made a joke saying that the old “Guess Who” song “American Woman Stay Away From Me” may have been right.


----------



## BBCWatcher

So far it appears you have zero financial U.S. tax liability. You have an annual paperwork responsibility, but that's something you would have to get familiar with if you renounce. (There's no such thing as a "quiet" renunciation, although there is such a thing as "quiet" maintenance of U.S. citizenship.) Those of us who have that annual ritual generally know how it works and how to get it done with free or low cost tax preparation software. (H&R Block has a free online edition for tax year 2015.)

For what it's worth, one of my close friends came close to renouncing a few years ago but decided not to in large part because of close family ties to U.S. residents. Sure enough, one of those family members now requires long-term care and has needed/needs his help in the U.S. to make sure proper care is delivered, financial affairs are in order, etc. (And not just for a "we might or might not let you in" 90 day period.) Yes, he's got the annual tax/financial filing paperwork ritual, also with zero U.S. tax owed. He's not thrilled with that, of course. But he made the right decision for him and his family. This stuff does/can happen, unfortunately.


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## Bevdeforges

One issue in all this that IS significant, and probably within the range of "unintended consequences" relates to the family discord for those married to non-resident aliens, many of whom are seriously disturbed by the prospect of having their financial details revealed to the IRS when they are not subject to US jurisdiction. It's a valid concern and one you have to evaluate and deal with based on your own circumstances.
Cheers,
Bev


----------



## BBCWatcher

Bevdeforges said:


> One issue in all this that IS significant, and probably within the range of "unintended consequences" relates to the family discord for those married to non-resident aliens, many of whom are seriously disturbed by the prospect of having their financial details revealed to the IRS when they are not subject to US jurisdiction.


If that possibility concerns you or someone else, it's entirely and easily avoidable. Simply file a separate tax return (Married Filing Separately or, if qualified, Head of Household), and don't have joint accounts. Supplemental credit cards (highly preferably with automatic full monthly balance payment) and "Payable on Death" accounts are perfectly fine for these purposes.


----------



## iota2014

BBCWatcher said:


> So far it appears you have zero financial U.S. tax liability. You have an annual paperwork responsibility, but that's something you would have to get familiar with if you renounce.


You got that the wrong way round, BBCWatcher, it's the person who _doesn't_ renounce that has to "get familiar with an annual paperwork responsibility". The person who renounces is free of the burden.



> For what it's worth, one of my close friends came close to renouncing a few years ago but decided not to in large part because of close family ties to U.S. residents. Sure enough, one of those family members now requires long-term care and has needed/needs his help in the U.S. to make sure proper care is delivered, financial affairs are in order, etc. (And not just for a "we might or might not let you in" 90 day period.)


Your friend is in a rather unusual situation if he's able to spend unlimited periods in another country looking after a sick relative. Most of us have work/family commitments at home.


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## celticweb

My name has already been removed from the joint account now only to be returned to the account after I renounce however the damage has been done because I had to do 6 years back dated fbars. I still don't really know if they will come back to me with fbar penalties regardless of foreign streamlined offshore being waived. so there's that stress too that my husband reminds me of because it's his money too in these accounts.

When all this came out, he wanted me to go and renounce immediately file paper work and no fbars. He said if you are renouncing why do you even need to file fbars. just go and renounce now then file the 5 back years. I think you did that Iota?

But at the time I didn't know if I wanted to renounce and didn't want to be pressured into it. The streamlined process was a nightmare and my accountant said that I was a dream client because I had all the paperwork and back records. Not that I was expecting a pleasant experience. no one in their rightful mind thinks tax filing is pleasant even for one year never mind 3 back years and 1 current year.

Through that process I became aware of what my responsibilities would be now every year, not just filing but fbars, the other special forms, the financial planning that needs to be done and expense. 

So have to weight things up for sure. Just wish they could relax the fbar rules for permanent residents abroad and the other $200,000 form. I could live with the filing.


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## celticweb

also I forgot to mention that I met another expat a few weeks ago at a house warming party and we got into the discussion of the tax and she told me a few times the US government tried to remove the foreign earned income exclusion but it never got passed but doesn't mean they won't try again. So that has to weight up into the equation too. Are they going to make it harder to compy in future? It hasn't got better I am told.


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## iota2014

celticweb said:


> My name has already been removed from the joint account now only to be returned to the account after I renounce however the damage has been done because I had to do 6 years back dated fbars. I still don't really know if they will come back to me with fbar penalties regardless of foreign streamlined offshore being waived. so there's that stress too that my husband reminds me of because it's his money too in these accounts.
> 
> When all this came out, he wanted me to go and renounce immediately file paper work and no fbars. He said if you are renouncing why do you even need to file fbars. just go and renounce now then file the 5 back years. I think you did that Iota?


No, I renounced and then backfiled only the FBARs, plus the 8854. I didn't file any returns, having concluded from the treaty that most of my income was exempt (pensions).

Filing FBARs without returns isn't risky, because it's both true (in my case) and not unusual.

Filing returns but no FBARs (if FBARs are due) would be a different kettle of fish, because if noticed (if the account should get reported by the bank, for instance), that could be risky.



> But at the time I didn't know if I wanted to renounce and didn't want to be pressured into it. The streamlined process was a nightmare and my accountant said that I was a dream client because I had all the paperwork and back records. Not that I was expecting a pleasant experience. no one in their rightful mind thinks tax filing is pleasant even for one year never mind 3 back years and 1 current year.
> 
> Through that process I became aware of what my responsibilities would be now every year, not just filing but fbars, the other special forms, the financial planning that needs to be done and expense.


Yeah, just unbelievably unreasonable isn't it. I'm so glad to be out of it.



> So have to weight things up for sure. Just wish they could relax the fbar rules for permanent residents abroad and the other $200,000 form. I could live with the filing.


The FBAR rules are completely unjustifiable. But unlikely to be changed.


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## iota2014

celticweb said:


> also I forgot to mention that I met another expat a few weeks ago at a house warming party and we got into the discussion of the tax and she told me a few times the US government tried to remove the foreign earned income exclusion but it never got passed but doesn't mean they won't try again. So that has to weight up into the equation too. Are they going to make it harder to compy in future? It hasn't got better I am told.


It did get passed. They had to restore it because CBT without the FEIE makes it pretty much impossible for Americans to work abroad. Not good for American companies overseas, and not good for fetching in capital.


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## celticweb

So are foreign pensions exempt? I thought that this was another tax trap for US persons overseas. 

I have the rental income so I will never be free of filing unless I renounce. 

I am glad I didn't listen to my husband then and did things correctly with the filing. I wouldn't want to land as a covered expatriate in future or be assessed penalties even.

Trouble is that you really don't know who to listen to. when i first started this journey, one accountant did actually tell me that I could expatriate without filing fbars. This is why my husband jumped on this idea. I wrote all this info down, and I just looked it up and basically he said "You need to certify that your obligations under Title 26 of the United States Code are up to date, the 5 years filing. The FBAR filings are required under Title 31." so that i could safely certify without the fbars.

But I didn't want to take a risk and at that time I wanted to learn a bit more before deciding on renunciation.


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## iota2014

celticweb said:


> So are foreign pensions exempt? I thought that this was another tax trap for US persons overseas.


I have the UK State pension (taxable exclusively in the residence State - Article 17(3)) and a LA pension (UK Govt pension, exempt from US tax unless the recipients is both a US citizen and a US resident - Article 19). I don't know about other pensions. I also have an annuity, which is not exempt but it doesn't bring me above the filing threshold. 



> I am glad I didn't listen to my husband then and did things correctly with the filing. I wouldn't want to land as a covered expatriate in future or be assessed penalties even.
> 
> Trouble is that you really don't know who to listen to. when i first started this journey, one accountant did actually tell me that I could expatriate without filing fbars. This is why my husband jumped on this idea. I wrote all this info down, and I just looked it up and basically he said "You need to certify that your obligations under Title 26 of the United States Code are up to date, the 5 years filing. The FBAR filings are required under Title 31." so that i could safely certify without the fbars.


Don't you also have to file Schedule B with each year's 1040, in order to admit to having "foreign" bank accounts? And also have to file 8938 if you're over the FATCA threshold? Those are Title 26 requirements.


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## celticweb

The firm that said this were basically solicitors/accountants together and what they said exactly was that the item were care about is
"such individual fails to certify under penalty of perjury that he has met the requirements of this title for the 5 preceding taxable years or fails to submit such evidence of such compliance as the Secretary may require.”
and the words this title means title 26 so I could technically leave fbar out. Trust a lawyer or solicitor to find a loop hole. 

You still have to file the other stuff but I didn't need to file Form 8938 for all the back years, just the current year because I got some money from my mother that pushed me close to the limit. My husband particularly objected to fbar because he sees it as being some sort of criminal database. and he doesn't know how secure the system was. what he wanted me to do was renounce immediately, file the 5 back years and he was going to take his name off of the account and move whatever money he earned into his own account free from reach of penalties. 

It was a really stressful time and still is. You have to stand on your own two feet and be strong because your other half of course is going to be worried about what your negligence not knowing the rules would mean to them.


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## celticweb

sorry i meant to say the money came from his mother not mine (so that added to the stress)

but yes the firm said I could wave good bye and safely certify that I met my obligations until title 26.


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## iota2014

celticweb said:


> The firm that said this were basically solicitors/accountants together and what they said exactly was that the item were care about is
> "such individual fails to certify under penalty of perjury that he has met the requirements of this title for the 5 preceding taxable years or fails to submit such evidence of such compliance as the Secretary may require.”
> and the words this title means title 26 so I could technically leave fbar out. Trust a lawyer or solicitor to find a loop hole.


Unless I'm missing something, technically a person hasn't "met the requirements of this title [Title 26]" for the 5 preceding taxable years if during any of those 5 years they had a foreign account but didn't file Schedule B. So the solicitor/accountant's loophole is not one that I would sign up to, myself. But everyone has to come to their own answers about how to deal with this pile of garbage America has dumped on us. Fortunately, given the state of the IRS, they'll probably never notice, whatever we do!


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## iota2014

celticweb said:


> sorry i meant to say the money came from his mother not mine (so that added to the stress)


Ah.



> but yes the firm said I could wave good bye and safely certify that I met my obligations until title 26.


Did they offer a guarantee?


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## BBCWatcher

iota2014 said:


> You got that the wrong way round, BBCWatcher, it's the person who _doesn't_ renounce that has to "get familiar with an annual paperwork responsibility". The person who renounces is free of the burden.


I think by now you've figured out where you went wrong. (Hint: There's no such thing as a "quiet" renunciation/documenting relinquishment. The IRS gets notified of every one of them.)


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## BBCWatcher

celticweb said:


> I still don't really know if they will come back to me with fbar penalties regardless of foreign streamlined offshore being waived.


Extremely, vanishingly unlikely. The Streamlined Program offer is as it purports to be. The only way I can imagine your being assessed a FinCEN Form 114 penalty is if you did something stupid and lied in your Streamlined Program filings. That the IRS would not appreciate.


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## iota2014

BBCWatcher said:


> I think by now you've figured out where you went wrong. (Hint: There's no such thing as a "quiet" renunciation/documenting relinquishment. The IRS gets notified of every one of them.)


Yes, the DoS allegedly sends the IRS a copy of the CLNs, as they slowly slowly work their way through the exacting task of doing nothing. How would that impose an annual paperwork obligation on a renunciant?


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## maz57

BBCWatcher said:


> I think by now you've figured out where you went wrong. (Hint: There's no such thing as a "quiet" renunciation/documenting relinquishment. The IRS gets notified of every one of them.)


The only thing the OP did "wrong" was to be a UK citizen trying to live an ordinary life in the UK with her UK husband without interference from a foreign government, not only in her financial affairs, but in her marriage relationship. 

What's wrong is the US government and its CBT system. Everybody who discovers this fact instinctively knows it. This discussions on this forum are almost entirely about how to either deal with it or permanently escape from it. As far as I can tell you are the only US expat here who likes it.


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## maz57

BBCWatcher said:


> (Hint: There's no such thing as a "quiet" renunciation/documenting relinquishment. The IRS gets notified of every one of them.)


You are wrong about that as well. If you take the trouble to read INA 349a you will find that there are 7 ways to lose US citizenship (expatriating acts). Of those 7, the first 4 describe acts that, if committed voluntarily and with the intention of losing US citizenship, will result in the immediate loss of US citizenship. There is no mention whatsoever of any requirement to inform the US government or to file any tax paperwork in order to lose that citizenship. One who loses US citizenship in this manner technically remains a US taxpayer, but it is debatable whether one who has never filed improves his/her situation by submitting to the exit tax regime. Obviously one who doesn't notify the US State Dept. of their relinquishment won't be reported by them to the IRS.


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## celticweb

iota2014 said:


> Ah.
> 
> 
> 
> Did they offer a guarantee?


They didn't offer a guarantee as such but they have been in business a long time, and are US accountants/cpa/lawyers based in London and said they filed many returns and never been questioned or had a bad oucome with an audit. 

They didn't suggest this route to all clients, only the ones that had non US citizen partners that didn't want their account information sent through on Fbar now FinCEN 114 and since that is required under Title 31, you are not required to certify that your FBAR filings are up to date. 

Schedule B is just something you file with your return right? not related to these fbars. I think in your case someone who didn't file a return would maybe need to file the Fbar to establish that they met the requirements of title 26 but if you just filed, that was enough and you didn't need the fbars technically. 

They did say if you use streamlined you do have to file the fbars though because that's a requirement of streamlined. but they only use quiet disclosure for renunciations. in fact they only use quiet disclosure full stop and again said no problems. 

I do think a lot is scaremongering. 

I didn't feel comfortable with this because the whole reason I wanted to file was fbar and worrying about the penalties. 

My returns are squeaky clean because my back records were so good.


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## iota2014

maz57 said:


> You are wrong about that as well. If you take the trouble to read INA 349a you will find that there are 7 ways to lose US citizenship (expatriating acts). Of those 7, the first 4 describe acts that, if committed voluntarily and with the intention of losing US citizenship, will result in the immediate loss of US citizenship. There is no mention whatsoever of any requirement to inform the US government or to file any tax paperwork in order to lose that citizenship. One who loses US citizenship in this manner technically remains a US taxpayer, but it is debatable whether one who has never filed improves his/her situation by submitting to the exit tax regime. Obviously one who doesn't notify the US State Dept. of their relinquishment won't be reported by them to the IRS.


I daresay BBCWatcher has got confused about which version of the exit tax rules currently applies. There was one version, ran for three or four years, required filing under certain circumstances for up to ten years after expatriation. I can't imagine why anybody would choose to comply with that. And maybe that dawned on them, and that's why they gave up on it.


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## celticweb

maz57 said:


> You are wrong about that as well. If you take the trouble to read INA 349a you will find that there are 7 ways to lose US citizenship (expatriating acts). Of those 7, the first 4 describe acts that, if committed voluntarily and with the intention of losing US citizenship, will result in the immediate loss of US citizenship. There is no mention whatsoever of any requirement to inform the US government or to file any tax paperwork in order to lose that citizenship. One who loses US citizenship in this manner technically remains a US taxpayer, but it is debatable whether one who has never filed improves his/her situation by submitting to the exit tax regime. Obviously one who doesn't notify the US State Dept. of their relinquishment won't be reported by them to the IRS.


yes I saw those 7 ways, I am thinking of trying to get a government job now. I think if you relinquished before 2004 you can get away with not having the CLN. But in today's climate, with global FATCA bounty-hunting of U.S. persons, the CLN is the only real proof. The legal counsel said it's the most sought after document in the world not for expatriates.


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## celticweb

sorry meant now for expatriates.

also regarding streamlined, the other accountant firm that never filed streamlined said they didn't feel comfortable getting anyone to sign the certification certificate because the determinations of willful versus non-willful conduct is up to the IRS. I guess some were coming forward in this program that weren't entirely non-willful. just wanted to clean up their act.


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## iota2014

celticweb said:


> Schedule B is just something you file with your return right? not related to these fbars.


If a person files Schedule B and confirms that they have "foreign" accounts, but they don't file FBARs, it might trigger a letter asking for further information about the accounts. 

If a person has "foreign" accounts and they don't file Schedule B, then technically they can't truthfully certify that they've fulfilled the five-year filing requirement (because they should have filed Schedule B, which is required under Title 26)

Of course, as always, the IRS might not be bothered. No one seems to have a clue how often they actually pursue people for invalid certifications.


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## maz57

iota2014 said:


> If a person files Schedule B and confirms that they have "foreign" accounts, but they don't file FBARs, it might trigger a letter asking for further information about the accounts.


How would the IRS even know that no FBARs were filed reporting the accounts listed on Schedule B? FBARs go to a totally different branch of the huge dysfunctional bureaucracy and it would take extraordinary diligence on the part of an IRS agent to even think to look. Most returns are processed by computer and are never seen by human eyes. Plus, I believe there are rules against inter-agency information sharing that might come into play unless there is real evidence of criminality.

Having said that, it really makes no sense for one who is going to all the trouble of jumping through the Form 8854 hoops to take an unnecessary chance and skip the FBARs. Its really a case of either do it all, or totally skip the whole stinking mess.


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## iota2014

iota2014 said:


> If a person files Schedule B and confirms that they have "foreign" accounts, but they don't file FBARs, it might trigger a letter asking for further information about the accounts.
> 
> If a person has "foreign" accounts and they don't file Schedule B, then technically they can't truthfully certify that they've fulfilled the five-year filing requirement (because they should have filed Schedule B, which is required under Title 26)


Correction. The filer has to report on Schedule B whether or not they're required to file FBARs, so it would be pointless (from the point of view of avoiding FBAR penalties) to file Schedule B and not file the FBARs. Better to skip filing altogether and just renounce (IMO).


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## iota2014

maz57 said:


> How would the IRS even know that no FBARs were filed reporting the accounts listed on Schedule B? FBARs go to a totally different branch of the huge dysfunctional bureaucracy and it would take extraordinary diligence on the part of an IRS agent to even think to look.


Not for Streamlined submissions. You can see it in the IRM - the FBARs and the 1040s get linked up. Why would they not?



> Most returns are processed by computer and are never seen by human eyes.


It doesn't need human eyes to check the standard requirements. Only if something non-standard comes up.



> Plus, I believe there are rules against inter-agency information sharing that might come into play unless there is real evidence of criminality.


The administration of FINCEN114 has been delegated to the IRS. I don't see how rules against inter-agency sharing could apply in those circumstances.



> Having said that, it really makes no sense for one who is going to all the trouble of jumping through the Form 8854 hoops to take an unnecessary chance and skip the FBARs. Its really a case of either do it all, or totally skip the whole stinking mess.


Couldn't agree more. It's pointless to hand them any information at all unless you cover your back and get out with a clean pair of heels.


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## celticweb

iota2014 said:


> Correction. The filer has to report on Schedule B whether or not they're required to file FBARs, so it would be pointless (from the point of view of avoiding FBAR penalties) to file Schedule B and not file the FBARs. Better to skip filing altogether and just renounce (IMO).


Exactly, this is what I thought too. i just wanted amnesty for fbars. Most of the accountants that I spoke to said it was unlikely I would owe any tax. 

Because they were lawyers/accountants they probably felt more comfortable with giving loop hole advise because they could defend in an audit. They said the IRS wouldn't even care about fbars for renunciations as long as form 8854 was filled out correctly. and any tax that was due was paid.

But it all sounded too risky whether I stayed or left the system. I told my husband let me file properly or if you're really uncomfortable best to divorce. This is what the system puts us through! Of course he didn't want me to divorce me, but for me to divorce the USA.


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## maz57

iota2014 said:


> . Better to skip filing altogether and just renounce (IMO).


Particularly for those who are not now and never have been in the IRS system. I have heard of some who went to a tremendous amount of trouble to get a SSN merely so they could file the few years needed to renounce and file Form 8854. That makes absolutely no sense to me.

Personally, I now regret I panicked and filed for a few years before I decided I wanted no more of it and got rid of US citizenship. I never filed anything from that point on and skipped the whole exit tax regime. I figured that even though technically that makes me a covered expat, my net worth is such that the IRS won't bother with me. There is always the remote chance some that young IRS "up and comer" will wonder "whatever happened to that guy?" but I doubt it.


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## celticweb

also what if i decided not to renounce at the last minute. i have heard it happens people change their mind on the day of the renunciation. and i hadn't filed fbars and then suddenly they appear in 2016 return with somewhat substantial amounts of money in the accounts. it was just better to file streamlined for me, think about the future and decide a course of action afterwards.


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## iota2014

celticweb said:


> Exactly, this is what I thought too. i just wanted amnesty for fbars. Most of the accountants that I spoke to said it was unlikely I would owe any tax.


By "not file at all", I mean not file anything, which would mean FEIE and FTC would not apply, so in the eyes of the IRS you would presumably be liable for tax, interest, and penalties. Not a decision to be taken lightly, but better than filing incorrectly.


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## maz57

Your present stated course of action makes perfect sense to me. By the way, contrary to BBC's fear-mongering, after the dust has settled you will be able to enter the US on your British passport to visit your sister with no problem. 

For me, when I enter on my Canadian passport to visit my relatives, I am granted an automatic 6 month visa-waiver entry just like any other Canadian. I would imagine similar rules would apply for UK citizens, but it might be worth checking just so you know exactly what rules will apply in your case.


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## celticweb

maz57 said:


> Your present stated course of action makes perfect sense to me. By the way, contrary to BBC's fear-mongering, after the dust has settled you will be able to enter the US on your British passport to visit your sister with no problem.
> 
> For me, when I enter on my Canadian passport to visit my relatives, I am granted an automatic 6 month visa-waiver entry just like any other Canadian. I would imagine similar rules would apply for UK citizens, but it might be worth checking just so you know exactly what rules will apply in your case.


I believe for UK citizens it 90 days on the waiver-entry but i can get 6 months on a visa. but must not stay more than 6 months otherwise they might still consider you a resident for tax purposes. this is what the expat i met at the house warming party told me. i will check the facts with the legal counsel when i do the renunciation paperwork. i wouldn't really be able to stay that long now anyway due to work commitments. it's after stopping work that I might be able to go and stay longer. 

the problem is if they change the laws later on and make it harder for expatriates to enter. i don't see how they would be able to enforce something like that though. they haven't been able to enforce it in the past. sure they could enforce it for some well known billionaire that renounces but not for ordinary people.


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## BBCWatcher

You're all completely missing the point I made. Celticweb has already dealt with the learning curve of U.S. tax and financial reporting. Renunciation (or documentation of relinquishment of citizenship) doesn't let you skip that. Quiet maintenance of citizenship might. (It depends.)

The learning curve is the hard part, but bridge, crossed.

I'd like to reply to this comment separately....



celticweb said:


> the problem is if they change the laws later on and make it harder for expatriates to enter. i don't see how they would be able to enforce something like that though.


Oh, I do. That would be pretty easy and getting easier all the time. To some extent U.S. CBP is already doing this, perhaps most famously in the case of De Beers executives who reportedly and wisely do not step foot in the United States.

Foreigners have no guaranteed right of entry into the United States. If you value access to your sister in the United States, maintenance of citizenship is the only way to guarantee such access.

With respect to the B-1/B-2 visa (the stay permission up to 6 months you're alluding to), here's how that works. If you apply for a B-1/B-2 and are approved, you can then get on a plane and be considered for entry into the United States. Entry may or may not be granted. If entry is granted, stay permission can be granted for any period of time up to 6 months. It could be 6 months, it could be less. The visa can be revoked at any time if the U.S. wishes. If you apply and the visa is denied then you cannot get on a plane, and you are barred from ESTA visa waiver privileges as well, for life. To net it out, if a foreigner wants the _chance_ of getting a 6 month stay he/she needs to put their ESTA visa waiver privileges at risk, for life. (How lucky do you feel?)

The United States just recently stripped ESTA visa waiver privileges from U.K. citizens (who are not U.S. citizens) who hold certain other "toxic" citizenships or who have traveled to certain "toxic" countries -- both lists subject to periodic, instant amendment. The U.S. government changed that policy within the space of a few weeks. It's very easy to do, doesn't require Congressional action or new legislation, and there is no appeal.

As it happens, we had a report in this very forum from Roger Ver who renounced his U.S. citizenship recently. He applied for a B-1/B-2 and tried to get into the United States, but he has been unable to. He'd like to visit his family members, but he cannot. He has no recourse. I've been doing some further research and discovered that he wasn't the first renunciant to fact this problem. It really happens, quietly and selectively at present.

There is actually a law on the books called the Reed Amendment which bars renunciants from entry in certain cases. The law is thus far unenforced (or not officially and widely enforced, to be more precise), but obviously it could be enforced at any time without any further Congressional action. The attack in Belgium was all it took for the recent, rapid dilution of ESTA visa waiver privileges.

You can assess these risks however you wish, but in my view a renunciant must be prepared for the very real possibility of never stepping foot in the United States ever again. If it's no longer your country it's their country, their rules. If that risk is acceptable, fair enough, but it's a real risk however you measure it and naive (at least) to assume otherwise. One of the rights of citizenship is the right of entry and indefinite stay, to take care of a sister in distress for any length of time or for any other reason(s). That's just how it goes.


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## maz57

BBCWatcher said:


> As it happens, we had a report in this very forum from Roger Ver who renounced his U.S. citizenship recently. He applied for a B-1/B-2 and tried to get into the United States, but he has been unable to. He'd like to visit his family members, but he cannot. He has no recourse. I've been doing some further research and discovered that he wasn't the first renunciant to fact this problem. It really happens, quietly and selectively at present.
> 
> There is actually a law on the books called the Reed Amendment which bars renunciants from entry in certain cases. The law is thus far unenforced (or not officially and widely enforced, to be more precise), but obviously it could be enforced at any time without any further Congressional action. The attack in Belgium was all it took for the recent, rapid dilution of ESTA visa waiver privileges.
> 
> You can assess these risks however you wish, but in my view a renunciant must be prepared for the very real possibility of never stepping foot in the United States ever again. If it's no longer your country it's their country, their rules. If that risk is acceptable, fair enough, but it's a real risk however you measure it and naive (at least) to assume otherwise. One of the rights of citizenship is the right of entry and indefinite stay, to take care of a sister in distress for any length of time or for any other reason(s). That's just how it goes.


Rodger Ver is a person who went out of his way to pick a fight with the US government. Its not surprising he had problems. His case bears no resemblance to that of a garden variety renunciant.

The Reed Amendment only allows the State Department to bar those it can prove renounced solely for tax reasons, which not the case for those who have shown on their filings that they owe little or no tax. It has almost never been used. One problem with enforcing it is that the IRS is not allowed to release tax return information to other agencies, including State. That's also why it is not advisable to go on a rant against the US government or CBT when asked for your reasons for renouncing. 

Approaching any border control (and not just the US border) entails risk. Being a US citizen doesn't guarantee anything. The worst time I ever had entering the US was on my US passport. Why? Because the guy suspected I would overstay my allotted time or I might get a job! He was an idiot and totally in the wrong, but if he wanted to he could have denied me entry. As I have mentioned before, I now get much more respect when traveling on my Canadian passport than I ever did as a US citizen.

Personally, I'm fully prepared for the extremely unlikely possibility of being banned and it is a risk I am quite happy to take in order to escape the oppression. You can rest assured every one of my relatives and friends would hear about what their wretched government had done out of spite.

Let's stop the fear-mongering, OK?


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## BBCWatcher

maz57 said:


> Being a US citizen doesn't guarantee anything.


Yes it does. U.S. citizens (and U.S. nationals) have a legally guaranteed right of entry into the United States. In the _extremely_ unlikely event a CBP officer screws up and denies that right, that screwup is immediately appealable and winnable. Once CBP ascertains the individual is a U.S. citizen there is no legal ambiguity whatsoever about entry.(*)



> Let's stop the fear-mongering, OK?


There's no "fear-mongering" here. It's just plain legal fact, well documented. If you are a foreigner (or become one) then you simply cannot assume you will be granted entry whenever you wish for the rest of your life. You have no legal right of entry, and you have no legal right of appeal for denial of entry. This legal fact is not unique to the United States. You must assume the _possibility_ that you will never be able to step foot in that foreign country ever again. However you want to assess and weigh that risk is up to you, but it's a real, non-zero risk. Roger Ver is a recent example, but in my research thus far he's by no means the only example.

I was incorrect about the Belgian attacks with respect to the narrowing of ESTA visa waiver privileges that occurred earlier this year. It was actually the attacks in _Paris_ that precipitated rapid U.S. response. Here's the timeline. The attacks in Paris occurred on November 13, 2015. The U.S. House of Representatives dusted off a "placeholder" bill (a common practice) and inserted new text named the "Visa Waiver Program Improvement and Terrorist Travel Prevention Act of 2015." The amended bill passed out of committee on December 7, 2015. The entire House overwhelmingly passed it on December 8, 2015. The Senate also passed it almost immediately, and the President signed the new law on December 18, 2015. U.S. CBP started enforcing the new law on January 21, 2016. So from event to enforcement took a grand total of two months, and that included an act of Congress -- a major change, with lightening speed, even with Congressional approval. (Decisions about how to treat/maltreat foreigners don't generally require acts of Congress. The President and Secretary of State have vast powers here.) Actually, in this case, these ESTA changes didn't require an act of Congress either, but Congress insisted on the changes, as it can do (subject to a possible presidential veto, although in this case Congress had veto-proof supermajorities). So within a mere two months of a single world event those individuals who are dual citizens of, or who traveled to, Iraq, Iran, Sudan, and Syria (a list subject to amendment at any time) suddenly lost their ESTA visa waiver privileges -- and many of them also lost a realistic prospect of getting B-1/B-2 visa approvals.

These changes can happen, and they can happen practically or even literally overnight. Foreigners have absolutely no right of entry, period. I would also point out that one of the two major candidates for the presidency has already put himself on record that there will be huge changes in U.S. immigration and visa policies. Will President Trump continue to tolerate visits by renunciant foreigners? I don't know. How lucky do you feel?

To pick another example of possible changes to travel privileges, on June 23rd the United Kingdom will vote on whether to leave the European Union or remain. If the U.K. votes to leave, then one possible outcome is that U.K. citizens will eventually no longer be able to live and work in the 30-odd EU/EEA countries, and vice versa. This is all very, very possible. However you want to judge that risk (and then value the loss of that privilege), together with the other pros and cons of EU membership, is up to you, but it's a non-zero risk. Let's not pretend otherwise, for to pretend otherwise is simply not rational.

The U.K. is sovereign and gets to decide. So does the United States, but in the U.S. case the U.S. can decide questions of foreigner privileges on any random Tuesday (or Friday, or Monday, or whenever). The President and his/her Secretary of State don't need a referendum and don't even need Congress to make policy decisions about which foreigners get to enter the United States and which don't. And then CBP gets its own discretion, seldom even questioned, on how to handle foreigners with no legal right of entry. _Nobody_ is going to object if President Trump (or Clinton) decides to issue an executive order on January 21, 2017, barring all former U.S. citizens from entry. It could be "game over" at any time for any reason -- or no reason at all. This is possible. How possible? That's up to you to decide, but certainly _possible_.

How do you think President Trump _should_ feel about maintaining entry privileges for ex-U.S. citizens? Do you folks think, from the perspective of U.S. politics and government, that the small cohort of ex-U.S. citizens is a cohort that Congress and the President are going to do _anything_ to protect? Please enlighten me on why you think their current entry privileges are likely to endure. I'd love to understand that sort of theory of politics and government.

(*) Entry is one thing. Of course, like anyone else (like foreigner Roman Polanski, to pick an example), a U.S. citizen or U.S. national can be detained upon entry for a lawful reason -- an outstanding arrest warrant, for example. However, U.S. citizens and U.S. nationals are legally incapable of violating immigration laws with respect to their personal status. They cannot be legally detained for overstaying a visa, for example.


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## Bevdeforges

Unfortunately, this is the sort of discussion that kind of defines "fear mongering." And gives rise to the sorts of unfortunate family conflicts that the OP (remember her?) has been having to deal with.

For the average, middle class, no tricky investments kind of individual, it is entirely possible to maintain US citizenship without unduly jeopardizing the financial privacy of one's NRA spouse. There is also a range to the level and degree of strict compliance you can pursue.

What gets folks all in a tizzy is this notion that each and every return submitted to the IRS gets scrutinized down to the last detail against some mythical data set that includes every transaction that happens everywhere in the world and is directly tied in to your US social security number. There is information the IRS has and may (or may not) use in performing a standard "quick check" of all incoming returns. If that spot check produces nothing overtly questionable, then chances are that's it.

If you have reason to want to maintain your US citizenship, then you file a "good faith" return. They will not arrive at the house with a SWAT team to haul away your first born if you make a minor mistake or omission, or choose to interpret some regulation in your own favor. If and when they contact you to ask about it, you can have the discussion and either settle up or not - and then continue from that point.

If you decide to renounce, then you accept the uncertainties of that situation going forward regarding travel to the US and any other conditions that could change in the future.

And as far as what a future "President Trump" (I shudder at the thought) might do - yeah, sure, entry to the US may become an issue. But the Donald doesn't exactly have a stellar reputation as far as declaring and paying his own taxes, so draw your own conclusions about how scrupulous you need to be to maintain your own claim to nationality.
Cheers,
Bev


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## iota2014

celticweb said:


> I believe for UK citizens it 90 days on the waiver-entry but i can get 6 months on a visa. but must not stay more than 6 months otherwise they might still consider you a resident for tax purposes. this is what the expat i met at the house warming party told me. i will check the facts with the legal counsel when i do the renunciation paperwork. i wouldn't really be able to stay that long now anyway due to work commitments. it's after stopping work that I might be able to go and stay longer.
> 
> the problem is if they change the laws later on and make it harder for expatriates to enter. i don't see how they would be able to enforce something like that though. they haven't been able to enforce it in the past. sure they could enforce it for some well known billionaire that renounces but not for ordinary people.


They don't have to change the laws. If for any reason they want to refuse entry to a non-citizen, existing laws give ample scope for doing so. INA 214(b) is favourite. But there's no evidence (that I've seen) to suggest it's being used to bar renunciants in particular. 

You're not likely to have any trouble entering the US as a former citizen, but you'll no longer have automatic right of entry. So if automatic right of entry is important to you, weigh that in the balance when deciding if you want to renounce.


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## iota2014

> Nobody is going to object if President Trump (or Clinton) decides to issue an executive order on January 21, 2017, barring all former U.S. citizens from entry.


 I predict half the country is going to object to anything "President Trump" might try to do, be it to ban Muslims, Mexicans, and former citizens, or redecorate the White House in the Trump style.

Renewed paralysis seems the most likely outcome of this election.


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## iota2014

> There is actually a law on the books called the Reed Amendment which bars renunciants from entry in certain cases. The law is thus far unenforced (or not officially and widely enforced, to be more precise), but obviously it could be enforced at any time without any further Congressional action.


Apparently not.


> The U.S. government has never issued regulations to implement the Reed Amendment.[8] One issue with the enforcement of the law was that the Attorney General was never authorized to obtain the required information from the Internal Revenue Service in order to be able to make the determination whether a former American's loss of citizenship was motivated by tax reasons...
> 
> According to former IRS international tax counsel Willard Yates, the Immigration and Naturalization Service and the IRS' Office of Associate Chief Counsel (International) worked together in an effort to create procedures to work around this limitation. Under their proposal, the Customs Service (now Customs and Border Protection) would have been required to check the names of all aliens appearing at U.S. ports of entry against the list of former United States citizens published by the IRS under the Health Insurance Portability and Accountability Act of 1996. Those who were identified as former U.S. citizens would be required to sign a waiver of their rights under § 6103; Customs would then fax the waiver to the IRS so that the IRS could provide Customs with tax information relating to the former citizen, in particular whether the former citizen met the asset thresholds of, and any private letter ruling regarding whether or not the former citizen had tax motivations for giving up U.S. citizenship.[9]
> 
> However, there were various practical difficulties with these proposed regulations. Most notably, only one IRS agent would have been assigned to handling such requests; if a former U.S. citizen arrived on a weekend, he or she might have to be detained until Monday in order for CBP to make the required determination of tax motivation, as no IRS staff might be available to respond to the request for information on a weekend. Additionally, the IRS already had a large workload drafting other guidance for former citizens and green card holders under newly-passed tax laws. In the end, the proposed regulations were never issued.[9]


and


> According to the Foreign Affairs Manual (FAM), due to the lack of regulations, the Department of State has no procedures in effect to implement the Reed Amendment.[10] The FAM goes on to instruct consular officers that "[t]he role of the Department and the consular officer is very limited in implementing this ground of inadmissibility. Unless the applicant appears as a hit in the lookout system revealing a finding of inadmissibility under INA 212(a)(10)(E), you _must_ assume the applicant is eligible." Finally, the FAM states that a person who is found inadmissible due to the Reed Amendment could request a Waiver of Inadmissibility under INA 212(d)(3)(A) to obtain a non-immigrant visa, but that no waiver is available to obtain an immigrant visa.[11]


and


> Congress later amended the law concerning the expatriation tax, adding provisions to account for the possibility that a former citizen might spend significant amounts of time in the United States. Kirsch describes this as "implicit recognition" of the "substantative and technical problems" of the Reed Amendment.[1] In 2004, Kirsch outlined an alternative proposal to more narrowly tailor the Reed Amendment in a way he suggested would make it enforceable.[3] Among various criticisms of the law, Renee S. Liu describes it as "an inappropriate response" to the problem it sought to address, while Michelle Leigh Carter argued that it may "unconstitutionally infringe on the fundamental right to expatriate".[4] [21] Temple University law professor Peter Spiro also suggested that it may violate the Expatriation Act of 1868, as well as the International Covenant on Civil and Political Rights' guarantees that everyone has the right to leave any country and to change their nationality.[22]
> 
> In May 2012, following news that Facebook co-founder Eduardo Saverin had renounced his U.S. citizenship, there was speculation that the Reed Amendment might be invoked against him, and Reed himself (by then senior RI senator) sent a letter to Secretary of Homeland Security Janet Napolitano urging her to bar Saverin from re-entry.[23] [24] [25] However, Senator Chuck Schumer (D-NY) stated that the Reed Amendment "was written in a manner that inhibits its enforcement", and so he and Bob Casey (D-PA) introduced new legislation, the Ex-PATRIOT Act, which would make former U.S. citizens inadmissible to the United States and charge them 30% capital gains tax on their U.S. investments, but it died in committee.[23] [26] The following year, Reed himself, along with Schumer and Casey, moved the Ex-PATRIOT Act as an amendment to the Border Security, Economic Opportunity, and Immigration Modernization Act of 2013, but their amendment did not appear in the final version of the bill which passed the Senate in June that year, nor in the version of the bill which was introduced in the House in October that year.[27] [28] [29]


See Reed Amendment (immigration) explained for the cites.


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## JustLurking

BBCWatcher said:


> As it happens, we had a report in this very forum from Roger Ver who renounced his U.S. citizenship recently. He applied for a B-1/B-2 and tried to get into the United States, but he has been unable to.


Apparently not so. From wikipedia.


> He renounced his United States citizenship in 2014. In 2015 he was denied a visa to reenter the United States by the US Embassy in Barbados which claimed that he had not sufficiently proven ties outside of the USA that would motivate him to leave at the end of his visit, causing fears he might become an illegal immigrant. *Later his visa was approved by the US Embassy in Tokyo.*


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## celticweb

The fact of the matter is that my sister is dual citizen and even if there were a situation that she needed my care, she could come be with me here in the UK if I could not stay in the USA for that long.

I believe expat law is going to get worse. They could even change the rules and say the exit tax will apply to dual citizens at birth that spent at least 10 years in the states in their life time. They could make more invasive laws. Freedom will be a thing of the past.

Yes you have to weight things up but the scale does tip in favour of renunciation. I just count myself lucky that I only heard about it now and didn't get caught up in the offshore voluntary program of a few years ago.


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## celticweb

iota2014 said:


> They don't have to change the laws. If for any reason they want to refuse entry to a non-citizen, existing laws give ample scope for doing so. INA 214(b) is favourite. But there's no evidence (that I've seen) to suggest it's being used to bar renunciants in particular.
> 
> You're not likely to have any trouble entering the US as a former citizen, but you'll no longer have automatic right of entry. So if automatic right of entry is important to you, weigh that in the balance when deciding if you want to renounce.


There have been a lot of intelligent posts in this thread relating to my situation and I thank everyone who helped weight in on it.

Of course I would rather have unlimited entry but in reality, i haven't been to the USA since 2009, my US passport expired in 2012 and has not renewed yet. My sister comes here most Christmas times not just to see me but to see the rest of the family.

Yes it is unlikely that Trump or another president is going to care about people who renounced. But do they even care about all the expats that haven't renounced? I see no evidence that they care at all, actually the opposite.
They imposed Fatca on us, without taking into the consideration the affects it would have on our lives, they consider our bank accounts as off shore. I live and work in the UK so my accounts are not off shore in my view. they interfere with our private and financial life, they place their laws on us outside of their borders, they assess how much tax we paid in our resident countries and if they do not believe our local tax is high enough, they tax us more, their presumption of guilt of tax evasion until innocence is proven, forcing fbar asset reporting, the excessive fines, the waver of our constitutional rights and lack of any government services here.

I could go on and on but we all know this already so the government doesn't care about me whether I stay or leave the US. 
We are the ones having to pay citizenship tax, not the US people in the USA. I say make a flat rate citizenship tax that everyone has to pay no matter if you live in or out of the USA. Can you imagine what the people living in the US would say to that?


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## celticweb

also if i do renounce, i won't go ranting and raving about CBT at the renunciation appointment and my views on CBT hasvenothing to do with my views on America as a whole. there are lovely people in America and it's still a great place of beauty. But the government laws make it hard to survive as a normal person outside of her borders. When all this came out, i really thought I entered the Twilight zone. Quiet filing isn't all that possible for me while having to use an accountant just based on cost and how they over complicate every issue. Just when I mentioned the word Isa, i was meant to feel as I have invested in some stock of toxic waste materials.


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## iota2014

Be aware - if you renounce and subsequently want to enter the US on your UK passport, you'll need the biometric version. The non-biometric ones are no longer being accepted for entry to the US.


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## celticweb

iota2014 said:


> Be aware - if you renounce and subsequently want to enter the US on your UK passport, you'll need the biometric version. The non-biometric ones are no longer being accepted for entry to the US.


yes I have the biometric version.
and I will not try to enter right away after renouncing. don't want to have a bad experience or for some over zealous border official to think I renounced to try and sneak in a live in the USA under cover. i will leave at least a year before I go back.


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## BBCWatcher

JustLurking said:


> From wikipedia.


Perhaps it's true. However, there's no citation given, and I cannot find any information on Ver's current visa status. Have you been able to find anything except an unsourced Wikipedia entry?


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## BBCWatcher

celticweb said:


> The fact of the matter is that my sister is dual citizen and even if there were a situation that she needed my care, she could come be with me here in the UK if I could not stay in the USA for that long.


How would she do that in a medical or other emergency? Or if her husband has a medical or other emergency? It's not hard to imagine situations when a family member in need cannot or is unwilling to travel.

Again, I don't care what decision you make or don't make. It's your citizenship, not mine. But I think it's wise to be realistic (and highly transactional) about the risks and benefits. There is _some_ risk here since you have a U.S. resident family member (and her spouse -- and possibly also nieces and nephews, current and future?) you presumably care about. How much risk is up to you to decide and to weigh. In my personal circumstances I judge those risks to be fairly significant, and I highly value the ability to be with my U.S. resident family members for as long as I wish whenever I wish. (_Obviously_, since unlike you I actually owe and pay U.S. tax on non-U.S. source income.) Your mileage and your relationships may vary, and there's nothing wrong with that. The risks are still real, but evaluations and valuations vary.


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## celticweb

Yes the travel part does worry me and I have nieces through my sister, however the expat that I met at the house warming party had renounced and been back and forth many times. She says she goes there to see some family and do shopping and she said don't forget that the US wants your money for shopping so will let you through. Doesn't mean it won't get tougher.

I want to make an informed decision so I am probably going to keep the legal counsel appointment in August just to get all the facts. Then then try not to let these issues overtake my life. If I am 100% not affected by the exit tax (legal counsel to confirm), I may wait a while and try to get more familiar with the requirements.


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## JustLurking

BBCWatcher said:


> Perhaps it's true. However, there's no citation given, and I cannot find any information on Ver's current visa status. Have you been able to find anything except an unsourced Wikipedia entry?


There is a direct statement from Roger that he got a US visa from the Tokyo consulate without any issues in this YouTube interview. I guess "person gets US visa" isn't as newsworthy as "person has trouble getting US visa".


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## celticweb

It's not constructive to get too worried about entry for normal people. My reasons have nothing to do with tax, i had no tax liability. It’s the whole information reporting regime, which is a huge problem for me and the fact that U.S. citizenship is incompatible with life if you are outside the U.S permanently and don't need it for work purposes or intend to life there. 

And it absolutely important not to be a covered expatriate. That's why I decided to take professional advice to expatriate from someone who specializes in expatriation not just an accountant. I think renunciations would have been higher if some had not been caught up with the exit tax. 

But for myself, if absolutely I am not going to be subjected to the exit tax regime, it could be possible for me to wait and watch a little while.


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## BBCWatcher

celticweb said:


> It's not constructive to get too worried about entry for normal people.


A renunciant is not "normal." It's a very special and very rare category, at least with respect to this particular country. It is a distinct and separate cohort from other foreigners.

I'll repeat: a renunciant must be prepared for the _possibility_ that he/she will at some point be unable to step foot in his/her former country of citizenship ever again. If you are not prepared for that possibility, eyes wide open, then you probably should not renounce.


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## maz57

Just to present a contrarian viewpoint, the exit tax regime is purely voluntary for those who have no assets within the US. If you don't file Form 8854 in the prescribed manner at the prescribed time, in IRS lingo you become a "covered" expat. So what? I decided to skip the exit regime because I found the notion of "exit" tax on assets that were never in the US in the first place offensive. Besides, what good could ever come from sending the IRS a handy "shopping list" by filling out that form?

So what does that really mean? That means that if, for some reason, you did happen to be subjected to the exit tax regime, all of your assets would treated as if they were sold on the day of reckoning and the net gains would be taxed accordingly. That would mean nothing if your net worth were below the thresholds in the regime because you would still be entitled to the $650,000 exemption and owe nothing. In addition, you will still be able to inherit tax free if you happen to be the heir of a US citizen, US resident relative. Any tax in such a situation will have been already paid by the estate before distribution to the heirs and can be sent out of the US with no tax problem. I know this for a fact because several people I know have inherited from US relatives. These were people who had never filed anything because they didn't even know about CBT.

The only possible snag is if you want to leave something to some US resident heirs when you die. Because you are a covered expat, anything you leave to your US resident heirs will be taxed at an exorbitant 40%. In other words, the US is in effect telling expats "You can take money out of the country with no problem, but if you later try to send it back we will seize 40% of it. Don't even try to send money back into the US; we don't want or need it. We think you are a bad person but we can't do anything to you so instead we will screw your relatives because they still live here." It makes absolutely no sense, but the US government tax rules really are that crazy.


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## maz57

BBCWatcher said:


> A renunciant is not "normal." It's a very special and very rare category, at least with respect to this particular country. It is a distinct and separate cohort from other foreigners.
> 
> I'll repeat: a renunciant must be prepared for the _possibility_ that he/she will at some point be unable to step foot in his/her former country of citizenship ever again. If you are not prepared for that possibility, eyes wide open, then you probably should not renounce.


It is becoming more and more normal, thanks to US government policy.

If we drive a car we might be killed or injured in a car crash; we drive anyway.
If we take a commercial flight, it might crash; we fly anyway.
The city we live in might have an earthquake; we live in cities anyway.
If we live in a house it might catch fire; we live in houses anyway.

Life entails risk. Being banned for being a former US citizen is far less risky than any of the above.


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## celticweb

maz57 said:


> The only possible snag is if you want to leave something to some US resident heirs when you die. Because you are a covered expat, anything you leave to your US resident heirs will be taxed at an exorbitant 40%. In other words, the US is in effect telling expats "You can take money out of the country with no problem, but if you later try to send it back we will seize 40% of it. Don't even try to send money back into the US; we don't want or need it. We think you are a bad person but we can't do anything to you so instead we will screw your relatives because they still live here." It makes absolutely no sense, but the US government tax rules really are that crazy.


Seems a backwards view point really, why would they make it hard for money to come back into the country but this is exactly the reason why I don't want to risk the covered expatriate. I understand your reasons for not caring and I sometimes feel the same way and don't want to put any figures on the form 8854 except part of it's already there on the fbar anyway. but I have nieces based in the US (we never had kids) so they could easily wind up being my closest next of kin blood relatives if my husband were to go first and my sister too is there. and don't want them to inherit from me with the covered expatriate terms. The only way around it would be for them to make life in the UK and also renounce. My nieces are duals too, my sister passed UK citizenship on to them and they were born in the USA. I don't want to cause even more family friction by having this discussion either. Best to just not be covered.

Otherwise I wouldn't care either. and might still come to not care if things get worst. But I think BBCWatcher is right that I have to think about things from both perspectives. If right of entry is important to me and how would I feel if I wasn't allowed to enter if laws changed. They have passed crazier laws so who knows.


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## JustLurking

maz57 said:


> ... That means that if, for some reason, you did happen to be subjected to the exit tax regime, all of your assets would treated as if they were sold on the day of reckoning and the net gains would be taxed accordingly. That would mean nothing if your net worth were below the thresholds in the regime because you would still be entitled to the $650,000 exemption and owe nothing.


Sorry maz57, there's one other 'snag' you didn't mention, and it's huge.

If you're a 'covered expatriate' then your _entire_ non-US pension and retirement savings are taxed as if fully distributed in the year of renunciation, with no allowance and not covered by the $650k exemption or mark-to-market rules. Truly outrageous. For some, this alone could be a deal-breaker.

Of course, it relies on you grassing yourself up to the IRS with form 8854, so...


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## maz57

If everything is outside the US, then the IRS and its "imaginary distribution" rules have absolutely no leverage. Why would anybody in their right mind even tell the IRS about such a pension, or anything else the IRS doesn't already know about for that matter? As I have mentioned before, I now regret I panicked and filed anything at all because before I mistakenly did that all they knew about me is that I vanished over 40 years ago.

You are right. It is outrageous. (By the way, I'm not recommending anything in particular; I'm just pointing out that the IRS isn't as all powerful as it would have us believe it is.)


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## celticweb

My returns and fbars are squeaky clean because of scaremongering by the accountants. I actually admitted to the legal counsel that I panicked about the fbar penalties and disclosed everything. I don't trust accountants 100% anymore. They are out to make money and the more forms you have to fill out, the better for them.

So the last thing I need is legal expenses on top of everything else but I rather deal with an actual solicitor that specializes in this for this process. But it is what it is and the whole thing is insane that a place of birth should have all these consequences financially, emotionally and cause family problems. 

My husband wanted me to renounce immediately and file afterwards and leave fbars out, of course my sister doesn't see why I need to renounce.

However if I do renounce, I am not going to be a covered expatriate under any circumstances. Assets are slowly creeping up to the 2 million mark. that threshold is way too low, i don't consider myself rich! It's just property prices in London. So if no exit tax applies to me 100% i can take a bit of time.

then the other tests i pass, for the filing i am doing 2011 anyway just in case, no tax is due. then we are going to get transcripts to ensure it's all gone through and then renounce in November. the legal counsel has an expatriation package that goes through steps to ensure it's all going to be done correctly with the right outcome.


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## celticweb

and just to show how insane it is, a friend of mine just sold a house in London for over a million pounds, and bought two properties with the sale of the house, one for her and her husband a bit out of town and a flat for her son in central London.

Had she been a US citizen, you would probably have been close to if not over the 2 million mark and these people are not rich! They are normal middle class families. of course had she been a US citizen, she would probably not have been able to buy the two properties because of the US capital gains tax.

I am sure it's the same in Canada, people owning house in Toronto must be worth the 2 million mark already.


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## Nononymous

celticweb said:


> I am sure it's the same in Canada, people owning house in Toronto must be worth the 2 million mark already.


Toronto and Vancouver, absolutely, lots of Boris Johnsons. But it's all quite voluntary - you don't owe the IRS any money unless you actually want to write them a cheque. Which is an utterly mad thing to do, anyone facing that sort of capital gain should either renounce or keep quiet. Though if the property gain in high enough then I suppose there are exit tax issues with renouncing.

I prefer staying off the radar and doing nothing. I'm sure that feigned ignorance is a better course of action than filing a return that "forgets" a million dollars worth of taxable capital gains - even if the IRS has no way of collecting penalties outside the country.

I personally wouldn't care about being a "covered expatriate" except that it could potentially create problems if my daughter were to move to the US and then inherit money from me. (I'm not sure which of those two scenarios is the more unlikely!) For her sake it may be worth my going through the trouble of renouncing and exiting properly, but those decisions are many years into the future.


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## Bevdeforges

You will note that several posts have been deleted here. I would like to remind folks that personal remarks and insults are not permitted. I would also like to caution against wild speculation about what rules and laws "could be" enacted. This is the very definition of fear mongering. 

I now return you to your regularly scheduled program....
Cheers,
Bev


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## celticweb

I thought I would post some good news now in the thread
I actually made more headway on my imaginary return i have been doing, managed to get to the very end, just having a bit of trouble working out tax credits.

So if I decide to hold off renouncing, i am going to make a determined effort to learn to file myself.


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## maz57

Bevdeforges said:


> You will note that several posts have been deleted here. I would like to remind folks that personal remarks and insults are not permitted. I would also like to caution against wild speculation about what rules and laws "could be" enacted. This is the very definition of fear mongering.
> 
> I now return you to your regularly scheduled program....
> Cheers,
> Bev


I was wondering just how long it would take for you check in on the kids, find they were out of line, and give them a good scolding! You gave us plenty of rope, and sure enough, we hung ourselves. 

We managed to stray pretty far from streamlined as well....


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## Nononymous

Oh poos, I missed all the fun. Any chance of a synopsis?


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## maz57

celticweb said:


> I thought I would post some good news now in the thread
> I actually made more headway on my imaginary return i have been doing, managed to get to the very end, just having a bit of trouble working out tax credits.
> 
> So if I decide to hold off renouncing, i am going to make a determined effort to learn to file myself.


One useful concept to always keep in mind when doing a 1040 is that it must be "processable". That means it must be accepted with no problem by the IRS computer system rather than being kicked out to be studied by a human to figure out what is "wrong". If an IRS person has to look at it you can rest assured they won't have a clue about anything "foreign" so if it gets to that point all bets are off.

The multitude of non-US accounts available to expats around the world often amount to square pegs which don't necessarily fit nicely into the IRS defined round holes. The trick is to figure when they need to be "trimmed" a bit to fit. This is the grey area that Bev often mentions. As long as you report the income and have a reasonable explanation for why you did what you did, chances are good the return will move through the system with no problem. Voila! You are now compliant (sort of). This is a nebulous concept and takes a bit of practice but if you keep plugging away you'll soon figure it out.


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## maz57

Nononymous said:


> Oh poos, I missed all the fun. Any chance of a synopsis?


Sure, no problem: BBC and I disagreed about a few things!


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## celticweb

maz57 said:


> One useful concept to always keep in mind when doing a 1040 is that it must be "processable". That means it must be accepted with no problem by the IRS computer system rather than being kicked out to be studied by a human to figure out what is "wrong". If an IRS person has to look at it you can rest assured they won't have a clue about anything "foreign" so if it gets to that point all bets are off.
> 
> The multitude of non-US accounts available to expats around the world often amount to square pegs which don't necessarily fit nicely into the IRS defined round holes. The trick is to figure when they need to be "trimmed" a bit to fit. This is the grey area that Bev often mentions. As long as you report the income and have a reasonable explanation for why you did what you did, chances are good the return will move through the system with no problem. Voila! You are now compliant (sort of). This is a nebulous concept and takes a bit of practice but if you keep plugging away you'll soon figure it out.


Chances are I am renouncing. there are other factors that come into play. I have a chance of a directorship here in the UK in the next 6 months and being a US citizen will cause problems. so it's not just a case of me being overwhelmed with paperwork. I generally like a challenge.

But I did 2011 as the imaginary return and I feel I did it correctly. i used pass returns as a guide. i learned about exempting myself. and then taking the single deduction instead of itemizing. i saw where the foreign income exclusion came out. i saw where interest and dividends went and how the rental property was entered and where those deductions went. even the treaty exemption looked straight forward. the tax credit page, i managed to get all the way down even to the point that I had the tax credit, the only thing stuck on was the tax line 44 from 1040 (which also goes on 1116)

This was just an exercise. for the purposes of doing 2011, the accountant will do it and then I will compare with my imaginary return to see how accurate I was should i decide last minute not to renounce. and try to learn from my mistakes.


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## celticweb

also i did this all manually, the right tax software should compute some of this stuff i imagine.


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## iota2014

BBCWatcher said:


> Perhaps it's true. However, there's no citation given, and I cannot find any information on Ver's current visa status. Have you been able to find anything except an unsourced Wikipedia entry?


A link posted on another forum shows Roger Ver present in the U.S. at a recent bitcoin conference. 

https://btcmanager.com/news/roger-ver-at-5280-feet-on-bitcoin-and-his-life-journey/



> So you’re probably wondering how I finally got a visa and was eventually able to sneak back into the country after renouncing my citizenship two and one half years ago. At the time I went to apply for a visitor visa, I had been living outside of the U.S. for ten years. In applying, I knew that you had to show reason to leave the U.S. after a visit. So I brought a nice stack of paperwork with me showing all of my ties to Japan. The person at the U.S. embassy physically refused to allow me to slide this [documentation] under the window to review. They said to me, “We haven’t seen any proof that you have reason to leave the U.S. after your visit. We think you have secret immigrant intent,” meaning that I went to all the trouble and effort to renounce my citizenship only to now come back and live in the United States again as an illegal immigrant.
> 
> Eventually, I managed to convince them [the authorities] via a different embassy location that I was not planning to live back in the U.S. as an illegal immigrant. So they issued me a visa which now allows me to come and go from the U.S. at any time. Isn’t that how the world should work?


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## celticweb

thanks
i wasn't taking any of the scaremongering seriously anyway. it's all a myth. the reed amendment is a myth too. never heard anyone being denied entry to the USA unless they had an infectious disease or were convicted criminals. some might avoid the US after renouncing though. 

The ex pat I met at the party renounced in 2014. She was more American than me because she spent up until the age of 24 in the USA. She's been here the last 20 years in the UK and she never once had a problem going to visit family in the USA since 2014. she renounced because of PFIC nightmare she was having every year and huge accountancy costs around it. I certainly don't blame her when I heard her story. It made my tax situation sound like a walk in the park. She also said the USA wants your money and will let people come in to spend on business and pleasure trips and this is certainly more true for billionaires.

Not trying to start a new debate on this but the facts speak for themselves.


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## celticweb

also to be clearer, i am not saying people aren't denied entry to the USA because I am sure visas aren't approved every day. what i am saying is that people are not denied entry because they renounced and there is no evidence past or present that this is happening.


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## iota2014

celticweb said:


> thanks
> i wasn't taking any of the scaremongering seriously anyway. it's all a myth. the reed amendment is a myth too. never heard anyone being denied entry to the USA unless they had an infectious disease or were convicted criminals.


There are documented instances of individuals being denied entry for what can seem to some of us to be quite irrational reasons, such as "moral turpitude" (undefined), or attempted suicide. But no documented cases (that I've seen) of former citizens being denied entry as punishment for renouncing.



> Not trying to start a new debate on this...


Nor I. Just clarifying the fate of Roger Ver, in response to BBCWatcher's query.


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## celticweb

totally agree
the ex pat said as long as you have a return ticket home or plans to travel onwards to somewhere else you will be fine. they don't like people to overstay but that's true of any country.

the reasons that people might be denied entry apply to all individuals not just for those renouncing.


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## maz57

“We haven’t seen any proof that you have reason to leave the U.S. after your visit. We think you have secret immigrant intent,” meaning that I went to all the trouble and effort to renounce my citizenship only to now come back and live in the United States again as an illegal immigrant."

That's amusing and who knows whether that is really a direct quote but it certainly illustrates how crazy things can get and how much depends on the individual officer. Apparently, in this case just going to visit another bureaucrat fixed the problem.

Millions of Canadians who show up at the US border every year are granted an automatic 6 month visa-free entry. Any one of those people could become an illegal immigrant because there is no way to track them once they leave the border zone. I am frequently one of them and the US doesn't seem to be terribly worried about that possibility.

Is there a moral? Sure: be prepared for the unexpected when approaching inspection because all bets are off when you try to cross ANY border.


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## celticweb

true.
if i do visit USA after renouncing it won't be until 2018 anyway. my sister comes every Christmas. i won't go this year or next year most likely. we take holidays in Italy, Spain generally. Later this year we are going to Moscow.
I have never been denied entry to any country and don't expect it to be any different for the USA in future. but yes it's a risk wherever you go.


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## Booth44

celticweb said:


> thanks
> i wasn't taking any of the scaremongering seriously anyway. it's all a myth. the reed amendment is a myth too.


The Reed amendment is not a myth. If you are a US-born person travelling under the passport of another country trying to enter the US, a Customs officer is going to notice. If they ask why you do not have a US passport and you tell them you renounced for tax purposes you may very well be detained at the border for a period of time while they investigate. 

I'm not trying to 'scaremonger'. I'm personally aware of this having happened on two separate occasions at local border crossings. To be sure, neither party was denied entry to the US outright, but both were made to wait several hours before being released. (moral of the story - DON'T tell Customs Agents that you renounced for tax reasons).


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## iota2014

The Reed Amendment is not a myth, but the enforceability of the Reed Amendment is a myth.

Some border agents perhaps feel that it _ought_ to be enforced and it's up to them to do it. Thus the Reed Amendment can cause trouble, by encouraging poorly trained border agents to act beyond their authority. But poorly trained border agents can cause trouble without any need for the Reed Amendment, as witness the experience of Roger Ver.

As for explaining to a border agent that one has renounced for tax reasons - kind of unlikely, don't you think?


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## celticweb

well in my case my main motivation for renouncing is not due to tax reasons. I didn't owe tax with my streamlined filing. and it would be stupid to even mention tax either at the embassy when you renounce or afterwards.

If i were to analyze my reasons for reasoning, it's more to do with gaining back the freedom to live my life in the UK as a UK citizen without interference from a foreign government. Also the fbar filing and the problems that has caused with my relationship with my spouse with our joint account and that our assets could be threatened by IRS Fbar penalties even though my spouse isn't a US citizens and the loss of privacy around these filings. These are the main reasons, there are others of course. if it was just a case of filing a simple tax return yearly, I would probably not bother renouncing.


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## maz57

Seems to me that if you never owed any tax, then by definition you couldn't possibly have renounced for tax reasons. (Of course, we all know about the reporting reasons but the Reed amendment says nothing about being sick to death of the reporting.)

The Reed amendment is certainly still on the books but there is no way for the immigration guys to know anything about your tax situation unless you tell them something. So don't. Like so many other issues the US seems to prefer the "don't ask...don't tell" method of handling the subject. Every one of those US officials knows perfectly well why most people renounce but they can't prove it. Its a very bad idea to give them the rope they could use to hang you. 

Generally speaking, having a conversation with any border official is a bad idea. They are not there to be your friend. One word answers are the least risky response.


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## Bevdeforges

If a border agent notices your US birthplace on your passport and questions you, you answer that you have renounced. There is no way the agent has any right to ask you "why?" though s/he may ask to see your CLN. OTOH, it's entirely possible that someone with a US birthplace could have had diplomat parents (in which case they would not be US citizens just for the accident of being born in the US) and I really wonder what "proof" of that they can ask for. Like maz says, it's very much a "don't ask, don't tell" arrangement. But in no event should you ever answer any question the immigration agent doesn't ask you.

My friend's daughter was detained for over an hour at JFK on arrival with her mother. She was born in the US when her mother and father were living there, but they moved back when the kids were 10 or younger and the daughter had never been back. Had no idea she was even supposed to have a US passport. (And she's not inclined to get one now, seeing as she has definitely been put off the idea of visiting the US again.)
Cheers,
Bev


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## BBCWatcher

So let's summarize:

1. After a terrifically long, expensive, and bureaucratic delay of at least several months, Roger Ver managed to travel to the United States. Once, so far. (Congratulations, Roger.)

2. Foreigners have no legal right of entry into the United States. The U.S. State Department and U.S. Customs and Border Protection have practically unlimited, non-reviewable discretion.

3. The United States government can change and has changed its entry policies practically overnight, including recently the ESTA limitations on visitors to and citizens of certain unpopular countries. Policy changes can be initiated in Congress (as that one was) but generally don't require Congressional action.

4. None of the above is "scaremongering." It's plain, simple fact -- and not unique to the United States in character. Here's the bottom line, again: *an ex-citizen must be prepared for the possibility, at some point in the future, of never stepping foot in his/her former country of citizenship ever again.*


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## Bevdeforges

And citizens or ex-citizens must also be prepared for the possibility that the US government may fall to a military or fascist coup some day, which will really booger up everyone's rights and responsibilities. Everything is possible in the world today - just look at the current presidential race.

You have to live your life based on what the situation on the ground is today - and any viable and active movements towards change that look to have a reasonable chance of success and might seriously impact your own personal situation. Past that, any rants about what "might" happen fall under the heading of "fear mongering."
Cheers,
Bev


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## BBCWatcher

Bevdeforges said:


> And citizens or ex-citizens must also be prepared for the possibility that the US government may fall to a military or fascist coup some day....


Or the country where you live at present.

So now we're getting into how one assesses risks again. But let's focus on some facts. First, the risk an ex-citizen will be limited in how long he/she can stay in the United States if permitted entry is statistically close to a certainty. Second, statistically the risk of visa or ESTA denial, denied boarding, denied entry, or substantially delayed entry is currently much higher than the risk of any other event suggested so far in this thread, never mind the future risk.

How you choose to evaluate and weigh risks is up to you, but the _fact_ is these risks are not zero and not trivial, currently and/or in the future. If anybody suggests otherwise, they're being misleading and providing very bad advice.

This s**t is real, folks, with any country.


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## iota2014

BBCWatcher said:


> Or the country where you live at present.
> 
> So now we're getting into how one assesses risks again. But let's focus on some facts. First, the risk an ex-citizen will be limited in how long he/she can stay in the United States if permitted entry is statistically close to a certainty. Second, statistically the risk of visa or ESTA denial, denied boarding, denied entry, or substantially delayed entry is currently much higher than the risk of any other event suggested so far in this thread, never mind the future risk.
> 
> How you choose to evaluate and weigh risks is up to you, but the _fact_ is these risks are not zero and not trivial, currently and/or in the future. If anybody suggests otherwise, they're being misleading and providing very bad advice.
> 
> This s**t is real, folks, with any country.


It hardly qualifies as sh!t, though, does it?

In an uncertain world, where people are daily being bombed out of their homes and starved into forced migration, the risk of not being able to visit the US pales into insignificance.

No passport, no papers, no home - _that's_ sh!t, folks. Get a grip.


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## celticweb

Fatca i think was the last straw for US citizens. why is it that renunciations increased significantly after that. 

I have a chance of a directorship next year for a newly formed business that my ex boss is starting. will this mean i have signatory over the business bank accounts? Probably yes. And it's ridiculous that based on my place of birth i can't take up this directorship without causing a headache for this UK company owned by a UK citizen.

I know I will loss automatic right to enter the USA. But I know that I will feel worst if I do nothing now and the rules get harder and they change the rules that I will even be subject to the exit tax. and place of birth should not cause relationship problems, there are enough things that do in life. or work life or anything else.

I met another expat this weekend, she holds three citizenships and is keeping US citizenship no matter how hard the laws gets, she's a journalist and travels all over the world and part of her work is with NY newspapers so it is very much on a case by case situation.

and I agree with Iota, the issue of being able to enter the US pales in significance compared with other things.


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## iota2014

celticweb said:


> Fatca i think was the last straw for US citizens. why is it that renunciations increased significantly after that.
> 
> I have a chance of a directorship next year for a newly formed business that my ex boss is starting. will this mean i have signatory over the business bank accounts? Probably yes. And it's ridiculous that based on my place of birth i can't take up this directorship without causing a headache for this UK company owned by a UK citizen.


It seems to me that identifying accounts as "reportable-unless-proved-otherwise" on the basis of birthplace alone, is a feature of FATCA that should be open to legal challenge, at some point.

CRS uses birthplace, for matching/identification purposes, but does not treat birthplace as something that the accountholder is required to explain. Even if the US doesn't sign up to CRS, the contrast between these two different ways of treating birthplace information might carry some weight in court, if a test case eventually is brought. Not that that's much help in the present, but eventually, perhaps.


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## Bevdeforges

The other side of the coin here is the individual's evaluation of the risk of getting caught (or at least called out for some "ignorance of the law" or whatever you want to call your particular brand of non-compliance). 

If you should accept that directorship, and you fail to do anything more than report on your FBAR the name and address of your employer (for a company account you have signature authority over, that's all you have to report - not account numbers and balances), what are the chances the company will get into any sort of trouble for not filing all those other obnoxious filings, detailing the balance sheet and income statement in local currency and converted to US dollars? Honestly, pretty close to 0. Especially if you don't hold 10% or more of the stock of the company.

You can make yourself crazy with all this stuff. Ultimately what it comes down to is how connected you are to the US and how visible you may be on the IRS radar. But like celticweb says, it comes down to the case by case situation and each individual's evaluation of the risks involved, based on the current situation. When and if the laws or other factors change, you re-evaluate based on the actual changes.
Cheers,
Bev


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## celticweb

Well I was completely invisible to the IRS and now I assume I am completely visible.

I accept I am still not that knowledgeable about reporting requirements and there is still an element of uncertainty. and I am still not at the stage that I don't feel comfortable with not reporting things. Because I don't know the consequences. 

The Fatca letter put fear into me that is still hard to shake-off. Even now when i hear the post arrive or when I come home and post is waiting for me, my heart skips a beat because I am expecting to see a penalty letter from the IRS, or a court summons. I scan the post quickly to see if the envelope gives me a clue. then I breathe a sigh of relief when nothing is there. 

Regarding the directorship. I will have to find out more about how the business is going to be run, we only had a brief discussion and it could be that US citizenship might even work out as being an asset to the business.


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## Bevdeforges

OK, the first thing to know and to understand is that your first point of contact with the IRS is very unlikely to be a "penalty letter" and certainly will not be a court summons. If and when you ever hear from the IRS, the first contact may be a letter questioning something on your return and asking for $X in additional taxes based on their understanding of your situation. Or, potentially, they might advise you that they want to audit your return for a particular year for a particular issue or problem. You have the right to respond with your side of the story or to provide the support for whatever it is you claimed. Or you can simply say, "oops, my bad" and pay whatever it is they are asking for in additional taxes.

But other than for a really egregious omission or "mistake" it's rare that they bother us overseas taxpayers much. It's simply not worth losing sleep over.
Cheers,
Bev


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## celticweb

Thank you for the reassuring words. I know I am being irrational over this. and if truth be told, it's not so much the filing I worry about, but the Fbar. 

It is the Fbar penalties I worry about, still worry about and what started this mess and will be what finishes this mess if I renounce because that will be the main reason I renounce, the fbar filings. It might be too tempting for the IRS to pass up, send a penalty letter and make some money. wasn't it called the fbar fundraiser?

Also on another note, my accountant did say audits were rare and usually it will be the self-employed overseas that have more chance to get audited and that he thought there was nil chance I will hear from the IRS. They are short of manpower.


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## maz57

BBCWatcher said:


> So let's summarize:
> 
> 1. After a terrifically long, expensive, and bureaucratic delay of at least several months, Roger Ver managed to travel to the United States. Once, so far. (Congratulations, Roger.)


Roger Ver is way more determined than I am. I would have been happy to take that first no as a final answer and never set foot in the US again. (In fact, I can envision future circumstances that would cause me to make that decision myself.)


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## maz57

BBCWatcher said:


> 2. Foreigners have no legal right of entry into the United States. The U.S. State Department and U.S. Customs and Border Protection have practically unlimited, non-reviewable discretion.


Ummm, we know that. I'll leave it to someone else to count how many times in the last 20 pages of this thread you have stated the exact same fact.


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## maz57

BBCWatcher said:


> 4. None of the above is "scaremongering." It's plain, simple fact -- and not unique to the United States in character. Here's the bottom line, again: *an ex-citizen must be prepared for the possibility, at some point in the future, of never stepping foot in his/her former country of citizenship ever again.*


*

Point taken. Now that you have helped the ex-citizens among us to be prepared, its time to set that aside and start worrying about an asteroid impact.*


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## maz57

Now, once again, I'll let it go.


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## Bevdeforges

Actually, even with the FBARs, unless you're concealing a multi-million dollar account, the first contact with the IRS is much more likely to be an inquiry, saying something like, we have received information that you hold another account that was not reported on your FBAR filing - what do you have to say about this? 
Cheers,
Bev


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## iota2014

celticweb said:


> Thank you for the reassuring words. I know I am being irrational over this. and if truth be told, it's not so much the filing I worry about, but the Fbar.
> 
> It is the Fbar penalties I worry about, still worry about and what started this mess and will be what finishes this mess if I renounce because that will be the main reason I renounce, the fbar filings. It might be too tempting for the IRS to pass up, send a penalty letter and make some money. wasn't it called the fbar fundraiser?


Since you went through Streamlined, you're not at risk of "non-wilful" FBAR penalties, so presumably it's the "wilful" FBAR penalties you're worrying about.

To try to apply a "wilful" FBAR penalty against you, the IRS would first have to build a legal case proving that you've been engaged in criminal tax evasion. Assuming that in fact you haven't been committing tax evasion, the IRS couldn't possibly build such a case and why would they waste time and money trying to do so?



> Also on another note, my accountant did say audits were rare and usually it will be the self-employed overseas that have more chance to get audited and that he thought there was nil chance I will hear from the IRS.


There's a calculator at Calculator: What's Your Risk of a Tax Audit?-Kiplinger

Useless, I expect. 



> They are short of manpower.


And in many ways, caught between a rock and a hard place, since Congress seems to be determined to keep cutting the funding while demanding better face-to-face taxpayer service, better security, and better returns. If I were an IRS agent I'd be looking for a less dispiriting job.


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