Renunciation Form 8854 question

Hi all,

Am very happy to have found this community, looks like a wealth of information.

I am an accidental American (born there to British parents) and am looking to renounce my US citizenship. I have a query regarding the statement on Form 8854 that you have been tax compliant for the last 5 years. Is it possible to certify this statement if you file 5 years of tax returns (the majority of which will of course be late) with the form 8854?

Any thoughts gratefully appreciated.

Hi shellzbellz, and welcome to UKY.

I can only give you my opinion regards your question. I do not believe you can file past returns with the 8854. I may be wrong. 8854 is not filed until the tax year following the year in which you renounce.

Your situation is by no means unique, as many 'accidental Americans' are now seeking to shed their US citizenship. The questions you may have are getting a great deal of discussion on various sites.

Your comment leads to several assumptions; 1) you are in the investigative stage, and have not started the process yet, and 2) you indicate that both parents were British Citizens at the time of your birth.

I would suggest you investigate as much information as you can find. For example, the fact that you will be considered a British Citizen at birth (both parents were British) may help in your efforts. An other avenue worth investigating is the possibility that you may be able to 'relinquish' US Citizenship, and not 'renounce' it (there is a difference). This may be a long shot, but it may be worth investigating.

It's also the position on some sites that it is not necessary to be compliant for 5 years at the time you renounce, although this does not relieve you from the obligation to be compliant by the following year.

There are also several options you may wish to consider regards how you become compliant for the past 5 years. If you do undertake additional research, you may come across the more extreme elements that say once you've renounced, is it worth filing the 5 years of returns? Very dicey ground, and would depend on your appetite for future risk of not being 'compliant' with the US.

There's a lot to consider.

Thank you very much for the response, there certainly is a lot to consider

Yes, I am in the 'investigative' stage regards renunciation, but I have been compliant with US tax requirements for the past few years (I filed tax returns and FBARs for 2010-2012). I have also had returns  and FBARs prepared for me for 2008 and 2009 but not filed these as they were late.

I see no benefit in retaining my citizenship and the ongoing compliance costs are getting expensive and time consuming to keep up with. As I am going to renounce, I would like to do so as cheaply and easily as I can which is why I am wondering if I could file my 2008 and 2009 forms now and be able to tick the box saying that I have complied despite these being late. The alternative of course is just to file for two more years and then I could be confident in making the confirmation but I'd really like to avoid the expense of doing so!

Just to be clear on the filing on the 8854, if I were to renounce this year, I would have to file a return for 2013 this year and then the 8854 next year?

Thanks again.

..... but I have been compliant with US tax requirements for the past few years (I filed tax returns and FBARs for 2010-2012). I have also had returns  and FBARs prepared for me for 2008 and 2009 but not filed these as they were late.

Well done, you are approaching this in a very rational manner. If you have already filed for 2010, 11, and 12, and will file a return for 2013, you will have 4 years. You will have to file for 2013 (and FBAR), no way out of it given the circumstances.

As I am going to renounce, I would like to do so as cheaply and easily as I can which is why I am wondering if I could file my 2008 and 2009 forms now and be able to tick the box saying that I have complied despite these being late..... Just to be clear on the filing on the 8854, if I were to renounce this year, I would have to file a return for 2013 this year and then the 8854 next year?

If you renounce in 2014, I believe you will have to file a return for 2014, even if it's a part year return. That would give you 5 years ('10, '11, '12, '13, and 2014).

If you wanted to be safe, you could file '09 by a 'quiet' disclosure (just send it in now). Supposedly, FBARs (both past and present) must now be done over the internet with the Treasury Dept. There are risks associated with doing this for both the tax return and the FBAR, and you need to research those. IMHO, there would be no need to consider the 'streamlined' disclosure route since you have already filed for the past 3 years. Others may disagree.

If you renounce in 2014, then yes, you would file the 8854 in 2015. The 8854 not only checks you out of the system, but also gives your position regards the exit tax, if applicable.

Being as you have already filed the returns for 2010-12, and have the return for '09 prepared, it makes sense (after the expenses) to renounce. I assume you are aware there is a $450 additional fee to be paid for renouncing (at present).

There are those on this site that are going through renunciation at present. I would hope they may comment, giving a more accurate perspective.

The law is unclear about when the 5 returns must be filed.  A conservative position would be to have these filed before expatriation. Nonetheless many people file them after expatriation but before the 8854 is filed and there is public record indicating that bad things tend to happen.