Accidental American panic

If you relinquish is 8854 and 5 years of up to date tax filings required?

Question rewritten: "What does the IRS consider as the date of relinquishing US citizenship?" Yes, renunciation is only one act of relinquishing, so what happens when relinquishing is based on one of the other acts?

It all hinges on 26 U.S.C. Section 877A(g)(4). Basically, the IRS will say the act of relinquishing did not occur until the paperwork is received by the Department of State.

Even explanations from the best minds are not clear. Read Phil's blog, and then read the comment section, 3rd one down from Michael J. Miller, which contradicts what is in the blog using the IRS as a source for those who receive a CLN date of expatriation before June, 2004:
 
http://hodgen.com/relinquishing-u-s-citizenship-and-expatriation/

 

OK, so here I am a US/UK dual citizen and I decide I don't want US citizenship anymore and don't want to pay $2350 to get rid of it.

So I swear an oath to Queen Elizabeth II, would singing the national anthem with a lot of feeling and thinking "I'm doing this to relinquish US citizenship" be enough?

Send a registered letter to the US Embassy telling them I spoke the oath with the intention to relinquish US citizenship and maybe include a pre-emptive DS-4079
http://www.state.gov/documents/organization/97025.pdf

Wait for the Embassy to contact me about the relinquishment

Then, file the 8854, final US tax return and say "adios" to the US of A and buy everyone a round of margaritas with the $2350 I just saved

A friend of mine went through the relinquishing process, and she had to do all the same stuff as renouncing except pay the fee. They made it really hard for her, and she had to provide proof that it had been her intent to relinquish when she became a UK citizen, which included letters from people saying that she had always stated it was her intention. They don't let you off easy at all!

Well, I swore an oath to QEII on November 10, 2014....but British born and raised DH swore a similar oath to the US of A when he became a citizen in 2010.

So DH goes to the Town Hall and swears that he only wants to be British....and then we each send our stuff in. No more US tax liability? Somehow, if it seems too good to be true, it probably is, more's the pity  

A friend of mine went through the relinquishing process, and she had to do all the same stuff as renouncing except pay the fee. They made it really hard for her, and she had to provide proof that it had been her intent to relinquish when she became a UK citizen, which included letters from people saying that she had always stated it was her intention. They don't let you off easy at all!

WOW! That seems very harsh, I naively thought that simply living somewhere else and swearing allegiance to that country was enough proof.

This thread is getting more and more interesting, as I plan to relinquish the moment I have that magic new maroon passport in my hot little paws (a few months more, I would think).  Thanks, DrSL99, for that extra bit of info.  I'll line up my ducks now - how many letters did she need?  Anything else I need to know?  Will it help that I will have allowed my US passport to expire?

It interests me that renouncing/relinquishing US citizenship now seems to be a topic that is openly discussed by lots of people, rather than being something whispered about. For years giving up US citizenship was taboo......the most un-american thing you could do. So things must be pretty bad if so many Americans are considering it. Of course its different for the naturalized/accidental American vs those born and raised in the US....surely it's far more difficult for the latter group?

I've asked my friend to provide a write-up of her experience, so I'll get back to you!

lucy w, you'd think so, but my aforementioned friend was born and raised in the US and couldn't wait to be rid of her citizenship. She's an uber-lefty atheist with crazy right wing evangelical family she doesn't get on with, so she didn't feel any affection for the US that made it difficult. For me, I was born in a third country and had dual citizenship at birth (my mum is also a citizen of that country, while my dad was American, and that's how I got my US citizenship), but I mostly grew up in the US and lived there from ages 5 to 23. When I left I had no intention of going back, and didn't find it very hard to renounce at all.

nun,

You are right; it is an indication that things are pretty bad.

For me it is easy, I am not culturally American and I only lived in the USA till I was 4 years old. It is easy to understand why I feel about as American as I feel French (two countries I have no links to).

The idea of giving up my American passport creates no conflict whatsoever within me and I would imagine most people in my situation feel exactly the same. You mention it being an “un-american” act, I can understand why it would be a pretty horrible thing to do for someone who feels American. Betraying one’s heritage and family is not easy!!! But since I don’t feel American, I don’t see it as betrayal.

My situation is more complex than most here probably; I was born in the US to non-US parents. Then I moved to my parent’s country at 4 years old and to the UK at 14. Eventually I became British. Culturally I am the same as my parents and I feel a loyal to the UK, I really feel British! I would feel utterly gutted if I had to give up my British nationality, it would literally be like I’m missing a part of me. But I cannot say the same about the USA; it is simply a country that I don’t know as I’ve only been to the US once as an adult. I’ve been to Italy, France and Spain much more than to the USA and I don’t feel Italian, French or Spanish either.

Before we all get carried away, let's break this down part by part. CAUTION, ALL IMHO!

Part 1:
Relinquishing (including renouncing) US citizenship is not dependent on filing with the IRS. When you renounce/relinquish, your record regards US tax is not a factor. It is a separate factor. If you wish to extract yourself from the US cleanly, legally, and without future anxiety, you will also solve your US tax problem. That need NOT be done prior to renouncing/relinquishing, but there are reports it would be much better for you if you did do it first.

Part 2:
If you are allowed to relinquish, you do not pay the $2,350 fee. The US will insist that anyone relinquishing/renouncing US citizenship must have a second citizenship. Technically, this is not required, but you may have trouble without the second citizenship. If you did not have a second citizenship, you would become stateless, even though you may have the right to remain in a foreign country. Not good to be stateless, but there are 1 or 2 examples of those who have done this.

Part 3:
Relinquishing other than by renunciation. There are 7 ways to relinquish. We'll forget two; your country is at war with the US and an act of treachery. Renunciation is a third. That leaves 4 other ways to relinquish.

Naturalization in a Foreign State: You become a British citizen. If, at the time of naturalising, your intent is to lose US citizenship, it can be an act of relinquishment. It's been reported on other sites of those who prepare a written statement indicating when taking the oath at the ceremony, they are doing it with the intention of losing US citizenship. They take it along to the ceremony, and have the person who administered the oath sign, as a witness, the document. Surprising it seems, most of those administering the oath are happy to sign the document. You take that signed document, along with the other required forms, to the US Embassy, and present it as evidence of your relinquishing act. The Embassy may agree, or they may say it is not sufficient evidence. You may be persistent, and insist they forward the paperwork to the Department of State in the US. The officials at the DoS may accept your naturalisation as a relinquishing act, or they may reject it. It may be many months before you hear back. If they reject it, you then may follow up by renouncing and paying the $2,350 fee.

Oath of Allegiance. Taking an official oath of allegiance other than doing it at a citizenship ceremony.

Join Foreign Armed Services. Generally only works if you attain officer ranking. Enlisting as a squaddie won't suffice. (Think of the dual US/Israel person who leaves the US to do mandatory service.) You must initiate the relinquishment. Being an officer is not sufficient to have your US citizenship taken away, unless the country is at war with the US.

Work for a Foreign Government as a Foreign National. Perhaps the most popular way to provide an act of relinquishment. Work for the UK Foreign Office? Become an MP? Again, as the Boris Johnson case proves, it is the individual who must initiate the relinquishment. Boris is still a USC although he spent time in the UK Parliament as an MP.

Part 4:
If you request relinquishment today, based on a relinquishing act of, say, 2 years ago, it is likely you will be deemed as subject to the completion of your US tax obligation, including filing form 8854 and its' attendant requirements.

Part 5:
The messy bit. In the 1970's, many Americans went to Canada, They became Canadian citizens, and at their ceremony it was made clear they would lose their US citizenship. In 1970, the US did not allow dual citizenship. Fast forward to 1986(?). The US Supreme Court rules the US does not have the right to take away someone's US citizenship. Dual citizenship for the US person is tolerated, but not encouraged. Without knowledge of the fact, those Canadians once again became dual US/Canadian citizens, subject to US obligations. Fast forward again to 2011. Thanks to US actions (the increased enforcement of FBAR obligations and FATCA) those individuals discover they are indeed still US citizens with the attendant obligations. 26 Section 877 did not exist in 1970.

In 2013, they go to the US Embassy to claim a CLN. Most are granted the CLN based on their taking Canadian citizenship in 1970(+), but the paperwork for the CLN isn't dated in 1970, it's dated in 2013; but their CLN date of the act of relinquishment is 1970(+). Do they file an 8854? Most don't. Are they a "covered expatiate"? This is when the date of the relinquishing act becomes subject to discussion.

AGAIN; CAUTION, all IMHO!

On re-reading the previous post, there is perhaps one point I did not make clear. The US Department of State always has the last say as to whether an application for relinquishment is accepted or rejected, including renunciations. It's not over until a CLN is issued.

From the IBS site today, the last figures for Q4 relinquishments is in. The total for Q4 is roughly 1,062. That would make the total for 2014 roughly 3,415. As most acknowledge, the figures are always an understatement of those actually renouncing, relinquishing, or handing back a green card as an LTR. The figures will be published tomorrow.

Before we all get carried away, let's break this down part by part. CAUTION, ALL IMHO!


Part 5:
The messy bit. In the 1970's, many Americans went to Canada, They became Canadian citizens, and at their ceremony it was made clear they would lose their US citizenship. In 1970, the US did not allow dual citizenship. Fast forward to 1986(?). The US Supreme Court rules the US does not have the right to take away someone's US citizenship. Dual citizenship for the US person is tolerated, but not encouraged. Without knowledge of the fact, those Canadians once again became dual US/Canadian citizens, subject to US obligations. Fast forward again to 2011. Thanks to US actions (the increased enforcement of FBAR obligations and FATCA) those individuals discover they are indeed still US citizens with the attendant obligations. 26 Section 877 did not exist in 1970.

In 2013, they go to the US Embassy to claim a CLN. Most are granted the CLN based on their taking Canadian citizenship in 1970(+), but the paperwork for the CLN isn't dated in 1970, it's dated in 2013; but their CLN date of the act of relinquishment is 1970(+). Do they file an 8854? Most don't. Are they a "covered expatiate"? This is when the date of the relinquishing act becomes subject to discussion.

AGAIN; CAUTION, all IMHO!

Wow... just.. wow 

I am not considering relinquishing or renouncing my US citizenship.  Unlike the OP and others, I do feel thoroughly American having lived there since birth, for almost 60 years, until very recently.  But reading through this post and others on this subject, I'm absolutely floored that a country which prides itself on individual freedom of choice works so hard (and, IMHO, in such underhanded ways) to deny people the right to choose their citizenship.

just.... wow.....   

It interests me that renouncing/relinquishing US citizenship now seems to be a topic that is openly discussed by lots of people, rather than being something whispered about. For years giving up US citizenship was taboo......the most un-american thing you could do. So things must be pretty bad if so many Americans are considering it. Of course its different for the naturalized/accidental American vs those born and raised in the US....surely it's far more difficult for the latter group?

You raise an interesting point about the recent change in attitude. Five years ago this topic would have been very unusual. It began to gain prominence in 2010 with the passage of the HIRE act and has risen to the point where now renunciation is seriously considered by 31% of all Americans abroad. For those who may not have noticed, Amanda Klekowski von Koppenfels has released a preliminary summary of her survey (as noted on this board). It can be found at:

http://talk.uk-yankee.com/index.php?topic=84454.0

There are signs even within the Obama administration that the shakedown on Accidental Americans maybe going too far, even for them. There is a limited proposal to let accidentals off the hook. See this:

http://www.moodysgartner.com/us-proposes-relief-for-some-who-renounce-us-citizenship-is-fatca-a-motivating-factor/

The OP did get a US passport, albeit for travelling to the USA as a tourist, so he may not qualify. Even so, any wavering in the assertion that all expatriates are criminals is encouraging.

Perhaps the OP is best off waiting a while longer to see what happens.

Thanks for that, looks like a small step in the right direction.

Still point 6 does point out that I need to comply with 5 years worth of tax filing, which doesn't make it that much different to current approaches in terms of overall cost.

And point 4 is a little confusing, it says "has held a U.S. passport for the sole purpose of departing from the United States". Does that mean only once? I've only ever used my US passport for entering and leaving the USA once. Does that rule me out?