Thank you for the reply and information. People react differently when they discover they are an Accidental American with obligations (what's commonly referred to as the OMG moment). You sound understandably stunned, but unlike many others, not panicked.
Be wary of what you read in the press and on the sites of tax advisors. The information may be basically correct, but it's often laced with fear tactics and undue scaremongering. This is in truth a common, straightforward situation with the IRS which has effected thousands of Accidentals worldwide. You are not the only person facing this at this time; there are thousands. There are various ways of proceeding, but how you proceed depends much on your personal value judgements.
A growing popular attitude amongst accidentals, if there is no US indicia (born abroad, no passport, no embassy notification, etc.), is to simply ignore the whole thing. The IRS would not know about you, and unless you give them reason, would continue to not know about you. The proviso is to avoid frequent US trips in the future, avoid living in the US in the future, and avoid having any assets in the US. That obviously requires a wilful intent to avoid the issue.
For someone in your position (a past record in the form of a passport), the same can apply although, again, it would involve a higher degree of wilful intent to avoid the issue. Still, the IRS does not know about you, and possibly, you would have had no reason to file a US tax return (income has always been below filing thresholds for your status for example).
It's also important to point out that the act of renouncing US citizenship is, currently, in no way tied to filing a tax return. If you so decided, you could go to the US Embassy next month and renounce your US citizenship. There's nothing to stop you and the renunciation is legal. Of course, there is the small matter of the $2,350 fee to do so. You could then tackle tax reporting for the current year and previous years during the following year. Or, you simply forget about ever reporting, but, you would wilfully be evading tax reporting responsibilities and the US could act in response, although again, currently, that is a less than likely response. There could be ramifications in the future if you, say, left an inheritance to a US citizen (by the way - your children would not be US citizens; you don't meet the residency requirements to pass USC on to them). It's a question of how you would feel about doing that. For some, it's not an issue, but for others, there is the inclination to withdraw from the US in a formalised, proper fashion. One never knows what legislation the US Congress will pass in the future, and influencing the UK to cooperate in detection is certainly not unknown. What causes someone to not sleep at night depends on the individual.
To withdraw properly and avoid any possible repercussions, one files 5 years of past IRS 1040 returns and 6 years of FBARs. Note, if you were to file in such a manner before 15 June 2019, the current years return (2018) would count as a normal year and the three delinquent filings would be for 2015, 2016, and 2017. That would only leave one additional year, which could be 2014.
The IRS page referring to Streamlined Offshore procedures can be found here:
https://www.irs.gov/individuals/international-taxpayers/u-s-taxpayers-residing-outside-the-united-statesYour stocks and shares account will require a lot of research into past performance. Sale and a gain on your personal property is covered by the $250,000 exclusion (S, MFS), but beware of currency gains on the mortgage. I'm unsure about your stipend, but perhaps others will comment (my guess is it is somehow covered). The FEIE is for excluding 'earned' income only (related to your income from employment). All other income (interest, etc.) is deemed 'unearned' income. Unearned income can be offset by the standard deduction or by using FTCs (Foreign Tax credits) for all income instead of FEIE for earned income only.
Many do complete the package on their own without the need of a professional. It all depends on your ability to read and research what is involved, and your tolerance of form filing. Forms required will vary according to the particular years. The new forms for 2018 are somewhat different than those required for previous years.
Check with your parents if they are available to find what your US Social Security number is. At the time you were born I believe a US SSN was automatically issued. If you can't locate it, the US Social Security Administration can help. Confirmation of your US citizenship would have been required at the time your passport was issued, but an SSN may not have been.
https://www.americansabroad.org/obtaining-reclaiming-your-social-security-number-ssn/As for self-relinquishing acts in your case (already born a UKC), serving in HM Forces or other government posts will do, or any oath to HRH QEII, among others, but you have to go through the paperwork proving the act and would still have to pay the $2,350 fee to relinquish. In the past there was no fee to file for a self-relinquishment, but now days most simply go the renunciation route since the fee is the same.
You'll need time to take all this in, but anytime you need further direction as to where you might locate information, post your question here and someone will try to answer. There are many professionals who will be more than willing to help, at varying fee ranges, but most will want at least £1,000 to start a full Streamlined filing. If you feel so inclined, contact several and ask for a free consultation.
