One More Free

Well today one of my children was able to renounce U.S. citizenship.  The monkey of U.S. citizenship is now off the back of one more Canadian citizen.

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49 thoughts on “One More Free

  1. citizenship based taxation=citizenship+taxation
    citizenship based taxation-taxation=citizen
    citizenship based taxation-citizen=tax with no one to pay it.
    citizen-citizenship based taxation=freedom!

  2. Apart from these few mega rich who want to renounce to save on taxes, renunciations of the young and middle class is very short-sighted from the US’s point of view.

    If any of these renunciations go into business and create wealth and jobs in future are they going to do it in the US? Answer NO.

    But homelander Americans believe these nouveau riche would be trying to burst down the door to re-enter the US and re-take US citizenship because the US is the only country you can make money in. It’s true these people may want to open a subsidiary in the US to tap into that market, but the HQ doesn’t have to be US-based.

    Citizenship-based taxation is like a Christmas Tree farmer allowing young trees to be cut down one-by-one over the years with nothing left for Christmas 2020 to sell!

  3. @recalcitrant,

    Congratulations!!!!!!!!!!! to this child of yours — the one that was allowed to make this decision.

    This one of your children has seen first hand what US citizenship would mean for him in Canada and, I am sure, has made a very informed decision. There will be opportunities in other parts of the world if he wants to explore those and the big wide world outside the USA at some point! With this off his mind, he will now be better able to concentrate on his education, his future plans, his life.

    We should all remember you, a parent and Guardian, have been denied the right to renounce on behalf of another of your children, because of the developmental disability of that child!

  4. Very good to hear, Congratulations! Another friend of mine in Calgary has just got her appointment set an she’s very excited.

  5. @peg11- It went as expected. He was pelted with the usual hypothetical situations where no longer being a U.S. citizen could possibly be detrimental to his future. But he was not dissuaded.

    @john- it is a shame that the U.S. thinks that you have to be rich in order to want out of an oppressive system. It is also an insult to those who aren’t rich to believe that they don’t have a brain and no sense of right or wrong.

    @calgary411- yes, his decision was very much an informed one. He is studying to be an engineer and realized that if he remains a U.S. citizen that his job prospects in this world will be very restricted. This would have been true for him even in his home country of Canada. But even at this stage in life it doesn’t take much for an industrious young person to find himself/herself butting up against the FBAR account reporting rules and the IRS investing restrictions.
    I am a former teacher I many times I have encountered many young people who have well over 10,000 in financial assets. It isn’t hard for young people to make serious money in some regions of Canada. So already at this age you can see that there is no net present value to U.S. citizenship. Any future value that it may have is purely hypothetical but as you improve your economic situation its associated future expenses and option restrictions are very real.

    In the end the U.S. behaving like the merchant who has a failing retail business. When this merchant looks at his/her business he/she can only acknowledge the existence of the unhappy customers who return and complain but never thinks about the customers he could have had but who stayed away because of the public reputation that the operation has.

    One rule in retail is that bad publicity travels fast and for free. The U.S. now has 6-7 million people who will give it a lot of bad publicity. They don’t count the people who they could have had but who now will not buy from a place where both the service and product are shoddy.

  6. A while ago I found out that my MP had been born in Illinois. My concern is that no elected official in Canada should have dual citizenship. It took several emails to finally get the following response. I think we should all push our MPs and MLAs on this issue.

    “Dear Mr. Fuller,
    On behalf of the Hon. Diane Ablonczy, Member of Parliament for Calgary-Nose Hill, thank you for your recent e-mail.
    Ms. Ablonczy renounced her U.S. Citizenship when she became a Canadian of Canada.
    Thank you for taking the time to share your concerns.
    Sincerely,

    Executive Assistant
    Hon. Diane Ablonczy, MP
    Calgary-Nose Hill”

    How about that ‘Canadian of Canada’. As Petros mentioned to me, is there any other kind? Thanks Petros, I actually missed that.

  7. @Recal, Thank you for reply, the reason I asked my son was born in Canada and will just now be getting his SSN to start the whole process.. Filing and then Renounce. I just hate that he even has to be on the Radar, but I feel there is no other way but to come forward and get it over with. He could just stick his head in the sand but that maybe worse or maybe better than coming forward, who knows? It is a hard decision to make.. I guess your son had to go to the US as well to get SSN. Did he file 5 years back or 6??
    Sorry for being so nosey, hope you don’t mind..

  8. I know a US-person, who has valuable patents and planning to start a business. He has good chance to make huge money and was planning to start a company in the USA and have a subsidiary in his native country. But after learning about the complex tax code, incomprehensible forms and threat of life-altering penalties for even honest mistake (even if there is no tax due), he is now in the process of relinquishing his US citizenship.

    He is now planning to start a company in tax friendly nation and if necessary start a subsidiary in the USA. His consideration is not taxes, since when he sells his company, he doesn’t mind paying capital gains and it doesn’t mater which country he pays.

    Biggest problem is, when he explained about his situation investors don’t want the risk and complexity of US tax code. No one wants to waste too much time on filing complex forms and threat of jail, if he commits innocent mistake, for example, don’t know about a requirement such as FBAR. He is a passionate scientist/researcher and can’t afford such huge distraction that takes away his focus from his business.

    If he lucky enough to make few hundred millions, he don’t need to worry about inheritance tax. The USA is imposing capital controls in-disguise and it is real problem for him, because all his family is living in his native country.

    Why I am saying this is: Even if you kid has a bright idea and if he needs to start a company in the Silicon Valley, he can always do it on L1 visa. Many companies in Silicon Valley were started by immigrants on even before they got Green card. The US citizenship is not necessary and in-fact it is a liability.

    Some times, it is desirable to keep his US-citizenship. If he likes to work for a large company and build his carrier, then he must keep his citizenship because still the US has many large and innovative companies such as Cisco, Intel, Boeing or Apple etc. But if he has no intention of living and working in the USA, it is best to relinquish US citizenship. If he is successful, he can always sponsor his own non-immigrant temporary L1 or H1 visa to work in the USA, while getting salary in Canada. He may need to file taxes for US sourced income for the days he spent in the USA, which is much simpler and less risky than global tax net for the US-citizens.

  9. @itacaf,

    I didn’t get a reply to this January 2012 correspondence to Diane Ablonczy’s office:

    Jason Ritchie
    Executive Assistant
    Hon. Diane Ablonczy, MP
    Calgary-Nose Hill

    Mr. Ritchie, thank you so much for your prompt response to my email. It is encouraging when that consideration occurs.

    If Ms. Ablonczy has indeed renounced with her Certificate of Loss of US Nationality in hand, I congratulate her for her foresight or the legal expertise she was able to hire to advise her to do so. That is not the case for most other US persons in Canada. Can you confirm that Ms. Ablonczy received that very important document from the US, Certificate of Loss of Nationality?

    In my case, I immigrated to Canada in 1969, became a Canadian citizen in March of 1975, at that time being warned that I would be relinquishing my US citizenship, which is what I intended to do, and I lived my life as such in Canada – until in 2007 learning that the US had changed its rules, reinstating citizenship to all those who “thought” they had lost it. Lost it, but few knew about the existence of importance of the Certificate of Loss of Nationality, which now is a more important document for ‘US persons in Canada’ than is a Canadian passport. Because I got wrong advice by going to a respected cross-border tax accounting firm when to get advice on my responsibilities for tax compliance with the US, instead of an immigration or tax lawyer, I entered back into the US system, by filing three years of back US tax returns and in 2009 applying for my first US passport as I was challenged at the US border and told that the next time I crossed it was to be with a US passport, which is the law (although had not been adhered to in reality). I have not gotten accurate advice from any Canadian accountant I dealt with prior to going to an expensive cross-border accounting firm (knowing that I was born in the US), from my bank, from my financial advisor, from the IRS phone number for international matters, from the IRS Tax Help Line on the internet. Indeed, all advice is as yours – get the advice of an independent tax advisor. In fact, the IRS no longer helps US persons in Canada (see just below):
    TAXPAYER ASSISTANCE
    The information on this page is intended especially for taxpayers residing in Canada. Note: Owing to budget cutbacks, the Internal Revenue Service will not/not be providing any in-person assistance or tax seminars at the U.S. Embassy and certain of the Consulates General in Canada…

    IRS Ottawa

    The Internal Revenue Service (IRS) does not maintain an office in Canada. For information tailored to both U.S. citizens in Canada and Canadian citizens, please refer to this page at the IRS web site.

    Since starting this nightmare, I have spent in excess of $20,000 for coming into and staying in compliance, owing the US IRS zero in five of the six years and $1,380 last year as I received a Disability Tax Credit in Canada that, which is not recognized by the US. I became the holder of a Registered Disability Savings Plan (RDSP) for my son, upon its inception, as it was such a wonderful benefit for those in the disabled community to save for their retirement (as well as for other uses). I also obtained for him a Tax Free Savings Account. My son, born in Canada, raised in Canada, never registered with the US, never having lived in the US, has never filed US tax returns or FBARs. Because these are considered foreign trust accounts by the US, any passive gains (i.e. Canadian Disability Savings Bonds and Grants and actual gain in investment) I as the Holder and my adult son as the Beneficiary (when he is 60) are subject to $10,000 per account per year of non-reporting.

    Yesterday I engaged a new Tax lawyer in Calgary (my estate planning lawyer had been consulting with a US Tax lawyer in New York State, but I was getting very little useful advice. I asked that I be given my bill to date, and I have no idea what that will be. The estimate for the work to be done on my case now will be about $20,000, which will be for essentially the same audit that the IRS would do because my Net Worth statement would have me coming dangerously close to being defined as a “covered person” by the US and subject to the exit tax and to amend any filings that do not have all the required IRS forms – and you don’t even want to hear about that. I am 68 years old, retired, have worked very hard in Canada to provide for my children and to be a contributing member of Canadian society. My retirement funds are being drained (I also have a TFSA which is not advisable to have as that further makes US persons in Canada second-class citizens, tax wise). This work all has to be done before I can reschedule my first appointment with the US Consulate in Calgary, the one where I will be advised that it is not a good idea to give up the benefits of my US citizenship. Because of my supposed US citizenship I have a millstone around my neck – and I could have bank accounts closed when FATCA comes to town – it’s already happening to US persons in other countries. Because of my son’s (and my daughter’s) birth to US citizens in Canada, they are “Accidental Americans”. My daughter will deal with her situation, but my son has a developmental disability that precludes him from understanding the importance of such a decision as renunciation of citizenship, but I’ve been told by the Calgary US Consulate that even with a court order I cannot renounce my son’s US citizenship for him. (And, for him to renounce, if he had the perceptual capability, he would have to apply for a US social security card, then would have to file five years of back US tax returns and FBARs, before he would have the “right to renounce his US citizenship”.)

    Mine is certainly not the only family affected by this injustice – and the hurtful labelling of myself and the approximately 1,000,000 other hard-working, Canadian tax-paying ‘US persons’ in Canada as TAX EVADER. It is mind-boggling what this is doing to families who are affected. In fact, polls show that most people in Canada are ignoring the whole issue, hoping that it will not affect them or they won’t be caught. They are then having to make a decision never again to cross the Canada/US border to see aging relatives or for any other reasons — for fear of arrest on US soil. Either that or they are getting their lives in order at great financial and emotional cost to be able to renounce US citizenship. The US continues to tax on citizenship rather than residence as 99% of the rest of the world. It is immoral and absurd.

    So, again, If Diane Ablonczy has saved herself from this nightmare, I certainly congratulate her. Could you advise?

    Thanks once again for listening and I hope passing this on to Ms. Ablonczy.

    Respectfully,

    (calgary411)

  10. @saddened123- I don’t mind you asking. We can’t help each other if we aren’t willing to share. My son has not yet filed anything with the IRS but neither has he yet made enough to meet the filing requirement. However I guess now that he is over 18 1/2 that he will have to file in order to prove that he never had any filing requirement. He’ll do his six years- 5 back + Current = 6 yrs. ttl.

    He received his SSN either when or shortly after we received his Report of U.S. citizen birth abroad. We never did have to go to the States to get it. I should say that this report was also taken away from him at yesterday’s meeting.

    I have read of no requirement that you must file before you renounce. And I don’t believe that any mention was made of it at the interview. He can’t be taxed anyway since he was born a citizen of both countries.

    I agree that coming forward and renouncing is much better than living your life in fear of being discovered. Now of course you could always just choose to comply but then you have to live a life of endless humiliation from the IRS and the State department. I don’t see any dignity in having to each year file a 2555 telling the IRS that you are still residing in your country of birth or chosen residence. Renounciation is the only choice if you want a life that allows you to look yourself in the mirror each morning.

  11. @recal, Thank you very much for the reply, my son is 29 and will have to travel to US to get his SSN. He is nervous about filing because he has lived at home and saved and invested all his earning. But I feel he does not have much of a choice.. How miserable to have to hide and look over your shoulder at a young age. I just hope he doesn’t get hit too hard will all his investments…It really makes me mad mostly for the Accidental Americans it is just not fair.

  12. @saddened123- I am sorry to hear about your son but his situation is a prime example of why it is so important to get rid of U.S. citizenship inside of that 16-18 1/2 window of opportunity. It is the only break that the U.S. government is going to give you so you better use it while you can.

  13. @saddened, I also had to travel to the US to get a SSN. Thought that it was funny that they called it a field office and don’t allow the consulates to handle the issuing. Just another obstacle to compliance.

  14. Congratulations both to your son and to you. I’m sure his decision is a relief to you as well as to him. And I’m sure neither of you will regret it. With all our various warts, and various concerns many of us have about some aspects of our current federal government, I think we can be far prouder of our Canada than I ever was of the United States when I was one of its citizens, or could possibly be now that it’s become what it is today. We have a great, wonderful country, which deserves our undivided and sole loyalty and allegiance. “Dual citizenship” is something I’ve never had nor wanted for a moment, and a concept that I find very difficult to accept.

  15. @Bubblebustin, Yes another aggravation. He called them this morning to verify what he needed to bring and they told him that they would have to speak to me when he arrives and told him to make sure I would be available to answer questions.. I would like to tell them all just to F-off.. I am so sick of it.. so I will be waiting by the phone!!

    It will be nice when the nitemare is over, if it ever is..After the filing deadline next month something new will come out making it even worse I am sure.. The US and there Drama!!

  16. @saddened123- Now I have a question for you. Of course if you don’t want to answer then I will have to accept that,
    My question is, if your son is 29 then why would the need to speak with you? The Calgary Consulate never asked to speak with my and my son is just over 18. I’ve never heard of such a request being made.

  17. @recal, I know isn’t that funny. Someone else on Brock said the same thing a while ago, that the person at SS had to call them.. I don’t know, maybe she just wants to verify my SSN and make sure it is not a scam..they will probably ask questions about my SSN number maybe where I worked last in the states.. etc. I was going with him but I have a bad back and it bothers me to ride in a car..even though it is only about 2 hours there. She told me when I called months ago that if I came with him he could get the SSN number the next day instead of waiting up to 2 weeks by mail.. You would think having all the documents with him why would they want to talk to me..it will be interesting.. I will let you know what they ask. Maybe have you filed your taxes?? HA!!

  18. When I went to get my first ever SSN, I had to bring documents dating back to when I entered Canada proving that I lived in Canada each decade. Canadian income tax assessments didn’t count, neither did BC medical even though you have to be a resident to receive BC med. They are really concerned that you may have been issued a number already.

  19. Saddened 123. I can’t imagine why your son is bothering. In my case, I came within hours of entering the OVDI. Would have caused no end of aggro. and a small fortune. Fortunately, accountant said ‘I can’t advise you to break the law but do you really think this is what you want to do. After all you would be sending a carload of info to the CRIMINAL branch in Texas”
    and
    “I have no idea what it will end up costing”

    Reading these boards has liberated me. Now if anybody asks, I am Canadian.

  20. @chester12, He will not be going in the OVDI program, I would not allow that.. I think he is just going to file back 5 or 6 years back. (Now) the way he is talking he wants to see what happens down the road,( he was talking about renouncing) He said he may want to live there someday, his boss told him there could be good opportunities to work there. When he came home and told me this, I thought why in the hell, damnit why did she have to say that. I want him to get away for US.(Renounce and be Free)
    Chester, I know what you are saying, but it is damned if you do and damned if you don’t. I have been so sick over this, one minute I want him to just forget about it and the next just do it and get it over with..

    I wish I knew what to tell him.. he said the other nite that if he did nothing he didn’t think it would matter.. I know it is his choice but I just want him to comply and get it over with.. I would hate that he got caught up with this later after he had a family and money in the bank..

    Chester, it is damned if you do and damned if you don’t .. It could be the wrong thing to do, but also doing nothing could be wrong as well..

  21. @Chester12, Thank you for wishing us good luck, we will probably need it. I wish I knew the best thing for my son to do..

  22. It is of course absurd that the US makes you travel back there to get an SSN in order to file in order to be able to renounce. I assume that this also applies that you need to get a US passport as proof of citizenship as well in order to prove that you are a citizen in order to get the SSN. What a huge waste of time and money! I once had to get the Italian equivalent issued to me (codice fiscale) and the Consulate issued it to me on the spot for free. What a difference…

    By the way, I think that the day that the IRS starts going after people like Diane Ablonczy is the day that the tide will finally turn against them. So far they seem smart enough to avoid hassling people like her, Boris Johnson, Prince Albert of Monaco and so on, because I imagine that they understand the huge backlash that that would cause.

  23. @saddened123- the Consular official tried that line, you may want to go there and work or what if your brothers move to the States, but thankfully this time he didn’t cave.
    Your son needs to take a long serious look at the tax reporting and investment constraints that he will have as long as he continues to live in Canada. It is where you are and what you can do in the here and now that deserves to have greater weight in his decision as opposed to the “what if”. Maybe now would be the right time for him to consult a good cross border tax attorney or accountant. In other words, before, he actually has work that needs to be done. Maybe they can give him a wake up call.
    They can tell him about the filing costs, the investment limitations and the fact that he is taking an undue risek by exposing himself to unquatifiable U.S. legislative risks.
    If they lay out their case well they can show him that he will remain poor if he lives in Canada while having to observe pointless U.S. tax rules. He should also be informed that he has to observe all U.S. travel restrictions, such as not being t legally allowed to travel to Cuba.
    He needs to understand that all of these rules will affect his family, should he have one later, and not return a single dime to his pocket.

  24. @recalcitrant,

    I think saddened is referring to getting the SSN process rather than the renunciation process for her son.

    @saddened,

    If your son wants to sometime in the future be able to live and work in the States, his decision should be based on that and what would be best for him. (He should know there is a whole big world out there besides the US.) Then, his decision might be much different than if he was OK with never again crossing the US/Canada border.

    And, if he decides to renounce his supposed US citizenship, this is in the oath he will take; i.e. it has to be his own decision, not influenced by anyone, even his mom. Advice, yes; support of his decision, yes; telling him what he should do, no.

    I desire and hereby make a formal renunciation of my U.S. nationality, as provided by section 349(a)(5) of the
    Immigration and Nationality Act of 1952, as amended, and pursuant thereto, I hereby absolutely and entirely
    renounce my United States nationality together with all rights and privileges and all duties and allegiance and
    fidelity thereunto pertaining. I make this renunciation intentionally, voluntarily, and of my own free will, free of any
    duress or undue influence.

  25. @Don, actually a birth certificate was sufficient to get a SSN. I applied for SSN so I could file taxes and to renew my passport. I wrongly thought that it was required for passport, but apparently you can put a series of “000’s” in its place and that’s what I ended up doing because my SSN wasn’t issued before my passport appointment. However, if you have a SSN and you don’t put it on your passport application, you can be fined $500.

  26. @saddened123- one area of our lives where many of us fail to plan at all is with regards to “taxes”. Tax liability planning can make the difference between having wealth in your old age or living in penury. When it comes to the compatability between Canadian tax law and U.S. tax law there is virtually none.
    Such things as TFSA, income splitting, PFIC’s are either not allowed or have their tax benefit eliminated by U.S. taxation.
    The best tax planning act that a dual citizen can perform is to eliminate U.S. citizenship.
    Don’t be afraid to tell this to your son. The wording about “undue” influence is put there not for the sake of protecting your son but to keep you from telling him the truth. The U.S. will not tell your son the truth nor will they ever love him like you do. They can care less about him. All that they want is his money.

  27. @all, I appreciate all the comments.. It will be a hard decision for him. I think he will renounce, he has said in the past that he did not want to keep US citizenship because he did not want to file every year. I think he just got caught up in the moment at work because they are always telling him how lucky he is to have US Citizenship, they make it sound like it is the land of Milk and Honey.. they think there is nothing like it. They also told him how they would give anything to have US Citizenship. They just have no idea!

    One of his co-worker had lived in LA and moved back to Toronto, he just got his US Citizenship and was so happy. My son told him he has to file US income tax every year and he said no way are you crazy.I laughed I told my son OH BOY is he ever in for a shock..

  28. Calgary411

    My bill with the tax lawyer was $26,000 and they made the 2011 OVDI look like it was my only option. “Join now or the IRS will be after you”. I paid no taxes but I did get hit with an $1889 FBAR penalty. I did some good service and all my tax docs were filed on time. So now I wait to see what happens. My biggest concern is that I now know my 2011 filing has hit the IRS first, at least I have had correspondence relating to that not the OVDI. That will probably create issues. I renounced Wednesday March 7/12 and I’m now drafting a letter requesting the CLN as soon as possible. I see no reason why Canadians wait nearly a year and others around the world get there CLN in a few weeks.

  29. Sure, my story is actually under the name Late Loyalist listed below. Petros posted it for me some time ago. Oh, I just sent request to the Calgary consulate to expedite my CLN. I paid the fee now I want the service that’s supposed to follow. The responce should be interesting.

  30. @itacaf — Thanks for the clarification. Late Loyalist is there! Good idea and good luck to you in getting expedition of your CLN. We Canadians should all take heed.

  31. Look at the way Columbia treats its expats. It does many things to support them abroad because it values the money they send home to family members and the influence they have as informal ambassadors.

    http://www.washingtonpost.com/national/nations-seek-to-channel-expats-us-money-more-productively-colombia-plans-nyc-outreach/2012/05/04/gIQAxLG41T_story.html

    Compare this with the US which punishes expats with citizenship-based taxation and treats them like pariahs.

  32. bubblebuster,

    Just me posted a great comment on Lewis the bonehead’s hit piece on expats:

    From Just me aka FBAR_compliant

    “Sorry, but I have to disagree with Al. If you think people are giving up their citizenship to evade taxes you are sadly misinformed. Americans abroad have many reasons unrelated to the amount of tax they pay, which is often higher in the country they are living then what you all pay as an “effective rate” back in the homeland. But sadly you don’t seem to understand that!

    It is easy to demagog this issue, and just think this is some unpatriotic act, but that is too simple of a characterization .

    It is the TAX COMPLEXITY, STUPID, to paraphrase an old expression. The US is unique with its Citizenship taxation. There are multitudes of forms that you must fill out, with draconian penalties for failure. There FATCA legislation that is making Americans pariahs and locking them out of banking services. There is double taxation. If you are living and paying tax overseas, there is less value now in having a US passport. Move abroad for a year or two and you will get it!”

  33. @Calgary411
    I got a response from the Calgary Consulate about my CLN request.

    “Thank you for your comment. Unfortunately, as we discussed at your interview, we remain unable to give you a precise timeline for completion of your loss of nationality case. As also discussed, recent experience shows that it is taking between six months and a year to complete the process. I do hope that it is completed more quickly than that, but it would be imprudent to make any guarantees that this will be the case. Your documentation is currently being considered by the Department of State in Washington. As soon as we become aware of their decision on your file we will contact you. After completion of the process, your date of loss of nationality should be retroactive to the date that you took your oath of renunciation.

    Sincerely,

    Consul
    U.S. Consulate General Calgary”

    Basically all I was looking for was that some action had already been taken. I specifically like this, “your date of loss of nationality should be retroactive to the date that you took your oath of renunciation”. That’s whats important to me.

  34. @itacaf,

    Thanks for sharing the feedback you received from the US Consulate in Calgary. There certainly appears to be no standard of procedure from one Consulate to another; one Country to another; one Relinquishment vs Renunciation in timing for appointments, number of appointments or the time it takes to get a Certificate of Loss of Nationality.

    (I’m going to put your comment in the Relinquish and Renounce thread as well so it isn’t lost.)

    Thanks again!

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