BritInParis

The OP was asking a question about whether spending time outside the US would affect his US citizenship after naturalising. My answer was relevant to the question being asked as my next sentence qualified, 'The length of time you reside outside the US is irrelevant'.

If the OP was asking a question about the extremely limited and unusual circumstances in which their US citizenship could lost involuntarily then my answer would've been different.

Whilst I think it unlikely that anyone else would be reading this thread worried about losing their US citizenship after having joined Islamic State or become a cabinet minister in a foreign government I am glad that you have now clarified the situation.

Some links:

Expatriating acts: http://travel.state.gov/content/trav...tionality.html

Denaturalization: http://www.uscis.gov/policymanual/Pr...e12-PartL.html

Pulaski

That sounds pretty drastic!

Pulaski

Here's a list of denaturalized USCs, though it is reportedly incomplete, but numbers only low-hundreds. With some cases going back to the 1930's it is obviously a fairly uncommon occurance.

Scanning down the list the names are almost entirely either war criminals (not necessarily WWII), terrorists/terrorist sympathizers, communist spies, and immigration fraudsters. The few others I noticed are other unsavory characters, such as drug dealers. I did see one who was born overseas and failed to come to live in the US for a minimum of five years, under the provisions of a law that was repealed in 1978.

For all practical puposes, becoming a USC is permanent unless you later voluntarily renounce the citizenship.

jmood

Abandoning the driving licence? Why? What does keeping the driving licence have anything to do with tax requirements? Also, will the state tax department know that you still have or don't have the licence? People can NOT file taxes for many reasons (e.g. income too low, or don't live in that state any longer) and unless the state gets info that a relevant federal return has been filed, do they come after you to ask why you haven't filed?

Pulaski

If you leave the US you not only have to consider the implications of paying federal taxes, you can end up being on the hook for state income taxes of the last state you lived in. It is however possible to sever those links by completely breaking all your links to that state, including selling or removing all registered property, including real estate, cars, and boats, and turning in your drivers license.

Also making sure that your name doesn't appear on any utility bill and that you don't use an in-state address on any bank or brokerage account, or pension or insurance company, whether a PO Box, or friend's or relative's address because those addresses, all of them, are collected and appear on commercially available identity and background check databases.

The issue doesn't arise when you move from state to state, because the state you move to automatically supplants the previous one you lived in when you switch your drivers license and update all your bank and other addresses, but when you leave the US you can end up with an unexpected and unnecessary state tax liability if you aren't diligent about severing all links.

thinbrit

kimilseung

Irrelevant to Mr P's point, but...

After a quick look down the list, I am, surprised by the inclusion of Emma Goldman, who to the best of my knowledge was never a citizen and was deported as an alien.
edit: a little research, they got her under the Anarchist Exclusion Act, which only applied to non-citizensn. But it was claimed that the revocation of her husbands citizenship (for fraud, not in the list), removed hers too, so the Act applied.
http://query.nytimes.com/mem/archive...669D946896D6CF

Pulaski

I saw her name, and something about anarchism, but her name means nothing to me. ...... I will go and consult Wikipedia.

[Five minutes later] ETA Just seems like a trouble maker. Not especially interesting to me.

robin1234

I assume that state tax depts DO get information from the IRS. When my daughter left New York State to live in Massachusetts, she got a letter here demanding a specific dollar amount for state taxes for the the previous year. This state tax bill was based on her IRS 1040.

I passed the NYS demand to her, she wrote back to the NYS tax folks with a photocopy of her MA tax return, and the matter was closed.

Steve_

Some clever bugger on this website worked out that the State Dept. has to submit records to the FBI NICS database: The Isaac Brock Society | FBI NICS data disproves WSJ claim that U.S. citizenship renunciations are “leveling off”

Steve_

I have come to the conclusion the biggest downside to becoming a US citizen are the PFIC rules because I hadn't realized until recently just how much stuff the IRS considers to be a PFIC.

Obviously as soon as you move to the US a wide variety of investments and accounts you have outside the US can be covered by the PFIC rules but of course you're then subject to this nightmare if you ever leave the US, once you're a citizen.

It's more common in Canada because there are more Americans here, endless guff from financial advisors and planners about PFICs. "Oh you should invest in X because their fund complies with the PFIC rules so you can claim it as a QEF on Form 8621". The which on the what now?

The section 1291 stuff and the "mark-to-market" stuff is just unreal.

I'm sure I'm not the first person to realize this (probably among the last in fact) but the PFIC rules seem to me to have been dreamt up by Wall Street to stop Americans from investing abroad.

Steve_

If you've been an LPR for 8 years you're subject to the expatriation rules anyway, so it's a bit academic. The tax filing rules apply to LPRs as well, and you can't file as non-resident when you're an LPR as explained in the instructions for N-400. So in essence, if you want to come back to the US you will have to become US citizens. Have a read of: http://www.irs.gov/publications/p54/index.html

If you're actually planning on moving back to the US, I would say the trick to it is to keep as much of your investments and financial stuff in the US, thereby keeping the aggravation from PFIC rules, FBAR reporting and so on to a minimum. An ISA for example is considered a foreign trust and must be reported by you (on form 3520) and the FFI (on form 3520-A), but because they don't care about Americans and don't file the form, you have to do 3520-A which is next to impossible unless it's something simple like a cash ISA.

Another thing is the UK FATCA agreement which comes into force in 2017 (which strangely excludes ISAs as they're trusts, not "accounts").

That is going to cause various FFIs to stop doing business with US citizens I reckon.

Also - remember New Jersey has an estate tax which kicks in at quite a low limit and uses the same weird US estate tax rules which make it very beneficial to be a US citizen rather than an LPR. If you don't live in NJ then it's not as big of a problem as the US estate tax limit for married couples is nearly $12 million.

nun

You should also make sure you comply with local tax rules....so for the UK you should avoid US funds that are not "UK Reporting Funds".

Owen778

Not that I have one any more, but all the advice I've ever seen states that because the rules ignore the financial wrapper, cash ISAs are treated by the US like normal bank accounts, and not any sort of trust. Do you have any links that show otherwise?

livinginUSA

Wait - so the UK is gonna introduce something like FACTA?

Would it be for tax residents (like current UK taxes) or citizens (like the US)?