Renouncing US citizenship or applying for a passport - help!
Jul 29th 2017, 1:09 am
#16
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Re: Renouncing US citizenship or applying for a passport - help!
Pulaski is correct.
I have US Citizenship and currently live outside the US.
I find the hassle to be minimal to non-existent. Based on what I have read from OP, I believe he/she falls into this category and that this would CONTINUE to be the case. Though I agree there is a lot of misinformation and scare-mongering on this thread! (Evidence No 1: People who apparently think US Citizens can be denied entry to the US).
OP, you are not liable for US tax on foreign-earned income if that foreign-earned income is less than something like $100,000 per year (I forget the exact figure - it is around that) AND you were outside the US for 330 days in that tax year. This is called the "Foreign Earned Income Exclusion." Therefore based on what you have written I find it unlikely you actually do owe tax.
If you have foreign-earned income over that threshold of $100,000 - there is a multitude of tax treaties that serve to prevent double taxation of US citizens. Generally (but not exclusively) speaking you pay the tax to whatever country you are resident in; as European taxes are typically higher than American ones I find it unlikely you owe anything.
The way the foreign-earned income exclusion also works is if your foreign earned income was, say, $105,000 - you get to exclude the first $100,000 and just pay the tax on what was left. So in this example your taxable income would be $5,000, likely covered by UK tax and therefore you owe nothing.
The reporting for ordinary citizens is minimal and takes a few hours, once per year. You do have to file FBAR (report a non-US bank account with more than $10,000 each year). This takes about 10 minutes, once a year, and is done/submitted online. The income tax return is 2 pages, as is the foreign-earned income exclusion document. That will take an hour or two provided you have kept good records and have collected all of your official UK tax documents.
Now, if you do owe back taxes, which based on what you have written I find unlikely - renouncing US citizenship does not get you out of that, or any consequences. It is not a "get out of jail free" card. You are still responsible for any tax accrued while you were a US Citizen.
However, authorities are very well aware that this sort of thing goes on, and are usually very understanding. There are by no means just a small number of cases where this has happened. It is when people get deceitful and try to lie, that problems start.
If you don't have a Social Security Number - it will not take you very long to fill out the application to request one.
US Citizenship is a very, very valuable thing and it would be irresponsible to renounce based on some scare-mongering on a blog site or an Internet forum, from people who don't know any better.
Make an appointment to see a qualified US-UK accountant to sort out your situation - which you should do anyways, since as I said, renouncing won't get you out of any back tax issues regardless - and you will probably see that what I've written is correct, and retaining your US Citizenship will require minimal time and expense, and outweigh any value of renouncing.
I have US Citizenship and currently live outside the US.
I find the hassle to be minimal to non-existent. Based on what I have read from OP, I believe he/she falls into this category and that this would CONTINUE to be the case. Though I agree there is a lot of misinformation and scare-mongering on this thread! (Evidence No 1: People who apparently think US Citizens can be denied entry to the US).
OP, you are not liable for US tax on foreign-earned income if that foreign-earned income is less than something like $100,000 per year (I forget the exact figure - it is around that) AND you were outside the US for 330 days in that tax year. This is called the "Foreign Earned Income Exclusion." Therefore based on what you have written I find it unlikely you actually do owe tax.
If you have foreign-earned income over that threshold of $100,000 - there is a multitude of tax treaties that serve to prevent double taxation of US citizens. Generally (but not exclusively) speaking you pay the tax to whatever country you are resident in; as European taxes are typically higher than American ones I find it unlikely you owe anything.
The way the foreign-earned income exclusion also works is if your foreign earned income was, say, $105,000 - you get to exclude the first $100,000 and just pay the tax on what was left. So in this example your taxable income would be $5,000, likely covered by UK tax and therefore you owe nothing.
The reporting for ordinary citizens is minimal and takes a few hours, once per year. You do have to file FBAR (report a non-US bank account with more than $10,000 each year). This takes about 10 minutes, once a year, and is done/submitted online. The income tax return is 2 pages, as is the foreign-earned income exclusion document. That will take an hour or two provided you have kept good records and have collected all of your official UK tax documents.
Now, if you do owe back taxes, which based on what you have written I find unlikely - renouncing US citizenship does not get you out of that, or any consequences. It is not a "get out of jail free" card. You are still responsible for any tax accrued while you were a US Citizen.
However, authorities are very well aware that this sort of thing goes on, and are usually very understanding. There are by no means just a small number of cases where this has happened. It is when people get deceitful and try to lie, that problems start.
If you don't have a Social Security Number - it will not take you very long to fill out the application to request one.
US Citizenship is a very, very valuable thing and it would be irresponsible to renounce based on some scare-mongering on a blog site or an Internet forum, from people who don't know any better.
Make an appointment to see a qualified US-UK accountant to sort out your situation - which you should do anyways, since as I said, renouncing won't get you out of any back tax issues regardless - and you will probably see that what I've written is correct, and retaining your US Citizenship will require minimal time and expense, and outweigh any value of renouncing.
Jul 29th 2017, 9:06 am
#17
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Re: Renouncing US citizenship or applying for a passport - help!
Ok, thanks for all the responses! I am a bit more confused now than I was to start with, but feeling slightly reassured. I guess my question should have been "should I make myself known to the authorities or continue flying under the radar", haha.
I'm female, just to clear up any confusion
Another related question - I have a birth certificate from the British Consul General in Atlanta, which shows my claim to British citizenship. Can this be used as evidence of US citizenship for a US passport? Or do I need to write to the records people in NC to get a birth certificate? Google only shows me the answer the other way around (for proving British citizenship). Maybe I'm not searching for the right thing.
I'm female, just to clear up any confusion
Another related question - I have a birth certificate from the British Consul General in Atlanta, which shows my claim to British citizenship. Can this be used as evidence of US citizenship for a US passport? Or do I need to write to the records people in NC to get a birth certificate? Google only shows me the answer the other way around (for proving British citizenship). Maybe I'm not searching for the right thing.
Jul 29th 2017, 9:42 am
#18
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Joined: Apr 2011
Location: The Shire
Posts: 1,117
Re: Renouncing US citizenship or applying for a passport - help!
This site prides itself on giving accurate information. Those who regularly post in response to immigration issues are usually precise in the comments they make, down to the last detail. They are very knowledgeable on the immigration issues and strive to make sure anyone approaching those issues are fully informed as to all aspects, including the negatives that make for a full picture. (ex. - if I, a UK citizen only, buy a pool cleaning business in Florida for $5 million and employ some US workers, I can move to the US without any worries, ever.)
Comments made regarding US tax obligations, for the USC resident abroad, should be no less precise, or informative, and generalisations from one experience should not be tolerated as the rule for all. Individual circumstances vary greatly and are never indicative of the overall picture for every individual.
We know very little of the circumstances of LH1986. We do know they are 31, was born in the US, and does not have a US SS number. They have no plans, at present, to live in the US.
We know nothing of their status (married, single), their background (UK tax advisor? don't laugh, we've had this before), nor their financial situation (own stocks and shares ISAs, collect child credit payments, inherited £100,000, and on and on). We do know they aren't a pensioner.
"(Evidence No 1: People who apparently think US Citizens can be denied entry to the US)."
If you revue the comments in this thread, I believe you'll find no one made that statement.
According to newer legislation, tax can prevent a USC from leaving the US, although it was pointed out this has yet to be enforced and will likely not apply to expats.
U.S. Passport Denial or Revocation Where Taxes are Owed to the IRS - Lexology
"OP, you are not liable for US tax on foreign-earned income if that foreign-earned income is less than something like $100,000 per year (I forget the exact figure - it is around that) AND you were outside the US for 330 days in that tax year. This is called the "Foreign Earned Income Exclusion." Therefore based on what you have written I find it unlikely you actually do owe tax.....If you have foreign-earned income over that threshold of $100,000 - there is a multitude of tax treaties that serve to prevent double taxation of US citizens."
The UK/US Treaty does not prevent US taxation of all UK income. You are liable for tax on all income until you file 2555 or 1116. Even with FEIE and FTC, you may have income far below $100,000 and owe US tax, it all depends on your circumstances.
The US/UK Treaty prevents the US and UK taxation of a ROTH. It prevents US taxation of a US SSA payment made to a UK resident. It protects taxation of certain pensions. Beyond that, it is of little use to a USC resident in the UK. (See: Saving Clause - 1.4 and exceptions 1.5) It does not prevent the US from taxing the UK income (exceptions noted) of a USC resident in the UK.
Aside from the above, both countries have the right to tax their citizens and residents as they wish. The UK generally does not tax the foreign sourced income of a non-resident UK citizen. The US can tax all income (exceptions noted), from anywhere in the cosmos.
The US allows FEIE and FTC, but those have nothing to do with the treaty. Those exist under the US Tax Code. And, they are subject to US legislation. In the late 1970's, the FEIE was abolished. It raised such a stink among expats that within a year or two, it was reintroduced. Abolishing FEIE is a yearly sport in Congress by those who are searching for offsets to fund new legislation (any legislation). The last attempt was in 2015(?). FEIE and FTC depend solely on the whims of the US. Note, the "stacking rule" and FATCA came into existence as last minute riders to totally unrelated legislation.
"The reporting for ordinary citizens is minimal and takes a few hours,"
For you maybe, but this is not true for many others.
"[FBAR] This takes about 10 minutes,"
For you maybe, but this is not true for many others.
"The income tax return is 2 pages, as is the foreign-earned income exclusion document."
For you maybe, but this is not true for many others. Mine takes 50 pages. Others report hundreds of pages. It depends on ones situation.
"That will take an hour or two provided you have kept good records and have collected all of your official UK tax documents."
I wish.
I'll stop here.
Please do not base statements as positive on one's own experience. It will vary per individual.
It's up to LH1986 to research, evaluate, and then decide on how they wish to proceed. But, they should know the full picture, not just as it may exist now, but what may exist in the future. (I'll own that pool business for ever and ever, and live in Florida happily forever after.)
Cross post with LH1986
Comments made regarding US tax obligations, for the USC resident abroad, should be no less precise, or informative, and generalisations from one experience should not be tolerated as the rule for all. Individual circumstances vary greatly and are never indicative of the overall picture for every individual.
We know very little of the circumstances of LH1986. We do know they are 31, was born in the US, and does not have a US SS number. They have no plans, at present, to live in the US.
We know nothing of their status (married, single), their background (UK tax advisor? don't laugh, we've had this before), nor their financial situation (own stocks and shares ISAs, collect child credit payments, inherited £100,000, and on and on). We do know they aren't a pensioner.
"(Evidence No 1: People who apparently think US Citizens can be denied entry to the US)."
If you revue the comments in this thread, I believe you'll find no one made that statement.
According to newer legislation, tax can prevent a USC from leaving the US, although it was pointed out this has yet to be enforced and will likely not apply to expats.
U.S. Passport Denial or Revocation Where Taxes are Owed to the IRS - Lexology
"OP, you are not liable for US tax on foreign-earned income if that foreign-earned income is less than something like $100,000 per year (I forget the exact figure - it is around that) AND you were outside the US for 330 days in that tax year. This is called the "Foreign Earned Income Exclusion." Therefore based on what you have written I find it unlikely you actually do owe tax.....If you have foreign-earned income over that threshold of $100,000 - there is a multitude of tax treaties that serve to prevent double taxation of US citizens."
The UK/US Treaty does not prevent US taxation of all UK income. You are liable for tax on all income until you file 2555 or 1116. Even with FEIE and FTC, you may have income far below $100,000 and owe US tax, it all depends on your circumstances.
The US/UK Treaty prevents the US and UK taxation of a ROTH. It prevents US taxation of a US SSA payment made to a UK resident. It protects taxation of certain pensions. Beyond that, it is of little use to a USC resident in the UK. (See: Saving Clause - 1.4 and exceptions 1.5) It does not prevent the US from taxing the UK income (exceptions noted) of a USC resident in the UK.
Aside from the above, both countries have the right to tax their citizens and residents as they wish. The UK generally does not tax the foreign sourced income of a non-resident UK citizen. The US can tax all income (exceptions noted), from anywhere in the cosmos.
The US allows FEIE and FTC, but those have nothing to do with the treaty. Those exist under the US Tax Code. And, they are subject to US legislation. In the late 1970's, the FEIE was abolished. It raised such a stink among expats that within a year or two, it was reintroduced. Abolishing FEIE is a yearly sport in Congress by those who are searching for offsets to fund new legislation (any legislation). The last attempt was in 2015(?). FEIE and FTC depend solely on the whims of the US. Note, the "stacking rule" and FATCA came into existence as last minute riders to totally unrelated legislation.
"The reporting for ordinary citizens is minimal and takes a few hours,"
For you maybe, but this is not true for many others.
"[FBAR] This takes about 10 minutes,"
For you maybe, but this is not true for many others.
"The income tax return is 2 pages, as is the foreign-earned income exclusion document."
For you maybe, but this is not true for many others. Mine takes 50 pages. Others report hundreds of pages. It depends on ones situation.
"That will take an hour or two provided you have kept good records and have collected all of your official UK tax documents."
I wish.
I'll stop here.
Please do not base statements as positive on one's own experience. It will vary per individual.
It's up to LH1986 to research, evaluate, and then decide on how they wish to proceed. But, they should know the full picture, not just as it may exist now, but what may exist in the future. (I'll own that pool business for ever and ever, and live in Florida happily forever after.)
Cross post with LH1986
Last edited by theOAP; Jul 29th 2017 at 9:50 am.
Jul 29th 2017, 9:51 am
#19
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Re: Renouncing US citizenship or applying for a passport - help!
theOAP, reading comprehension is apparently not your strong suit.
It was clear from my post (but apparently not to you) that for ordinary citizens with ordinary income, FBAR and income tax returns are only a few pages and do not take long. Nowhere did I say that "my" income tax return was 2 pages.
Those documents are designed to be for the vast majority of people.
Nor did I dispute that US Citizens could be prevented from leaving the US due to tax obligations. It was implied by another poster that US Citizens could possibly be denied from entering the US and I was not the only one to point out that this was incorrect.
I also suggest you read up on what the Foreign Earned Income Exclusion is.
After reading what you have written - I doubly stand by my advice for OP to see a qualified US/UK tax consultant.
I suggest you respond to posts as written and not phantom posts.
I will stop there . . .
It was clear from my post (but apparently not to you) that for ordinary citizens with ordinary income, FBAR and income tax returns are only a few pages and do not take long. Nowhere did I say that "my" income tax return was 2 pages.
Those documents are designed to be for the vast majority of people.
Nor did I dispute that US Citizens could be prevented from leaving the US due to tax obligations. It was implied by another poster that US Citizens could possibly be denied from entering the US and I was not the only one to point out that this was incorrect.
I also suggest you read up on what the Foreign Earned Income Exclusion is.
After reading what you have written - I doubly stand by my advice for OP to see a qualified US/UK tax consultant.
I suggest you respond to posts as written and not phantom posts.
I will stop there . . .
Jul 29th 2017, 11:32 am
#20
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Location: The Shire
Posts: 1,117
Re: Renouncing US citizenship or applying for a passport - help!
As for my interpretation of your post, I would most kindly suggest, given this situation, comments (no matter how sincere) should be not limited to the restricted aspects of our interpretation of the OPs current situation (which we know nothing about). The OP is 31. They have a long life ahead which will involve making both simple and complicated financial decisions.
The OP deserves the full picture of what retaining USC means for their future life, and the thorough understanding of the restrictions that may entail.
Posting correct information is fine. Generalisations and avoiding to clarify all resulting consequences is not fine. For example - the implication that all "ordinary citizen[s] with ordinary income" will not owe US tax could be misleading. Your comment used the term "earned income". The assumption is the OP fully understands the US interpretation of the difference between earned income and unearned income and it's the generalisations that cause the problem. Someday the OP may be a US/UK dual citizen pensioner resident in the UK, an "ordinary citizen with ordinary income". If that individual has a combination of £11,000 UK pension income, £2,000 interest from a cash ISA, and £950 from savings, and owes no UK tax, could you please explain how that pensioner can avoid paying the US tax due?
Investigate, LH1986. Research!
Jul 29th 2017, 11:35 am
#21
Joined: Dec 2001
Location: Dixie, ex UK
Posts: 52,448
Re: Renouncing US citizenship or applying for a passport - help!
I strongly agree with what several others have said, that US citizenship is worth keeping, that the tax issues are not especially burdensome, and unless you become significantly wealthy, and/or realize a gain on the sale of your home of at least $250,000 (or $500,000 if you are married) you are unlikely to owe Uncle Sam a penny.
.... Someday the OP may be a US/UK dual citizen pensioner resident in the UK, an "ordinary citizen with ordinary income". If that individual has a combination of £11,000 UK pension income, £2,000 interest from a cash ISA, and £950 from savings, and owes no UK tax, could you please explain how that pensioner can avoid paying the US tax due? ....
Last edited by Pulaski; Jul 29th 2017 at 11:41 am.
Jul 29th 2017, 12:57 pm
#22
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Re: Renouncing US citizenship or applying for a passport - help!
Yes, seriously.
I kept the example simple (the pensioner). I did not mention the aspects of PFICs, trusts, benefits, informational reporting, etc.
The OP may fall in the category, today, of someone who simply has to file a 1040, sch. B, 8965, 2555, and FBAR, (all required but not all mentioned above) but that may change at any time. If the OP were to have been born in the UK, no SS, and no passport, to a qualified US parent, many might suggest (illegally) flying under the radar is the way to go. A subjective and controversial opinion.
There is a denial by many here that the US determines what creates a US tax obligation for expats, and the laws can change at any time. There are those in the US Congress who have no concern over US expats (they should have never left anyway, or continue to live abroad) and are determined to see any source of foreign income penalised. Does the OP understand that she is assumed to be a tax evader (at best) and accordingly, to some, be fully punished to the extent of the law. Thank goodness they are currently held in check,....most of the time (FATCA for expats anyone?).
Like it or not, and given the OPs situation and opinions on moving to the US, there are many who fully understand the consequences of living abroad as a USC would not hesitate to tell the OP to renounce - immediately. We haven't done that and only suggested they fully investigate the implications.
Or, do you wish to condemn the OP to not strive to be successful?
No one is suggesting that US tax compliance is impossible (although very few would acknowledge their return is likely 100% accurate, even the pros). But, equally, you don't have to be rich to have a US tax problem which requires careful navigation. (Love those generalities!)
Don't shoot the messenger. Instead, could those who disagree with my posts please offer the OP all the precise reasons retaining USC would be important to the OP. So far, we have they could move to the US at any time (which they indicate they have no intention of doing). Any others? Please. The OP deserves to hear those.
This isn't a normal US-centric discussion. Emotional responses or patriotic allegiances are best avoided. Many are devoutly patriotic to the US and could never consider renouncing. We understand that, but the OP has a serious decision to make. We do understand that many USCs living abroad are have no concerns about filing a US tax return. Great. If the OP is devoutly patriotic to the US, they will remain a USC and clean up their act immediately!
The issue, as far as tax is concerned, isn't the owing of tax. It's being fully tax compliant. Yes, it's always understood, it may be simple for many. It is not simple for others which is why appointments for renunciation at the US Embassy in London are always fully booked.
I'm sure many of us will continue to disagree. Everyone has an opinion. On this issue there are no rights or wrongs. Everyone may have their own opinion. It's the OP that must make the balanced decision.
I kept the example simple (the pensioner). I did not mention the aspects of PFICs, trusts, benefits, informational reporting, etc.
The OP may fall in the category, today, of someone who simply has to file a 1040, sch. B, 8965, 2555, and FBAR, (all required but not all mentioned above) but that may change at any time. If the OP were to have been born in the UK, no SS, and no passport, to a qualified US parent, many might suggest (illegally) flying under the radar is the way to go. A subjective and controversial opinion.
There is a denial by many here that the US determines what creates a US tax obligation for expats, and the laws can change at any time. There are those in the US Congress who have no concern over US expats (they should have never left anyway, or continue to live abroad) and are determined to see any source of foreign income penalised. Does the OP understand that she is assumed to be a tax evader (at best) and accordingly, to some, be fully punished to the extent of the law. Thank goodness they are currently held in check,....most of the time (FATCA for expats anyone?).
Like it or not, and given the OPs situation and opinions on moving to the US, there are many who fully understand the consequences of living abroad as a USC would not hesitate to tell the OP to renounce - immediately. We haven't done that and only suggested they fully investigate the implications.
Or, do you wish to condemn the OP to not strive to be successful?
No one is suggesting that US tax compliance is impossible (although very few would acknowledge their return is likely 100% accurate, even the pros). But, equally, you don't have to be rich to have a US tax problem which requires careful navigation. (Love those generalities!)
Don't shoot the messenger. Instead, could those who disagree with my posts please offer the OP all the precise reasons retaining USC would be important to the OP. So far, we have they could move to the US at any time (which they indicate they have no intention of doing). Any others? Please. The OP deserves to hear those.
This isn't a normal US-centric discussion. Emotional responses or patriotic allegiances are best avoided. Many are devoutly patriotic to the US and could never consider renouncing. We understand that, but the OP has a serious decision to make. We do understand that many USCs living abroad are have no concerns about filing a US tax return. Great. If the OP is devoutly patriotic to the US, they will remain a USC and clean up their act immediately!
The issue, as far as tax is concerned, isn't the owing of tax. It's being fully tax compliant. Yes, it's always understood, it may be simple for many. It is not simple for others which is why appointments for renunciation at the US Embassy in London are always fully booked.
I'm sure many of us will continue to disagree. Everyone has an opinion. On this issue there are no rights or wrongs. Everyone may have their own opinion. It's the OP that must make the balanced decision.
Jul 29th 2017, 1:26 pm
#23
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Joined: Jan 2017
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Re: Renouncing US citizenship or applying for a passport - help!
theOAP, you continue to struggle with reading comprehension and are responding to phantom posts.
Who said that the US does not set its own tax agenda or that the law can't change? Pulaski, among others, stated EXACTLY THAT, that the US will create and impose whatever tax laws it wants.
Advising the OP to renounce because - to cite your own post - things may be OK now but there might be unspecified law or personal circumstance changes many years from now, sounds crazy.
I also don't know who said to fly under the radar. I certainly did not, and have advised the OP - and repeated this to you - to see a specialist US/UK accountant to settle any tax accounts. I also specifically warned that renouncing would not free OP from any outstanding issues. Others have said the same thing. I find it bizarre that you bring nationalism or patriotism into this.
If tax issues are such a burden for you and your 50 page returns - you go renounce.
Who said that the US does not set its own tax agenda or that the law can't change? Pulaski, among others, stated EXACTLY THAT, that the US will create and impose whatever tax laws it wants.
Advising the OP to renounce because - to cite your own post - things may be OK now but there might be unspecified law or personal circumstance changes many years from now, sounds crazy.
I also don't know who said to fly under the radar. I certainly did not, and have advised the OP - and repeated this to you - to see a specialist US/UK accountant to settle any tax accounts. I also specifically warned that renouncing would not free OP from any outstanding issues. Others have said the same thing. I find it bizarre that you bring nationalism or patriotism into this.
If tax issues are such a burden for you and your 50 page returns - you go renounce.
Last edited by carcajou; Jul 29th 2017 at 1:28 pm.
Jul 29th 2017, 1:31 pm
#24
Joined: Dec 2001
Location: Dixie, ex UK
Posts: 52,448
Re: Renouncing US citizenship or applying for a passport - help!
Yes, seriously.
I kept the example simple (the pensioner). I did not mention the aspects of PFICs, trusts, benefits, informational reporting, etc.
The OP may fall in the category, today, of someone who simply has to file a 1040, sch. B, 8965, 2555, and FBAR, (all required but not all mentioned above) but that may change at any time. If the OP were to have been born in the UK, no SS, and no passport, to a qualified US parent, many might suggest (illegally) flying under the radar is the way to go. A subjective and controversial opinion.
There is a denial by many here that the US determines what creates a US tax obligation for expats, and the laws can change at any time. There are those in the US Congress who have no concern over US expats (they should have never left anyway, or continue to live abroad) and are determined to see any source of foreign income penalised. Does the OP understand that she is assumed to be a tax evader (at best) and accordingly, to some, be fully punished to the extent of the law. Thank goodness they are currently held in check,....most of the time (FATCA for expats anyone?).
Like it or not, and given the OPs situation and opinions on moving to the US, there are many who fully understand the consequences of living abroad as a USC would not hesitate to tell the OP to renounce - immediately. We haven't done that and only suggested they fully investigate the implications.
Or, do you wish to condemn the OP to not strive to be successful?
No one is suggesting that US tax compliance is impossible (although very few would acknowledge their return is likely 100% accurate, even the pros). But, equally, you don't have to be rich to have a US tax problem which requires careful navigation. (Love those generalities!)
Don't shoot the messenger. Instead, could those who disagree with my posts please offer the OP all the precise reasons retaining USC would be important to the OP. So far, we have they could move to the US at any time (which they indicate they have no intention of doing). Any others? Please. The OP deserves to hear those.
This isn't a normal US-centric discussion. Emotional responses or patriotic allegiances are best avoided. Many are devoutly patriotic to the US and could never consider renouncing. We understand that, but the OP has a serious decision to make. We do understand that many USCs living abroad are have no concerns about filing a US tax return. Great. If the OP is devoutly patriotic to the US, they will remain a USC and clean up their act immediately!
The issue, as far as tax is concerned, isn't the owing of tax. It's being fully tax compliant. Yes, it's always understood, it may be simple for many. It is not simple for others which is why appointments for renunciation at the US Embassy in London are always fully booked.
I'm sure many of us will continue to disagree. Everyone has an opinion. On this issue there are no rights or wrongs. Everyone may have their own opinion. It's the OP that must make the balanced decision.
I kept the example simple (the pensioner). I did not mention the aspects of PFICs, trusts, benefits, informational reporting, etc.
The OP may fall in the category, today, of someone who simply has to file a 1040, sch. B, 8965, 2555, and FBAR, (all required but not all mentioned above) but that may change at any time. If the OP were to have been born in the UK, no SS, and no passport, to a qualified US parent, many might suggest (illegally) flying under the radar is the way to go. A subjective and controversial opinion.
There is a denial by many here that the US determines what creates a US tax obligation for expats, and the laws can change at any time. There are those in the US Congress who have no concern over US expats (they should have never left anyway, or continue to live abroad) and are determined to see any source of foreign income penalised. Does the OP understand that she is assumed to be a tax evader (at best) and accordingly, to some, be fully punished to the extent of the law. Thank goodness they are currently held in check,....most of the time (FATCA for expats anyone?).
Like it or not, and given the OPs situation and opinions on moving to the US, there are many who fully understand the consequences of living abroad as a USC would not hesitate to tell the OP to renounce - immediately. We haven't done that and only suggested they fully investigate the implications.
Or, do you wish to condemn the OP to not strive to be successful?
No one is suggesting that US tax compliance is impossible (although very few would acknowledge their return is likely 100% accurate, even the pros). But, equally, you don't have to be rich to have a US tax problem which requires careful navigation. (Love those generalities!)
Don't shoot the messenger. Instead, could those who disagree with my posts please offer the OP all the precise reasons retaining USC would be important to the OP. So far, we have they could move to the US at any time (which they indicate they have no intention of doing). Any others? Please. The OP deserves to hear those.
This isn't a normal US-centric discussion. Emotional responses or patriotic allegiances are best avoided. Many are devoutly patriotic to the US and could never consider renouncing. We understand that, but the OP has a serious decision to make. We do understand that many USCs living abroad are have no concerns about filing a US tax return. Great. If the OP is devoutly patriotic to the US, they will remain a USC and clean up their act immediately!
The issue, as far as tax is concerned, isn't the owing of tax. It's being fully tax compliant. Yes, it's always understood, it may be simple for many. It is not simple for others which is why appointments for renunciation at the US Embassy in London are always fully booked.
I'm sure many of us will continue to disagree. Everyone has an opinion. On this issue there are no rights or wrongs. Everyone may have their own opinion. It's the OP that must make the balanced decision.
Jul 29th 2017, 1:48 pm
#25
BE Forum Addict
Joined: Apr 2011
Location: The Shire
Posts: 1,117
Re: Renouncing US citizenship or applying for a passport - help!
The OP did in their first post.
Could we try and keep this civil, please.
Jul 29th 2017, 4:16 pm
#27
Under blue skies
Joined: Mar 2011
Location: East Anglia->New England
Posts: 3,624
Re: Renouncing US citizenship or applying for a passport - help!
I'm 31 years old and was born in the USA to British parents. I only lived in the USA for 6 months or so, and then we moved back to the UK where I have lived more or less all my life. I've visited the USA on holiday a few times but otherwise have no links there. I have a British passport, a consular British birth certificate, but on my passport it says my place of birth is NC, USA.
I have recently discovered that as I have US citizenship I have to use a US passport to enter and leave the country OR show a letter renouncing my citizenship ....
I have recently discovered that as I have US citizenship I have to use a US passport to enter and leave the country OR show a letter renouncing my citizenship ....
https://en.wikipedia.org/wiki/Accidental_American
And I wish you much luck in your decision as to what in the world to do with the status. Not an easy decision, and very very individual....
I wouldn't be in any rush to decide the matter. (I hope there's no rush for you.) You may need time to do research. Settling this whole business may actually take a lot of thought, too, taking into account perhaps any & all of the following: your own ideas/hopes for your own future, as well as the potential future(s) of any of your partners or children; your future educational/career/holiday needs; your ideas about citizenship in general; your ideas about taxation in general; your present & future thoughts/feelings about your Britishness; your politics now & in the future; et cetera ad infinitum....
The Isaac Brock Society | Tag Archives: accidental American
https://www.thebalance.com/accidenta...erseas-3193099
https://www.facebook.com/pg/Accident...=page_internal
Last edited by WEBlue; Jul 29th 2017 at 5:39 pm.
Jul 29th 2017, 7:43 pm
#28
BE Forum Addict
Joined: Apr 2011
Location: The Shire
Posts: 1,117
Re: Renouncing US citizenship or applying for a passport - help!
I would also suggest this past thread from BE:
http://britishexpats.com/forum/movin...-check-871001/
and this link:
Citizenship Counselling For U.S. Citizens in Canada and Abroad | Counselling, life planning, investment solutions, expatriation, U.S. tax assistance and citizenship solutions in a FATCAesque world!
http://britishexpats.com/forum/movin...-check-871001/
and this link:
Citizenship Counselling For U.S. Citizens in Canada and Abroad | Counselling, life planning, investment solutions, expatriation, U.S. tax assistance and citizenship solutions in a FATCAesque world!
Jul 29th 2017, 8:24 pm
#29
BE Commentator
Joined: Feb 2010
Location: Los Angeles, California
Posts: 8,427
Re: Renouncing US citizenship or applying for a passport - help!
One point not discussed - nothing was discussed on how OP's mother was in Atlanta. There is a UK Consulate in Atlanta. Children of diplomats born in the US are NOT US citizens. They are born with green cards, but the normal abandonment rules apply.
Jul 29th 2017, 8:53 pm
#30
BE Forum Addict
Joined: Apr 2011
Location: The Shire
Posts: 1,117
Re: Renouncing US citizenship or applying for a passport - help!
The following is an additional video link I should also have noted. It's from Allison Christians, the H. Heward Stikeman Chair in the Law of Taxation at the McGill University Faculty of Law. "Understanding the Accidental American: Tina's Story". It should be viewed by every accidental American. Plug the title into youtube.
Last edited by theOAP; Jul 29th 2017 at 8:56 pm.