US Citizenship Renunciation

(Allie) #1

Has anyone on here gone through the process of renouncing US Citizenship, and if so - any advice/warnings/things I should know?

(Richard Weber) #2

Yes, done it. I found it quite easy. There is paperwork and a $2,350 fee to pay when you make a personal appearance at the consulate to affirm your oath. Start by emailing the consulate and they will send you the forms. A separate matter is detaching yourself from the IRS. This needs more paperwork.

(Allie) #3

Thanks! What does ‘detaching’ from the IRS require? Surely a partial-year 1040 covering the part of the year I was a US citizen along with proof I’m not a citizen anymore should do the trick?

(Richard Weber) #4

Well … if you want to detach correctly and never be hassled again by
the IRS you need to file Form 8854. You do this in the year after
renouncing. On this from you are asked to attest that you have been tax
compliant for the past 5 years. So if you were to renounce in 2017 that
would mean US tax compliance for 2012,13,14,15,16. You also need to
complete a US tax return for the part of 2017 for which you were a USC.

For this reason it can be good to renounce early in a year. If you were
to renounce in 5 January 2018 there would be almost nothing you would
need to report for 2018 and filing that would be easier.

You can ignore the requirements of Form 8854, but then you are become
"covered expatriate", which may or may not be a problem, depending on
your circumstances.

(Allie) #5

Thank you for the information! One more thing, I actually am a US citizen in two ways. Unlike most of my US citizen friends (who were born here, but have an American parent), I was actually born in the US (which, unlike most countries, gives you citizenship - because the US tries to create as many citizens as possible for tax reasons) AND one of my parents was American (which also gave me citizenship). I don’t imagine that being born in the US complicates it at all (since I’m also a British Citizen by birth), but just checking?

(Richard Weber) #6

Being a dual citizen from birth is of great advantage because it means
you can avoid becoming a “covered expatriate” and avoid possible of
being charged “exit tax”. There is a special exception for such people.
I was also in this situation and rejoiced when I discovered it.

I recommend you carefully read through Form 8854 and realise how lucky
you are! Download the form from the web. Look at Section IV Part A 3.

(Allie) #7

Thanks, I looked at the rules, I’m nowhere near being a ‘covered expatriate’ anyway, but good to know if I was rich, I’d be safe :rofl: