Should one give up US citizenship?
Hi David,
I am distressed by reading your comments regarding my possible future obligations to the IRS as a dual citizen.
I was born in BC to US parents, grew up in the States from age 4 to 33 and have been living back in BC for the past 19 years. I have a small IRA (12,000 USD) in the US, which I opened 20 years ago and have not added to since. I have no other US assets, nor have I earned income there for 20 years. I have intermittently filed US income tax returns over the years - never owed them anything due to foreign tax credit. I have not filed for the past two years because I changed accountants, I moved within BC and the new guy doesn't file US returns. I have however, completed W8 forms with various investment firms. I don't have a US passport nor do I receive any benefits from the US. I never intend to reside in the US or seek employment there.
I have not voted since I left. However, my networth is beginning to grow as is my income (earned and investment) and I do not want Uncle Sam to view me as an opportunity to pay for the many unfunded liabilities they have promised the aging babyboomers (I am one of those boomers)
I am wondering whether I should relinquish my US citizenship and whether I can consult with you or would you recommend someone else to discuss my situation in detail? What fees might I expect? I am in the Vancouver area. I want to know what potential ramifications there might be from a legal and tax perspective of relinquishing. I imagine I would first collapse my IRA - pay the tax and then attend the US Consulate, complete a questionnaire, and take an oath, etc. but I wonder about any potentially negative implications? Do I need to file the last 2 years taxes and next year's if I collapse my IRA?
I obtained US citizenship for my 10 and 12 year old daughters who were born in Canada by registering them for the US citizens born abroad program - so now they have dual citizenship. What do I do for them as I don't want them to be obliged to have to declare their world income to the IRS into perpetuity?
Would you please provide us a quote for back filing my US tax returns for the last 2 years, I have a copy of my CAD returns and don't owe $ to the IRS?
I am a xxxxxxxxxxxxxxx employed by xxxxxxxxxx,
I own 3 rental properties in the Lower Mainland and had some stock investments (jointly with my wife) - all of our income has been earned in Canada and I have no ties to the US (except the IRA mentioned above). We are also wondering what it might cost to have you be our accountant to file our CAD and US taxes for 2007 and discuss relinquishing the US citizenship? Regards,
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david ingram replies:
Do NOT expect replies as fast as this in the future. It was sent to an address that I do NOT answer questions from as well. I have over 700 unanswered email questions that arrived before yours.
However, this arrived as i was cleaning up my files so here goes.
Giving up your US citizenship to avoid income tax filing results in your being banned from the US in perpetuity.
It is usually not a good idea an dfewer than 50 people a year actually go through the process because of the ramifications. In addition, you trigger a 'departure' tax when you do and the rules are that you are supposed to keep on filin US returns for 10 more years.
What you are talking about is filing two returns. More work, and more cost but rarely more tax. people in 43 states and the Province of Quebec file two physical returns and it does not kill them.
You should likely come and see me for a $400.00 hour. In general, for a current year, we charge $800 to $2,800 for a US / Canadian return. If you have three rentals and capital gains, you are likely in the $1,500 range.
Doing the two old ones at this time of year wouold likely be under $1,000 unless you have multi stock trasdes, etc. and you must do them.
Not filing form TDF 90-22.1 is now a stated minimum $10,000 penalty. Not filing form 8891 for your RRSP is a fine of 35% of the prinicipal plus 5% for every year not reported.
And, cheer up. In another 9 years, you qualify for US social Security.
I am distressed by reading your comments regarding my possible future obligations to the IRS as a dual citizen.
I was born in BC to US parents, grew up in the States from age 4 to 33 and have been living back in BC for the past 19 years. I have a small IRA (12,000 USD) in the US, which I opened 20 years ago and have not added to since. I have no other US assets, nor have I earned income there for 20 years. I have intermittently filed US income tax returns over the years - never owed them anything due to foreign tax credit. I have not filed for the past two years because I changed accountants, I moved within BC and the new guy doesn't file US returns. I have however, completed W8 forms with various investment firms. I don't have a US passport nor do I receive any benefits from the US. I never intend to reside in the US or seek employment there.
I have not voted since I left. However, my networth is beginning to grow as is my income (earned and investment) and I do not want Uncle Sam to view me as an opportunity to pay for the many unfunded liabilities they have promised the aging babyboomers (I am one of those boomers)
I am wondering whether I should relinquish my US citizenship and whether I can consult with you or would you recommend someone else to discuss my situation in detail? What fees might I expect? I am in the Vancouver area. I want to know what potential ramifications there might be from a legal and tax perspective of relinquishing. I imagine I would first collapse my IRA - pay the tax and then attend the US Consulate, complete a questionnaire, and take an oath, etc. but I wonder about any potentially negative implications? Do I need to file the last 2 years taxes and next year's if I collapse my IRA?
I obtained US citizenship for my 10 and 12 year old daughters who were born in Canada by registering them for the US citizens born abroad program - so now they have dual citizenship. What do I do for them as I don't want them to be obliged to have to declare their world income to the IRS into perpetuity?
Would you please provide us a quote for back filing my US tax returns for the last 2 years, I have a copy of my CAD returns and don't owe $ to the IRS?
I am a xxxxxxxxxxxxxxx employed by xxxxxxxxxx,
I own 3 rental properties in the Lower Mainland and had some stock investments (jointly with my wife) - all of our income has been earned in Canada and I have no ties to the US (except the IRA mentioned above). We are also wondering what it might cost to have you be our accountant to file our CAD and US taxes for 2007 and discuss relinquishing the US citizenship? Regards,
-----------------------------------------------------------------------------------------
david ingram replies:
Do NOT expect replies as fast as this in the future. It was sent to an address that I do NOT answer questions from as well. I have over 700 unanswered email questions that arrived before yours.
However, this arrived as i was cleaning up my files so here goes.
Giving up your US citizenship to avoid income tax filing results in your being banned from the US in perpetuity.
It is usually not a good idea an dfewer than 50 people a year actually go through the process because of the ramifications. In addition, you trigger a 'departure' tax when you do and the rules are that you are supposed to keep on filin US returns for 10 more years.
What you are talking about is filing two returns. More work, and more cost but rarely more tax. people in 43 states and the Province of Quebec file two physical returns and it does not kill them.
You should likely come and see me for a $400.00 hour. In general, for a current year, we charge $800 to $2,800 for a US / Canadian return. If you have three rentals and capital gains, you are likely in the $1,500 range.
Doing the two old ones at this time of year wouold likely be under $1,000 unless you have multi stock trasdes, etc. and you must do them.
Not filing form TDF 90-22.1 is now a stated minimum $10,000 penalty. Not filing form 8891 for your RRSP is a fine of 35% of the prinicipal plus 5% for every year not reported.
And, cheer up. In another 9 years, you qualify for US social Security.
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