As a US citizen, you've been required to file taxes every year regardless of your foreign presence. Even if you did not owe any US taxes (when foreign-earned income is less than about 107k USD), it's still a requirement to file yearly.

I would strongly recommend you hire the services of a tax adviser who is well-versed in US tax filing. You also need to file FBAR on any foreign bank accounts (this is easily done yourself): Report of Foreign Bank and Financial Accounts (FBAR) | Internal Revenue Service

UK banks have recently (in the past few years) become very serious about tax compliance with people who have ties to the US, since they can be held liable for your financial activity. Just from my experience (the staff I dealt with at NatWest and HSBC were imbeciles and couldn't manage to put my paperwork into the correct folder so it was lost several times), they're unlikely to actually freeze your accounts on day 91, but they will be very insistent.

You could also choose to renounce your US citizenship but that is expensive and since you haven't been tax compliant (or if your net assets are worth over $2M), an "exit tax" could apply to you where you're taxed on ALL of your assets including your foreign home.

You should just start filing taxes now. You can file back taxes up to the last 5 years.

 

You should just start filing taxes now. You can file back taxes up to the last 5 years.

This is not good advice. The OP should do no such thing.

 

Hello EMD54, I am sorry that you've found yourself in this Kafkaesque situation like so many of us. You are what is known as an accidental American. Those who have personal experience of what you have described are uniting across the world and fighting this as it's a gross injustice and a violation of our fundamental rights (FATCA Legislation and its Application at International and EU Level - Think Tank).

Please get ALL of the information that you can before taking any action on this. It can be frightening to go through, and it's very tempting to fall into the arms of a compliance shark in hopes of making it all go away. But you may be creating more trouble for yourself by going that route. Many in shoes similar to yours have opted to do nothing, while others have renounced without filing a thing, and nothing bad has happened to them.

You can read/tweet on the FATCA hashtag on Twitter, and visit the Accidental Americans group on Facebook (Facebook Groups), to find those of us who are pushing back against this. I recommend getting advice from other accidentals who have already been through this, before you decide on what to do. Best of luck

 

Thank you for replies, most appreciated.

I certainly do not intend reacting at a rush, first of all I must consider and respond to my UK bank information request.

They have asked for a response, within 90 days, and they need (according to my understanding of their letter) a completed IRS Form W-9. I've downloaded this form, and it appears to be basically advising them of your name, address and US Social Security number - all of which I can provide. I don't recall when I got the SSN, unfortunately all my family members have passed on so don't know how I got the SSN.

Assuming I send this completed form to the bank, what do they do with that information? Presumably they just tell the IRS all my details and give amounts in the accounts?

Would giving the UK bank that information be sufficient to satisfy them, and not put my accounts with them in danger?

 

It's great that you already have an SSN. This makes things much easier. What is generally recommended in our groups for this situation is to fill in the form as requested by your bank and then forget about it. FATCA is so broad and overreaching that the data is mostly static noise that the US government cannot even use (https://www.treasury.gov/tigta/auditreports/2018reports/201830040fr.pdf), and even if they could, they know damn well that they would never get a penny out of people like you, as you have no US presence at all and pay your tax in full in the UK where you live. Many officials in the US government are aware that this situation is absurd and unjust. Not one person in any of our groups (in which I've been involved for five years) has ever been chased down on the basis of filling in a FATCA form.

 

I agree with Bev. As far as I'm aware, all they really do is keep it on file in case the IRS contacts them (unlikely). As long as you can provide the information you should be fine. It's basically a box ticking exercise and honestly pretty ridiculous in practice.

 

Thank you all for your responses so far. The advice about giving my UK bank my information is welcome, and is the route I will most probably follow, but at the moment there's no hurry to commit myself.

I have read about people renouncing their US Citizenship, which seems a drastic thing to do.

Where does one stand legally if renouncing US Citizenship - does one become a stateless person?

How does that affect the day to day life of a person? Presumably one would then have to apply to be a British citizen (or ‘naturalisation’) and that again costs money.

This renunciation sounds expensive, I would not want to go down that road!

 

Surely you are a British citizen after living in the UK for 50 odd years? Have you a British passport? Are/were your parents British born and bred? The fact you entered the UK at age 9 implies you had a British passport at the time......

 

Hi Crawford, I was asking about the renunciation purely out of interest.

 

Where does one stand legally if renouncing US Citizenship - does one become a stateless person?

You asked if renunciating US citizenship would make you stateless - well, not if you are a British citizen, obviously. Hence my question regarding your British citizenship

 

Foreign banks do take seriously the instructions they receive from the IRS practically asking "how high" when they say, "jump". For example, I still have my original social security card which I obtained at age 14 so that I could start my first after school job. It's a gray-blue background color imprinted with dark blue numbers. When I retired and became eligible for Medicare, I was issued an updated card. This one is quite different in design and is red, white and blue with the same number followed by a letter which indicates eligibility for Medicare.

My companion has only the newest card issued to him since he became retired as some people are just better than others at holding onto 50 year old mementos. When our Italian bank asked him for his FATCA info, he presented his most recently issued card (red, white and blue) and the bank officer actually pulled the file of another American client and showed us that his card is NOT red, white and blue. So we had to convince the officer that the client in possession of the blue card is still too young to be in possession of the card that my companion carries. But really, if he had decided to give us any trouble about it, just how do you prove to a foreign bank officer that your most recently issued card is the same number you've had since age 14 and perfectly valid except that it means you're now a senior citizen? By the way, as a result of this, my companion contacted Social Security and asked for a copy of the Blue card. And of course he can't be issued one because he's now a senior citizen.

 

To the OP:

I'll try to keep this quick.

Forget about the IRS and US taxes. While yes, technically, all US citizens are required to file US tax returns and FBARs and all that good stuff, you can safely ignore these obligations. The IRS does not know that you exist - keep it that way. (If you file a 2020 return you could collect the $3200 stimulus benefit, but if you're not desperate for the money, don't bother, it's not worth the trouble of continuing to file in future years.)

Sorting things out with your bank is unfortunately a task that you can't avoid. Does the bank actually know that you have US citizenship - is that stated in the letter - or are they making a general enquiry? It would be helpful if you could quote or paraphrase the exact wording here. If the bank is asking a general question, you have the option of answering "no" and not disclosing US citizenship. Depends really on how strict the bank enforces its own compliance rules and how you feeling about telling lies. You might be asked to fill out a W-8 form in this case, or the bank's own form, or they simply take your word for it.

If the bank already knows of your US citizenship, or you are not comfortable keeping it a secret, then you will need to do as you've been told and complete a W-9 form. It's a good thing you have your SSN, as they can be difficult to acquire. Were you to do this, the bank would report your year-end balance and any interest/dividend income to the US government. This information would then sit undisturbed in a giant pile of data - I would not expect to hear a word from the IRS. (Note also that the IRS has no ability to punish someone in the UK who has no US financial ties.)

Renunciation is not something you need to consider unless you are dealing with a situation where financial institutions refuse services to US citizens. Don't worry about this. (You do have UK citizenship, correct?) Were you to renounce, there is no requirement to be in US tax compliance beforehand, and you can choose to ignore the exit tax and anything that might come after.

 

Just a further note on renunciation - the US consulate/embassy is supposed to dissuade folks from renouncing unless they have another citizenship to fall back on. There is an international agreement that no country should do anything that leaves a person stateless - in large part because of the practical issues involved.

But the other thing to remember about renunciation is that it's expensive. At present $2350. Though, if you're having serious banking or financial issues related to your US citizenship and no loose ends in the US (significant investments or financial ties), it can be worth every penny. Add to that, the consulate staff are generally very sympathetic and gracious to those who choose to go through the process.